WELCOME

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.
* 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 $$$...

Venice

Venice

Events

UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Fri. Sept. 11 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. Sept. 16 @ 8:30 am ET ~ Core Retail Sales & Retail Sales
* Wed. Sept. 16 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
* Fri. Oct. 2 @ 8:30 am ET ~ Employment Data
* Wed. Oct. 7 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Wed. Oct. 14 @ 2:00 pm ET ~ Beige Book Report

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

Monday, March 30, 2020

China and Australia Indices: An Abnormal Divergence

As can be seen on the following monthly comparison chart of China's Shanghai Index (SSEC) and the Australian 200 Futures Index (AUS200), their price swings began to markedly and, abnormally, diverge from December 2017 to present day.

While the AUS200 continued to make new swing highs, the SSEC failed to do so.

The AUS200 has plummeted and has now made a new swing low, while the SSEC has not...yet.

We'll see if this significant weakness in the AUS200 is a harbinger of much further weakness to come in the SSEC in the next few days/weeks.


Source: bloomberg.com


Thursday, March 26, 2020

A "Grand Evolution" May Be Just Around The Corner

IN THE GRAND SCHEME OF THINGS


In the grand scheme of things, consider the area above current price on the following 50-year (monthly) chart of the SPX as the top of an iceberg...and the area below as its foundation beneath the surface of an ocean.

There is a fundamentally-solid foundation of (economic) support below the surface to keep the U.S. economy afloat in these turbulent times.


The volatility that we've seen the past couple of months revolving around the world-wide coronavirus pandemic will settle down at some point. It has already retreated somewhat (since it bottomed on March 16), as shown on the following SPX:VIX daily ratio chart.

The RSI is beginning to turn up, and there have been bullish crossovers on the MACD and PMO indicators, as the slowing of the recent decline and abrupt reversal of the SPX has outpaced the level of volatility over the past two weeks.

In the meantime, keep the above big picture in mind, together with the extraordinary monetary and fiscal stimulus measures, as well as health containment/mitigation measures, that are currently underway by global central bankers, world leaders, and health officials to cope with the financial, economic, and health fallout from this virus, as markets, in general, attempt to stabilize and regain some lost ground.


IN THE FINAL ANALYSIS


When the "virus dust" has settled, to a great degree, around the world, no doubt there will be an enormous amount of reassessment and restructuring by world leaders, financial experts, health officials, markets, and the manufacturing and service industries as to current methods of product development and distribution, education format, business environments, healthcare priorities and practices, monetary allocation priorities, etc.

Whether or not and to what degree life, as we knew it, will return to "normal" remains to be seen.

Exactly what and how changes can be made to improve the flow and delivery of information, education, goods and services, financial stability, and healthcare for everyone will, no doubt, be the topic by many for months to come.

"grand evolution" may be just around the corner.

A "creative visionary" would find a way to streamline, amalgamate all the moving parts, and accelerate this entire process. And, a "creative opportunist" would find a way to capitalize on this process.


N.B. Compare and contrast the SPX "iceberg" with China's Shanghai Index (SSEC), and you'll see that China's multiple attempts at rebooting their economic prowess have failed to hold for any sustained length of time since the early 2000s.

In fact, those short-term results have been, and continue to be, very erratic and volatile, as their measures become less and less effective.

Long-term major support sits at 2000, as shown on the monthly chart below.


* UPDATE March 27...


Tuesday, March 24, 2020

SPX Targets: Rally to 2750 or Catastrophic Selloff?

* See UPDATES below...

Should the SPX rally on Tuesday and beyond, the potential Fibonacci retracement targets taken from February's high to Monday's low are shown on the following monthly chart.

A drop and hold below the low could spark a catastrophic selloff to longer-term Fib retracement levels at 2030, or even 1700.

Note that there is a convergence zone of Fib levels and a trendline apex from 2650 to 2790, say 2750ish, making it an attractive eventual target for buyers in this extremely large 1200-point trading range.


P.S. This was tweeted right after I published this post...(so, more "green shoots" in the making?)...



And this information was released later today...


* UPDATE March 25...

The SPX is on its way, potentially, to 2750, or higher (screenshot of the following weekly chart was taken at 1:45 pm ET).


* UPDATE March 26...

The SPX is still on its way up after today's close...


Note on the following daily chart, there is a gap to be filled on the way up to 2750...not a lot of price resistance until then.


IN THE GRAND SCHEME OF THINGS


In the grand scheme of things, consider the area above current price on the following 50-year (monthly) chart of the SPX as the top of an iceberg...and the area below as its foundation beneath the surface of an ocean.

There is a fundamentally-solid foundation of (economic) support below the surface to keep the U.S. economy afloat in these turbulent times.


The volatility that we've seen the past couple of months revolving around the world-wide coronavirus pandemic will settle down at some point. It has already retreated somewhat (since it bottomed on March 16), as shown on the following SPX:VIX daily ratio chart.

The RSI is beginning to turn up, and there have been bullish crossovers on the MACD and PMO indicators, as the slowing of the recent decline and abrupt reversal of the SPX has outpaced the level of volatility over the past two weeks.

In the meantime, keep the above big picture in mind, together with the extraordinary monetary and fiscal stimulus measures, as well as health containment/mitigation measures, that are currently underway by global central bankers, world leaders, and health officials to cope with the financial, economic, and health fallout from this virus, as markets, in general, attempt to stabilize and regain some lost ground.


IN THE FINAL ANALYSIS


When the "virus dust" has settled, to a great degree, around the world, no doubt there will be an enormous amount of reassessment and restructuring by world leaders, financial experts, health officials, markets, and the manufacturing and service industries as to current methods of product development and distribution, education format, business environments, healthcare priorities and practices, monetary allocation priorities, etc.

Whether or not and to what degree life, as we knew it, will return to "normal" remains to be seen.

Exactly what and how changes can be made to improve the flow and delivery of information, education, goods and services, financial stability, and healthcare for everyone will, no doubt, be the topic by many for months to come.

A "grand evolution" may be just around the corner.

"creative visionary" would find a way to streamline, amalgamate all the moving parts, and accelerate this entire process. And, a "creative opportunist" would find a way to capitalize on this process.


Saturday, March 21, 2020

One "Green Shoot" In U.S. Markets

* See IMPORTANT UPDATE below...

There is one "green shoot" in U.S. markets as of Friday's close.

The following heatmap shows the percentages of stocks within the Sectors and Major US Indices that are currently trading above a variety of moving averages.

The one "green shoot" is the percentage of stocks in the Energy Sector now trading above their 5-day MA...a refreshing change in a constant sea of red for the past weeks. The heatmap shown in my post of February 29 was completely devoid of any green.

You can quickly see which of the Sectors and Major Indices are the weakest and strongest of the weak by which ones have the least/most stocks above their 200-day MA.

With regard to the Major Indices, the Nasdaq 100 is the strongest, while the Dow Composite, Dow Industrials, Dow Transports and Dow Utilities are the weakest.



The following monthly chart of the SPX shows the RSI at a 10-year low of 35.77, while price nearly hit February 2017 lows.

This downward plunge shows no signs of slowing any time soon.


The following percentages-lost graphs taken from February 19 show the destruction that has occurred in just one month in the Major Indices and Major Sectors.

The Small-Cap and Transport Indices and the Energy and Financial Sectors have suffered the most.



MY 2-CENT SERMON:


Markets are like gardens.

What shall we harvest from our gardens...sustenance or weeds? As we sow, so shall we reap. Are we tenders or raiders? Do we prepare the soil and provide nutrients and water for the seeds, or do we sow despair and destruction? If we love our gardens, they will love us back.

So, too, if markets continue to be raided, they will become barren beyond recovery.

"A bit of fragrance clings to the
hand that gives flowers."
-- Chinese proverb


* UPDATE Sunday, March 22...

Here's how U.S. Futures Indices opened Sunday...


And, how World Indices, Commodity and U.S. Indices Futures markets are trading Sunday evening (9:15ish pm ET)...


N.B. WTI Crude Oil's "green shoot" is still holding (barely)


What a time for Democrats to play political games!


Source: thehill.com



Click link to watch the video

WHAT'S NEXT?

Global markets are rapidly vaporizing as world leaders, financial experts, and health officials struggle to come up with solutions to mitigate the enormous health, economic, and financial fallout from the coronavirus pandemic.

The next major level of support for the S&P 500 Index (SPX) is the 11-year 50% Fibonacci retacement level at 2030, as shown on the following monthly chart.

Major resistance lies above at 2350 (40% Fib level).


Monday's pivot point support and resistance values/targets for the SPX are shown below.

Note that:
  • tonight's price on the S&P 500 Futures Index has already fallen below tomorrow's SPX S2 pivot point value
  • the SPX 50% Fib retracement level is below the SPX S3 pivot point value
  • the SPX 40% Fib retracement level matches that of the SPX pivot point for Monday

We'll see whether the SPX opens down and continues to drop on Monday, or if price snaps back to, at least, 2350 (confluence of the 40% Fib with the pivot point).


N.B. Unless Democrat House Speaker Pelosi and her Senate Democrat cohorts stop playing selfish, dangerous games (extortion tactics) with people's health and livelihoods, and behave in a sensible, timely and cooperative manner with Republicans, you might as well kiss markets goodbye once and for all!


Thursday, March 19, 2020

US Initial Jobless Claims: Volatility Event or Non-Event?

* See UPDATE below...

US Initial Jobless Claims data will be released on Thursday March 19 at 8:30 am ET.

A sharp increase could send the VIX spiking higher and the SPX plummeting lower.


The ATR, MOM and ROC indicators (shown with an input value of one period in histogram format) on the VIX daily chart below indicate that the velocity of upward momentum and daily volatility range is slowing somewhat.

That could accelerate dramatically if the claims spike higher than is forecast.


The VIX pivot point support and resistance values/targets for Thursday are:


The ATRMOM and ROC indicators (shown with an input value of one period in histogram format) on the SPX daily chart below indicate that the velocity of downward momentum and daily volatility range is slowing somewhat.

That could accelerate dramatically if the claims spike higher than is forecast.


The SPX pivot point support and resistance values/targets for Thursday are:


* UPDATE...

Here are Thursday's US economic numbers...the beginning of an economic slowdown is evident.


The velocity of the daily drops on this SPX 60-min chart may be slowing down somewhat, but has yet to flatten out.

Today's v-shape action mimics yesterday's and Tuesday's. And, with weekly initial jobless numbers rising for who knows how long, the SPX may have a tough time of stabilizing any time soon.


Saturday, March 14, 2020

From This Week's "Smile File"...When To Study History

Stay healthy and safe in the coming days and weeks! 😊


S&P 500 Index Daily, Weekly & Monthly Pivot Points

* See UPDATES below...

Further to my last post, the following pivot point calculations and charts are provided to illustrate a variety of support and resistance levels for three timeframes, namely daily, weekly and monthly, for the S&P 500 Index (SPX).

For a detailed explanation of pivot points, feel free to check out John Person's website at this link (the creator of this pivot calculator) and use his calculator for your own purposes. Just input the respective candle's high, low and close values to the second decimal point and press "submit."

Generally speaking, it uses the prior day's, week's, or month's high, low and close to calculate the following day's, week's, or month's Pivot Point (PP) and its resistance values above and its support values below. Price action above the PP is considered bullish, and below, it's bearish.

 SPX Daily Pivot Point Values (for Monday March 16)

SPX Weekly Pivot Point Values (for the WEEK of March 16)

SPX Monthly Pivot Point Values 
(taken from the MONTH of February for March)

For a quick way to view the PP (pivot point) of each timeframe, I've shown it in a one-period moving average (hlc3) cross format (blue) on each of the following daily, weekly, monthly, and last monthly charts.

Friday the 13th closed at 2711.02.

So, for example:

  • The daily PP for Monday March 16 is 2638.24 -- N.B. Friday closed above that value, as well as Thursday's PP at 2540.15, so it closed bullish on the day, as well as compared with the prior day.
  • The weekly PP for the week of Monday March 16 is 2687.4833 -- N.B. Friday closed above that value, so it closed bullish for the week, but still bearish below the prior week's PP at 3003.5434.
  • The monthly PP taken from February for March is 3067.86 -- N.B. Friday closed well below that level, so it is bearish on the prior month, so far. ***(NOTE that March's PP is currently 2772.7333, based on this month's trading action, thus far, and will change before month's end, the final value to be used for trading in April -- N.B. Friday closed below that value, so it is bearish on the current month, so far.)


SPX Daily chart 

 SPX Weekly chart

SPX Monthly chart 

I've included the following longer-term screenshot of the monthly price action of the SPX for the 21st century.

Shown on all of the four charts is the Average True Range (ATR) indicator with an input value of one period in histogram format to highlight extreme ranges, in particular.

The massive spikes in the February and March ATRs (on the monthly charts) have been unparalleled in range. They either represent capitulation or near capitulation that could produce a hefty bounce, or extreme fear that could continue to send the SPX plunging even further down.

I would hope that large-scale global monetary and fiscal stimulus measures that are currently being considered and/or taken by world central banks and governments would begin to calm markets down soon.

Hence, my providing the above daily, weekly and monthly pivot point support and resistance levels for possible tools to use in gauging market direction and strength for the SPX, as well as a Fibonacci retracement study taken from the December 2018 low to the February 2020 high (which also provides support and resistance levels within that trading range).

We may see price whipsaw within this 1,046.94-point trading range for quite awhile, until it stabilizes and eventually begins a new rally.

A drop and close below the low of the range could see catastrophic selling to the S1, S2 or S3 levels noted on the above three pivot point calculators.

Note that the Daily S3 level for Monday is 2346.19...virtually at the bottom of this range.

As an aside, I mentioned 2750 as a level of some importance on the corresponding S&P 500 E-mini Futures Index (ES) in my last post. It happens to coincide, roughly, with the SPX 60% Fibonacci retracement level of the trading range, R1 on the daily calculator, S1 on the monthly calculator, and the current PP of the March candle. It's not that far above Friday's closing price, so we may see some action around it on Monday.

SPX Monthly chart (21st Century)

In any event, volatility is likely to remain extremely elevated in both directions for awhile, until we eventually see a new series of higher swing highs and lows form on the SPX daily timeframe.

The following SPX:VIX daily ratio chart shows that price is still well below 60 (at levels seen during the peak of the 2008/09 financial crisis), as well as 100. I'd like to see it recapture and hold above 100, at least, before considering the possibility that volatility is settling down somewhat.

Furthermore, price is under the bearish influence of a recently re-formed moving average Death Cross, the RSI has yet to retake the 50 level, and the MACD and PMO indicators have yet to form bullish crossovers. So, we'll need to see reversals of those occur and hold, if price rallies to anywhere near 100, and beyond...and, if the SPX can retake and hold above 2750 and higher.

Otherwise, look out below!

SPX:VIX Daily Ratio chart

* UPDATES...

The S&P 500 E-mini Futures Index (ES) nearly tagged the SPX S3 level of the Daily Pivot Point calculations for Monday March 16 (see above). It made a low of 2350.88, while the SPX low was 2364.55.

Each candle on the following S&P E-mini cash chart represents a period of one quarter.

As of Monday's close, the current candle, Q1 of 2020, is a massive bearish engulfing candle and it has erased nearly all of the preceding trades since Q2 of 2017.

I've shown an ATR overlay on the chart (Average Trading Range), with an input value of one period (one quarter) to show the excessively and unprecedented extreme level it has now reached. As I mentioned above, this either represents capitulation or near capitulation that could produce a hefty bounce, or extreme fear that could continue to send the SPX plunging even further down.


So far, in spite of recent moves by various world central bankers and treasury departments, markets around the world continued to plummet on Monday, as shown on the following charts. Their respective percentages lost to date from February 19 are shown on the following graph.

It remains to be seen what global monetary and fiscal stimulus measures, as well as health conditions related to the coronavirus pandemic, are necessary before world markets begin to stabilize.

In any event, the above Pivot Point calculations for the Week and Month are still valid as support and resistance levels/targets for the SPX...ones to watch for the rest of this week.



N.B.

The SPX pivot point support and resistance values for Tuesday are:


The SPX pivot point support and resistance values for Wednesday are:


The SPX pivot point support and resistance values for Thursday are:


The VIX pivot point support and resistance values for Thursday are:


The SPX pivot point support and resistance values for Friday are: