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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.

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Events

UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* 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 Day holiday
* Mon. Jan. 1 ~ U.S. Markets closed for New Year's Day holiday
* Wed. Jan 3 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Fri. Jan. 5 @ 8:30 am ET ~ Employment Data
* Wed. Jan. 17 @ 2:00 pm ET ~ Beige Book Report
* Wed. Jan. 31 @ 2:00 pm ET ~ FOMC Announcement
*** Click here for link to Economic Calendars for all upcoming events



Thursday, August 31, 2017

Sky-High Markets and Ho-Hum Wages

* See UPDATE below...

Friday's employment data is expected to fall within the "average" levels made during the past 17 years, as shown on the following three graphs.

Wage growth hasn't amounted to much during these years, so that should be a warning to sky-high markets, IMHO...especially if Congress fails to pass income tax cuts and tax reform this year.

The only time that the unemployment rate was lower than the current rate was pre-911.


Data Source: ForexFactory.com



* UPDATE September 1...

All three employment data results came in below expectations this morning, including a revision downwards (from 209K to 189K) on last month's Non-Farm Employment Change, as well as an uptick in the Unemployment Rate, and lower Average Hourly Earnings growth...not a healthy sign for the markets to build upon, especially with this gridlocked and divided Congress.


Commodity Leaders and Laggards

The following Year-to-Date and 2-Week graphs show which commodities (and commodity ETFs) have gained and lost the most (in terms of percentage) during those two time periods.

The second graph illustrates the massive 18.92% gains made in Gasoline during these past two weeks...no doubt, in anticipation of, and with respect to, current events surrounding the refinery shut-downs in Texas this week, due to the effects of Hurricane Harvey.

On a Year-to-Date basis, the laggards are WTIC Crude Oil, Brent Crude Oil, and the Agriculture ETF, while Copper leads in gains, followed by other metals.



The following 1-Year charts of these seven commodities and two ETFs show that all of these are mired within prior price resistance zones, except for the Agriculture ETF (DBA), and Copper, which are at their respective low or high points (and in their well-defined down or up trends) during this time period.

These are two to watch, along with WTIC Crude OilBrent Crude Oil and Gasoline, in the coming days and weeks for signs of, either, trend reversal, or, continuation.


Wednesday, August 30, 2017

World Markets Churning

* See UPDATE below...

World markets are still churning, much like Hurricane Harvey...watch for, either a breach of the 50-day moving average, or a retest of 1950 and potential breakout to new highs, as shown on the following Daily chart of the World Market Index.




* UPDATE September 8...




Tuesday, August 29, 2017

GASOLINE Futures Coming to a Head

* See UPDATES below...

The price of Gasoline RBOB Futures is coming to a head in this large triangle formation, as shown on the following Monthly chart.

Watch for a breakout and hold above its apex around the 1.6445 level, together with a new swing high on the Momentum indicator, to confirm sustainable bullish sentiment.


* UPDATE August 31...

The August candle broke out above the triangle apex (noted above) and closed today near its high of 1.7828 at 1.7796, as shown on the following following Monthly chart of Gasoline RBOB Futures. September's candle is just beginning to form, as you can see in after-hours trading tonight.

This candle confirms the bullish engulfing formation involving June and July's candles. Watch for a breakout and hold above 1.7828 for a potential run up to 2.00, or higher, together with continued rising Momentum and Rate of Change indicators (both of which made a higher swing high in August).

Failure to to do so, could see a retest of 1.50, or lower.


The following Year-to-Date and 2-Week graphs show which commodities (and commodity ETFs) have gained and lost the most (in terms of percentage) during those two time periods.

The second graph illustrates the massive 18.92% gains made in Gasoline during these past two weeks...no doubt, in anticipation of, and with respect to, current events surrounding the refinery shut-downs in Texas this week, due to the effects of Hurricane Harvey.

On a Year-to-Date basis, the laggards are WTIC Crude Oil, Brent Crude Oil, and the Agriculture ETF, while Copper leads in gains, followed by other metals.



The following 1-Year charts of these seven commodities and two ETFs show that all of these are mired within prior price resistance zones, except for the Agriculture ETF (DBA), and Copper, which are at their respective low or high points (and in their well-defined down or up trends) during this time period.

These are two to watch, along with WTIC Crude Oil, Brent Crude Oil and Gasoline, in the coming days and weeks for signs of, either, trend reversal, or, continuation.


* UPDATE September 7...

The August candle did, indeed, exceed the 2.00 level and made a new high of 2.1705, (together with new swing highs on the momentum and rate of change indicators) for 2017, as shown on the Monthly chart below of Gasoline RBOB Futures.

However, the price on the September candle gapped down quite a bit on its open, but is still trading above its apex (as noted above) of 1.6445...a level to watch and see if price can remain above to, potentially, retest its August high, or move even higher.


Monday, August 28, 2017

GOLD Approaching Neckline of Reverse Head & Shoulders

It looks like a a massive reverse Head & Shoulders formation could play out nicely if GOLD can break and hold above its neckline (and converging 40% Fibonacci retracement level) around 1376, as shown on the Monthly chart below.

Longer term, we could see an eventual run up to converging major price and 60% Fib retracement resistance around 1600. Watch for, not only a continuing rise on the Momentum indicator, but also an increase in its velocity, should we see such a sustained neckline breakout, as confirmation of bullish commitment.



Thursday, August 24, 2017

World Markets at Inflection Point

I don't have much to say about the markets (as of Wednesday's close), except to note that the World Market Index (50-day MA and 1900 near-term support level) and the SPX:VIX Ratio (200 price level) are, once again, at/near their respective inflection point.

Downtrending technical indicators are not (yet) supportive of continuing strength in these equity markets and may be signalling that longer-term weakness is ahead, as I mentioned here.

Perhaps we'll get a clearer picture of direction after the conclusion of this week's Jackson Hole meeting.



Saturday, August 19, 2017

Triple-Bottom Bounce in Store for US Dollar?

The US Dollar ($USD) has dropped to a triple-bottom major support level of 92.00 and is attempting to stabilize, as shown on the following Daily chart. Fairly major resistance lies overhead at 94.00.

All three technical indicators are still in downtrend and the RSI is still below the 50 level, although the MACD and PMO have recently crossed over to the upside.

It is still trading under the bearish influence of a Death Cross moving average formation, so it's still extremely vulnerable to a break below 92.00 and a swift drop down to its next major support level of 84.00.

Such a drop could be very threatening for equities, inasmuch as further weakness in both of these could see investors incur fairly catastrophic financial losses. As such, we may see $USD buyers step in any time now.

I've recently described a scenario for a potential short-term bounce in equities here, and another scenario for potential longer-term equity weakness here.

What the US Dollar does in the near-term, as described above, may influence what happens in equities...another tool that can be monitored, in this regard.


The following Monthly chart shows other longer-term support levels.

At the moment, the Momentum indicator is making a new swing low, hinting at further (longer term) weakness ahead...so, keep an eye on the daily activity in the near-term and the 94.00 and 92.00 levels for any (sustained) breakout or breakdown.


Longer-Term Weakness Ahead for Equities?

Most Major U.S. Indices (with the exception of the Dow 30 and Dow Utilities) are now below their 50-day MA, as shown on the following Daily chartgrid.


The following tables (Source: www.barchart.com) depict where the percentages of stocks in those indices were trading above a variety of moving averages two weeks ago.




The next set of tables depict where their percentages are as of Friday's close.

You can see the dramatic shift from green to red, not only on the 50-day MA, but also the erosion beginning on the 100, 150 and 200-day MAs.




Even if we did see a "short-term Jackson Hole bounce" into next week, as I described here, it may be that, in the medium-to-longer term, the next overall prognosis for equities is further weakness ahead.

So, it may be prudent to track these percentages over the weeks to come, along with the SPX:VIX ratio mentioned in my post, to measure any further erosion and the velocity of such erosion.

It could be that we may not see any kind of meaningful and sustained buying enter the markets until most stocks are at, or below, the 200 MA.

Short-Term Jackson Hole Bounce on the Table

Further to all the UPDATES noted on my original post of August 15th, I would note that, as of Friday's close, the SPX:VIX Ratio managed to stay above the critical 150 Bull/Bear Line-in-the-Sand major support level, but remains well below the 200 New Bull Market resistance level...as shown on the following Daily and Monthly ratio charts.

Next week, we could very well see a re-test of the 200 level (which happens to intersect with the 200-day moving average), in anticipation of any favourable news from global Central Bankers, policy makers, economists and academics attending the upcoming annual Jackson Hole Economic Policy Symposium (August 24, 25 & 26), before traders make a final commitment, one way or the other, as to longer-term direction...Fed Chair, Janet Yellen is scheduled to speak on August 25 at 10:00 am ET and ECB President, Mario Draghi is also expected to speak at some point.

For further details on what to watch for on a variety of timeframes, I'd direct your attention to my recent post on this ratio here.



Tuesday, August 15, 2017

Volatility Ramping Up in 2017

* See UPDATES below...

Further to my post of August 10th, the following Daily chart of the VIX shows that the same number of volatility price spikes has already occurred, so far this year, as made in all of last year.

A series of higher swing highs on the RSI, since Q4 of 2015, is hinting that each price spike made, since then, was done so with greater strength. We're seeing rising wedges form on the MACD and PMO indicators, suggesting that we may see the next price spike break out to new highs this year, with much higher force behind it, sending equity prices on the SPX plunging.

Call me cynical, but it seems to me that the escalating confrontational political rhetoric coming from the White House and Washington, of late, and the ensuing fallout playing out right before our eyes, indicates a fraying, or even an unraveling, of the current administration and its agenda...and, this is being reflected in this chart. So, as I said in the above article, buckle up!


* UPDATE August 17 @ 1:00 pm ET:

And, so the fractures in the White House agenda begin, with respect to tax cuts and tax reform...

Saturday, August 12, 2017

North Korea: No Peace Without Compromise

In my humble opinion, unless North Korean Leader Kim Jong-un and President Trump agree to effectively resolve their differences to their mutual satisfaction, there will be NO peaceful resolution to NOKO's goal of nuclear armament and threats to the U.S. and its allies.

Case in point...my post entitled "The Art of Conflict Resolution" outlines a path toward peace...in other words, they both need to have one common goal...plain and simple.


On the flip side...An act of war by one side will guarantee a response of war by the other...one common goal exists in that scenario.


So, if that scenario is a possibility, why not one that encompasses an opposite peaceful common goal? In which direction will both sides focus their attention? We'll see...

Hint...Observe which option each one is most actively and vigorously pursuing and most sincerely committed to enacting...that will give you a clue as to the direction this is headed and, ultimately, the most likely outcome...actions speak louder than words.


Thursday, August 10, 2017

SPX:VIX Ratio: "Major Conflict Zone" Awaits

After today's dramatic 36-point drop in the SPX, price on the SPX:VIX ratio plunged to the upper edge of a "Major Conflict Zone" and the "Bull/Bear Line-in-the-Sand" level, as shown on the Monthly ratio chart below.

A drop and hold below this critical 150 major support level will seal the fate of increased volatility and lower prices for the SPX. The Momentum indicator has also fallen below the zero level, confirming that instability is in store for this index, for the longer term, if it stays below zero.


Each candle on the following ratio chart of SPX:VIX represents a period of One Quarter.

As of today's close, the current candle (Q3 of 2017) is forming a massive bearish engulfing candle on, not only Q2, but also Q1. The lows of both of those candles are just above this 150 major support level, so a drop and hold below that would signal extreme weakness for the balance of this year. The downtrending Momentum indicator is also confirming such weakness.

We'll see how this candle closes at the end of September, as it, along with the above monthly timeframe, could provide further insight into how well Q4 may perform.


In the meantime, I'd watch to see whether the Momentum indicator makes a lower swing low on the Weekly timeframe (see ratio chart below), as confirmation of further weakness ahead for the SPX in the medium term, should price breach the 150 level.


The Momentum indicator made an historical low on the Daily timeframe, as shown on the following ratio chart...signalling that volatility may, indeed, be ramping up in the short term...so, buckle up!


Wednesday, August 09, 2017

Welcome to the Swamp, Mr. President!

It's "non-business as usual" for Congress, in spite of what (Republican) voters expected in 2016 and were promised for 7 years by Republican politicians. 

After hearing his unseemly public spanking of President Trump's and the American people's intelligence during his speech to a Rotary Club gathering in Kentucky on Monday, it appears to me like Senate Majority Leader McConnell doesn't want to take responsibility for his party's epic failure on healthcare reform, but would rather, shamelessly, shift the blame onto the President and Americans.

Wait 'till November 2018, Mr. McConnell...if nothing's accomplished by then, watch your party power drain from the swamp.