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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

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.
* 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...

Dots

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

Cabin

Cabin

Events

UPCOMING (MAJOR) U.S. ECONOMIC VENTS...
* Wed. May 22 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Thurs. May 23 @ 3:30 am ET ~ German Flash Manufacturing PMI (watch for a hold below 50)...N.B. Jan. 24 PMI came in at 49.9, Feb. 21 PMI came in at 47.6, Mar. 22 came in at 44.7 & Apr. 18 came in at 44.5 (contraction mode deepens!)
* Wed. May 29 @ 2:00 pm ET ~ Beige Book Report
* Fri. June 7 @ 8:30 am ET ~ Employment Data
* Wed. June 12 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Fri. June 14 @ 8:30 am ET ~ Core Retail Sales & Retail Sales
* Wed. June 19 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
*** Click here for link to Economic Calendars for all upcoming events

NOTABLE POSTS WITH IMPORTANT UPDATES...

Saturday, May 18, 2019

RIP Grumpy Cat :-(

Tardar Sauce (April 4, 2012 - May 14, 2019), nicknamed Grumpy Cat.

So sad...she'll be missed...1.5 Million Twitter followers and her own Wikipedia page...


Monday, May 13, 2019

China's Shanghai Index: No Longer A Market Leader

Take a look at this monthly comparison chart of the S&P 500 Index (SPX) versus China's Shanghai Index (SSEC).

While the SSEC literally exploded during 2007 compared with the gains made by the SPX, and made an anaemic attempt in 2015, it's, essentially, gone nowhere since mid-2015.


If this is a harbinger of things to come, I'd say that China is in for a rough ride over the next few years...particularly in light of the current trade war with the U.S. And, it's time for them to negotiate in good faith, as Senator Grassley has tweeted.

You can see from my post of May 6 that major support sits at 2500 for the SSECIf it blows through that level, watch out below!


Source: ZeroHedge.com

World markets closed the day massively in the red on Monday...possibly related to this trade escalation and perhaps other world tensions, e.g., Iran, Venezuela, North Korea, etc., as well as slowing world economies. We'll see how overnight trading fares in China tonight.


P.S. Is anybody besides me getting tired of President Trump's incessant "good-cop bad-cop" tweets/messages regarding trade talks with China? All you have to do is look at this 60 min chart of the SPX to figure out where and when after-hours "bad-cop" tweets/messages were let loose by either him or his negotiators, and when "good-cop" tweets/messages were released during market hours. It's getting silly...and predictable.

And, isn't it about time that he finally outlined a comprehensive trade policy that, not only includes China, but other world countries, as well? It's long overdue, in my opinion!


Saturday, May 11, 2019

Sell In May And Go Away...For The Rest Of 2019?

The following graph of the U.S. Major Indices shows the percentages gained from January 1 to the highs that were made, so far, in 2019 (about a week ago).


In my 2019 Market Forecast post of December 17, 2018, I reported that the SPX gained 9.62% for 2018 and thought that, "2019 is likely to bring the same level of volatility and uncertainty, not just in U.S. equity markets, but in other world markets and world politics, as well." That was based on the assumption that central bankers would continue to tighten their monetary policies, with no further fiscal stimulus packages on the horizon in the U.S. at the time. Since then, the Fed has loosened its monetary policies and has indicated that no rate hikes would be implemented in 2019.

I further mentioned that the SPX may, either, retest its all-time high of 2940.91, or resume further declines, putting it at 2400, or lower, to possibly 2250 or 2000 (on the date of my post, the SPX had closed at 2546.2).

After hitting a low of 2346.58 on December 26, the SPX closed out the year at 2506.85 and has since climbed to a new high of 2954.13 on May 1, surpassing its prior high. It has pulled back a bit to close at 2881.40 on Friday.

After further examination, I'd now add 2800 and 2600 to those major support levels, which are evident on the following weekly chart (shown in simple "area" format). At a glance, 2600 stands out as a "right shoulder" target on a potential "inverted head and shoulders" formation, albeit following a large rally from the 2016 Presidential election, rather than after a decline, which would be more typical for this type of technical formation in order for it to trigger and spawn a new rally to, potentially, new highs.


Inasmuch as the SPX has pretty much fulfilled my forecast in its gains for 2019, we may have just seen the top put in for the year, and we may see it pull back to, at least, 2600, or lower. At the risk of repeating myself, I'll, instead, refer to my recent posts here, here, here and here, which describe the market gauges I'm monitoring in this regard.

Monday, May 06, 2019

China's Shanghai Index Rejected At Major Resistance

* See UPDATE below...

I last wrote about China's Shanghai Index (SSEC) on March 25, at which time I identified 3150 as major resistance. Price had closed at 3043.03 that day.

Since then, price briefly broke above 3150 to hit a high of 3288.45 on April 8, and, after retesting that level several times over the next few days, it finally broke and closed below on April 25. In Sunday's overnight trading it closed today (Monday) at 2906.46.

Monday's losses occurred after two tweets Sunday night by President Trump regarding trade and tariffs, as noted below. The third tweet was posted today.




Today was another bad Monday (to put it mildly) for Asian markets, as noted below (screen shot taken at 1:30 pm EDT)...(source Indexq.org)


In my above post, I said the following regarding the SSEC:

"I've shown the input values of the momentum (MOM) and rate-of-change (ROC) indicators as one period. They're both still below the zero level and have, in fact, been declining on recent attempts to move higher during March.
If price breaks and holds above, say, 3150,  I'd like to see both of these indicators also break and hold above zero, while making new highs, as well, to confirm the sustainability of any further meaningful advancement beyond that price.
Otherwise, look for this index to retest its last weekly swing low, or plunge lower, inasmuch as its stability at current levels is questionable."
From the following updated weekly chart of SSEC, both the MOM and ROC indicators (shown with an input value of one period) failed to make a new swing high as price made its new swing high on April 8, and they've been declining ever since, to end back in negative territory...hinting of further weakness ahead.

Major support sits at 2500. Whether it hits that level, or plunges lower, may depend on future unpredictable Trump tweets (which have ranged from extreme optimism on a trade deal, to these latest threats), or on other internal Chinese factors, or other external world events (e.g. tensions/events involving North Korea, Iran, Israel/Palestinians, Venezuela/Russia/Cuba, etc.).


Click here to view video on Twitter

My thoughts outlined in my May 4 post, "I think that U.S. equities and bonds will continue to outperform the rest of the world markets," haven't changed, although we may see some increased volatility and deeper pullbacks over the coming weeks/months than I may have anticipated.

As the S&P 500 Index (SPX) made its new all-time high of 2954.13 on May 1, its corresponding SPX:VIX ratio was not corroborating that strength. As of 2:19 pm EDT today, this ratio had dropped to its 200-day moving average, after it began its decent when it peaked in mid-April. A drop and hold below this moving average (say, 180) could see the SPX plunge much lower (watch for a break and hold below near-term support at 2900) as the SPX:VIX ratio drops to, potentially, 100, or lower.


* UPDATE May 8...

Source: ZeroHedge.com

Saturday, May 04, 2019

General Market Musings

I've not much to say, other than I think that U.S. equities and bonds will continue to outperform the rest of the world markets (especially since the Mueller investigation is now closed, as AG Barr emphatically stated in his testimony before the Senate Judiciary Committee this past week)...that the slow melt-up continues, punctuated, periodically, by episodes of consolidation and minor pullbacks...watch for a strong U.S. dollar to support this. And, I doubt very much if the Fed cuts rates any time soon, as President Trump has suggested...not with the strong economy firing on all cylinders.

Inasmuch as other countries, such as Canada, have numerous trade messes with multiple countries that they're trying to sort out, without much luck, so far, and with their economies slowing, I don't see a growing world-wide slow-down abating anytime soon.

For example, German manufacturing PMI contraction continues to deepen for the fourth straight month, as noted below.


Major resistance for the U.S. dollar sits at 100.00 and major support at 90.00, as shown below.


So, basically, I've nothing significant to add to what I posted on March 26 and April 3, except to suggest keeping an eye on the market gauges mentioned therein.

Friday, April 19, 2019

A Joe Biden Stock Market

Former Vice-President Joe Biden may run for President in the 2020 election. He stated recently that his platform would be the Obama/Biden policies of yesteryear.

Were he to be elected, and if the old Obama policies were resurrected, we could very well see the S&P 500 Index return to pre-Trump levels around the 2200 level, or lower, as shown on the monthly chart below.

In the two years since President Trump took office, the SPX has gained around the same number of points as it did in the last four years of Obama's presidency. Those gains are in jeopardy, as uncertainty will weigh on markets in anticipation of a possible return to a more socialist agenda under Biden, or an even more far-left leaning Democrat.

Think about it...the Democrats' Green New Deal (et al) is only an election away...


Wednesday, April 03, 2019

SPX:VIX Ratio In "New Bull Market" Territory

Take a look at the following charts of the SPX:VIX ratio. Appearing in order,
  • each candle on the first chart represents a period of one year,
  • each candle on the next represents a period of one quarter,
  • each candle on the next represents a period of one month, and
  • each candle on the last represents a period of one day.

For the third day in a row, price closed on Tuesday above what I've called the 200 "New Bull Market" level since it first broke through during the first week in 2017. It still has a way to go before it runs into the 250-280 "Bull Froth Zone," where we've seen traders/investors spike the price first, then take profits in the SPX since then, beginning in May 2017.

Simply put, judging from the extremely bullish bias of the candle formations and the bullish signals of the technical indicators on all four charts and timeframes, I see no reason for this ratio not to retest this 250-280 "Bull Froth Zone" over the coming days/weeks. This means that the SPX will likely retest its prior all-time high of 2940.91, or spike higher at some point...provided that the SPX:VIX ratio holds above the 200 "New Bull Market" level.

In the short term, look for a bullish crossover (a "BUY" signal) to form on the PMO indicator on the daily chart, for the new bullish crossover (a "BUY" signal) to hold on the MACD, for the RSI to hold above 50 (a "BUY" signal), and for the recent bullish moving average Golden Cross formation (a "BUY" signal) to hold should the ratio price continue to rally, to support/confirm any higher prices in the SPX. Otherwise, we may see, either a period of sideways consolidation or a pullback in the SPX (depending on how skittish traders/investors are feeling), until it makes its next move to, potentially, new highs.

As an aside, the bullish comments referenced in my post of March 26 on U.S. 2-5-10-30-Year Bonds, still apply. As the level of market skittishness increases on SPX higher prices, no doubt, we'll see monies continue to flow into Bonds, possibly at an elevated rate...another clue to monitor for evidence of slowing enthusiasm for equities giving way to a growing demand for Bond hedging.





Tuesday, March 26, 2019

U.S. Bonds Inching Upwards

* See UPDATE below...

U.S. 2, 5, 10 and 30-year Bonds have been driving through prior resistance and inching upwards since the end of 2018, as shown on the following monthly charts.


Meanwhile, the following monthly SPX:VIX ratio chart shows that price has stalled just below the 200 "New Bull Market" level.

I anticipate that we'll likely see one last-gasp push in equities (SPX and other major indices) to, possibly a slightly higher all-time high, before we see a meaningful pullback/correction. Under that scenario, look for the SPX:VIX to break and hold above 200 and, potentially, retest the 280 all-time ratio high.

However, if the SPX:VIX fails to break and hold above 200 on an SPX rally, then I'd anticipate that we won't see a retest of the prior SPX high set in September 2018, but a fizzle before then, instead.

Either way, I anticipate that bonds will continue to gain ground...albeit perhaps slowly, but steadily.


Of note, is this astute observation from Slope of Hope's, Tim Knight...

Source: SlopeOfHope.com

I anticipate that a recession is on the way, if not this year, then likely next year...but likely slowing this year. I understand that Europe, China, Canada, and others are all slowing now. Watch the bond markets for clues and continued strength!

* UPDATE March 26...

Now this report from Investing.com...

Source: Investing.com

Monday, March 25, 2019

Asian Markets Falter...China's Shanghai Index At Major Resistance

Judging by one-day percentages lost, Monday's market action was a bad day for Asian markets, as shown below.


China's Shanghai Index is facing long-term major resistance at current levels, as shown on the following weekly chart of SSEC.

I've shown the input values of the momentum (MOM) and rate-of-change (ROC) indicators as one period. They're both still below the zero level and have, in fact, been declining on recent attempts to move higher during March.

If price breaks and holds above, say, 3150,  I'd like to see both of these indicators also break and hold above zero, while making new highs, as well, to confirm the sustainability of any further meaningful advancement beyond that price.

Otherwise, look for this index to retest its last weekly swing low, or plunge lower, inasmuch as its stability at current levels is questionable.


And...now this...

Source: ZeroHedge.com

Saturday, March 23, 2019

From This Week's "Smile File"...Chaos Theory

A bit of humour for the weekend...


Media & Americans Duped! A Criminal Dud!

* See UPDATES below...

Now that Special Counsel Robert Mueller's investigation of alleged Russia-Trump campaign collusion has been concluded, as advised by Attorney General William Barr on Friday, my observations on what's been uncovered (in a nutshell) in that respect, are as follows.



What started out as political opposition research of Donald Trump and his political campaign in 2015/2016 by the Hillary Clinton campaign and the DNC, and which was funnelled into the Obama State Department, DOJ and FBI, et al, through multiple sources and turned into a counter-intelligence investigation and subsequent Special Counsel investigation in search of criminal activities and leaked to multiple media outlets in order to, firstly, smear Trump and his chances of being elected as U.S. President, then, to hamstring his presidency, once elected, was, three years later, finally exposed for exactly what it was...a political vendetta and smear campaign and not a criminal matter.

Oppo Research ⇒ Criminal Investigation ⇒ Political Vendetta ⇒ Duped ⇒ Dud!

More on this entire process will be revealed by the U.S. Inspector General, Michael Horowitz, once he completes his separate ongoing internal investigation of numerous DOJ and FBI officials (and any others), which may be released in the next three months, or so.

So, this unabashed, unrelenting three-year political and media anti-Trump smear campaign and legal probe (which was based on salacious and unverified material, according to former FBI Director, James Comey) may end up producing unwanted consequences for the perpetrators involved in this entire complex process...and there could be many people exposed in this scheme. Whether any will be criminally indicted and prosecuted by current DOJ officials remains to be seen. No doubt, there will be much new information to come in the days/weeks ahead, in this regard.

I wonder what damage (not only on domestic matters, but also foreign policy issues) has already been inflicted on the President's ability to properly and fully discharge his duties to the American public, as he was duly elected and sworn in to carry out, because of this smear campaign. Meanwhile, the political chess game will likely continue through to 2020 and beyond, if President Trump is re-elected. At what point do endless and aimless political investigations become political harassment and constitutional overreach?

♔♕♖♗♘♙♚♛♜♝♞♟

Source: WSJ.com

Source: FoxNews.com (click link to view video)

Source: NationalReview.com

Source: TheHill.com

✵✵✵✵✵✵✵

Source: FoxNews.com...to view video, click here


* UPDATE March 24...

Attorney General Barr's 4-page summary letter (below) of Special Counsel Mueller's report was released today (the yellow highlight on page 1 is mine)...of note, are the following excerpts...

"...the Special Counsel did not find that the Trump campaign, or anyone associated with it, conspired or coordinated with the Russian government in these efforts, despite multiple offers from Russian-affiliated individuals to assist the Trump campaign."

"...Deputy Attorney General Rod Rosenstein and I have concluded that the evidence developed during the Special Counsel's investigation is not sufficient to establish that the President committed an obstruction-of-justice offense. Our determination was made without regard to, and is not based on, the constitutional considerations that surround the indictment and criminal prosecution of a sitting president."





Several reactions are as follows...

Friday, February 22, 2019

Contraction Mode Deepens For Germany's Manufacturing PMI

* See UPDATE below...

Germany's Manufacturing PMI continued its decline from 2017 highs and entered into contraction mode in January. Data released on Thursday shows this contraction deepening for February, as shown below.

Is this a precursor to a recession? Look for a pattern on next month's release (March 22) for possible clues.


The following monthly area chart of the DAX shows its toppiness on a long-term timeframe, after a long climb from 2003 and 2009 lows.


The following daily area chart of the DAX shows an abundance of overhead supply above the current price.

With two months of manufacturing PMI data now in contraction mode following a steady decline for the past year, it appears that this supply zone may pose a major resistance level for much of any further meaningful/sustainable rally.


Illustrated on the following daily candle chart of the DAX are the momentum (MOM), rate-of-change (ROC) and average true range (ATR) indicators. I've shown the input value of each as one period and in histogram format to depict daily changes in direction and strength of that direction. Keep an eye on whether or not we see an increase in each of these three on any further rally to determine the likelihood of its continuation into and through this overhead supply zone to eventually retest prior highs, or vice versa on a reversal/pullback/major selloff to retest December 2018 lows, or drop lower.


* UPDATE March 22...

Oops...contraction deepens! The next release date is April 24...


Thursday, February 14, 2019

Potential Head & Shoulders Forming on Amazon

Amazon (AMZN) is forming a potential bearish head and shoulders pattern, as shown on the following weekly chart.

We'll see whether it plays out, in view of their decision today (Thursday) to abandon their project to build their second headquarters in Long Island, Queens...at a loss of 25,000 job for New York. Their statement is here and it describes the political opposition it received.

Keep an eye on the momentum (MOM), rate-of-change (ROC), and average true range (ATR) indicators for direction and velocity purposes going forward. I've shown their input value as one period to illustrate that more clearly.


Core Retail Sales m/m data released today (Thursday) were drastically in the red...a harbinger of things to come, or just a blip? One to watch over the coming months. Another month like this last one could hit AMZN and other retail giants hard.


Happy Valentine's Day


Saturday, February 09, 2019

An Ideological Path To A Liquidity Crisis In U.S. Markets

Look out, corporate and middle America!

There's a new economic and capitalism threat occupying your (Congressional) House...namely, Alexandria Ocasio-Cortez, who has been busy sucking all the oxygen out of Democrats' House with the unveiling of her socialism-on-steroids "Green New Deal" this past week. As 2020 Democrats jump on board with her plan/proposed bill, Democratic House Speaker, Nancy Pelosi sarcastically referred to it as the "Green Dream."

If you want to create a liquidity crisis in U.S. equity markets, then go ahead...adopt and enact the ideological measures put forth in that deal/bill. If you want to create an economic crisis, in America, as well as the rest of the world, then go ahead...adopt and enact the ideological measures put forth in that deal/bill. Foreign and domestic investment in the U.S. will disappear.

As it is, U.S. and global markets have been fragile and volatile for over a year, and absurd political games such as this will only suck the liquidity out and increase volatility at an ever-accelerating pace. Offshore U.S. corporate monies will never be repatriated and invested in America. In fact, more funds will be hidden in offshore accounts under this scenario. This deal is a clever counter-measure to President Trump's Tax Cuts and Jobs Act, enacted on December 20, 2017. When companies fail to bring offshore monies to the U.S. by the 2020 election, Democrats will claim that the President's policies haven't worked and that Americans should, instead, embrace their ideology. Any benefits gained from this Act will be shattered. At that time, I was pondering whether the Dow 30 Index would reach 25,000. In fact, it reached a high of 26,951.81 in early October 2018 (just prior to the U.S. midterm elections) before it started to tank, and, interestingly enough, it's hovering just above 25,100, as of Friday's close.

You can see from the following weekly chart of the MSCI World Global Index that price rallied, after touching major support at 1800, and is now sitting at a critical intersection of a long-term uptrending Andrew's Pitchfork median and major price resistance level around 2030.


Inasmuch as many Democrats are on board with this destructive deal (adding to political headwinds as I described in this post) and not many Republicans and the business world have dismissed it yet, no doubt more support for it will continue to grow, especially among Millennials.

Just wait until the big bank executives are hauled before Democrat Maxine Waters' Financial Services Committee (on which Ms. Ocasia-Cortez sits as a member) and watch this political farce continue.

Keep an eye on the MSCI World Global Index, because if that begins to implode, you'll see U.S. markets follow suit.

Perhaps GOLD will become the favoured hedge for traders/investors against such a catastrophic scenario...and we'll see the rally accelerate, as I described recently in this post.


Now it looks like Democrats (including Hillary Clinton and the Clinton Foundation) may be faced with serious investigations involving potential collusion with Russia and threats to national security on a variety of matters in the coming weeks, according to this latest report from The Hill's John Solomon. It's anticipated that the U.S. Inspector General will release a report by late spring/early summer in this regard, along with FISA abuse by the DOJ and FBI leading up to the 2016 election and beyond. As well, Senator Lindsay Graham will be investigating these issues, along with this FISA abuse, via his Senate Judiciary Committee.


2019 likely won't be a good year for Democrats as more is uncovered and revealed, including hypocritical racism and selective political support/non-support for alleged "Me Too" victims, which appears to be dependent upon which political party the accused is affiliated with...remember this fiasco during the (then) Judge Kavanaugh (now Justice Kavanaugh) Senate Judiciary hearings?




And, thanks to active socialist resistance to Amazon's proposal to build a second headquarters in Long Island, Queens from New York politicians such as Ms. Ocasio-Cortez, Amazon are abandoning their project, which would have created 25,000 jobs...their statement is below.


And, the knock-on effect has erupted...

Source: Bloomberg.com


We'll see if Virginia's politicians are any friendlier towards and supportive of capitalism than New York's...


So, Democrats' far-left socialist movement is already underway and is, seemingly, effective at stopping capitalism in its tracks.

Senate Majority Leader, Mitch McConnell is planning to force a vote in the Senate on this "Green New Deal." We'll see if Senate Democrats and their 2020 Presidential candidates will "put their money where their mouth is" to support it...or not.



And, is this constitutional overreach by Democrats?...take a look at this Associated Press article, "House Panel Seeks Documents on 81 People Linked to Trump." How will House Democrats find any time to draft legislation over the next two years that actually benefits Americans when all their attention is focused on these shenanigans?


Source: washingtonexaminer.com

Meanwhile...

REALITY CHECK: A good reason to NOT adopt the "Green New Deal"...it would add trillions to the already ballooning $22 Trillion National Debt!


P.S.
They're coming for your cows...time to stock up on Big Macs! 😊
Judge Jeanine's Opening Statement Feb. 9, 2019 on Fox News TV's "Justice With Judge Jeanine"

* UPDATE March 26...

This series of tweets from Senate Majority Leader Mitch McConnell mentions that the Senate will vote today to begin debate on the Democrats' Green New Deal...stay tuned...


RESULTS OF THE VOTE...all Republicans voted "against" beginning to debate the Green New Deal...the Democrats did not vote "for" or "against" and, instead, voted "present."

So, it looks like Democrats don't even support a discussion of their own deal in the Senate, despite their on-air declarations of support to the media and to Americans...so, it will not be advanced in the Senate.

Rather, it appears to simply be a 2020 election tool/prop and not a serious proposal that they're willing to defend in Congress.

Continue reading at BNNBloomberg.ca