Paris Cafe
Monday, October 24, 2011
US $ Flirting with Support...
The first Daily chart below of the US $ shows a couple of interesting bits of information:
If 76.00 fails to hold as support, price may fall back down to a confluence level of 74.00ish...however, if it can re-gain a foothold above 76.70, it has a chance of re-testing 78.00, and possibly 80.00.
- the 50 sma (red) crossed above the 200 sma (pink) on October 10th and has formed a Golden Cross
- price is currently trading in between the 50 and 200 smas
- price is currently flirting with support around 76.00
- price retreated after hitting the +2 deviation of the uptrending regression channel on October 3rd
- price has dropped the past 2 days since failing to resume its upward climb at a confluence point of the +1 deviation level of the downtrending regression channel and the "mean" of the uptrending regression channel
- price has formed a sloppy downward sloping H&S pattern from September 9th with the neckline at 76.70ish
- my RSI is running a bit hot so price may either consolidate or move up soon
If 76.00 fails to hold as support, price may fall back down to a confluence level of 74.00ish...however, if it can re-gain a foothold above 76.70, it has a chance of re-testing 78.00, and possibly 80.00.
Friday, October 21, 2011
Nasdaq 100 finishes the week in the red...
Below is a 5-day 5-minute percentage comparison chart of the Dow 30 ($INDU), S&P 500 ($SPX), Nasdaq 100 ($NDX), Russell 2000 ($RUT), the Financial sector ETF (XLF), and the Chinese Financial ETF (GXC).
It shows that the $INDU finished the week up at +2%, while the $NDX finished down at -1%. Whether the Technology index is weakening as the leader of the Major Indices remains to be seen in the days and weeks to come...it's a sector that I'll be keeping a close watch on, along with the Financial sector, XLF, which finished the week well ahead of the indices with a gain of around +5.25% on the week. In contrast, the Chinese Financials ETF, GXC, finished the week down at -3.5%.
The Weekly chart below of GXC shows that price was unable to climb above major overhead resistance of 65.00.
The Weekly chart below of Copper also shows that price was unable to continue its climb from prior weeks and closed down on the week just above the 200 sma (pink) and at the Monthly Volume Profile POC.
If the Technology sector, the Chinese Financial sector, and Copper continue to lag and weaken against the Major Indices and the U.S. Financial sector next week (or weeks), it may forecast the demise of those indices and sector...otherwise, a strengthening of these should confirm any continued advance in those markets.
Of course, the fate of the Major Indices seems to hinge on the decisions from Europe...as can be seen on the Weekly chart below of the EUR/USD, price ended the week with a small gain over last week below major resistance of the 50 sma (red) and 200 sma (pink), and price resistance around 1.4.
Furthermore, if the Major Indices and the Financials sector were to rally next week, it's important that they hold the following price levels (see 60-day 60-minute charts below):
It shows that the $INDU finished the week up at +2%, while the $NDX finished down at -1%. Whether the Technology index is weakening as the leader of the Major Indices remains to be seen in the days and weeks to come...it's a sector that I'll be keeping a close watch on, along with the Financial sector, XLF, which finished the week well ahead of the indices with a gain of around +5.25% on the week. In contrast, the Chinese Financials ETF, GXC, finished the week down at -3.5%.
The Weekly chart below of GXC shows that price was unable to climb above major overhead resistance of 65.00.
The Weekly chart below of Copper also shows that price was unable to continue its climb from prior weeks and closed down on the week just above the 200 sma (pink) and at the Monthly Volume Profile POC.
If the Technology sector, the Chinese Financial sector, and Copper continue to lag and weaken against the Major Indices and the U.S. Financial sector next week (or weeks), it may forecast the demise of those indices and sector...otherwise, a strengthening of these should confirm any continued advance in those markets.
Of course, the fate of the Major Indices seems to hinge on the decisions from Europe...as can be seen on the Weekly chart below of the EUR/USD, price ended the week with a small gain over last week below major resistance of the 50 sma (red) and 200 sma (pink), and price resistance around 1.4.
Furthermore, if the Major Indices and the Financials sector were to rally next week, it's important that they hold the following price levels (see 60-day 60-minute charts below):
- $INDU = 11700
- $SPX = 1230
- $NDX = 2340 (needs to re-capture this price level as it's holding as resistance)
- $RUT = 710
- XLF = 13.00
Friday, October 14, 2011
"Pinball Fantasy"...
Today's "pinball" action, so far, from the open on the 5 min TF...it's anybody's game today...it's caught in its "700 web" for now and is attempting to form support here...good luck on the day:
Here's a shot of a 60-day 60-min chart of the Russell 2000 Index...at the moment, today's gap is holding price up...we'll see whether the gap is filled by the end of the day...at the moment, the VIX is headed back up toward 30.00 in an attempt to fill its gap down on the open:
Thursday, October 13, 2011
Strength vs. Weakness...
Today, the markets were held up by, basically, Technology, as shown on my ETFs graph below, and were held down by Banks and Financials.
Contrast the following two Weekly charts of the Nasdaq 100 Index (NDX) and the Financials ETF (XLF).
NDX has made a higher high this year over last year's high and is approaching its July 2011 lows...the rising 50% Fibonacci fan line held as support from its July decline, and the 38.2% line (which was support) is near-term resistance...it has advanced back above the 2007 highs this week.
XLF dropped below the neckline of a rising H&S formation in August of this year...it nearly reached its target of 10.50 before popping up last week and this week. XLF remains range-bound in the mid-2009 zone in between price levels of 13.00ish and 11.00ish.
The 8-day 10-minute percentage comparison chart below of the NDX and the XLF shows that the XLF has led the NDX on a couple of occasions recently on their rally that began on October 4th. The 2-day 2-minute close-up chart shows the switch-over in who was leading who the past two days. The XLF was quite a bit weaker today than the NDX, compared with the action on the first chart...whether or not this is signalling a possible reversal of this latest push up remains to be seen. It's something I'll be watching over the next few days.
It's been my view for quite awhile now, that the Financial sector will have to strengthen and come on board if the equities markets (Dow 30, S&P 500 & Russell 2000) are going to have a convincing advancement beyond their large ranges that they've been in since August.
Also, out of interest, I'll watch China's Financial ETF, (GXC)...It is just below a major resistance level of 65.00, which was support until it dropped below in September, as shown on the Weekly chart below. There was a huge spike up in volume last week (nearly as high as was put in when price broke below the highs in 2007 before beginning a large decline) as price pierced below a support level of 55.00. What price does in between these two levels could have some bearing on the U.S. Financials, so I'll check in on this one from time to time to see where price is going.
Contrast the following two Weekly charts of the Nasdaq 100 Index (NDX) and the Financials ETF (XLF).
NDX has made a higher high this year over last year's high and is approaching its July 2011 lows...the rising 50% Fibonacci fan line held as support from its July decline, and the 38.2% line (which was support) is near-term resistance...it has advanced back above the 2007 highs this week.
XLF dropped below the neckline of a rising H&S formation in August of this year...it nearly reached its target of 10.50 before popping up last week and this week. XLF remains range-bound in the mid-2009 zone in between price levels of 13.00ish and 11.00ish.
The 8-day 10-minute percentage comparison chart below of the NDX and the XLF shows that the XLF has led the NDX on a couple of occasions recently on their rally that began on October 4th. The 2-day 2-minute close-up chart shows the switch-over in who was leading who the past two days. The XLF was quite a bit weaker today than the NDX, compared with the action on the first chart...whether or not this is signalling a possible reversal of this latest push up remains to be seen. It's something I'll be watching over the next few days.
It's been my view for quite awhile now, that the Financial sector will have to strengthen and come on board if the equities markets (Dow 30, S&P 500 & Russell 2000) are going to have a convincing advancement beyond their large ranges that they've been in since August.
Also, out of interest, I'll watch China's Financial ETF, (GXC)...It is just below a major resistance level of 65.00, which was support until it dropped below in September, as shown on the Weekly chart below. There was a huge spike up in volume last week (nearly as high as was put in when price broke below the highs in 2007 before beginning a large decline) as price pierced below a support level of 55.00. What price does in between these two levels could have some bearing on the U.S. Financials, so I'll check in on this one from time to time to see where price is going.
Wednesday, October 12, 2011
Major Indices Hit Resistance...What Holds the Key?
Below are a series of 1-hour charts of the Dow 30, S&P 500, Nasdaq 100 & Russell 2000 Indices. As can be seen, they have run into prior resistance at/near the top of their large trading range...however, the Russell 2000 is lagging on the advance that began at the beginning of this month.
In addition, the YM, ES, NQ & TF have also hit resistance at either their downtrending regression channel or a Fibonacci retracement level (or both as in the case of the YM & ES), as shown on the Daily charts below.
A look at the Weekly charts of the YM, ES, NQ & TF, however, do not show much resistance at the current price levels for the YM & ES)...however, the NQ is attempting to hold above the rising 50 sma (red) and is immediately below resistance from the July highs...the TF is lagging on this timeframe, as well and is currently just below resistance of the -1 deviation level of the uptrending regression channel and the upper one-third of the range from its March 2009 lows to the May 2011 highs. Price has been bouncing around in between the 50 sma (red) and 200 sma (pink) on this timeframe...these are holding, for now, as support (200 sma) and resistance (50 sma) levels.
We'll see whether or not these resistance levels matter much over the next few days on these Major Indices and their corresponding e-mini futures indices. If price pulls back, they may re-test prior resistance levels, as shown on the 1-hour charts above, before potentially finding support and resuming their weekly trek upwards...I'm still mindful, however, of my comments in recent posts regarding the "thin-ice" which lies below the current price levels.
On the 60-day 60-minute chart below, I've shown a percentage comparison of price action of the S&P 500 ($SPX), Nasdaq 100 ($NDX), the Financials ETF (XLF), and the Commodities ETF (DBC). They all fell at roughly the same rate from July of this year until the beginning of August. From August, DBC led the bounce that ensued, followed by $NDX, $SPX & XLF. In mid-September, DBC dropped below, first, $NDX, then $SPX, where it currently sits in third place. XLF has remained the weakest, percentage-wise from where they began 60 days ago.
The 10-day 10-minute chart below shows a percentage comparison of the same four instruments. It's interesting to note that XLF took over the lead today (by 1.5% above $SPX at one point) in terms of a percentage increase since 10 days ago...whether this was just a one-day pop by this sector remains to be seen (although it did pop slightly above on October 6th)... DBC is in last place on this timeframe. Financials and Commodities (and the Euro) may hold the key as to whether or not a full-blown rally has begun in equities...it's something I'll be watching over the next few days/weeks, together with the price action of the EUR/USD Forex pair that I mentioned in my earlier post today.
In addition, the YM, ES, NQ & TF have also hit resistance at either their downtrending regression channel or a Fibonacci retracement level (or both as in the case of the YM & ES), as shown on the Daily charts below.
A look at the Weekly charts of the YM, ES, NQ & TF, however, do not show much resistance at the current price levels for the YM & ES)...however, the NQ is attempting to hold above the rising 50 sma (red) and is immediately below resistance from the July highs...the TF is lagging on this timeframe, as well and is currently just below resistance of the -1 deviation level of the uptrending regression channel and the upper one-third of the range from its March 2009 lows to the May 2011 highs. Price has been bouncing around in between the 50 sma (red) and 200 sma (pink) on this timeframe...these are holding, for now, as support (200 sma) and resistance (50 sma) levels.
We'll see whether or not these resistance levels matter much over the next few days on these Major Indices and their corresponding e-mini futures indices. If price pulls back, they may re-test prior resistance levels, as shown on the 1-hour charts above, before potentially finding support and resuming their weekly trek upwards...I'm still mindful, however, of my comments in recent posts regarding the "thin-ice" which lies below the current price levels.
On the 60-day 60-minute chart below, I've shown a percentage comparison of price action of the S&P 500 ($SPX), Nasdaq 100 ($NDX), the Financials ETF (XLF), and the Commodities ETF (DBC). They all fell at roughly the same rate from July of this year until the beginning of August. From August, DBC led the bounce that ensued, followed by $NDX, $SPX & XLF. In mid-September, DBC dropped below, first, $NDX, then $SPX, where it currently sits in third place. XLF has remained the weakest, percentage-wise from where they began 60 days ago.
The 10-day 10-minute chart below shows a percentage comparison of the same four instruments. It's interesting to note that XLF took over the lead today (by 1.5% above $SPX at one point) in terms of a percentage increase since 10 days ago...whether this was just a one-day pop by this sector remains to be seen (although it did pop slightly above on October 6th)... DBC is in last place on this timeframe. Financials and Commodities (and the Euro) may hold the key as to whether or not a full-blown rally has begun in equities...it's something I'll be watching over the next few days/weeks, together with the price action of the EUR/USD Forex pair that I mentioned in my earlier post today.
EUR/USD at formidable resistance...
As shown on the Daily and Weekly charts below, the EUR/USD has reached a level of formidable resistance...note the intact "Death Cross" formations on both timeframes as the Euro continues to struggle against bearish sentiment.
"2 or 3 more months like this would confirm an official recession..."
I happened to read this report today on the Nasdaq/Economic Calendar site:
| "Ceridian-UCLA PCI | |||||||||
| |||||||||
Highlights
The Ceridian-UCLA Pulse of Commerce Index fell 1.0 percent in September on a seasonally and workday adjusted basis, following a 1.4 percent decline in August and a 0.2 percent decline in July. In the last three months, the PCI has declined at an annualized rate of 10 percent per year. This rate of decline has been exceeded only in the deep recession of 2008/09, and equaled only once outside of a recession in March 2000. In other words, since June, trucking activity has been receding at a pace that would be expected to show up in other economic measures soon. According to report's statistical analysis, two or three more months like this would confirm an official recession."
Perhaps the markets will ignore this until after Christmas...they have, so far, today as they continue to gap up above "thin ice."
 | |||||||||
Tuesday, October 11, 2011
Percentage Comparison of Index and Sector Performance
I've selected a variety of time periods in which to compare percentage-performance-to-date of a variety of indices and sector ETFs, namely, S&P 500, Dow 30, Nasdaq 100, Russell 2000, Financials ETF, Commodities ETF, Energy ETF, Basic Materials ETF, Gold ETF, and Oil ETF.
The percentage comparison charts below were created using www.StockCharts.com (PerfChart) facilities.
The first time period begins with the 2011 year-to-date data.
The second time period shows data for the past six months.
The third time period shows data from August 5th.
The fourth time period shows data from the beginning of the current Options Expiration (from September 19th).
The last time period shows the current month-to-date data from October 3rd.
What's interesting to note is the increased percentage decline between the first and second chart time periods (the biggest decline of the year took place from May to August)...the Gold ETF is beginning to decline in the second time period. The third time period shows a contraction of the decline, except for the Gold EFT which has declined further. The Gold ETF declined considerably in the fourth time period, which the others basically continued to rally. The last time period shows the continuation of the rally, with the Gold ETF participating in a substantial turn around.
In conclusion, looking at the data on the first time period, it would appear that the ones to watch over the coming days/weeks are the Russell 2000 Index, and the Financials, Basic Materials, Gold and Oil ETFs in terms of how they compare with the other Major Indices, as well as with the Energy ETF...with possibly the closest watch on the Russell 2000 Index, the Financials ETF, and the Gold ETF.
The percentage comparison charts below were created using www.StockCharts.com (PerfChart) facilities.
The first time period begins with the 2011 year-to-date data.
The second time period shows data for the past six months.
The third time period shows data from August 5th.
The fourth time period shows data from the beginning of the current Options Expiration (from September 19th).
The last time period shows the current month-to-date data from October 3rd.
What's interesting to note is the increased percentage decline between the first and second chart time periods (the biggest decline of the year took place from May to August)...the Gold ETF is beginning to decline in the second time period. The third time period shows a contraction of the decline, except for the Gold EFT which has declined further. The Gold ETF declined considerably in the fourth time period, which the others basically continued to rally. The last time period shows the continuation of the rally, with the Gold ETF participating in a substantial turn around.
In conclusion, looking at the data on the first time period, it would appear that the ones to watch over the coming days/weeks are the Russell 2000 Index, and the Financials, Basic Materials, Gold and Oil ETFs in terms of how they compare with the other Major Indices, as well as with the Energy ETF...with possibly the closest watch on the Russell 2000 Index, the Financials ETF, and the Gold ETF.
What's holding the S&P 500 down today?
So far, the near-term resistance level of 1200 is holding the S&P 500 down today as shown on the 1-hour chart below. Beyond that, 1210 is the next level of resistance, while 1190 is the near-term support level. Today's action on the YM, ES, NQ & TF, has been slow, choppy, and compressed as they re-test yesterday's highs...technology is, once again, slightly more bullish. At the moment, Forex and commodity markets are mixed. Basically, there is no real convincing direction one way or the other in any of the markets...we'll see how they close today and what the rest of the week brings.
P.S. The YM, ES, NQ & TF are still trading above "thin ice" as noted in my post yesterday.
P.S. The YM, ES, NQ & TF are still trading above "thin ice" as noted in my post yesterday.
Where's the support for unemployed Americans?
From Yahoo! Finance: "Senate Republicans likely to kill Obama jobs bill"
http://finance.yahoo.com/news/Senate-Republicans-likely-to-apf-1745877098.html?x=0
Amazing...
http://finance.yahoo.com/news/Senate-Republicans-likely-to-apf-1745877098.html?x=0
Amazing...
Monday, October 10, 2011
Somewhere in between 100% and 1%...
Is volatility still present in the markets?...yes...How much do the markets move in a day?...somewhere in between 100% and 1% on a daily basis...What is this telling me?...that the markets cannot afford to be complacent on a daily basis for the time-being. The 4-hour chart below of the VIX shows the large trading range that it's been in since it broke above 25.00 at the beginning of August. Because of trend and price confluence, it's important that the VIX reclaim the level of 35.50 if it's going to resume its climb upwards to confirm a corresponding move down on equities. Otherwise, it may fall to the next support level of 31.30. As I mentioned in my previous post on September 12, volatility will remain elevated as long as the VIX holds above 25.00, and we can probably expect further large and volatile intraday swings until it falls much further below that level (so far, that's been the case): http://strawberryblondesmarketsummary.blogspot.com/2011/09/money-is-always-interesting-subject.html
Should the YM, ES, NQ & TF continue their steep climb from last Tuesday, the next resistance levels are around:
- YM = 11500 - 11600
- ES = 1213 - 1220
- NQ = 2295
- TF = 710
The corresponding resistance levels for the Dow 30, S&P 500, Nasdaq 100 & Russell 2000 are around:
- Dow 30 = 11500
- S&P 500 = 1210
- Nasdaq 100 = 2300
- Russell 2000 = 695 & 710
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