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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) ECONOMIC EVENTS...
* Wed. Apr. 5 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Fri. Apr. 7 @ 8:30 am ET ~ Employment Data
* Fri. Apr. 14 @ 8:30 am ET ~ Retail Sales
* Wed. Apr. 19 @ 2:00 pm ET ~ Beige Book Report
* Tues. May 2 ~ 2-day FOMC Meeting Begins
* Wed. May 3 @ 2:00 pm ET ~ FOMC Announcement
* Tues. June 13 ~ 2-day FOMC Meeting Begins
* Wed. June 14 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts + @ 2:30 pm ET ~ Fed Chair Press Conference
*** Click here for link to Economic Calendars for all upcoming events

Saturday, March 25, 2017

3 Trillion Dollars Now at Risk...and More

Three Trillion dollars gained in the U.S. markets since the Presidential election in November 2016 are now at risk...and more.

With the recent failings of two attempts by the President to implement temporary travel restrictions from several foreign countries via his executive orders, and the failure of Republicans to reach a consensus on passing a bill that would have repealed and replaced ObamaCare, one has to wonder whether Republicans can, in fact, ever reach agreement on any of President Trump's economic, fiscal, national security, tax and regulation reform, and immigration reform agenda.

Combine these recent failures together with ongoing intelligence investigations of election activities and of the President and his campaign officials, themselves, as well as the Senate's inability to have confirmed a full Trump cabinet and a new Supreme Court Justice, to date, and we're left with a big question mark in that regard.

Unless Republicans pledge their complete loyalty to the President and become united in their efforts to seriously move that agenda forward as a professional governing party, nothing will be accomplished in the next two to four years. They are risking three trillion dollars that have been pledged by market participants in their faith that they would, in fact, do that very thing...and, likely, much more is at stake.

If they simply attempt to stumble forward, like a bull in a china shop, with fractured ideas and methods without, first, addressing and fixing that problem, they are assuring continued failure of this President and their party. In fact, I'd suggest that their future as a viable governing party is at risk at this very moment and they'll be doomed to limp along forever as an infantile opposition party.

So, the time for individual political posturing and gamesmanship is over. It's time to put your constituents' livelihoods and that of your country's ahead of your own agenda, roll up your sleeves and hammer out solutions with your fellow party members and that of your leader. That's what successful societies do.




Make no doubt about it...markets will make their own interpretations as to how serious politicians are at coalescing and advancing this ambitious agenda. Right now, they're at a crossroads, as evidenced by the pause that the S&P 500 Index has taken this month, as shown on the following Monthly chart of SPX.

Price is sitting just above a 161.8% external Fibonacci retracement level, after hitting a new high at 2400. A drop to the next Fibonacci level would see price hit somewhere around 2200. That would also tie into the next support level (provided by the median of a long-term uptrending channel), as shown on the next Monthly chart of SPX.

Such a drop could be sooner rather than later, as well as swift, and, perhaps, be the jolt that makes Republicans finally sit up and take notice of how their actions (or inactions) are affecting more than just themselves. We'll see if they're willing to take that risk, or whether they can act more quickly than markets.

Monthly SPX

Monthly SPX

Finally, my post of March 10th and update of March 19th mentioned a level of 200 as being an important "new bull market territory" level on the SPX:VIX ratio.

The following Monthly ratio chart of SPX:VIX shows that price has fallen below that level. As long as price holds below that level, we'll see an increase in volatility in the equity markets. We could see price on this ratio drop as low as 150, or lower, if the SPX does drop to 2200.

Any further setbacks for the Republican administration in the near term would, likely, compound existing political problems and contribute to such a drop.

Monthly SPX:VIX Ratio


Friday, March 10, 2017

SPX: New Bull Market Territory Awaits

* SEE UPDATE BELOW...

In my post of February 9th, I mentioned the importance of the World Market Index breaking, and holding above, 1750, as a potential signal of support for world equities, in the longer term, including that of the S&P 500 Index (SPX).

Since then, the World Market Index has, indeed, broken above and dipped back below 1750 several times, and closed out this week (March 10th) just above that level, as shown on the Daily chart below.

The RSI is in downtrend, but popped back above the 50 level, while the MACD and PMO indicators have yet to form bullish crossovers and remain in downtrend.

Daily World Market Index

The SPX was, at the time of the above-referenced post, languishing just below 2300. It closed out this week at 2372.60, after my projected December 2017 target of 2400 was hit, 10 months early, on March 1st (see my same-day post here), as shown on the Daily chart below.

Short term resistance lies at 2400 and longer-term major support sits at 2300. At the moment, price is within the upper one-third (above 2366) of this resistance/support zone and remains above the middle Bollinger Band (2361.37) on this timeframe...favouring the bulls above these levels.

The RSI remains in uptrend and above the 50 level, while the MACD and PMO indicators have just formed a bearish crossover.

Daily SPX

As shown on the following Daily chart, the SPX:VIX ratio has been swirling around the 200 level since January of this year and closed out the week at 203.48...favouring equity bulls. My last post on this ratio referred to this level as a new bull market territory for the SPX. So far, attempts to hold and advance much beyond this level have been short-lived...an indication that volatility is threatening to increase.

The RSI sits just above the 50 level, while the MACD and PMO indicators have yet to form a new bullish crossover, although downward momentum seems rather muted, so far.

Daily SPX:VIX Ratio

As I mentioned on February 9th, I'd re-iterate that a longer-term sustained advancement (with conviction) of either the S&P 500 Index or the World Market Index is likely interdependent on each other's success. The important (bullish) levels to be held are 1750 for the World Market Index, 2366 for the SPX, and 200 for the SPX:VIX ratio. As well, since the technical indicators remain mixed, I'd like to see all of them form, and maintain, new bullish "BUY" signals on any such rallies.

Exactly how much of an influence U.S. political policies, Presidential executive orders, and new pieces of legislation that may be enacted, as well as forthcoming Federal Reserve rate decisions, may have on such sentiment going forward, remains to be seen. We may get a hint of that when the FOMC announces their next interest rate decision on March 15th, with future guidance and forecasts provided by the Fed Chairperson during her press conference to follow.

* UPDATE March 19th:

With price spiking up well above the 1750 major support level on the World Market Index last week, bullish crossovers have now formed on the MACD and PMO indicators, and the RSI has slightly broken above its tight downtrend with its latest push upward, as shown on the Daily chart below.

World Market Index Daily

There are, potentially, bullish signals forming on the SPX:VIX Ratio, as well, with price attempting to remain above 200, the formation of a new bullish crossover on MACD, and an imminent formation of a bullish crossover on PMO, as shown on the following Daily ratio chart. However, the RSI indicator remains muted, but remains above the 50 level...still a positive sign for equity bulls.

SPX:VIX Ratio Daily

We'll see, however, whether the SPX can remain above its 20-day moving average, if the above two charts firm up in bullish activity. At the moment, it's sitting just above, as shown on the Daily chart below.

*** Perhaps we'll see another push higher over the next couple of weeks, as equity fund managers look to increase, not only their end-of-month profits, but also their Q1 profits for 2017.

SPX Daily

Wednesday, March 08, 2017

CIA, WikiLeaks & iWatch

In this new world of technology and its attendant problems of the hacking of gadgets and products, Apple's iWatch now takes on a whole new meaning after WikiLeaks published material yesterday that is purported to be CIA documents and files related to U.S. intelligence cyber and spying activities.





Apple (AAPL) is nearing a convergence of a couple of Fibonacci levels that may serve as resistance around 145.00-146.00, as shown on the following Weekly chart.

We may see a last-gasp spike towards that level before Apple's market participants decide whether or not they may be influenced by further information and any consequences that may unfold from the above referenced document dump.

Weekly volumes have been lower than average for a few weeks, so I'd watch for an accompanying high spike in volumes as a hint that a top may have been reached.

AAPL Weekly

Wednesday, March 01, 2017

The Art of Conflict Resolution


Just as there is a process into which an artist immerses himself/herself before creating a masterpiece, there is also a process that can be followed for people to resolve conflicts.

The next time you're about to have a "discussion" with someone who may have a differing opinion than you about an issue, you may want to ask him/her if they would like to:
  • be clear about the issue,
  • accurately identify and agree upon what you're both trying to achieve, and
  • effectively resolve an issue to your mutual satisfaction.

If he/she is willing, then it may be helpful if you both take a few moments to use the flow chart below to map out exactly what each of you desires...write out your answers separately, then compare notes. You're both more likely to resolve your situation or issue on a "win-win" basis if you both completely understand each other's points of view and desires. 

Resolving your issue may end up with you both simply "agreeing to disagree," respectfully, then moving on, with no hard feelings toward each other...you will likely develop a deeper relationship, as a result...a better place to be, rather than further apart, wouldn't you agree? And, you would both end up creating your own "masterpiece."

N.B. While you're discussing the issue, you may find that other issues surface...set those aside to deal with another time, using this method...stick to one issue at a time for best results.


P.S. If you're wrestling with several options or paths to follow on a single issue that involves only yourself, you can also use the above approach and play "devil's advocate" (take both sides) in order to decide which option/path would be best for you to implement.

3 Trillion Dollars Added to Markets Since 2016 Presidential Election

Somewhere around 3 Trillion dollars have been added to U.S. markets since the Presidential election on November 8, 2016, with percentage increases, to date, shown on the following graph of the Major Indices.

U.S. Major Indices: Percentages Gained Since 2016 Presidential Election

The next graph shows percentages gained since January 1st of this year.

U.S. Major Indices: Percentages Gained Since January 1, 2017

Undoubtedly, market participants have faith in President Trump's ambitious reform and stimulus agenda, which was emphasized by today's market reaction to what he delivered in his first Joint Address to Congress last night. I'd dub him as a high-energy hunter-gatherer who settles for nothing less than winning...so, I'd watch market action going forward to gauge how well he's accomplishing his goals.

In that regard, I'd like to see these indices, generally, remain above their 50-day moving averages as confirmation (as outlined in my post of February 11th). Otherwise, a drop and hold below could signal a reversal of bullish market sentiment and endorsement of his unfolding agenda.

U.S. Indices 1-Yr. Daily

Today's "Shout Out" -- 2017 SPX Target Hit 10 Months Early!

Further to my post of February 18th, the S&P 500 Index (SPX) hit this year's projected target of 2400 today (March 1st) -- 10 months ahead of schedule -- and set another new all-time high in the process!

SPX 5-Yr. Daily

All other U.S. Major Indices also participated in setting new record highs today, with the exception of the Utilities Index. It, however, is in a strong uptrend.

U.S. Major Indices 1-Yr. Daily

The following graph shows percentages gained in the Major Indices since January 1st of this year.

U.S. Major Indices: Percentages Gained Since January 1, 2017

With bullish sentiment still strong, the SPX remains on track to hit its 2020 projected target of 2700.

SPX 15-Yr. Monthly

Most world markets were also strong today, especially European markets. We'll see if China picks up the pace in the near future.

World Market Indices