Further to my last weekly market update, here is a summary of where money flow ended for Week 3 of March, 2012.
The Weekly charts below of YM, ES, NQ & TF show that they all made a higher close than the prior week. The uptrending channel is still holding as support and direction for the Weekly timeframe. Secondary support levels lie at the middle Bollinger Band (12386 for YM, 1291 for ES, 2419 for NQ, and 768 for TF...note the bullish crossover of the mid-BB with the 50sma on TF this week...now the mid-BB is above the 50sma on all 4 e-mini futures indices).
As I noted in my post of March 15th, if the Major Indices are going to continue a convincing rally from here, it will be important for the Russell 2000 to break (convincingly) and hold above its February highs to provide added fuel. A failed breakout could lead to the onset of weakness, not only in this index, but also in the others.
The three Daily charts below depict support and resistance levels on the percentage of Stocks Above 20-Day, 50-Day, and 200-Day Averages.
Stocks Above 20-Day Average advanced higher to close just above the prior 60% resistance level...one to watch to see if it holds as support.
Stocks Above 50-Day Average inched higher to close just below the 70% resistance level, once again...one to watch to see if it continues to hold as resistance.
Stocks Above 200-Day Average inched higher to close just above the 70% resistance level, once again...one to watch to see if it holds as support.
The closing levels on all of these three charts are higher than the prior week. I'd conclude that, in the short and medium term, stocks remain mildly bullish, and in the longer term, stocks remain bullish.
The VIX fell by 7.48% this past week, as shown on the graph below. Please see the comments in my post of March 9th as related to major volatility resistance on the SPX:VIX ratio. The Daily ratio chart below shows that the SPX broke out relative to the VIX since then, thereby reversing the previous negative divergences on the RSI, MACD, and Stochastics. As the SPX is near the top of an uptrending channel in this ratio scenario, we'll see whether the SPX pauses or pulls back any time soon.
As shown on the graph below of the Industry Groups, the major loser was Gold/Silver once again. Financials was the big gainer, followed by Brokers. We'll see whether this weakness in metals and strength in financials/brokers, et al, continues next week.
For my latest update on the Financials ETF (XLF) versus SPX and U.S. $, I would direct you to my post of March 13th.
As shown on the graph below of the Major Sectors, Financials was the big gainer, and Utilities was the only loser...ones to watch for either continued strength/weakness, or a pause/reversal next week.
As shown on the graph below, the biggest gains occurred in the European and U.S. Financials Sectors (EUFN and XLF). A small gain was made in the Chinese Financial Sector (GXC), and a modest gain made in the Emerging Markets Sector (EEM). Small gains were made, overall, in the Commodities Sector (DBC) and Agricultural Sector (DBA).
Further to my post of March 15th, I'll be watching GXC and the Shanghai Stock Exchange Index in view of recent negative data released on China's Trade Balance and Foreign Investment. The uptrend was broken this week on the Index on the Daily timeframe on negative divergences in the RSI, MACD, and Stochastics, as shown on the chart below. Near-term support lies at the 50 sma and resistance just below the 200 sma. Additionally, any further drop in this Index may negatively affect EEM (see my post of March 12th for the latest update on EEM and the BRIC countries).
As shown on the graph below, the S&P 500 outperformed Gold and Silver, which lost, and Oil, which had a minor gain. Copper gained, as well. As mentioned in my post of March 15th, Thursday's bullish 50/200 sma Golden Cross on the Daily chart of Copper may provide further fuel for an equity rally...one to watch for a potential breakout above its trading range which began in mid-January.
As shown on the graph below of the Major Indices, the Dow Transports gained the most, while the Dow Utilities lost on the week...ones to watch for either continued strength/weakness, or a pause/reversal.
As shown on the currency graph below, the British Pound gained the most, followed by the Aussie $. Minor gains were made by the Euro and Canadian $, while the a minor loss was made by the U.S. $. Should Gold continue to fall, we may see further losses on the U.S. $, particularly if equities continue to advance...two to watch for any possible correlation.
Enjoy your weekend!
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