My Blog is 4 years old today...this is my 1103rd article...it's been fun...now for some cake...
...and maybe some strawberries...
...and maybe some ice cream...
Beach Drinks
Saturday, April 18, 2015
Happy 4th Year of Blogging!
My Blog is 4 years old today...this is my 1103rd article...it's been fun...now for some cake...
Friday, April 10, 2015
U.S. Markets: The Safest Place to Invest?
The following 5-Year Daily ratio charts of the S&P 500 Index compared to Major World Indices shows that the SPX has underperformed all of them since the beginning of this year, and some for the past 1 1/2 to 2 1/2 years.
Price now sits at or near major support levels on all of these ratios. Unless serious buying begins to pour into the SPX, we may see panic selling ensue in U.S. markets. I'd keep a particularly close eye on the German, Japanese and Chinese indices for signs of any potential rotation of money from those markets and into the SPX, since their ratios are at the most extreme levels against the SPX during this 5-year period. Otherwise, the Fed may, very well, consider re-introducing another round of QE to compete with those countries' Central Banks' QE programs.
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
.png)
Price now sits at or near major support levels on all of these ratios. Unless serious buying begins to pour into the SPX, we may see panic selling ensue in U.S. markets. I'd keep a particularly close eye on the German, Japanese and Chinese indices for signs of any potential rotation of money from those markets and into the SPX, since their ratios are at the most extreme levels against the SPX during this 5-year period. Otherwise, the Fed may, very well, consider re-introducing another round of QE to compete with those countries' Central Banks' QE programs.
Sunday, March 29, 2015
Forecasting the S&P 500 E-mini Futures Index...My Dumb Luck?
My post of April 5, 2014 refers.
The following Daily chart of the ES (S&P 500 E-mini Futures Index) shows what happened from that date up to the present. The ensuing swings overshot my projected targets a bit, and it took a bit longer for the "FROTH" level around 2100 to be reached, but price action generally followed the path that I forecast a year ago...price has been consolidating, basically, below that level since December 2014. Additionally, volatility did become the "name of the game" over those weeks and months, as I had anticipated.
As can be seen on the next Daily chart of the ES, 2100 represents a double Fibonacci confluence major resistance level that will have to be solidly overcome and held before bulls can resume any kind of sustainable uptrend. A break and hold below 1992 could see bears take the ES down to 1813, or lower. Until we see a solid break one way or the other, I expect volatile swings to continue in both directions to plague both the bulls and the bears.
The following Daily chart of the ES (S&P 500 E-mini Futures Index) shows what happened from that date up to the present. The ensuing swings overshot my projected targets a bit, and it took a bit longer for the "FROTH" level around 2100 to be reached, but price action generally followed the path that I forecast a year ago...price has been consolidating, basically, below that level since December 2014. Additionally, volatility did become the "name of the game" over those weeks and months, as I had anticipated.
As can be seen on the next Daily chart of the ES, 2100 represents a double Fibonacci confluence major resistance level that will have to be solidly overcome and held before bulls can resume any kind of sustainable uptrend. A break and hold below 1992 could see bears take the ES down to 1813, or lower. Until we see a solid break one way or the other, I expect volatile swings to continue in both directions to plague both the bulls and the bears.
Friday, March 27, 2015
Big Caps Fizzle While Nasdaq and Foreign Markets Sizzle
The following Year-to-Date Percentage Gained/Lost graphs are presented without individual comment to, simply, show where money has flowed in a variety of world markets since January of this year (until Friday's close).
This year, the majority of the money has flowed into the Nasdaq, Biotech, Homebuilders, Healthcare, the U.S. Dollar, U.S. Bonds, Silver, Russia, China, Japan, Australia, Germany, France, Portugal, Italy, Ireland, and Spain. The Dow 30, S&P 100, and S&P 500 Indices have remained, basically, flat, while Dow Utilities, Dow Transports, and Nasdaq Transports are down on the year, and Small Caps have made some minor gains.
U.S. MAJOR INDICES
U.S. MAJOR SECTORS + Biotech
U.S. MAJOR SECTORS + Homebuilders
MAJOR EU COUNTRIES
EMERGING MARKETS + BRICs
CANADA, JAPAN, BRITAIN, AUSTRALIA + MAJOR WORLD MARKET INDEX
COMMODITIES
COMMODITIES + LUMBER + HOMEBUILDERS + USD + US BONDS
MAJOR CURRENCIES
The following 1-Year percentage gained/lost chart shows the trend of the S&P 500 Index compared to the U.S. Dollar. They were, generally, in an uptrend until January of this year, whereupon the USD continued its gains, while the SPX consolidated in a large sideways range. From the beginning of March, the spread between them accelerated to the greatest extent seen over this one-year period, and they have been making some large volatile moves since then.
Whether this points to a capitulation and shift of money flow from the USD and into SPX (or whether we see a major correction in the SPX, with money flowing back into the USD) remains to be seen...it may be worth tracking the spread between these two to gauge such a shift in sentiment.
Furthermore, inasmuch as Europe has made such extensive gains, so far this year (compared with U.S. markets), we'll see whether this pace continues, or whether some money is taken off the table soon. You can see on the following 1-Year percentage gained/lost chart that the spread between the German DAX and the Euro has reached an extreme level...in fact, the next chart, which begins in January 1999, shows this anomaly to be highly exaggerated and unprecedented.
The German DAX may, in fact, be well overdue for a major correction...another spread to watch closely over the near term.
This year, the majority of the money has flowed into the Nasdaq, Biotech, Homebuilders, Healthcare, the U.S. Dollar, U.S. Bonds, Silver, Russia, China, Japan, Australia, Germany, France, Portugal, Italy, Ireland, and Spain. The Dow 30, S&P 100, and S&P 500 Indices have remained, basically, flat, while Dow Utilities, Dow Transports, and Nasdaq Transports are down on the year, and Small Caps have made some minor gains.
U.S. MAJOR INDICES
U.S. MAJOR SECTORS + Biotech
U.S. MAJOR SECTORS + Homebuilders
MAJOR EU COUNTRIES
EMERGING MARKETS + BRICs
CANADA, JAPAN, BRITAIN, AUSTRALIA + MAJOR WORLD MARKET INDEX
COMMODITIES
COMMODITIES + LUMBER + HOMEBUILDERS + USD + US BONDS
MAJOR CURRENCIES
The following 1-Year percentage gained/lost chart shows the trend of the S&P 500 Index compared to the U.S. Dollar. They were, generally, in an uptrend until January of this year, whereupon the USD continued its gains, while the SPX consolidated in a large sideways range. From the beginning of March, the spread between them accelerated to the greatest extent seen over this one-year period, and they have been making some large volatile moves since then.
Whether this points to a capitulation and shift of money flow from the USD and into SPX (or whether we see a major correction in the SPX, with money flowing back into the USD) remains to be seen...it may be worth tracking the spread between these two to gauge such a shift in sentiment.
Furthermore, inasmuch as Europe has made such extensive gains, so far this year (compared with U.S. markets), we'll see whether this pace continues, or whether some money is taken off the table soon. You can see on the following 1-Year percentage gained/lost chart that the spread between the German DAX and the Euro has reached an extreme level...in fact, the next chart, which begins in January 1999, shows this anomaly to be highly exaggerated and unprecedented.
The German DAX may, in fact, be well overdue for a major correction...another spread to watch closely over the near term.
Sunday, March 22, 2015
Update of the SPX:VIX Ratio
As I mentioned in my post on February 24th, 150.00 is the Bull/Bear Line-in-Sand level for the SPX:VIX ratio, as shown on the updated Daily ratio chart below.
At the moment, price is back above this level, after bouncing in between 160.00ish and 120.00ish since that last post.
The following 2-year Daily chart of the SPX shows a high-volume spike made this past Friday. Generally speaking, each time such a volume spike occurred during this timeframe, it has been followed by, either, an immediate reversal, or one shortly thereafter. If history is to repeat itself, I'd say the SPX is due to reverse to the downside soon.
We may see clues of such an event develop in the SPX:VIX ratio chart above. Bulls will need to hold price above 150.00, plus we'll need to see the price of the Momentum indicator hold above the zero level. A drop and hold below those levels may see the Bears re-take control of the SPX and send it below its last swing low to, potentially, re-test the 200-day moving average, or lower.
Additionally, further clues as to direction may be found in the last update I've written in my post entitled "Major World Index Poised for Breakout or Failure?" at this link.
At the moment, price is back above this level, after bouncing in between 160.00ish and 120.00ish since that last post.
The following 2-year Daily chart of the SPX shows a high-volume spike made this past Friday. Generally speaking, each time such a volume spike occurred during this timeframe, it has been followed by, either, an immediate reversal, or one shortly thereafter. If history is to repeat itself, I'd say the SPX is due to reverse to the downside soon.
We may see clues of such an event develop in the SPX:VIX ratio chart above. Bulls will need to hold price above 150.00, plus we'll need to see the price of the Momentum indicator hold above the zero level. A drop and hold below those levels may see the Bears re-take control of the SPX and send it below its last swing low to, potentially, re-test the 200-day moving average, or lower.
Additionally, further clues as to direction may be found in the last update I've written in my post entitled "Major World Index Poised for Breakout or Failure?" at this link.
Thursday, March 05, 2015
Major World Market Index Poised for Breakout or Failure?
* NB: See UPDATES below...
The World Market Index will need to recapture the 200-day moving average, as well as the 1900 level, as shown on the following Daily chart. Since it's still under the bearish influences of a moving average Death Cross formation, it's still vulnerable to a retest of the 50-day moving average, or lower, should we see major world markets plunge...a drop and hold below the 50 level on the RSI could point price in that direction.
UPDATE March 15, 2015:
Price has, indeed, declined to retest the 50-day moving average and is now sitting just above a major support level at 1800, as shown on the Daily chart below. A drop and hold below that would have serious implications, not only for foreign markets, but, also, U.S. equity markets. Also, the very recent daily uptrend has now been broken, as price has fallen back into a large sideways trading range. As long as the RSI remains below the 50 level, and the MACD continues to decline, we may very well see this scenario develop. Otherwise, we may see some very volatile swings in both directions over the short term, until a firm breakout from this range in a new direction is confirmed, one way or the other...one to watch closely over the coming days.
UPDATE March 21, 2015:
The following updated chart, as of Friday's close, shows that volatility is still rampant in this index. Price is, once more, poised to break out of this large sideways trading range to the upside. A break and hold above the 1900 level and the 200-day moving average, together with a hold above the 50 level on the RSI should see the bulls re-take control of this index. Otherwise, a fall back into the range will likely result in more volatile and swift swings in favour, ultimately, of the bears, inasmuch as it's still under the bearish influences of a moving average Death Cross formation
UPDATE May 22, 2015:
The following updated chart, as of Thursday's close, shows that price has broken above the 1900 major resistance level, retested it and bounced, after a bullish moving average Golden Cross formed in mid-April.
With all three technical indicators declining in value since the swing high of 1949.91 set on April 27th, we'll need to see price break and hold above that major resistance level, with confirmation of higher highs on the RSI, MACD and Stochastics indicators. Otherwise, we could see a major reversal at what could be considered a right shoulder of a bearish Head and Shoulders formation (with a downward-sloping neckline), that could send world markets tumbling considerably to around the 1600 level, or lower.
P.S. Price closed on May 26th just below the 50 moving average...stay tuned for fireworks...
The World Market Index will need to recapture the 200-day moving average, as well as the 1900 level, as shown on the following Daily chart. Since it's still under the bearish influences of a moving average Death Cross formation, it's still vulnerable to a retest of the 50-day moving average, or lower, should we see major world markets plunge...a drop and hold below the 50 level on the RSI could point price in that direction.
UPDATE March 15, 2015:
Price has, indeed, declined to retest the 50-day moving average and is now sitting just above a major support level at 1800, as shown on the Daily chart below. A drop and hold below that would have serious implications, not only for foreign markets, but, also, U.S. equity markets. Also, the very recent daily uptrend has now been broken, as price has fallen back into a large sideways trading range. As long as the RSI remains below the 50 level, and the MACD continues to decline, we may very well see this scenario develop. Otherwise, we may see some very volatile swings in both directions over the short term, until a firm breakout from this range in a new direction is confirmed, one way or the other...one to watch closely over the coming days.
UPDATE March 21, 2015:
The following updated chart, as of Friday's close, shows that volatility is still rampant in this index. Price is, once more, poised to break out of this large sideways trading range to the upside. A break and hold above the 1900 level and the 200-day moving average, together with a hold above the 50 level on the RSI should see the bulls re-take control of this index. Otherwise, a fall back into the range will likely result in more volatile and swift swings in favour, ultimately, of the bears, inasmuch as it's still under the bearish influences of a moving average Death Cross formation
UPDATE May 22, 2015:
The following updated chart, as of Thursday's close, shows that price has broken above the 1900 major resistance level, retested it and bounced, after a bullish moving average Golden Cross formed in mid-April.
With all three technical indicators declining in value since the swing high of 1949.91 set on April 27th, we'll need to see price break and hold above that major resistance level, with confirmation of higher highs on the RSI, MACD and Stochastics indicators. Otherwise, we could see a major reversal at what could be considered a right shoulder of a bearish Head and Shoulders formation (with a downward-sloping neckline), that could send world markets tumbling considerably to around the 1600 level, or lower.
P.S. Price closed on May 26th just below the 50 moving average...stay tuned for fireworks...
Tuesday, March 03, 2015
Volatile Glitter
My gut tells me that GOLD volatility is about to hit the fan...as long as the RSI remains below the 50 level, and as long as price remains under the bearish influences of the moving average Death Cross, a break and hold below the 1200 level could, finally, see GOLD reach a potential target of 1150 or even 1000 (rather quickly), as I mentioned in my last post on GOLD.
Add a potential downside target of 7.75 for GDX (Gold Miners) into the mix, and you'll definitely see volatility spike...
Add a potential downside target of 7.75 for GDX (Gold Miners) into the mix, and you'll definitely see volatility spike...
Friday, February 27, 2015
Tuesday, February 24, 2015
The Line-in-Sand Level for SPX:VIX Ratio
150.00 is the Bull/Bear Line-in-Sand level for the SPX:VIX ratio as shown on the Daily chart below.
Price closed today (Tuesday) at 154.53...failure to hold 150.00 could see a serious correction in equities and possible break of the critical 60.00 level, which has been threatened numerous times since mid-October 2014.
Momentum has been choppy and rising tentatively since mid-January of this year, but has yet to make a new all-time high. Price has definitely not made an all-time high on this ratio, and is not confirming the all-time high set on the SPX, as shown on the second Daily chart. As well, momentum on the SPX has also been choppy and rising tentatively since mid-January of this year, but has yet to make a new all-time high. These three observations tell me that, although the SPX remains in uptrend, it is rising in a choppy, tentative and fragile manner at current levels. Furthermore, the SPX will reach a major external Fibonacci level (161.8%) at 2138, where we may see some major profit-taking occur on rising volatility.
Price closed today (Tuesday) at 154.53...failure to hold 150.00 could see a serious correction in equities and possible break of the critical 60.00 level, which has been threatened numerous times since mid-October 2014.
Momentum has been choppy and rising tentatively since mid-January of this year, but has yet to make a new all-time high. Price has definitely not made an all-time high on this ratio, and is not confirming the all-time high set on the SPX, as shown on the second Daily chart. As well, momentum on the SPX has also been choppy and rising tentatively since mid-January of this year, but has yet to make a new all-time high. These three observations tell me that, although the SPX remains in uptrend, it is rising in a choppy, tentative and fragile manner at current levels. Furthermore, the SPX will reach a major external Fibonacci level (161.8%) at 2138, where we may see some major profit-taking occur on rising volatility.
 |
| SPX:VIX Daily Ratio Chart |
 |
| SPX Daily Chart |
Wednesday, February 11, 2015
Homebuilders Sector at a Critical Level
The following Daily chart of the Homebuilders Sector (XHB) shows, that it reached a new 3-year high today (Wednesday), but not a new closing high. However, the RSI, MACD and Stochastics indicators are not yet confirming a move higher. Note the high volume activity since the beginning of this year...signalling major rotation in and out of this sector, perhaps, in readiness for a big move one way or the other.
When compared with the Financials Sector (XLF), the following Daily ratio chart of XHB:XLF shows that the XHB weakened from the beginning of 2013 until mid-October 2014, while XLF outperformed. At the moment, price has bumped up against major resistance at 1.50 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 1.40/38 level before the next major move is established.
When compared with the S&P 500 Index ($SPX), the following Daily ratio chart of XHB:$SPX shows that the XHB weakened from mid-2013 until mid-October 2014, while the $SPX outperformed. At the moment, price has bumped up against major resistance at 0.0175 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 0.0165/60 level before the next major move is established.
Since the "continued recovery" in the U.S. is seen to be dependent, in part, on strong homebuilding activity, it may be worth measuring its "strength" against the above sector and index over the near and longer terms...I wouldn't be surprised to see some weakness of the XHB against these in the short term.
When compared with the Financials Sector (XLF), the following Daily ratio chart of XHB:XLF shows that the XHB weakened from the beginning of 2013 until mid-October 2014, while XLF outperformed. At the moment, price has bumped up against major resistance at 1.50 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 1.40/38 level before the next major move is established.
When compared with the S&P 500 Index ($SPX), the following Daily ratio chart of XHB:$SPX shows that the XHB weakened from mid-2013 until mid-October 2014, while the $SPX outperformed. At the moment, price has bumped up against major resistance at 0.0175 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 0.0165/60 level before the next major move is established.
Since the "continued recovery" in the U.S. is seen to be dependent, in part, on strong homebuilding activity, it may be worth measuring its "strength" against the above sector and index over the near and longer terms...I wouldn't be surprised to see some weakness of the XHB against these in the short term.
Wednesday, January 28, 2015
On Vacation
As of today, I'm on vacation for one to two weeks, so no posts until then. Best of luck with your trading in the meantime!
Tuesday, January 27, 2015
Gold Rush or Dump?
A break & hold below 1270/60 on Gold could send it tumbling (quite hard this time) to 1150 or lower (ultimately 1000).
1314 is the near-term resistance level to overcome before running into major resistance at 1550, in my opinion, (based on my analysis of price, Fibonacci, channel, and volume profile data), as shown on the 5-Year Weekly chart below.
1314 is the near-term resistance level to overcome before running into major resistance at 1550, in my opinion, (based on my analysis of price, Fibonacci, channel, and volume profile data), as shown on the 5-Year Weekly chart below.
Saturday, January 24, 2015
Where Has Money Been Invested This Year?
See for yourself...
The following Year-To-Date percentage gained/lost graphs of World Markets are presented without individual comment. A general observation is that money has begun to flow into non-U.S. markets. I'd also add that fund managers will likely be looking to top up their accounts for January's month-end...as such, we may not see new trends emerge until February.
The following Year-To-Date percentage gained/lost graphs of World Markets are presented without individual comment. A general observation is that money has begun to flow into non-U.S. markets. I'd also add that fund managers will likely be looking to top up their accounts for January's month-end...as such, we may not see new trends emerge until February.
Thursday, January 22, 2015
Possible Bounce in Store for Euro
Further to my recent posts here and here, the EUR/USD Forex pair has reached a potential (double Fibonacci) support level between 1.1205 and 1.13, as shown on the following Weekly chart. A possible bounce is in store for the Euro.
Failure to begin stabilizing at this level and reclaim the major resistance level between 1.19 and 1.2125 (seen pre- and post-2007/08 financial crisis) could send the Euro plunging down to the 2000 lows of 0.8227. I can't imgine that's what Mr. Draghi has in mind with his ECB QE policy announcment earlier today...although stranger things have happened.
Failure to begin stabilizing at this level and reclaim the major resistance level between 1.19 and 1.2125 (seen pre- and post-2007/08 financial crisis) could send the Euro plunging down to the 2000 lows of 0.8227. I can't imgine that's what Mr. Draghi has in mind with his ECB QE policy announcment earlier today...although stranger things have happened.
Subscribe to:
Posts (Atom)