Welcome and thank you for visiting!

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

* 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.
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* In answer to this often-asked question, please be advised that I do not post articles from other writers on my site.
* 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...please read my full Disclaimer at this link.


* If the dots don't connect, gather more dots until they do...or, just follow the $$$...





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Friday, August 31, 2012

Money Flow for August Week 5

Further to my last weekly market update, this week's update can be summed up in three words...more profit-taking.

The following Weekly charts and graphs (for the past week) of the 6 Major Indices and 9 Major Sectors show that these markets have not advanced for a second week as they struggle at major resistance.

The following two charts and graphs depict money flow for the month of August. You can see that the majority of interest/buying occurred in the riskier growth-oriented Technology and Small Cap Indices and Sectors versus a virtual non-interest in the value-oriented defensive Indices and Sectors.

In summary, whether we'll see a rotation of Sector preference in September remains to be seen. I suspect that market action will, generally, be news-driven as we await important decisions by the Fed, ECB, Germany's Constitutional Court ruling on the legality of the ESM, Eurogroup meetings, further economic data, the Dutch election, and any fall-out from the U.S. election campaigning, etc.

Since this tends to produce volatility, I'll continue to monitor it as depicted by the following Daily ratio charts of the SPX:VIX and RUT:RVX. As of Friday's close, both the S&P 500 and Russell 2000 Indices are sitting near the apex of trendline/channel resistance/support. Volatility has been rising the past two weeks and a break of the apex one way or the other is inevitable soon. We may see a build in volumes as price tries to establish a trend away from the apex...something else I'll be monitoring in order to assess the viability/sustainability of such a move. Perhaps we'll see a rotation into the more defensive Sectors and Large Cap Indices in preparation for volatility.

Enjoy the long weekend and best of luck next week!