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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

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...

Dots

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Late Summer

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Events

UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. Sept. 26 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
* Fri. Oct. 5 @ 8:30 am ET ~ Employment Data
* Mon. Oct. 8 ~ Canadian markets closed for Thanksgiving Day Holiday
* Thurs. Oct. 11 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. Oct. 17 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Wed. Oct. 24 @ 2:00 pm ET ~ Beige Book Report
* Tues. Nov. 6 ~ U.S. Midterm Elections
* Thurs. Nov. 8 @ 2:00 pm ET ~ FOMC Announcement
* Thurs. Nov. 22 ~ U.S. markets closed for Thanksgiving Day Holiday & NYSE closes early @ 1:00 pm on Fri. Nov. 23
* 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
*** Click here for link to Economic Calendars for all upcoming events

IMPORTANT BLOG POST UPDATES...
* Trade Wars have escalated and now include diplomatic wars PLUS President Trump is cannibalizing prior U.S. market gains with his tariff tantrums against its world trading partners, while destabilizing a delicate world market balance

Wednesday, January 31, 2018

January 2018 Market Wrap-Up

* See UPDATE below...

We could see a tepid recovery of yesterday's "shock drop" in equities (as I described here), until the Fed's next interest rate hike (possibly in March), to send Major Indices to levels somewhat higher than their recent all-time highs. But, we'll likely see higher volatility remain in play and, possibly, more wild price swings, until then.

As I promised in that post, here's January's month-end summary.

DOW 30 INDEX

The first daily chart shows that the Dow 30 Index failed to fill yesterday's gap down and closed 100 points above its low of the day.

Momentum remains above the zero level, but has dropped dramatically after failing to rise to a new high when the Dow made its last new high on January 26. It's an important level to hold in support of such a recovery. Otherwise, a drop and hold below zero would see further weakness in the Dow.


S&P 500 INDEX

The next daily chart shows that the S&P 500 Index failed to fill yesterday's gap down and closed off its low of the day. The VIX is overlayed on this chart and price remains above near-term support of 13.00.

Momentum remains above the zero level, but has dropped dramatically after failing to rise to a new high when the SPX made its last new high on January 26. It's an important level to hold in support of such a recovery. Otherwise, a drop and hold below zero would see further weakness in the SPX.


NASDAQ COMPOSITE INDEX

The next daily chart shows that the Nasdaq Composite Index came within a couple of points of filling yesterday's gap down and closed off its low of the day. 

Momentum remains above the zero level, but has dropped dramatically after failing to rise to a new high when the Nasdaq made its last new high on January 26. It's an important level to hold in support of such a recovery. Otherwise, a drop and hold below zero would see further weakness in the Nasdaq.


RUSSELL 2000 INDEX

The next daily chart shows that the Russell 2000 Index came within about three points of filling yesterday's gap down and closed near its low of the day with a bearish engulfing candle. 

Momentum has dropped below the zero level, and a hold below this signals weakness ahead for the Russell.


SPX:VIX RATIO

The following monthly chart of the SPX:VIX ratio shows January's close just above major support of 200, after dipping and closing below in yesterday's session. You can see that volatility has risen substantially on this ratio this month. It's not yet out of control, but it could be if price drops and holds below 200.

The momentum indicator has risen a bit from yesterday and remains above the zero level. A drop and hold below zero, as well as the 200 price level, would indicate accelerating selling pressure in equities.


And, for a slightly different perspective, this next monthly chart depicts the SPX in the upper half and the SPX:VIX ratio in the lower half (in histogram format of monthly closing prices only).

January's price on the ratio rose back above yesterday's close and is now back above the 20-month moving average (yellow), once more. A drop and hold below this level would coincide with increased selling in the SPX.


As an aside, I'll add the following observations...

10 YRT & US DOLLAR INDEX

The following monthly chart shows a very long view of the 10 YR Treasury rates (green & red candles) compared with the US Dollar Index (blue & pink candles). [I wrote about 10-Year Yields ($TNX) in yesterday's post.]

Momentum of the 10YRT remains above the zero level...an important level to hold if rates continue to rise.


A closer daily view of these two shows that the dollar is trying to form a base, from which to rise, while the 10YRT spiked briefly at the conclusion of today's Fed interest rate meeting, but closed off its high of the day.

Momentum of the 10YRT remains above the zero level, but has failed to make a higher swing high on this latest push higher over the past couple of days. A drop and hold below zero would see some weakness set in and rates fall.


US DOLLAR INDEX

A longer monthly view of just the US Dollar Index shows that price remains below a major resistance level of 90.00...and momentum firmly below zero.


As the dollar attempts to stabilize at current levels, momentum is moving upward and is just below zero on a shorter-term daily basis. Watch for a spike and hold above zero to suggest that the dollar is gaining strength, and for price to break and hold above 90.00. Alternatively, a hold below both of these could see more weakness ahead...two levels to monitor, in combination.


WORLD MARKET HEAT MAP

Lastly, world markets paused on Wednesday, for the most part, following yesterday's large-scale sell-off. We'll see how long that lasts.

Source: CNBC.com

* UPDATE February 2...

Please refer to today's post for an update on the SPX:VIX ratio.