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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.
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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...

Dots

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

Markets In Chaos

Markets In Chaos
Markets Ending February In Chaos

Events

UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. Mar. 4 @ 2:00 pm ET ~ Beige Book Report
* Fri. Mar. 6 @ 8:30 am ET ~ Employment Data
* Wed. Mar. 11 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Tues. Mar. 17 @ 8:30 am ET ~ Core Retail Sales & Retail Sales
* Wed. Mar. 18 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
* Wed. Apr. 8 @ 2:00 pm ET ~ FOMC Meeting Minutes

*** Click here for link to Economic Calendars for all upcoming events

Tuesday, February 25, 2020

Dr. Copper Needs An Antidote

The following weekly chart of COPPER shows that its price has fluctuated wildly around the 2.47 level in an increasingly narrowing triangle formation since the end of the 2008 global financial crisis. At the moment it's acting as major support and happens to coincide with the triangle apex. A drop and hold below this level could see a sharp downdraft in this commodity to around 2.20 (price support combined with the bottom of the triangle and a secondary volume bump), or lower.

Major overhead resistance sits at the confluence of the 50 & 200-month moving averages with the Volume Profile POC around 2.70. A spike and hold above this level could see price rise to around 2.99 (price resistance combined with the top of the triangle and a secondary volume bump), or higher.


Until such time as price breaks through either of these barriers and holds, I'd watch for increasing volatility in the near term.

The technicals are giving mixed signals on the daily chart as to breakout direction.

On a negative note, the RSI is trading below 50, while the MACD and PMO have recently formed a bullish crossover, and a bullish Golden Cross has formed on the moving averages...albeit on a recent weak and tentative price bounce.

These technicals can be monitored for confirmation and sustainability of either directional breakout. They must, either, hold on a rally (and the RSI must break and hold above 50), or reverse on a drop in price on this short-term timeframe.


Finally, COPPER has, historically, mirrored, more or less, China's Shanghai Index (SSEC) over the years, as shown on the following monthly comparison chart.

I last wrote about the SSEC in my post of February 3. Since then, it rallied and sits just above 3000, a level I had identified as major resistance.

If it fails to hold above 3000, I'd watch for a sharp drop to 2500, or lower. If that happens, I'd predict that COPPER would also drop...another potential useful directional gauge.


World-wide pandemic yet?

Monday, February 24, 2020

U.S. Tech Sector Blow-Off Top In Progress

Further to my post of February 10 regarding FNGU (an exchange-traded note that tracks 3x the daily price movements on an index of US-listed technology and consumer discretionary companies) and the Nasdaq Composite Index, the following scenario developed.

  • FNGU did retest its prior all-time high, blew past it, and made a new high at 115.40 last week, as shown on the weekly chart below.
  • The Nasdaq Composite Index did attempt to reach 10,000, but stopped short at its new all-time high of 9838.37 last week, as shown on the weekly chart below.
  • After they both formed a shooting star candle last week, they gapped down considerably today (Monday) to close near their low of the day.
  • You can see, from the last two chartgrids (daily timeframe), that all of the ten tech stocks which comprise FNGU gapped and closed down on Monday, as well.

So, where do they all go from here?

  • The Balance of Power on FNGU and the Nasdaq Composite Index still lies with the buyers on the weekly timeframe, but that is fading quickly. Watch for a drop and hold below zero to indicate that a larger blow-off is developing. Otherwise, if it holds above zero, look for some short-term buying or short-covering or a dead cat bounce before further selling, potentially, resumes.
  • Keep an eye on the ROC (Rate of Change) and ATR (Average True Range) to confirm, either further selling, or a sharp turnaround in buying. I've shown the input value on both of these technical indicators as one period and in histogram format to highlight extreme movements in either direction. Neither one has matched prior all-time extremes yet, so we may see further selling before any serious longer-term buyers step into the Technology sector.
  • You can see from the last two chartgrids where Monday's closing price on each of the ten stocks, as well as FNGU and the Nasdaq Composite Index, sits in relation to their respective 50-day moving average (red). They are either above, below or near it, which is acting as support or resistance. Three of them (FB, BABA and BIDU) are the weakest, after failing to make new swing highs, and their 20-day MA is in the process of crossing below their 50-day MA...hinting at further weakness ahead for these three stocks. The ROC on 8 out of the 12 are below the zero level...hinting at further weakness ahead for the Tech sector. Keep an eye on the ROC on NVDA, TSLA, TWTR and FNGU on the daily timeframe...if they also drop and hold below zero, and if the others hold below, watch for further sharp selling in the Tech sector.
  • Finally, keep an eye on the 4 E-mini Futures Indices and the SPX:VIX ratio mentioned in my last post. If we see further weakness develop in those, we'll likely see continued selling in the above-referenced stocks, ETF and Index.





* UPDATE February 25...

The blow-off continues...



World-wide pandemic yet?

S&P E-mini Futures Intraday Targets For 02/24/2020

It's around 12:30 am ET on Monday as I begin to write this post. All four U.S. E-mini Futures Indices have gapped down substantially from Friday's close, as shown on the following daily charts of YM, ES, NQ and RTY.

The ES is hovering above its 50-day MA (3279), while the NQ is still well above, and the YM and RTY are below their respective MA.

All of them are trading either within or below a "chaos zone" of a trio of future-offset 5, 8 and 13 moving averages (green, red and blue). Until they all break and hold above this entire zone, I forecast further volatility and/or weakness for U.S. equities. The downturn in these three moving averages is hinting of further weakness. 

In fact, the weakest of these E-mini Futures Indices is the YM, inasmuch as the 5 and 8 are about to both cross below the 13 future-offset MA. If that occurs and the crossovers hold, watch for increased volatility and weakness, with the other three indices following suit, in the days ahead.


In the very short term, Monday's intraday Pivot Point targets for the ES are (as shown on the following 30-day 60-min chart):

R3 = 3427.67
R2 = 3386.42
R1 = 3362.33
PP = 3345.17
S1 = 3321.08
S2 = 3303.92
S3 = 3262.67

Weekly VWAP = 3297.18
Monthly VWAP = 3340.93
50-hr MA = 3353.53
200-hr MA = 3369.43

All of these levels, as well as the above-noted 50-day MA (3279) represent intraday support and resistance levels (potential targets) for Monday.


Finally, the following daily ratio chart of the SPX:VIX ratio shows that price gapped down and closed below the 200-day MA around the 200 price support level on Friday.

The RSI, MACD and PMO indicators are in downtrend, and price on this ratio failed to make a new swing high when the SPX hit its all-time high of 3393.52 on February 19. The RSI has dropped below the 50 level, the MACD has formed a bearish crossover, and the PMO is about to form a bearish crossover...all of which are hinting at further weakness ahead for the SPX.


BOTTOM LINE:

Unless we see a sharp snap-back in the above 4 E-mini Futures to new highs soon, together with a new swing high on the SPX:VIX ratio, look for increased volatility and further equity weakness in the near term.

Monday, February 10, 2020

FNGU: Blow-Off Top Coming?

I last wrote about FNGU in my post of December 26, 2019.

FNGU is an exchange-traded note that tracks 3x the daily price movements of an index of US-listed technology and consumer discretionary companies. The index is highly concentrated and equally weighted.

Since then, price blew through both the 78.6% Fibonacci level and it's prior all-time high, as shown on the following weekly chart.

The Balance of Power still lies in the hands of buyers, in spite of a bit of a blow-off in the last weekly candle. We may not see a trend reversal until this indicator spikes to, and closes on, a new high in one of the coming weeks.

I've shown the input value on both the Rate of Change (ROC) and Average True Range (ATR) technical indicators as one period and both indicators in histogram format.

The ROC on this past week's candle is just below its all-time high (which may be reflective of its blow-off close for the week). No doubt, it may have been at an all-time high when price was at its high of 100.11 on Tuesday.

The ATR spiked to an extreme all-time high this past week.

While the Balance of Power appears to indicate that the buying may not yet be over, the ROC and ATR indicators are hinting at some volatility, choppiness and caution ahead. We may see price attempt to retest last week's all-time high before it, either consolidates in a sideways trend, or drops to near-term support around 80.00, or lower.

However, the Nasdaq Composite Index (IXIC) is only 480 points away from its 10,000 target (as of Friday's close)...a figure I mentioned in my above-referenced post. So, we may see a parabolic spike to that price in short order. If so, we'll likely see FNGU retest 100, or spike higher...before they both, potentially, form blow-off tops.



Sunday, February 09, 2020

A Tale Of Two Parabolic Markets

Check out the similar parabolic moves on Tesla (TSLA) and Bitcoin (BTC/USD) on the following weekly comparison chart.

Although both instruments are wildly different (inasmuch as Tesla is actually pegged to a tangible product and is backed by shareholders, Bitcoin is not...it's a cryptocurrency), they've both experienced extreme parabolic moves.

Bitcoin dropped like a stone throughout 2018 before it stabilized and eventually experienced a mini-rally (in comparison to its prior heady spike to 19,210 in 2017). Since mid-2019, it has mostly dropped in a choppy manner, and is attempting yet another comeback.

Tesla reached a high of 968.99 on February 4 before losing a couple of hundred points in two days. The Balance of Power is still in the hands of buyers on this timeframe. A drop and hold below zero will shift that power to sellers...one indicator to watch over the coming weeks.


Monday, February 03, 2020

China Markets Plunge

Here's a snapshot of CNBC's world market heat map as at 1:25 am ET Monday February 03.

North and South American markets are still closed from Friday. Of particular note is China's Shanghai Index (SSEC)...down 8%...presumably on worries related to the coronavirus.

However, it seems to me that there may be systemic problems that have been hidden by China for years with respect to their real (sustainable) economic prowess, or lack thereof...based on what the following chart and analysis reveal.



Source: Reuters.com

The following monthly chart of the SSEC shows this overnight catastrophic drop.

Price has been trapped in a large sideways trading range between 3000 and 2500 since mid-2018...and is now precariously suspended in the middle of this zone.

Essentially, it's had difficulty getting any sustained traction above 3000 since it plunged below in June 2008. When it did manage to break through in December 2014, it was followed by a volatile, parabolic rise and fall back to its current level by the end of 2015. Successive attempts to break out have been increasingly feeble and short-lived.

It's clear, from a charting perspective, that China has been struggling to regain its heady glory days as a stable global economic leader since its bottoming in October 2008, following the global financial crisis.

What's unclear to me, at this time, is when that slump will finally end.

For clues on when this particular rout may be stemmed, I've shown the input value on the ATR (Average True Range) and ROC (Rate-of-change) technical indicators as one period (one month). At the moment, neither of these has spiked to an extreme level, as did occur following the 2008 financial crisis crash and, then, after another drop through to January 2016.

Watch for extreme spikes to form on both of these indicators as a potential sign that a turnaround in market sentiment may, finally, be on the way.

A drop and hold below 2500 could see price plunge further to 2000, or lower, in short order.


Sunday, February 02, 2020

From This Week's "Smile File"...Game Day!

SUPER BOWL 2020: Sunday, February 2



PUPPY BOWL 2020: Sunday, February 2

As fans enjoy Super Bowl 2020, I'd just post this compilation of highlights from previous Puppy Bowls (courtesy of Animal Planet)...


This year's Puppy Bowl will begin on Sunday at 3:00 pm ET on Animal Planet. People can also follow the action during the game at Animal Planet's Facebook, Twitter and Instagram pages.

And...this year's winning team is...



SUPER PALINDROME 02/02/2020


FYI...👀






"The Old Switcheroo" Game

Thanks to *Nancy Pelosi's fumbled impeachment shenanigans, here's a preview of what could happen if Joe Biden is elected President in November 2020. 😮

She's certainly lowered (all but eliminated) the bar on impeachment standards in the House to pave the way for such a scenario!

Something to ruminate (along with your hamburger) during today's Super Bowl half-time show...😏



Source: bloomberg.com

Saturday, February 01, 2020

Money Flow Flip: SPX vs GOLD vs OIL

Further to my post of January 9, GOLD is poised to take the lead away from the SPX in terms of safe-haven money flow, while money has been fleeing OIL.

As shown on the following monthly comparison chart of the SPX, GOLD and OIL, the Balance of Power has shifted from buyers to sellers in the SPX on this timeframe.

For clues as to further weakness or strengthening of the SPX, please refer to my comments with respect the SPX:VIX ratio in my last post, which hints of further weakness. Furthermore, January's candle formation on the SPX is a shooting star, also a bearish signal in the longer term.

Near-term major resistance sits at 1600 for GOLD. That level must be recaptured and held to support any further sustainable rally with conviction.


SPX:VIX Ratio Trendline Break: Look Out Below

Further to my post of January 27, the SPX:VIX ratio broke and closed below its 2019 uptrend line on Friday, as shown on the following daily ratio chart.

Failure to recapture and hold above, firstly, 180, then, 200 will signal further weakness in the SPX.

Breaks of the RSI, MACD and PMO uptrends are hinting of further weakness in the SPX.

Failure of the SPX to hold and rally above Friday's closing price of 3225.52 could see it drop to around 3189 or 3153, as described in my above-referenced article.