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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

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

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Events

UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. Nov. 29 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Wed. Dec. 5 @ 2:00 pm ET ~ Beige Book Report
* Fri. Dec. 7 @ 8:30 am ET ~ Employment Data
* Wed. Dec. 12 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. Dec. 19 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
* Tues. & Wed. Dec. 25 & 26 ~ Canadian markets closed for Christmas & Boxing Day Holidays
* Tues. Dec. 25 ~ U.S. markets closed for Christmas Day Holiday & close early @ 1:00 pm on Mon. Dec. 24
* Wed. Jan. 30 @ 2:00 pm ET ~ FOMC Announcement
*** Click here for link to Economic Calendars for all upcoming events

NOTABLE POSTS WITH IMPORTANT UPDATES...

Sunday, December 09, 2018

The Major Inflection Point For The SPX

Further to my post of December 2, it's evident from the following daily charts of the four U.S. E-mini Futures Indices that they all broke and closed below both their "chaos zone" (the trio of future-offset 5, 8 & 13 MAs) and their 50 & 200 MAs, respectively, last week...a failure to hold above those major support levels.


Price on the SPX is currently hovering above 2600, as shown on the following monthly chart.

It's clearly a major inflection point for a couple of reasons...namely, it's a major price support level, and it's right along the upper edge (+1 standard deviation level) of a long-term regression channel from the lows of 2009.

As I stated in the above-mentioned post, the SPX is now in danger of dropping to its next major support level around 2400, as more fully illustrated in my post of August 6.

In fact, 2400 is...
  • slightly below a confluence of two external Fibonacci retracement levels around 2473 and 2485
  • just above the lower monthly Bollinger Band at 2372
  • above a convergence of a -1 standard deviation level of the regression channel with a 161.8% external Fib level at 2347, and the 50-monthly moving average at 2332

Extreme weakness on accelerating downside momentum may just see price reach 2400, or lower, before, possibly, stabilizing.


Furthermore, price on the SPX:VIX ratio is well below the Bull/Bear Line-in-the-Sand level and is approaching the 100 level, which represents an extremely volatile zone, as shown on the following monthly ratio chart.

The momentum indicator closed at its lowest historic reading on this timeframe last Friday, confirming that extreme volatility is already present in this ratio.

A drop and hold below the 100 level on the SPX:VIX ratio, together with a drop and hold below 2600 on the SPX could very well see the SPX drop to somewhere around 2400 in short order.


Sunday, December 02, 2018

U.S. Futures Sunday Gap Breakout

As I'm writing this on Sunday around 7:30 pm ET, the four U.S. E-mini Futures indices have gapped up and are currently trading above a "chaos zone" of a trio of future-offset 5, 8 & 13 moving averages (green, red & blue), as shown on the following daily charts of the YM, ES, NQ and RTY.

Both the YM and ES are above the 50 MA (pink) and 200 MA (yellow). Both the NQ and RTY are trading under the bearish influence of a moving average Death Cross formation. The NQ is slightly above its 50 MA, but slightly below the 200 MA, whereas the RTY is below both of those.

On a short-term basis, I'll be looking for price on all four E-minis to hold above, firstly the moving average trio and, secondly, their 50 MA to maintain a bullish bias, whereby we may, potentially, see them retest their highs of this year or even set new records before year end (the RTY will have to first break above its 50 MA).


Price on the following SPX:VIX monthly ratio chart popped back above the 150 Bull/Bear Line-in-the-Sand level on Friday.

We'll need to see it hold above 150 to corroborate a bullish bias and an advancement on the ES, as mentioned above.

Failure of the 4 E-minis and the SPX:VIX ratio to hold above these moving averages and price level, respectively, could see the SPX drop to 2400, as I recently described here.


Sunday, November 25, 2018

"U.S. Growth Slowing In 2019 Q1 and Recession In 2019 Second Half"

David Prince of Harbinger Capital Markets Research talks with BNN/Bloomberg's Greg Bonnell about world markets in the following two videos, which aired on November 23...he's standing by his call for U.S. growth to slow in 2019 Q1 and for a recession in the second half of 2019.

This ties in with my posts pertaining to world market chaos, which can be read here...they describe the various market gauges that I'm monitoring on a variety of world markets and their potential outlooks.



Monday, November 19, 2018

Will U.S. Markets Rally Or Tank Into Year End?

Just a few words describe U.S. market action, so far, this year, as depicted on the following monthly, weekly and daily charts of the SPX (N.B. the 'input value' for both the momentum and rate-of-change indicators is shown as 'one' and in histogram format to emphasize the following)...
  • indecisive
  • increased expansion/contraction (fluctuation) of volatility (compared with 2016 and 2017)
  • lack of convincing directional follow-through on a weekly and daily basis
  • in other words, profits have been taken, but there is a hesitation to commit to a larger-scale sell-off

While the the weekly and monthly uptrends have not yet been broken, the weekly action has been lacklustre/non-committal, and the daily uptrend has been badly damaged.

I'd keep an eye on both the MOM and ROC indicators to see whether they begin to expand, and in what direction (using the aforementioned input value), and for how long, to determine their directional conviction/sustainability in the coming days/weeks, as we approach year end.




Additionally, it's worth monitoring the SPX:VIX ratio, as I most recently described here.

To support a convincing resumption of buying in the SPX, price on SPX:VIX will need to hold above the 150 level, the RSI will need to hold above 50, we'd need to see a sustained increase in the MACD histogram bars above its zero level, the PMO will need to rally and hold above its zero level, and the bearish moving average Death Cross formation will need to reverse and form a new bullish Golden Cross.

Otherwise, a drop and hold below 150 on this ratio could produce a larger-scale sell-off in the SPX (to, potentially, 2400, as I described here) on expanding (downside) momentum, rate-of-change, and volatility to, finally, break the weekly uptrend with conviction.


Sunday, November 11, 2018

China's Shanghai Index & Yuan At Potential Inflection Points

My post of October 11 mentioned that China's Shanghai Index broke below a major monthly swing low level of 2638.30 and that it could be headed for its next major support level at 2260, or lower.

Since then, price has fluctuated in both directions and has been attempting to stabilize, but remains just below that former swing low...a potential major inflection point.

Overlayed on all of the following three charts of the USD/CNY forex pair is the Shanghai Index (shown in pink). After price peaked in January of this year, it began an 1,140 point decline, in divergence with a rally in the USD/CNY.

The following monthly chart of the USD/CNY forex pair shows that its price is also now at a potential inflection point...the last swing high set in January 2017, following the November 2016 U.S. Presidential election.

Both the momentum (MOM) and rate-of-change (ROC) indicators (of USD/CNY) have surpassed the January 2017 highs and are at historical highs on this timeframe...hinting at further strength on this timeframe.


On a weekly timeframe, both the MOM and ROC (of USD/CNY) have declined and remain just above the zero level in divergence with this latest price bounce, which began at the end of August...hinting at a potential pullback on this timeframe.


On a daily timeframe, both the MOM and ROC (of USD/CNY) have declined and are just below the zero level in divergence with this latest price bounce, which began at the end of August...hinting at a potential pullback on this timeframe.


In conclusion, both the Shanghai Index and the USD/CNY forex pair are at or near potential inflection points, so it's worth keeping an eye on both to see whether they, either continue to diverge, or whether they both reverse and begin to converge in the near term.

In this regard, monitor the action of the MOM and ROC indicators around their respective zero levels on both the daily and weekly timeframes for clues on direction and strength in the short and medium terms.

As an aside, it would also be interesting to hear whether any chatter arises about whether President Trump declares that China is manipulating its currency any time soon -- which seemed to have been discussed, then dismissed, following the 2016 election -- and whether, and to what extent, such talk affects both the USD/CNY and Shanghai Index.

Friday, November 09, 2018

World Market Headwinds Escalate On A Shift Away From Harmonic Globalism

INTRODUCTION


In my Market Forecast for 2018, I thought that, taking into consideration the uncertainty of the 2018 U.S. midterm elections, coupled with likely interest rate hikes, we'd probably see:
  • volatility rise in 2018 and the SPX and other U.S. Major Indices gain only about half of what they gained in 2017, which would mean an approximate increase of 10% for the SPX
  • that Technology would remain fairly strong, while Small-Caps would likely struggle more than Big-Caps
  • that U.S. markets would continue to outperform other World markets (with the performance of their financials playing an important part)

WHAT HAS HAPPENED, TO DATE, IN 2018


At its all-time high set on September 21 of this year, the SPX had gained 9.62% year-to-date, as shown on the first percentage graph.

Since then, we've seen profits decline to a point whereby only 4.02% of those gains remain as of today's (Friday's) close, as shown on the second year-to-date graph.



You can see from the following daily SPX:VIX ratio chart that volatility increased greatly (doubled) this year, compared with 2017.

Watch for a bearish Death Cross moving average crossover form in the coming days. If that holds, as well as a drop and hold below 150, we'll see further selling occur in the SPX.


The following monthly charts of the S&P 500, Germany's DAX, France's CAC, Italy's FTSE MIB, India's Nifty 50, China's Shanghai, Australia's S&P/ASX, and the Nasdaq Composite Indices show that the Momentum indicator (MOM) has been in decline all year...MOM is below the zero level on all of them, hinting at further weakness ahead on this longer term timeframe, especially if we don't see strong, sustained, convincing buying come in soon.


The following percentage graph shows that, from the March 6, 2009 lows of the SPX (666.79) to Friday's close, the Nasdaq Composite has gained the most, while the Shanghai Index has gained the least.


The following year-to-date graph shows that the Nasdaq Composite is the strongest, while the Shanghai Index is in bear market territory.

Not shown on this graph is the Russell 2000 Index, which has only gained 0.91% YTD and has, in fact, struggled more than Big-Caps since it began to decline after August 31, at which point it had gained 13.37% from the beginning of the year. It's in correction territory.


The following one-month graph shows that buying has occurred in the Nifty Index, while selling has accelerated in the others.


The following monthly chart of the MSCI World Index shows that price pierced below the median of a long-term uptrending Andrew's Pitchfork formation on accelerating downward Momentum (MOM) and is attempting to bounce back to its median.

Failure to recapture and hold above its median, together with continued downward MOM, will indicate further weakness ahead for major world indices.


The following daily chart of the MSCI World Market Index (ex USA), shows how weak other world markets are in comparison with the U.S. markets.

Failure to recapture and hold above 1850 could see this Index retest its 1750 level. If that happens, I think we'll see further selling in the U.S. markets.


The following percentage graph shows that the MSCI World Market Index (ex USA) gained 101.09% from March 6, 2009 to Friday's close.


The following percentage graph shows that the MSCI World Market Index (ex USA) has lost 10.27%, so far this year, and is in correction mode.


CONCLUSIONS


Based on the combative political rhetoric I've seen leading up to and, especially, since the U.S. midterm elections this week, I think that will increase on all sides (Democrats, Republicans, media, and President Trump) until the 2020 elections. In fact, I think that will be like what we've witnessed in 2017/18 on steroids.

I'll go so far as to posit that Democrats have (unwittingly and conveniently) now become the President's scapegoat, so that when the U.S. economy slows in 2019 and shows signs of recession in 2020, he can simply blame Dems for obstruction, gridlock and a waste of taxpayer dollars on endless investigations into his administration. It will cannibalize some (or a considerable amount) of the economic and market gains made since the Presidential election in November 2016 under Trump, and he will accuse Dems of destructive governance and legislative failure as a platform on which to run in 2020.

A failure of U.S. and world markets to recapture convincing sustained buying and to reduce volatility, coupled with escalating domestic and foreign political unrest, as well as President Trump's trade wars and a world-wide shift from an embrace of harmonic globalism to a more divisive world order of nationalism/protectionism will signal, either continued market gridlock/consolidation, or escalating weakness.

Government, corporate, banking, and/or personal debt crises will determine exactly if/when the 9-year bull market bubble blows up, I think.

CLOSING REMARKS


Appearing in the Profile section on my trading blog is the following:


From volatile, whipsaw market action (as evidenced in the above charts and graphs), contentious world-wide political rhetoric and actions, weakening global financials, military buildups, and even increasingly severe weather disturbances, etc., so far this year, I'd say that all three of those behaviours are in retrograde to some degree or other. It's unlikely all of it will abate any time soon.

Buckle up!