Money Flow for January Week 1 2013

Further to my last weekly market update, this week's update will look at:

• 6 Major Indices
• 9 Major Sectors
• VIX
• Index/Volatility Ratio Charts
• 30-Year Bonds
• U.S. $
• 3 Days/Candle Charts on 7 Major Indices

***PLEASE NOTE that I've had to provide links only to my charts and graphs as my Blogger is not working properly tonight (Friday)...my apologies for this.

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6 Major Indices

As shown on the Weekly charts and 1-Week percentage gained/lost graphs below, all six Major Indices gained between 4 and 5% on the week.

• Weekly charts: http://screencast.com/t/xRxwSvHP
• 1-Week percentage gained/lost graph: http://screencast.com/t/qoE5Oq683

9 Major Sectors

As shown on the Weekly charts and 1-Week percentage gained/lost graphs below, all nine Major Sectors gained between 3.5% and 5.5% on the week.

• Weekly charts: http://screencast.com/t/wDvm3nyjoiZE
• 1-Week percentage gained/lost graph: http://screencast.com/t/XGtlJm1Sa

 

VIX

As shown on the 10-Year Weekly chart below, the VIX closed the week at 5-Year lows. Whether it pops from this level, or simply bases for awhile, remains to be seen.

• Weekly chart of VIX: http://screencast.com/t/o6USVfl0N

 

Index/Volatility Ratio Charts

As shown on the 10-Year Weekly ratio chart below of the SPX:VIX, price closed at 2012 highs. The next resistance levels are at 125 and 150, respectively. Assuming this ratio can rally and hold above today's closing price of 106, we may see further buying in the SPX Index...to confirm, I'd see if the Momentum indicator remains above zero on the weekly timeframe.

• Weekly ratio chart of SPX:VIX: http://screencast.com/t/sAMMhmMb

As shown on the 10-Year Weekly ratio chart below of the RUT:RVX, price reached and closed at an all-time high today. Price on the Russell 2000 Index also reached and closed at an all-time high today. Assuming this ratio can rally and hold above today's closing price of 51, we may see further buying in the RUT Index...to confirm, I'd see if the Momentum indicator remains above zero on the weekly timeframe.

• Weekly ratio chart of RUT:RVX: http://screencast.com/t/lZK8rwg9MEz

As shown on the 10-Year Weekly ratio chart below of the NDX:VXN, price rallied this week and made a higher swing high. It's approaching the 2012 highs. Assuming this ratio can rally and hold above 170, we may see further buying in the NDX Index...to confirm, I'd see if the Momentum indicator remains above zero on the weekly timeframe.

• Weekly ratio chart of NDX:VXN: http://screencast.com/t/5ssXBw3f

30-Year Bonds

As shown on the 5-Year Weekly chart below of 30-Year Bonds, price closed just a fraction below major support on the week, but on lower holiday volumes. I'd look for another close lower by next Friday on higher volumes before I would assume that selling has begun in earnest.

• Weekly chart of 30-Year Bonds: http://screencast.com/t/g1pSjpdwgi

 

U.S. $

As shown on the 5-Year Weekly chart below of the U.S. $, price closed higher on the week on decent volumes. It's been bouncing in between the 50 (red) and 200 (pink) MAs for a few weeks now. I'd look for a break and hold either above the 50 MA or below the 200 MA to gauge further strength or weakness in the weeks ahead.

• Weekly chart of U.S. $: http://screencast.com/t/TCTlQVRAlR

3 Days/Candle Charts on 7 Major Indices

Each candle on the following three charts represents 3 days. The current candle finished today and closed higher to confirm either a bullish engulfing or hammer setup on all seven Major Indices.

You can see that the Dow 30 and Dow Transports closed right underneath the major trendline that was broken last year.

• 3 Days/Candle charts of Dow 30, Transports & Utilities: http://screencast.com/t/AY8yL4P8Wo5t

The S&P 500 and Russell 2000 Indices broke above and closed well above their major trendline.

• 3 Days/Candle charts of Dow 30, S&P 500, Nasdaq 100 & Russell 2000: http://screencast.com/t/VyeEr5FHsdi

The S&P 100 Index also broke above and closed just above its major up trend line, as well as a major downtrend line from the 2000 highs...a significant achievement, particularly if these breaks hold as major support.

• 3 Days/Candle charts of S&P 100: http://screencast.com/t/MJGZPu85lW

 

Summary

In summary, the above charts are ones I'll be watching going forward over the next few weeks.

Using the Index/Volatility ratio charts above, I'll be looking for volatility to remain low, with the Major Indices moving higher and holding above their major trendlines in order to confirm any further rally that may continue to run for the next few weeks...at least until the end of February deadline on the "Fiscal Cliff" and "Debt Ceiling Limit" issues.

Whether we see further selling in 30-Year Bonds and further buying in the U.S. $ remains to be seen...I'll need to see a break and hold one way or the other, as noted above.

Furthermore, I'll be monitoring price movement on the Russell 2000 E-Mini Futures Index, as I discussed in my post of January 2nd, as well as my "Fed Monetary Stimulus Program Canaries," as I last discussed in my post of December 28th, in order to gauge selling/buying sentiment.

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Enjoy your weekend, and good luck next week!

Money Flow for December Week 4

Further to my last weekly market update, this week's update will look at:

• 6 Major Indices
• 9 Major Sectors
• Index/Volatility Ratio Charts
• 30-Year Bonds
• U.S. $
• EUR/USD
• Fed Monetary Stimulus Program "Canaries"

Last week I said:
"In summary, we may continue to see volatile intraday/overnight swings with little follow-through on lower volumes, until the "Fiscal Cliff" issue is settled and until the end of the year, as fund managers re-organize their portfolios for the 2012 year-end and Q4. At the moment, equity markets still appear to be hedged in Bonds and the U.S. $ as they trade near major resistance levels...this will likely continue until a convincing and sustained breakout occurs in equities. As well, I continue to watch the Fed monetary stimulus program "canaries" and the 1.3250ish resistance level on the EUR/USD forex pair as possible indicators of equity weakness that may become a cause for concern by bulls...at the moment, they are signalling caution, as I discussed in those two articles this week."

This past week, volatility increased and there was profit-taking in all of the above, with the exception of the U.S. $, Euro, and 30-Year Bonds, as will be shown on the following charts and graphs...there will be no commentary, as they are self-explanatory.

6 Major Indices

9 Major Sectors

Index/Volatility Ratio Charts

 

30-Year Bonds

 

U.S. $

EUR/USD

 

Fed Monetary Stimulus Program "Canaries"

In summary, we may continue to see a repeat of last week's increase in volatility, profit-taking in equities, and hedging in the U.S. $ and Bonds, until some sort of resolution of the "Fiscal Cliff" and the Debt Ceiling Limit issues are reached that satisfies the markets. We'll have to wait and see what comes from discussions and any votes held by politicians over the weekend (or beyond).

I intend to publish another article after Monday's close that summarizes the market action for Q4 and for 2012.

Happy New Year and good luck next week!

Money Flow for December Week 3

Further to my last weekly market update, this week's update will look at:

• 6 Major Indices
• 9 Major Sectors
• Index/Volatility Ratio Charts
• 30-Year Bonds
• U.S. $

6 Major Indices

Inasmuch as today (Friday) was a Quadruple Options Expiration, I'm showing the following chartgrid, where each candle represents a 1-month options expiration period. You can see that the current candle, which closed today, basically, bounced at/near the mid-Bollinger Band. Price is stuck within a sideways range and is at/near major resistance.

We may see some retracement on the next candle, which begins on Monday, before these indices either attempt to break out of and hold above this range to, potentially, rally to their upper Bollinger Band, or retreat to lower levels, such as their lower Bollinger/50 sma confluence major support levels. You will note that the Dow Transports is already at its upper Bollinger Band and the Russell 2000 is just below.

I'd watch the Russell 200 for either leadership in a push upwards or a pullback.

The following Year-to-date Weekly chartgrid shows the extent of this week's gains, as does the following 1-Week percentage gained/lost graph.

The largest gains were made in the Dow Transports and Russell 2000 Indices.

9 Major Sectors

The first chartgrid also depicts a 1-month options expiration period, with the current candle closing today. You can see that all sectors retraced some or all of the prior period's pullback. They are all in either longer or shorter-term sideways ranges, and are also at/near major resistance, with Consumer Discretionary, Consumer Staples, Healthcare, and Technology leading in overall gains from the 2009 lows.

We may also see some retracement on the next candle, which begins on Monday, before these indices either attempt to break out of and hold above this range to, potentially, rally to their upper Bollinger Band, or retreat to lower levels, such as their lower Bollinger/50 sma confluence major support levels.

I'd watch the Consumer Discretionary and Staples, Healthcare, and Technology Sectors for either continued leadership in a push upwards or a pullback.

The following Year-to-date Weekly chartgrid shows the extent of this week's gains/losses, as does the following 1-Week percentage gained/lost graph.

The largest gains were made in the Financials Sector, while Consumer Staples lost some ground.

Index/Volatility Ratio Charts

Normally I'd show Daily charts, but have opted to show the following 2-Year Weekly ratio charts comparing the SPX, RUT, and NDX to their respective Volatility Indices.

You can see that each one closed roughly in the middle of its weekly candle, after a week of what was particularly high volatility for the SPX...basically indicating indecision and lack of commitment in either direction in these markets. The SPX:VIX and NDX:VXN ratio pairs closed below major resistance (broken horizontal blue line), while the RUT:RVX ratio pair closed just above.

With volumes expected to be lower overall next week during the Christmas holidays, we could actually see an increase in volatility with large moves and little follow-through...probably something we'll continue to see until a deal is (presumably) reached before the end of the year on the "Fiscal Cliff" issue.

30-Year Bonds

The Weekly chart below of 30-Year Bonds shows that price also finished near the middle of this week's candle and is back in the middle of a longer-term sideways trading range from mid-May...so, there is no indication of panic selling in these bonds, yet.

 

U.S. $

The Weekly chart below of the U.S. $ shows that price finished near the top of this week's candle and at the Volume Profile POC (point of control) for the past 5 years. It's been in a 2-point trading range since mid-September, and remains the risk-on/risk-off trade, along with 30-Year Bonds.

In summary, we may continue to see volatile intraday/overnight swings with little follow-through on lower volumes, until the "Fiscal Cliff" issue is settled and until the end of the year, as fund managers re-organize their portfolios for the 2012 year-end and Q4. At the moment, equity markets still appear to be hedged in Bonds and the U.S. $ as they trade near major resistance levels...this will likely continue until a convincing and sustained breakout occurs in equities. As well, I continue to watch the Fed monetary stimulus program "canaries" and the 1.3250ish resistance level on the EUR/USD forex pair as possible indicators of equity weakness that may become a cause for concern by bulls...at the moment, they are signalling caution, as I discussed in those two articles this week.

Merry Christmas and have a safe and Happy Holiday week. Good luck to anyone trading next week!

Money Flow for December Week 2

Further to my last weekly market update, this week's update will look at:

• 6 Major Indices
• 9 Major Sectors
• Germany, France, and the PIIGS Indices
• Emerging Markets ETF (EEM), the BRIC Indices, and the BRIC ETF (BKF)
• Canada, Japan, Britain, Australia, and World Market Indices
• Commodity and Agriculture ETFs (DBC and DBA), Gold, Oil, Copper, and Silver
• 7 Major Currencies
• Ratio Charts comparing the SPX to other Major World Indices

Like last week, you won't see any commentary for individual groups, as I simply wanted to show, at a glance, three things:

1. where current price is relative to support/resistance levels
2. which groups money was flowing into and out of this past week
3. current relative strength/weakness of the SPX to other Major World Indices

in order to asses whether there was a common theme(s) going on here. In this regard, I've provided:

1. 6-Month thumbnail charts of each group
2. 1-Week percentage gained/lost graphs for each group
3. 2-Year ratio charts comparing the SPX to other Major World Indices

You can see from the 6-Month charts where current price is relative to resistance/support levels. Most of the U.S. Major Indices and Major Sectors experienced a pullback this past week, while most Major World Indices, essentially, based at/near their highs and are at either downtrend, horizontal, or moving average resistance. One notable exception is China's Shanghai Index with Friday's large rally...it is, however, trading at a new horizontal resistance level. Gold, Silver, and Agriculture continued down, while there was a slight uptick in Oil and Copper. Money flowed out of the U.S. $ and the Japanese Yen. This is the first common theme, at the moment.

The above is confirmed on the percentage gained/lost graphs. In the U.S. markets, the general theme was selling, except in the Dow Transports Index and the Materials Sector. This is the second common theme, at the moment.

The above is also confirmed on the 2-Year ratio charts comparing the SPX to other Major World Indices. You can see that the SPX has been trending downward, generally, from the middle of this year and is either at/near some form of horizontal, downtrend, or moving average support level, but on accelerating bearish downward RSI below the 50.00 bull/bear level. This is the third common theme, at the moment.

Summary

To summarize, sentiment is negative and relative weakness is accelerating in the U.S. Major Market Indices and Sectors compared with other Major World Indices. It's the theme to watch going forward into next week and beyond.

Markets seem to have shrugged off the Fed's latest monetary stimulus announcement from earlier this week and are waiting for a resolution of the "Fiscal Cliff" issue, as its end-of-year deadline approaches. At the moment, and, generally-speaking, there seems to be no confidence in, nor new money being placed in the U.S. markets or the U.S. $...rather, money is coming out as profits are being taken.

Also, you can read more about my three "canaries" that I'm watching over the next weeks/months as a gauge of the effectiveness of the Fed's latest stimulus program in my post of December 12th.

I'm also watching four ratio charts of the SPX:VIX, RUT:RVX, NDX:VXN, and AAPL:NDX over the next few days/weeks, in order to measure relative strength, as detailed in my other post on December 12th.

 

6 Major Indices

9 Major Sectors

Germany, France, and the PIIGS Indices

 

Emerging Markets ETF (EEM), the BRIC Indices, and the BRIC ETF (BKF)

Canada, Japan, Britain, Australia, and World Market Indices

 

Commodity and Agriculture ETFs (DBC and DBA), Gold, Oil, Copper, and Silver

 

7 Major Currencies

 

Ratio Charts comparing the SPX to other Major World Indices

 

Furthermore, we may see further buying on the beaten-down high-beta stocks, as has continued this past week, in some of the Social Media stocks and RIMM, (as shown on the 1-Week percentage gained/lost graph below), as fund managers attempt to top up their yearly portfolio gains before the end of the year. I'll be looking for any parabolic rise and climax on high volumes on stocks such as these as a precursor to a potential major market trend reversal. If this type of stock continues to explode higher in the near-term versus value stocks, I'll also be warned of potential Q4 earnings weakness (markets favouring beta-movers versus actual value).

Conclusions

In conclusion, we may continue to see volatile intraday swings:

1. until the "Fiscal Cliff" issue is settled,
2. during the upcoming Quadruple-Witching OPEX week, and
3. until the end of the year as fund managers re-organize their portfolios for 2012 year-end and Q4.

Enjoy your weekend and good luck next week!