WELCOME

Welcome and thank you for visiting!

The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...
please read my full Disclaimer at this link.

Dots

...If the dots don't connect, gather more dots until they do...

Winter City

Winter City

Events

UPCOMING (MAJOR) ECONOMIC EVENTS...
* Wed. Nov. 22 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Thurs. Nov. 23 ~ U.S. Markets closed for Thanksgiving holiday
* Fri. Nov. 24 @ 1:00 pm ET ~ U.S. Markets close early
* Wed. Nov. 29 @ 2:00 pm ET ~ Beige Book Report
* Fri. Dec. 8 @ 8:30 am ET ~ Employment Data
* Tues. Dec. 12 ~ 2-day FOMC Meeting Begins
* Wed. Dec. 13 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
* Mon. Dec. 25 ~ U.S. Markets closed for Christmas holiday
*** Click here for link to Economic Calendars for all upcoming events

Tuesday, November 21, 2017

SPX Hits 2600 as Social Chaos Churns

I last wrote about the SPX:VIX ratio in my post of October 25. I mentioned that if price dropped and held below the 200 level, expect volatility to increase and weakness to set in on the SPX...and, that if it failed to do so, we could see the SPX reach 2600 before such a scenario may ensue.

Since that date, we've seen the SPX stabilize somewhat, bounce around above 2560, and, finally, reach 2600 today (Tuesday), as shown on the Daily chart below.


After a brief dip below 200, a new "BUY" signal is about to form on the SPX:VIX ratio, as shown on the Daily ratio chart below.

However, it will be important for price on this ratio to reach and hold above the 280 major resistance level, and for the SPX to hold above 2600, in support of a convincing argument that favours the sustained entry of the SPX into a new bull-market phase.


This bird's eye view of the SPX (Monthly chart) shows that it has not faced a major challenge in almost two years.

Price is, however, mashed up against major resistance in the form of a +2 standard deviation of a regression channel. If price does manage to spike through this, the next hurdle is an external Fibonacci retracement level at 2678.


With the VIX down near historical lows (as shown on the Monthly chart below), the current battle unfolding within the Republican party to reform and cut taxes before the end of the year (with zero support from Democrats), and social chaos (sexual assault allegations) exploding across the U.S., we may see volatility increase, correspondingly, in equity markets in the weeks/months ahead...particularly in 2018, with the impending mid-term Congressional elections in November, with possible interest rate hikes by the Fed, and, especially, if tax reform/cuts fail.


Monday, November 20, 2017

Social Whiplash

With all the social whiplash occurring recently regarding allegations of sexual assault against women (and men), I'd just offer this bit of advice...never consider anyone else's body your property, nor is it your right to encroach thereupon.

The U.S. Department of Justice defines "sexual assault" as follows...


If you're in doubt whether anyone is interested in you, ask her/him...never assume anything, as Charlie Rose is now learning (*UPDATE November 21: he has now been fired by CBS and PBS)...


Source: Washington Post


* UPDATE November 21...

It looks like we're headed for social chaos in the weeks/months ahead, as allegations explode across many sectors of society/business/politics (Congressional "shush fund" exposed)...


Sunday, November 19, 2017

Small Caps & High Yield Corporate Bonds Hint of Higher Volatility Ahead

As can be seen on the Daily comparison chart and percentage-gained graph below, the Russell 2000 Index (RUT) and the High Yield Corporate Bonds ETF (HYG) generally trade lock-step, although the RUT is accompanied by more volatility and larger swings.

At the moment, the RSI and MACD indicators are hinting of lower prices ahead for HYG and volumes have spiked over the past few days.

We'll see if volatility ramps up and whether any significant weakness hits both of these in the near term...particularly as U.S. Republicans battle to reform and cut taxes before the end of the year.

In this regard, watch for a drop and hold below major price support (and the 200-day MA) on HYG at 86.00 as a potential harbinger of similar fate for Small Cap stocks.



I'd also watch to see whether price on the RUT:RVX ratio falls below the 85.00-105.00 zone (as it bounces in between), as shown on the Daily ratio chart below. Major price support (and the 200-day MA) lie around 85.00 and much higher volatility, and weakness, wait below that level for the RUT.


Saturday, November 11, 2017

Bearish "Shooting Star" Forming on BITCOIN

* See UPDATE below...

Further to my last post of October 20 and update of November 2, a bearish "Shooting Star" candle formation is in the making on this Monthly chart of BITCOIN...warning signs that we could see a further sell-off to, potentially, the 5000 level, which is the nearest major support level, or even lower to 3000, the next major support level (last hit on September 15).

Volatility is no stranger to this cryptocurrency, as price has plunged nearly 1700 points in the past four trading days, and I doubt that this will change any time soon. Price is currently trading at 6200 as I write this post on November 11 at 1:45 pm ET.


Both the Momentum and Rate-of-change technical indicators on the Daily chart below are hinting of lower prices to come.


As an example of volatility and parabolic moves, look no further than the graph below, which depicts the percentages gained Year-to-date on the SPX, the five FAANG stocks, and BITCOIN. The percentage gained in 2017 in BITCOIN is 2.5 times that of all five FAANG stocks combined.


* UPDATE November 12...

Volatility continues its grip as price hit a low of 5426 in the wee hours at 1:50 am ET today (as shown on the Daily chart below)...a 2469-point (32%) drop  from its high five days ago...


Sunday, November 05, 2017

WTI Crude Oil Aiming for $65.00

* See UPDATE below...

Further to my prediction at the end of July that WTI Crude Oil may reach $65.00 if it could reach and hold above the 55.00 level, this update will confirm that such a scenario is still a possibility, even though it's now three months later and we've seen a rise in volatility, as price has bounced around in a $10.00 range since then. As I write this post Sunday evening, it's finally hovering above 55.00.

As can be noted on the Monthly chart below, I'd say that a retest of the bearish (monthly) Moving Average Death Cross around 65.00 is imminent and that momentum currently favours the bulls -- particularly in light of the Saudi purge that is underway, as well as recent military activity that's occurring in that region -- and as illustrated by the recent bullish (daily) Moving Average Golden Cross that has formed on the Daily timeframe (see second chart below).



* UPDATE November 6...

More political and military "activity" underway in the Middle East...

Source: ZeroHedge

Source: ZeroHedge

Source: ZeroHedge

Source: Bloomberg Politics

...and the buying continues today in WTIC (Monthly chart)...


Saturday, October 28, 2017

Spain's Ibex 35 Index Mired in Long-Term Congestion Zone

In the midst of political and social uncertainty surrounding the recent referendum in Catalonia to separate from the rest of Spain and Prime Minister Rajoy's aim to stop it, Spain's Ibex 35 Index has been faltering, as shown on both the longer-term Monthly chart and the short-term Daily chart below.

Longer term, price ran into major resistance in the form of a downtrend line and a 50% Fib retracement level. It's currently hovering above the 40% Fib level. So far, neither the Momentum nor the ROC indicators are showing that higher prices are in store for this index on this timeframe.

Shorter term, a bearish moving average Death Cross has formed and price closed just below both of them on Friday. So far, the RSI, MACD and PMO indicators are not hinting of higher prices to come any time soon.

These technical indicators, resistance and support levels, together with the Death Cross formation, may be monitored to assist in determining the potential sustainability of any further decline or new rally that may ensue over both the short term and the longer term. A drop and hold below the long-term triangle apex at 9150 could produce a swift plunge to 7750, or lower.









Wednesday, October 25, 2017

New "SELL" Signal Triggered on Weekly SPX:VIX Ratio

I last wrote about the SPX:VIX ratio in my post of October 17. At the time, volatility was creeping higher, as the SPX was making new highs.

As of 2:00 pm today (Wednesday), volatility has continued to rise, as the ratio dropped to just above the critical 200 "New Bull Market" level, as shown on the following SPX:VIX Monthly ratio chart.


The following 60-Day 60-minute ratio chart shows that, although one gap up has been filled, there are two unfilled gaps remaining, dating back to September 11.


A new "SELL" signal has just triggered on the Weekly ratio, as shown below.


The SPX nearly reached a potential target of 2600 on Monday, as shown on the following Daily chart, where it will encounter major resistance in the form of a +2 deviation level of a very long-term regression channel, as I outlined in my above-mentioned post.


Keep an eye on these charts, especially the 60-Day 60-minute, to see if the prior gaps are filled, and whether the ratio drops and holds below 200. If so, expect volatility to increase as weakness sets in on the SPX. If not, the SPX may try, again, to reach 2600, before such a scenario may develop.

In any event, the SPX may whipsaw until after the next Fed meeting concludes on November 1, before it, either continues to advance to new highs, or we see a pullback, and gap fills on the intraday ratio.

Friday, October 20, 2017

BITCOIN: The Extreme Anomaly

* See UPDATE below...

After plunging to 3000 six weeks ago, Bitcoin snapped back and reached 6000+ today (a 100% increase during that time), as shown on the following Monthly chart, and, as noted in my last post (originally written on September 4th and updated periodically, with comments and charts, to, and including, today).


What strikes me as extraordinary is to see the percentage gained Year-to-date of Bitcoin (527.07%) compared to the U.S. Major Indices, as shown on the following graph.

I find this noteworthy and very unusual, to say the least, inasmuch as it's not "backed up by" or "pegged to" anything.


And, here's a look at the all-time percentage gains for Bitcoin, since it was first listed on the NYSE on May 19, 2015...2417.70%...

Is this an unsustainable parabolic bubble in the making? We'll see...


If Satoshi Nakamoto, the man believed to have created and implemented Bitcoin, still holds 1,000,000 Bitcoin, he'd be $6 Billion richer today:
https://en.wikipedia.org/wiki/Satoshi_Nakamoto


* UPDATE November 2...

Another 1300 points tacked on in the past 9 days as it ploughed through the 7000 level...the manic euphoria continues...


Tuesday, October 17, 2017

Will the SPX Reach 2600?

I last wrote about the SPX:VIX ratio on September 30.

Price action on the Monthly ratio chart below shows an inability, so far, for volatility to be held at bay, while the SPX continues to make new highs, almost daily.

It has failed to hold, with conviction, above the 250 level and advance above its next resistance level, which is a 161.8% external Fibonacci level at 280.


Price action, typically, doesn't like to leave unfilled gaps on the 60-Day 60-minute ratio chart. It gapped up on September 11 and remains unfilled. I'd expect that it will be filled in the near term, inasmuch as momentum has been fading on this timeframe and it has dropped below zero, once again. Watch for momentum to remain below zero on any gap fill.

Should price drop and hold below 200, we could see a significant drop occur in the SPX. Keep an eye on momentum on this timeframe for any confirmation of such a move.


One possible scenario that may occur (before any such gap fill) is for the SPX to make a last gasp to reach 2600 (a +2 deviation level of a very long-term regression channel), as shown on the Monthly chart below.

Keep an eye on momentum on the above chart to see if it pops back, and holds, above zero to confirm that such a rally may be imminent.


Friday, October 13, 2017

Amazon Musings...

Will Amazon (AMZN) follow in the (recently fateful) footsteps of Equifax (EFX)? Note the similarities in their price action over the past five years (until EFX began its plunge on September 8)...


Sunday, October 01, 2017

FAANG Rotation: Risk On or Risk Off for Q4?

I last wrote about the five FAANG Tech stocks at the end of June.

Since then, we've seen rotation in and out of these stocks, as depicted on the following four percentage gained/lost graphs of varying lengths of time...namely, Year-to-date, 2017 Q3, the month of September, and the past week, respectively.





They are all still stuck in their large sideways trading ranges -- and Amazon and Apple are trading below their 50-day moving average -- as shown on the following 1-Year daily charts. All of them have formed some kind of topping formation, especially Amazon, which has formed a bearish Head & Shoulders pattern.

Watch for a break and hold, firstly, below their 50-day moving averages, and, then, a break and hold below their support levels, on escalating volumes, as a signal that traders are running from risk in Q4. Otherwise, renewed strength in these stocks, with increasing volume support, will indicate the market's continued overreach for growth versus value, at least until the end of the year when we may see the Fed hike interest rates for the third time this year.

Additional information can be found in my last post here (that details what may lie ahead for equities, in general, in Q4), which may or may not influence risk-appetite trading action (and vice versa) in the FAANGs.