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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...
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Thursday, December 08, 2011

Symmetry (or lack of) in motion...



The definition of "symmetry" from Wikipedia:
"Symmetry (from Greek συμμετρεῖν symmetría "measure together") generally conveys two primary meanings. The first is an imprecise sense of harmonious or aesthetically pleasing proportionality and balance;[1][2] such that it reflects beauty or perfection. The second meaning is a precise and well-defined concept of balance or "patterned self-similarity" that can be demonstrated or proved according to the rules of a formal system: by geometry, through physics or otherwise."

It is by the very nature of this definition that the 17 Eurozone countries, with their diverse cultures, fiscal policies, financial policies, and economic strengths/weaknesses, cannot exist in a harmonious monetary sense, or exist in a balance of "patterned self-similarity"...even though it appears that some country leaders would like other countries to function as mini-versions of their own countries. It's my opinion that there will always be problems/discord/disharmony within the Eurozone...to try and "neutralize" each country so that they basically function as mirror images of each other would destroy/neuter each country's uniqueness and diverse offerings...and it begs the question, "Which country should dominate/create the mould?" Any current proposals to their present and long-term crises will be nothing more than band-aid solutions whose sell-by date has expired...the formation of the Eurozone was a disaster waiting to happen...a lack of symmetry in motion, as evidenced by the volatile, non-sensical movements of the markets this year in reaction to their many crises.

Further to my post last night, the following Daily year-to-date charts show where support and resistance levels lie for the Dow 30, S&P 500, Nasdaq 100, Russell 2000, XLF (Financials sector) & DBC (Commodities sector).







The 15-minute chartgrid below of the YM, ES, NQ & TF shows that price closed below the 6-day trading range...a hold below this range could send the Dow, S&P, Nasdaq 100 & Russell 2000 indices down to their next support levels shown on the above charts.


Below is a 4-hour chart of the YM, ES, NQ & TF. Price has closed below the 50 sma (red) on all of them, and below the 200 sma (pink) on all except the YM. With the MACD and Stochastics trending down, price may continue downward, but may, first, bounce slightly to relieve the short-term oversold readings on my RSI indicator.


In order to gauge equity market weakness/strength on any given day, I watch the 1-day 1-minute percentage comparison chart below for confirmation in the EUR/USD, XLF, & DBC...while the Euro was, basically, flat from the open today, there was confirming weakness in the XLF & DBC.


The VIX closed above 30.50...a potentially very bearish and volatile level for the S&P 500...will see if price holds above that level tomorrow...if it does, we could see some siginificant downside movement in the S&P 500 in the days/weeks ahead.