The Correlation Among Consumer Staples, Commodities And Agriculture Sectors

Following the bottoming of the 2008/09 U.S. financial crisis in March of 2009, the Consumer Staples ETF, XLP, began a years-long rally, along with the Commodities and Agricultural ETFs, DBC and DBA, respectively, as shown on the following monthly comparison chart.

While XLP has been on a slow, steady climb ever since, DBC and DBA began to diverge in a volatile and whippy descent in early 2011 and finally bottomed around late Q1 to early Q2 of 2020...then, reversed shortly after the WHO declared the COVID-19 virus a pandemic in March 2020).

DBC and DBA have been in an ever-steepening rally, ever since...likely accelerated most recently by Russia's declaration of war against and invasion of Ukraine.

As long as uncertainty exists around this war, as well as the after-effects of COVID, which have contributed to a spike in inflation, labour shortages, and supply-chain problems, I'd posit that all three ETFs will continue to rise.

However, a divergence in one or more may signal, either a pause and consolidation in these sectors for a period of time, or a reversal...so keep an eye on them for directional clues and trend strength, along with the information contained in my post of February 27 pertaining to U.S. Major Sectors and the SPX.

WORLD MARKETS March 7, 2022: A Sea Of Red & Bear Markets Everywhere

Presented without comment...

Source: CNBC

Source: StockQ.org

Source: Barchart Stock & Sector Heatmaps

Conversely, look what's in the green in the futures markets, today...

Source: Barchart Futures Heatmap

ZeroHedge's summary of today's market action is worth a read...(HINT: bear markets everywhere)...

Source: ZeroHedge

Is Weakness In China's Financials ETF A Harbinger for the Shanghai Index?

China's Financials ETF, GXC, has plunged dramatically since January of 2021, in contrast to China's Shanghai Index, SSEC, which is teetering on the brink of a downdraft, as shown on the following monthly comparison chart.

Extreme volatility began in GXC in March of 2020, relative to the SSEC, when the WHO declared COVID-19 a "pandemic" (March 11)...following its declaration of the virus as a "public health emergency of international concern" on January 30.

This dramatic and volatile trend reversal in China's financial sector may signal forthcoming weakness and produce problems, in the near term, and, possibly in the long run, for its equity sector, namely the Shanghai Index.

By the way, my post of September 15, 2021 described financial weakness in GXC pertaining to China's second-largest property developer, Evergrande Group (and its major debt obligations and defaults)...thereby, possibly, triggering a negative event in China's Shanghai Index, and, even, other world markets.

Combine those issues with 

• skyrocketing global inflation, 
• parabolic commodity prices, 
• Europe's financial weakness, 
• weakness in U.S. and Chinese Technology Sectors, and
• the invasion and war perpetrated by Russia against Ukraine, 

and you have a world-wide financial catastrophe waiting to happen.

Keep an eye on this comparison for clues on a weakening SSEC, as well as the above global issues.

P.S. More information and updates on Chinese markets can be found here.

Major Trend Divergences On DAX and EUFN

Do you notice something odd about the long-term trends of Germany's DAX with EUFN, Europe's MSCI Financials ETF?

While the DAX has been in a long-term uptrend, the EUFN has been in a volatile and whippy general downtrend, as highlighted by their respective channels depicted on the following monthly comparison chart below.

Whether that variance can continue in the coming weeks is debatable and whether that is a warning of further weakness for the DAX and other European indices remains to be seen...but worth tracking, as is the SPX relative to the DAX, about which I wrote in my post of March 4.

Even the EUR/USD is signalling further weakness...perhaps taking the EURO to parity, or lower...especially if the ECB does not raise interest rates at their upcoming meeting on March 10 this week.

ZOOM: A Spectacular Parabolic Rise & Crash

* See UPDATE below...

Further to my previous posts on Zoom (ZM) here and here, its price has plunged to just 9 points above my target of 100.00, as shown on the following monthly chart.

The Sellers have remained firmly in control since it topped out at 588.84 in October 2020...with no signs that is about to change any time soon.

* UPDATE Oct. 21...

ZM continued its selling and closed lower today at 80.98. 

It's sitting around 11.74% higher from its IPO, after spiking to gains above 700%!

Is European Market Weakness A Harbinger For The U.S. Markets?

Take a look at the following daily and weekly comparison charts of the SPX with Germany's DAX, and judge for yourself.

They've traded, essentially, in lock-step for many years...until the last few days, when the bottom has fallen out from under the DAX, dropping it below major support.

For further clues on market direction and price targets on the SPX, see my post of February 21 and important UPDATE of February 23.

FRIDAY'S FLUBS: Nancy Pelosi On Afghanistan 😕

How "eloquent"...😕

Would she dare say that directly to the 13 mothers who lost their brave sons and daughters in Biden's Afghanistan fiasco? 😕 Although, she already did, indirectly, through her reprimand of these members of Congress who spoke up for them.

It's time for Nancy Pelosi to pack up her cringe-worthy comments and retire.

Source: ZeroHedge

FNGU: Range Of Its "Chaos Zone" Deepens

The fact that FNGU's price support zone (now dubbed its "Chaos Zone") has deepened since I last wrote about it in my post of January 22, does not bode well for the 10 Technology and Consumer Discretionary companies that are listed in this ETN (x3).

The previous price support zone was 20.00-25.00. The range of this new "Chaos Zone" is 15.00-25.00. Price closed on Thursday slightly above 20.00...formerly the lower edge of the old price support zone.

This signals that the price action of stocks in this ETN is becoming more volatile, while pushing to the downside, as shown on the following monthly chart.

A drop and hold below 20.00, then 15.00 would be catastrophic for some or all 10 stocks in FNGU.

BITCOIN Mired In Chaos Zone

Following the formation of a bearish moving average Death Cross on Bitcoin in early January, it plunged briefly below a major support level of 35,000, as shown on the following daily chart (I wrote about the crossover on January 23, here).

It then bounced back above the 50 MA, retested 45,000, then plunged again to retest 35,000, before retesting 45,000, once again.

It's, basically, stuck in between the 50 and 200 MAs, or what I call a trendless "Chaos Zone"...roughly in between 40,000 and 49,000.

Until it breaks and holds above or below this zone, with force, look for more whippy, volatile, random and trendless spikes and plunges to occur in this cryptocurrency...one to avoid if you're risk-averse on the daily timeframe!

WTI CRUDE OIL: Price Targets 1 and 2 Hit...Target 3 In The Crosshairs

Further to my post of February 24, WTI Crude Oil took out price Target 2 (111.00-112.00) today, after blowing through Target 1 (100.00) yesterday.

It's currently trading above that level at 113.44, and rising, as I write this at 8:30 pm ET, as shown on the monthly chart below.

As I described in the above post, the "path of least resistance" is up (in fact, resistance is extremely thin above Target 2, as depicted on the TPO Profile of that chart), and Target 3 (147.27) is now in the crosshairs (to retest its prior all-time high).

Exactly how soon that may be hit remains to be seen, but the Buyers remain fully in control on this timeframe, as shown on the Balance of Power indicator. 

Furthermore, until we see an extreme spike made on both the Momentum and ATR indicators, as well as the Balance of Power, Oil may not have topped out yet. (By the way, I've shown the input value of the ATR as one period to illustrate this more clearly...the other two indicators are shown in their default mode).

So, we may see Target 3 hit sometime this month...possibly sooner, rather than later.

How Does This Make Sense And Lead To A Sovereign Ukraine?

* See UPDATES below...

As long as the US and Germany (and any other country) continue to buy oil and gas from Russia, they are partially funding President Putin's war against Ukraine, are they not?

Source: ZeroHedge

President Biden needs to reverse his executive orders that:

• banned the Keystone XL pipeline from being built from Canada (which was already well under construction), and

• banned further oil and gas exploration and drilling in the US on Federal lands and imposed further restrictions on the industry,

which, thereby, placed the US in a much weakened position with respect to energy and national security concerns...and a weakened position from which to respond to global crises, such as Ukraine and Afghanistan.

Until he does, he will have to continue to buy the excess oil and petroleum products the US currently needs from Russia...to fuel America's ever-increasing need for viable energy...and will continue to finance Putin's brutal war.

Source: AFPM

(American Fuel & Petrochemical Manufacturers)

Source: USEIA

(US Energy Information Association)

Biden's agenda and policies that he's enacted since he took office in January 2021 have contributed to and triggered numerous economic/inflationary and international and national security crises.

If he continues with these policies, including buying Russian oil, etc., to the exclusion of unleashing oil and gas production in America, or, even worse, making a deal to buy it from the brutal terrorist regime of IRAN, with whom he's already negotiating, he can add the demise of Ukraine to his growing list of failures...all under the guise of promoting so-called "green energy policies" to, purportedly, combat "climate change"...at the expense of America's own dependable and readily-available supply of oil and gas and at the expense of Americans and their pocketbook (inflation).

Why is the Biden administration ready to make deals with even more "Devils?" 😕 

N.B. On that point, WHAT will Biden give away to Russia and Iran in exchange for trying to sign a new nuclear deal with Iran, as may be imminent, according to the following article?

WHY is he so anxious to get back into that deal? He hasn't explained that to to the American people. 

WHY is he so anxious to buy Iranian oil, but not allow U.S. producers to ramp up their domestic production?

IF Russia's oil is sanctioned by the U.S., will Russia circumvent that by selling it to Iran, then Iran sell it onward to the U.S.?

WHY is Biden weakening America's energy sector with these actions? 

 WHY is no one asking him these questions?

Source: ZeroHedge

ZeroHedge excerpt

N.B. So, IF Biden continues to "lead from behind," it's doubtful we'll see the U.S. ban Russian oil imports, unless Europe does, as well.

Source: ZeroHedge

"Biden's own 'green deal' lunacy"...

ZeroHedge excerpt

By the way, President Biden really has no reason to go before Congress and the American people tomorrow, during his State of the Union Address, to tout any of his policies that he's unleashed over the past year as being successful...in fact, quite the opposite is true.

So, how does any of this make sense and lead to a sovereign Ukraine, especially since President Zelensky, reportedly, just filled out an application for membership in the EU?

German, EU, and US leaders need to explain how it makes sense...and why they are, incidentally, financing this Russian invasion of Ukraine...which includes acts of terrorism and war crimes against civilians and children.

* UPDATE March 1...

It seems that Americans do NOT approve of the job that  President Biden has done over the past year. His approval rating is now down at 37%. 

It's no wonder, as his left-leaning socialist policies are NOT popular and he was NOT elected with a clear majority mandate in Congress to implement them.

It's time for him to drastically change course to a more sensible and centrist agenda that could garner bi-partisan approval and eliminate the harsh divisiveness and chaos that he's caused among the population.

Source: ZeroHedge

Talk about devastating timing with the release of this report right before President Biden's SOTU Address tonight...stagflation rears its ugly head.

How will Biden explain that to Americans, while still pushing his massively-inflationary spending and energy-crippling agenda!

Source: ZeroHedge

Also, the EU has just voted "YES" to accept President Zelensky's membership application to join the European Union.

* UPDATE March 2...

President Biden, in his SOTU Address last night, touted the same old tired, far-left socialist agenda and spending priorities. 

His speech lacked any acknowledgement of reality relative to the economy and the impacts of rampant inflation, triggered by his policies, as described above.

It lacked any fixes for the current state of affairs, and was bereft of any future-oriented imaginative and prescriptive ideas to sustainably and responsibly grow the economy and ramp up international and national security measures.

I doubt whether his party will be able to convince Americans that their problems are being properly addressed by this administration, so I think the GOP will retake control of both the House and Senate in the November mid-term elections.

As I said, the majority of Americans are NOT in favour of his agenda.

It seems that Mr. Biden is NOT listening...or simply doesn't care...or both.

* UPDATE March 5...

Even electric car-maker, Elon Musk, gets it...why doesn't Joe Biden?

If the Supreme Court rules against Biden, he may not have a choice but to accept the reality around sound, prudent, and pragmatic energy policies...and pivot away from his crippling and dogmatic "green" regulations.

Source: Free Beacon

* UPDATE March 6...

The following article provides a summary of all Russia sanctions and developments, to date...bookmark this link to check back for further updates...

Source: ZeroHedge

Is There A Dow Rule-Breaker Lurking on February 28? 😏

* See UPDATES below...

IF there is an "old" Dow rule-breaker lurking about somewhere in the ether, then Monday's trading should not end in a "Crash." 

OTHERWISE...brace yourselves if history repeats itself, as described in the following ZeroHedge article.

BUT...although the Dow 30 Index closed at its all-time high on January 4, it reached an intraday all-time high on January 5...so, 55 calendar days later could put the "Crash" date forward by one day to March 1.

SO...either way, we may (or may not) see a "Crash" on Monday or Tuesday...depending on whether the "old" rule-breaker shows up. 😏

* UPDATE February 28...

No "Crash" today...

* UPDATE March 1...

No "Crash" today, either...the "Old Guy" (Fed Chairman Powell???) is still around, for now...we'll see how long that lasts.

P.S. By the way, Chair Powell looked nervous and stressed as he testified before the House Financial Services Committee on March 2. 

His responses to various questions posed by Committee members pertining to rampant and rising inflation, as well as the oil and gas industry relative to Biden's climate change policies/agenda, sounded weak, wishy-wasy and ill-prepared. 

It didn't sound like the Fed is prepared to act in any meaningful or serious way to quickly tamp down inflation and its destructive consequences. It appears that they are more concerned with keeping markets over-inflated at record levels than they are at deploying their monetary policies in a sound manner, as their mandate so requires (lacking or ignoring serious predictive warnings)...if they were, I doubt that inflation would have reached current levels.

So, I may not be wrong in assuming that the "Old  Guy" who showed up in markets yesterday (and today) may, in fact, be Powell...or, rather his "silent influence."

Source: ZeroHedge

MEANWHILE...U.S. equity markets are clinging to and threatening to break below major support...so, stay tuned as things heat up in global Oil markets...and other areas of concern in which the Fed may be ill-prepared to act in a timely, effective and prudent manner.

Source: ZeroHedge

U.S. Major Sectors Remain Defensive

The following graphs of the U.S. Major Sectors show that, for the most part, investing has remained defensive for a one-year period, with Energy taking the leading role. 

My latest post of February 24 on WTI Crude Oil described price targets in certain scenarios.

There has been some mild interest in Technology, Industrials, Materials, and Financials during February.

However, until we see sustained major buying flow into the Discretionary Sector, I think that any further advance on the S&P 500 Index (SPX) will be sporadic, whippy, tepid, and chaotic (see my post of February 21 and important UPDATE of February 23 for target prices and clues on market direction)...and that markets will remain, primarily, defensive.

We may have to wait until the Fed meets on March 16 to determine what their immediate and longer-term monetary policy will look like on interest rates in order to gauge which Sectors will gain or lose momentum in the short and medium term.

So, keep an eye on which Sectors are gathering strength on weekly graphs until then...and thereafter...as another trend/strength tool (StockCharts graphs).

U.S. Major Sectors One Year

U.S. Major Sectors Year-To-Date

U.S. Major Sectors February

U.S. Major Sectors One Week

BIDEN/PUTIN: More Talks? What's The Point? 😕

What's the point, President Biden?

Because...

And, as you and other world leaders have already discovered from your latest talks with Putin...

So...

And, if you do...beware...

P.S. This is what you get when you negotiate with fools...

Source: ZeroHedge

ZeroHedge Excerpt

(Russia was one of 5 countries)

White House Joint Statement