Convertible at Beach
Saturday, January 05, 2013
AAPL Bounce Coming?
This could be a possible scenario for AAPL as it approaches intersecting 50% channel levels as potential support to, ultimately, form a right shoulder of a large Head & Shoulders pattern over the next several months -- maybe far-fetched, but who knows?
The following Daily ratio chart of AAPL:NDX may offer some clues on the shorter-term outlook. At the moment, AAPL is underperforming the NDX as it approaches near-term support. However, Momentum has turned negative and dropped below the zero level once more...one to watch for hints of either a turnaround soon (on positively-diverging Momentum) or continued weakness on accelerating downside Momentum.
Friday, January 04, 2013
Money Flow for January Week 1 2013
Further to my last weekly market update, this week's update will look at:
***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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The S&P 500 and Russell 2000 Indices broke above and closed well above their major trendline.
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.
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.
Enjoy your weekend, and good luck next week!
- 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.
~~~
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.
~~~
Enjoy your weekend, and good luck next week!
Wednesday, January 02, 2013
Wednesday's Volatility Crush
With today's (Wednesday's) "gap-up-and-go" action on the SPX, RUT, and NDX, volatility got crushed, as shown on the three Daily ratio charts below.
The SPX:VIX ratio closed just above trendline resistance. I'd say, if price can hold above 95.00, it has a good chance of going higher, provided the Momentum indicator stays above the zero level now.
The RUT:RVX ratio closed at major resistance. I'd say, if price can hold above 46.00, it has a good chance of going higher, provided the Momentum indicator stays above the zero level now.
The NDX:VXN ratio closed in between trendline resistance and support. I'd say, if price can hold above 150.00, it has a good chance of going higher, provided the Momentum indicator stays above the zero level now.
As shown on the Daily charts below, and looking at a bigger picture, there is still plenty of room in a larger channel from the June 2012 lows on the SPX and NDX before they hit their upper channel, while the upper channel is much closer at around 890.00 on the RUT. Whether the RUT hits its upper channel and continues to run higher without either consolidating or pulling back remains to be seen, if the SPX and NDX continue their rally...one to watch for continued leadership, particularly after making it's all-time high/closing high today.
The SPX:VIX ratio closed just above trendline resistance. I'd say, if price can hold above 95.00, it has a good chance of going higher, provided the Momentum indicator stays above the zero level now.
The RUT:RVX ratio closed at major resistance. I'd say, if price can hold above 46.00, it has a good chance of going higher, provided the Momentum indicator stays above the zero level now.
The NDX:VXN ratio closed in between trendline resistance and support. I'd say, if price can hold above 150.00, it has a good chance of going higher, provided the Momentum indicator stays above the zero level now.
As shown on the Daily charts below, and looking at a bigger picture, there is still plenty of room in a larger channel from the June 2012 lows on the SPX and NDX before they hit their upper channel, while the upper channel is much closer at around 890.00 on the RUT. Whether the RUT hits its upper channel and continues to run higher without either consolidating or pulling back remains to be seen, if the SPX and NDX continue their rally...one to watch for continued leadership, particularly after making it's all-time high/closing high today.
Gap #? on the TF
I'm aware of three types of gaps -- usually occurring in a sequence in a trend:
We'll see, in time, if today's (Wednesday's) gap on the TF is a Continuation Gap. If so, then it has a long way to, ultimately, run before it hits the third type...essentially another 100 points, or so, to around 950...although, not likely straight up! I would note that the Breakaway Gap (which began the current uptrend) remains unfilled.
Since the formation on the 60 min (market hours only) chart below resembles that of an inverted Head & Shoulders, this target could be actualized...the timing, however, is unknown.
- Gap 1 = Breakaway Gap
- Gap 2 = Continuation Gap
- Gap 3 = Exhaustion Gap
We'll see, in time, if today's (Wednesday's) gap on the TF is a Continuation Gap. If so, then it has a long way to, ultimately, run before it hits the third type...essentially another 100 points, or so, to around 950...although, not likely straight up! I would note that the Breakaway Gap (which began the current uptrend) remains unfilled.
Since the formation on the 60 min (market hours only) chart below resembles that of an inverted Head & Shoulders, this target could be actualized...the timing, however, is unknown.
Price could, potentially, simply continue rising along the upper edge of the channel (shown on the 60 min market hours only chart below) to defy any overbought conditions. Or, it could zig-zag upwards within the channel to reach 950-970 by the end of February 2013. That would tie in with the date by which Congress will have to reach an agreement on the rest of the "Fiscal Cliff" issues, as well as raise the "Debt Ceiling Limit."
Tuesday, January 01, 2013
Monday, December 31, 2012
2012 Market Wrap-Up for U.S. Major Indices
Here's what I wrote one year ago about 2011:
"2011...what a year! A year of social unrest, demonstrations, riots, government overthrows, mass murders, earthquakes, tsunamis, floods, nuclear reactor meltdowns, political discord, economic distress (the "R" word has resurfaced), austerity, financial weakness, credit rating downgrades, volatility, financial fraud, law suits, assassinations, and the passing of Steve Jobs...no wonder the markets have been so reactive (sometimes quite violently) rather than proactive in a measured manner."
and
"The question will be whether stability returns to the European markets and whether recent stability can hold and improve in Emerging Markets for 2012, or whether volatility (VIX) will rise again...the VIX is still elevated, so there is a good possibility that it will. No doubt, all market action will be reflective of upcoming world news events, as well as consumer and investor sentiment, together with risk vs safety appetite. A couple of gauges that I'll follow in this regard are the VIX, U.S. $, and Copper, as well as the other instruments noted above. Without benefit of major Fed QE intervention, I imagine that next year could be range-bound...within this year's high and low, generally...although unforeseen catastrophes could send the Major Indices below this year's lows."
2012 has been slightly quieter -- just remove the words "nuclear reactor meltdowns, and the passing of Steve Jobs," but repeat the rest. Add to the mix the fact that (a) Central Banks around the world have poured huge amounts of monetary stimulus into the markets, (b) there have been a variety of government elections around the world, and (c) the markets have gone through a Presidential/Congressional election in the U.S. and have faced turmoil related to the "Fiscal Cliff" and "Debt Ceiling Limit" issues -- and you get the following results on the U.S. Major Indices.
"2011...what a year! A year of social unrest, demonstrations, riots, government overthrows, mass murders, earthquakes, tsunamis, floods, nuclear reactor meltdowns, political discord, economic distress (the "R" word has resurfaced), austerity, financial weakness, credit rating downgrades, volatility, financial fraud, law suits, assassinations, and the passing of Steve Jobs...no wonder the markets have been so reactive (sometimes quite violently) rather than proactive in a measured manner."
and
"The question will be whether stability returns to the European markets and whether recent stability can hold and improve in Emerging Markets for 2012, or whether volatility (VIX) will rise again...the VIX is still elevated, so there is a good possibility that it will. No doubt, all market action will be reflective of upcoming world news events, as well as consumer and investor sentiment, together with risk vs safety appetite. A couple of gauges that I'll follow in this regard are the VIX, U.S. $, and Copper, as well as the other instruments noted above. Without benefit of major Fed QE intervention, I imagine that next year could be range-bound...within this year's high and low, generally...although unforeseen catastrophes could send the Major Indices below this year's lows."
2012 has been slightly quieter -- just remove the words "nuclear reactor meltdowns, and the passing of Steve Jobs," but repeat the rest. Add to the mix the fact that (a) Central Banks around the world have poured huge amounts of monetary stimulus into the markets, (b) there have been a variety of government elections around the world, and (c) the markets have gone through a Presidential/Congressional election in the U.S. and have faced turmoil related to the "Fiscal Cliff" and "Debt Ceiling Limit" issues -- and you get the following results on the U.S. Major Indices.
Good-bye 2012...Hello 2013!
A hearty thanks to all who visited my Blog in 2012! Tune in again next year!
Happy New Year 2013...may all your dreams come true!
Happy New Year 2013...may all your dreams come true!
Friday, December 28, 2012
Money Flow for December Week 4
Further to my last weekly market update, this week's update will look at:
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.
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!
- 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!
I Smell Another Credit Rating Downgrade Coming Soon...
With both parties in disagreement on reaching a comprehensive "Fiscal Cliff" deal that aggressively reduces government spending and raises taxes, and with the "Debt Ceiling Limit" about to be breached (and probably inflated to unimaginable, out-of-control levels), I smell another U.S. credit rating downgrade coming soon...possibly to ring in the New Year.
I think "government inaction/complacency/impotency with power turned over to the Central Bank" would best describe 2012...for most countries of the world.
Who's in charge?
I think "government inaction/complacency/impotency with power turned over to the Central Bank" would best describe 2012...for most countries of the world.
Who's in charge?
Thursday, December 27, 2012
Even Cindy the Mouse Pays Her Own Way
Even Cindy the mouse knows she has to pay her own way...a seemingly foreign concept to U.S. politicians...
Wednesday, December 26, 2012
Update on SPX/VIX 2012 Complacency Odds
My post of February 28th of this year gave an 80% chance of another spike on the VIX this year. While that scenario threatened to occur mid-year, volatility subsided and has remained relatively quiet this year. However, with only three trading days left, I thought I'd provide an update on this topic.
The Weekly chart below shows the VIX pushing up against a major resistance level around 20.00. A close and hold above 20.00 may produce such a spike...if not this year, then in (possibly early) 2013.
The Weekly ratio chart of the SPX:VIX shows that the SPX has weakened on rising volatility, that price has fallen below a major support level, and that the Momentum indicator has fallen below zero again, after failing to continue pushing to new highs.
The Weekly comparison chart below of the SPX and the VIX confirms that volatility is overtaking any former strength of the SPX at the moment.
All in all, these three charts are worth tracking over the next few days/weeks, particularly as the "Fiscal Cliff" issue remains unresolved and the "Debt Ceiling Limit" is fast approaching, giving extra fuel to the high odds of another spike in the VIX, sooner rather than later. After all, Ben Bernanke did say recently that Fed monetary policy alone cannot solve America's unemployment and economic woes...a change in fiscal policies will be required, and without bi-partisan cooperation on these (and many other such) issues, I would say we'll see a spike in the VIX at some point soon.
The Weekly chart below shows the VIX pushing up against a major resistance level around 20.00. A close and hold above 20.00 may produce such a spike...if not this year, then in (possibly early) 2013.
The Weekly ratio chart of the SPX:VIX shows that the SPX has weakened on rising volatility, that price has fallen below a major support level, and that the Momentum indicator has fallen below zero again, after failing to continue pushing to new highs.
The Weekly comparison chart below of the SPX and the VIX confirms that volatility is overtaking any former strength of the SPX at the moment.
All in all, these three charts are worth tracking over the next few days/weeks, particularly as the "Fiscal Cliff" issue remains unresolved and the "Debt Ceiling Limit" is fast approaching, giving extra fuel to the high odds of another spike in the VIX, sooner rather than later. After all, Ben Bernanke did say recently that Fed monetary policy alone cannot solve America's unemployment and economic woes...a change in fiscal policies will be required, and without bi-partisan cooperation on these (and many other such) issues, I would say we'll see a spike in the VIX at some point soon.
Japan's Nikkei Approaching Major Resistance Levels
The Weekly chart below shows that Japan's Nikkei E-mini Futures Index is just below major resistance levels. We may start to see choppy (and potentially volatile) trading from today's (Wednesday's) high of 10390 up to 10900-11300ish until it either pulls back or continues upwards.
As you can see, it's had great difficulty staying above the 10390 level since the index began its rally after the lows of 2008/09. We'll see whether the government's money-printing program continues to translate into a continued equity push up, in spite of these technical limitations/constraints.
As you can see, it's had great difficulty staying above the 10390 level since the index began its rally after the lows of 2008/09. We'll see whether the government's money-printing program continues to translate into a continued equity push up, in spite of these technical limitations/constraints.
Tuesday, December 25, 2012
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