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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

* 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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* 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.

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





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Thursday, July 31, 2014

Japan's Nikkei at H&S Major Resistance

As shown on the following Weekly chart of the Nikkei E-mini Futures Index, price has now reached a potential Head & Shoulders major resistance level.

Failure to hold above the 15500 level may see price plunge back down to the neckline at 14000. A break of that level with conviction puts the H&S pattern target at 11500.

Stay Buckled Up...More Volatility Ahead as July Closes!

My last post on the SPX:VIX ratio refers. I mentioned that price on the Weekly ratio chart below may retest the 130.00 level and then rally. On Thursday of this week, price not only retested 130.00, but it blew right below to close around the 110.00 major support level.

Momentum has dropped below the zero level, indicating further weakness may be ahead.

The Monthly chart below of the SPX:VIX ratio shows that a massive outside bearish engulfing candle has now formed on the July candle (to close out this month) and that Momentum has also dropped below zero on this timeframe...also signalling we may see further weakness ahead.

The question is whether we see weakness continue and accelerate on Friday and next week, or whether we see price fluctuate wildly to consolidate or bounce and resume its upward trek for awhile before a potential next leg down.

The following Daily chart of the SPX:VIX ratio shows that Momentum has dropped to a very low level on this timeframe, which has typically been followed by some kind of consolidation or bounce...one to watch in the days ahead for possible clues on market direction and conviction.

Price action on the Dow 30 has seen a break below both a 60% Fibonacci fanline and rising channel from the 2013 breakout, as shown on the Daily chart below.

Price on the SPX has dropped to the 50% Fibonacci fanline and bottom of the rising channel from the 2013 breakout, as shown on the following Daily chart.

Price on the RUT has dropped below the 60% Fibonacci fanline and and well below the bottom of the rising channel from the 2013 breakout, as shown on the following Daily Chart.

Failure of the Dow and RUT to reclaim their respective channels, and failure of the SPX to remain within its channel will likely see further weakness develop in these three Major Indices...stay tuned for further intraday volatile price swings either way!

Saturday, July 26, 2014

Price Action in the SPX:VIX Ratio Still Volatile...

Further to my last post on the SPX:VIX ratio, price is still consolidating and we're awaiting a break one way or the other (above 180.00 or below 110.00).

Meanwhile, volatile swings continue, pushing down record-high Momentum levels...a drop below the zero level (see Weekly chart below) could see a break of this weekly uptrend begin to the downside (around the 110.00 price level). However, we may see a retest of the 130.00 level on the pretext of a major breakdown followed by a surge in price action.

Buckle up!

Friday, July 25, 2014

The Shanghai Shuffle 'n Surge

China's Shanghai Index has been quietly rallying since it approached the 2000 major support level once again in mid-June, as shown on the Daily chart of SSEC below. A recent surge has pushed price above the 200 MA, while the RSI, MACD, and Stochastics indicators remained above the zero levels and continued to rise.

Near-term support sits around 2090...a hold above this level should see price continue to rally.

The following Daily ratio chart of SSEC:SPX shows a recent firming at 3-year lows and a minor push above the 50 MA (at 1.053), with rising RSI, MACD, and Stochastics above the zero level.

Near-term support sits around 1.050...a hold above this level should see price continue to strengthen against the SPX.

The following Daily ratio chart of SSEC:EEM shows a recent firming at 3-year lows below the 50 MA, while the RSI, MACD, and Stochastics remain below the zero level.

Near-term resistance sits around 47.50...a break and hold above this level should see price continue to strengthen against EEM. However, it has yet to signal that it will outperform the EEM, even though it's giving the impression that it may.

We'll see whether traders continue to hold their long positions in the SSEC for any sustained length of time or whether this was simply a short-term technical trading opportunity off a triple-bottom formation in May. Monitoring the two ratio charts above, along with their indicators, should help to clarify any continued serious strength in this index.

Friday, July 18, 2014

Canada's Inflation Rate for June 2014 Increased to 2.4%...Trend or Anomaly?

Canada's inflation rate continued to rise from 2.3% in May to 2.4% in June, as reported today by Statistics Canada.

Is this the continuation of a longer-term trend, or simply temporary? Time will tell.

As I mentioned in my post of June 20th, a break and hold below 1.065 for the USD/CAD Forex pair may cause some concern for the Bank of Canada. That level was hit last week, as shown on the following 10-Year Weekly chart before it bounced and retested a 40% Fibonacci level at 1.08 and declined to its current level 1.0736 as I write this during Friday's trading session.

This is a chart worth watching, along with my chart posted overnight of GOLD, to watch for a break and hold of one of these resistance or support levels...higher GOLD prices may include a strengthening of the Canadian Dollar against the U.S. Dollar.

GOLD - Next Hurdle is 1400

If GOLD can hold above the 1300-1330 major support level shown on the 5-Year Weekly chart below, the next resistance level is around the 1400 level.

There is a convergence of the 50-week moving average, mid-Bollinger Band, -1 deviation level of the downward-sloping channel, and the 5-Year Volume Profile POC (pink line along the right side of the chart) at this major support level.

GOLD has, generally, been under accumulation since June of 2013, although it has been trading in a large range between 1180 and 1400 since then...one to watch in the coming days/weeks, particularly in light of Thursday's major geopolitical events in the Ukraine and Israel/Gaza Strip.

Thursday, July 03, 2014

"RISK-ON" Theme to Begin Fourth of July Fireworks

Since the lows of 2009, markets have been trending upwards, generally, with a couple of pullbacks in 2010 and 2011.

From the Weekly comparison chart below of the Dow, S&P 500, Nasdaq 100, and Russell 2000 Indices, you can see how much markets have gained, percentage-wise, since those lows. The Nasdaq is in the lead, followed by the Russell, S&P, and the Dow, thanks to the Fed's monetary policy pertaining to financial price stability, inflation, and unemployment concerns.

Since Janet Yellen indicated in her speech to the IMF on July 2nd that their monetary policy does not need to deviate from those concerns, I'd expect this bull market to, basically, continue until that changes. There may be periods of volatility over the next year or two that may be influenced by world incidents, or even by month-to-month economic data, especially concerning inflation or corporate earnings, but until we see any political uncertainty arise in the markets closer to the U.S. Presidential election in 2016, we may see a steady climb continue.

The next Weekly chart is the ratio of the SPX:VIX. This week's trading closed above near-term resistance of 180.00 and Momentum made another higher (all-time) swing high. Price may fluctuate between 180.00 and 150.00 before a further climb is made, if the 180.00 level (now near-term support) is breached.

The following Daily chart of the S&P 500 E-mini Futures Index (ES) shows a steady climb upwards in its channel from the 2013 breakout towards a confluence of the channel median with a Fibonacci Fanline and a Fibonacci extension level around the 1990 or 2000 level, as I mentioned in my post of June 8th (I was a little early in my projected date of the end of June for this target).

One thing I'm noticing on this chart is the drop-off in volumes...one to watch over the coming days/weeks to see if this trend continues, whether it has any effect on this upward climb, or whether we see more volumes pour into the Nasdaq and Russell Indices to confirm a full "Risk-On" scenario. This latter scenario would become evident over time on the comparison chart above...another one to watch.

Happy Fourth of July to my U.S. friends! Have a fun and safe long weekend.