Although U.S. Economic Optimism has been increasing, as shown on the graph below and according to data released today, it has rarely been above the 50 level since January 2007...so consumers' confidence is still on the pessimistic side of the scale.
Convertible at Beach
Tuesday, February 07, 2012
German Industrial Production Down at 2009 Levels
Data released today shows a sharp drop in German Industrial Production well into, once again, 2009 levels, as shown on the graph below. Production has been in a general downtrend since its peak in 2010.
Although U.S. Economic Optimism has been increasing, as shown on the graph below and according to data released today, it has rarely been above the 50 level since January 2007...so consumers' confidence is still on the pessimistic side of the scale.
Although U.S. Economic Optimism has been increasing, as shown on the graph below and according to data released today, it has rarely been above the 50 level since January 2007...so consumers' confidence is still on the pessimistic side of the scale.
Monday, February 06, 2012
Keeping an Eye on NYSI and S&P 500 Index
An Index that I'll be watching over the next couple of weeks is the NYSI (NYSE Summation Index) relative to its Stochastics. When the Stochastics cycle has peaked and crossed over on a Weekly timeframe, as shown on the chart below, and when NYSI reaches/approaches its weekly cycle high, this can be a signal that the S&P 500 Index is reversing or about to reverse.
For a live image of this chart, please click here.
For a live image of this chart, please click here.
Friday, February 03, 2012
Close Fumbles in the Markets
This Coca-Cola commercial for this Sunday's Super Bowl game reminds me of the markets...
...as the bulls (secretly disguised as one thirsty NY bear) pushed the markets higher from their 2011 lows, while nearly fumbling and losing control of the ball several times, to score yet another higher weekly close.
Further to my posts of January 27th and January 28th, equity bulls' "sweet tooth for risk" got sweeter as shown on the following Weekly charts of YM, ES, NQ & TF. They succeeded in their mandate this week of boosting the ES higher and propping up YM, while continuing to buy NQ and TF.
The ES and TF have closed at Fibonacci Extension and channel "mean" confluence resistance, while YM is still below that same scenario, and the NQ is below Fibonacci Extension and upper channel confluence resistance (Technology is clearly the leader in this push up from December 2011).
Whether the ES and TF break above their respective resistance levels to continue a move upwards next week remains to be seen...indices to watch for hints of either continued strength or an onset of weakness.
The charts and graphs below show where money flowed, firstly, from the beginning of 2012, and, secondly, during the course of this week. I've added JNK, the High Yield Corporate Bond ETF, to the equation since my January 27th post.
The first chart and graph show heavy buying of equities, Emerging Markets (EEM), Gold, and Copper during the course of January and into today's close, except for tepid buying in the High Dividend-Paying Stocks ETF (DVY) and the Corporate Bond ETF (JNK), and a pullback in Oil.
The last graph depicts buying/selling for this week. Proportionally, buying has continued to a similar degree as over the past month, except for a slight rise in DVY-buying, and except for a considerable drop in Gold-buying, as well as reduced buying in Copper and JNK, and a reduction in Oil-selling.
While risk-appetite seems to remain in force, it may be worthwhile keeping an eye on:
- Copper and JNK to see if further weakness sets in and, potentially, produces a drag on equity-buying,
- EEM and the Russell 2000 to watch for any signs of reduced buying interest to confirm the above point,
- increased buying in DVY as a potential hedge against equity weakness,
- increased buying in Gold as a potential hedge against equity weakness, and
- increased buying in Oil as a potential hedge against equity weakness
Finally, I'll leave you with this little tidbit concerning MF Global, which hasn't attracted much attention this week...will see where the money trail ends...
Enjoy the game...
Conflicting Business/Manufacturing Data
It appears that even though business purchasing managers rate the level of business conditions higher, according to data released today, actual purchase orders placed with manufacturers has declined, as shown on the graphs below.
Higher expectations does not automatically mean higher demand.
Higher expectations does not automatically mean higher demand.
An Odd Divergence on Unemployment Data
Data released today shows that the unemployment rate continues to rise in Canada, while it declines in the U.S., as shown on the graphs below.
I'd imagine that will affect cross-border shopping as it means that more Americans should be purchasing Canadian goods and fewer Canadians purchasing American goods, particularly as the USD/CAD currency is trading around parity. Perhaps the Canadian government's austerity measures are working to the detriment of employment, as they enforce policies to eliminate the budget deficit by 2015. With the expected softening of global growth for 2012, I don't see that number improving for the foreseeable future.
I'd imagine that will affect cross-border shopping as it means that more Americans should be purchasing Canadian goods and fewer Canadians purchasing American goods, particularly as the USD/CAD currency is trading around parity. Perhaps the Canadian government's austerity measures are working to the detriment of employment, as they enforce policies to eliminate the budget deficit by 2015. With the expected softening of global growth for 2012, I don't see that number improving for the foreseeable future.
Thursday, February 02, 2012
Six More Weeks of Winter...
This Washington Post article says we're in for six more weeks of winter, since Groundhog Phil saw his shadow today in Punxsatawney, Pennsylvania. Wrap up...
Lacklustre Data Releases
Data released today shows:
So, basically, we have a situation of fewer people being less productive at higher company costs in the U.S. and a continuing drop in Britain's business conditions. These figures do not bode well for a healthy business environment for either country that would support sustainable growth, without increasingly higher inflation in the short, medium, and long term, in my opinion.
- a drop in Britain's Construction PMI
- a rise in U.S. Job Cuts
- a drop in U.S. Unemployment Claims (which are still at higher average levels than from 2000 to 2009)
- a sharp drop in U.S. Nonfarm Productivity
- a sharp rise in Unit Labour Costs
So, basically, we have a situation of fewer people being less productive at higher company costs in the U.S. and a continuing drop in Britain's business conditions. These figures do not bode well for a healthy business environment for either country that would support sustainable growth, without increasingly higher inflation in the short, medium, and long term, in my opinion.
Wednesday, February 01, 2012
A Quick Update on TF
The only chart I'll be commenting on tonight is this 4-Hour chart of TF. Price is currently trading at a resistance level of an intersection of the the top of a "minor" uptrending channel and the lower one-quarter of a larger uptrending channel. It's also approaching another confluence resistance level at 813.20 of its 78.6% retracement level from its May 2, 2011 high to the October low and the lower one-third of the "senior" channel level.
At these levels, it's also beginning to trade in overbought territory according to my very short-term RSI indicator reading, so price may pull back somewhat before making its next move. At the moment, momentum is favouring the bulls, and near-term support sits at a confluence level of 780.00-785.00, comprised of the lower level of both channels and the upper one-third level of the Fibonacci retracement.
At these levels, it's also beginning to trade in overbought territory according to my very short-term RSI indicator reading, so price may pull back somewhat before making its next move. At the moment, momentum is favouring the bulls, and near-term support sits at a confluence level of 780.00-785.00, comprised of the lower level of both channels and the upper one-third level of the Fibonacci retracement.
my-Cloud
I came across this little tidbit in my local "Coffee News" today...
"When the 2022 World Cup is held in the Middle Eastern country of Qatar, fans won't be bothered by the intense sun and high temperatures. That's because scientists in that country have designed artificial clouds that will provide shade and lower the temperature inside the stadium. Solar-powered air conditioning will be supplemented with the clouds, which are made from a light-weight carbon structure that carries helium gas. FIFA president, Sepp Blatter, had originally said the tournament should be held in the cooler months, but is now convinced the scientists have come up with a good solution to beat the heat."
This news was reported in 2011 by the BBC in this article, along with a video showing how it would work.
As someone who's not a fan of heat, I hope they eventually create a "port-a-cloud" version for individual use that I can carry in my pocket and deploy it when the heat's on!
"When the 2022 World Cup is held in the Middle Eastern country of Qatar, fans won't be bothered by the intense sun and high temperatures. That's because scientists in that country have designed artificial clouds that will provide shade and lower the temperature inside the stadium. Solar-powered air conditioning will be supplemented with the clouds, which are made from a light-weight carbon structure that carries helium gas. FIFA president, Sepp Blatter, had originally said the tournament should be held in the cooler months, but is now convinced the scientists have come up with a good solution to beat the heat."
This news was reported in 2011 by the BBC in this article, along with a video showing how it would work.
As someone who's not a fan of heat, I hope they eventually create a "port-a-cloud" version for individual use that I can carry in my pocket and deploy it when the heat's on!
Manufacturing and Construction Data Up From 2011 Lows
Data released last night and today shows a small improvement in the Manufacturing PMI Indices in China, Europe, Britain, and the U.S., and a small improvement in Construction Spending and Manufacturing Prices in the U.S., as shown on the graphs below.
Since the last several months' worth of data has bounced a bit after large declines in 2011, it will be worth noting whether the weak trend is actually ending and strengthening into 2012, or whether this is just a blip before further weakness settles in.
Since the last several months' worth of data has bounced a bit after large declines in 2011, it will be worth noting whether the weak trend is actually ending and strengthening into 2012, or whether this is just a blip before further weakness settles in.
Tuesday, January 31, 2012
EUR/USD on My "Negative Watch" Radar
A break and hold below current price could get very interesting on the short side on the Weekly chart below of EUR/USD. It's on my "Negative Watch" radar...
How YM, ES, NQ & TF Closed in January, 2012
Below are 5-year Monthly charts for YM, ES, NQ & TF. All four e-mini futures indices closed in between their upper and middle Bollinger Bands on this timeframe. The YM and ES are in the thick of resistance, while the NQ has broken above, and the TF is approaching overhead resistance. Bollinger Bands are beginning to tighten slightly on YM, ES and NQ, suggesting a possible reversal of the advance at some point. Price has closed above the 5-year Volume Profile POC for all four e-minis. Volumes were lighter this month and have declined steadily since peaking in August of 2011. My very short-term RSI indicator is nearing overbought conditions for this timeframe.
Below are 20-day 4-Hour charts for YM, ES, NQ & TF. We can see the steady rise in price from the beginning of January. The NQ & TF made a new swing high in pre-market trading today, while the YM & ES have made progressively lower swing highs over the past four days...none of them has made a new swing low yet. Today's initial drop from 9:00 am was made on considerably higher volumes on all four e-minis...whether this is the beginning of a bear pullback remains to be seen. Near-term support sits at the lower Bollinger Bands, followed by their respective next lower Fibonacci retracement level...that would be the 60% level for YM, 50% level for ES, and 38.2% for NQ & TF. My very short-term RSI indicator is nearing oversold conditions for this timeframe, but it is very sensitive to minor corrections and can be easily relieved by minor price corrections before a trend resumes.
Question #1 from my post of January 30th has been answered, in part, as the ES closed above a moving average Golden Cross formation on the Daily chart...time will provide the answers to the rest of that question, as well as to the other two.
In the near term, we'll see whether the NQ and TF can continue a strong push up for February from here, with the YM and ES finding support to follow. Important sectors to watch in support of such an advance would be the High Dividend-paying Stocks ETF (DVY) and Emerging Markets ETF (EEM). As mentioned in my post of January 23rd, they are both facing a great deal of resistance at their current levels, and a push above would be at a considerable risk-to-reward ratio. In my opinion, we'd need to see higher volumes come in and stay on all these Indices and ETFs to confirm that a sustainable advance was viable in the face of such a high risk/reward scenario.
Below are 20-day 4-Hour charts for YM, ES, NQ & TF. We can see the steady rise in price from the beginning of January. The NQ & TF made a new swing high in pre-market trading today, while the YM & ES have made progressively lower swing highs over the past four days...none of them has made a new swing low yet. Today's initial drop from 9:00 am was made on considerably higher volumes on all four e-minis...whether this is the beginning of a bear pullback remains to be seen. Near-term support sits at the lower Bollinger Bands, followed by their respective next lower Fibonacci retracement level...that would be the 60% level for YM, 50% level for ES, and 38.2% for NQ & TF. My very short-term RSI indicator is nearing oversold conditions for this timeframe, but it is very sensitive to minor corrections and can be easily relieved by minor price corrections before a trend resumes.
Question #1 from my post of January 30th has been answered, in part, as the ES closed above a moving average Golden Cross formation on the Daily chart...time will provide the answers to the rest of that question, as well as to the other two.
In the near term, we'll see whether the NQ and TF can continue a strong push up for February from here, with the YM and ES finding support to follow. Important sectors to watch in support of such an advance would be the High Dividend-paying Stocks ETF (DVY) and Emerging Markets ETF (EEM). As mentioned in my post of January 23rd, they are both facing a great deal of resistance at their current levels, and a push above would be at a considerable risk-to-reward ratio. In my opinion, we'd need to see higher volumes come in and stay on all these Indices and ETFs to confirm that a sustainable advance was viable in the face of such a high risk/reward scenario.
House Prices Still Under Water
Data released today shows that house prices fell from the prior month's level and still remain in negative territory, as shown on the graph below. Since it's a "leading indicator of the housing industry's health because rising house prices attract investors and spur industry activity," the weak price levels just confirm the depressed state of new home sales, as mentioned in my post of January 26th.
The Daily chart below of the Homebuilders ETF, XHB, shows negative Stochastics and MACD divergence and that a topping process may be underway. Near-term support sits, first, at the confluence level of monthly Volume Profile POC and monthly VWAP of 18.58, and then at the -2 monthly VWAP level of 17.65. Near-term resistance is at the +2 monthly VWAP level of 19.50.
As this ETF has had a strong run from its October 2011 lows, it remains to be seen as to whether it runs out of favour on the buying side any time soon.
The Monthly chart below shows that this ETF has been slow to recover from highs made in 2006, and has made a rough triple top formation, beginning from the April 2010 highs. Resistance on this timeframe sits at a Fibonacci confluence of level of 20.00...a very important level for the bulls to break above and hold. However, with data like we've seen of late, it makes such a bull case very weak, in my opinion, and I would not look to this sector to lead the general markets higher.
The Daily chart below of the Homebuilders ETF, XHB, shows negative Stochastics and MACD divergence and that a topping process may be underway. Near-term support sits, first, at the confluence level of monthly Volume Profile POC and monthly VWAP of 18.58, and then at the -2 monthly VWAP level of 17.65. Near-term resistance is at the +2 monthly VWAP level of 19.50.
As this ETF has had a strong run from its October 2011 lows, it remains to be seen as to whether it runs out of favour on the buying side any time soon.
The Monthly chart below shows that this ETF has been slow to recover from highs made in 2006, and has made a rough triple top formation, beginning from the April 2010 highs. Resistance on this timeframe sits at a Fibonacci confluence of level of 20.00...a very important level for the bulls to break above and hold. However, with data like we've seen of late, it makes such a bull case very weak, in my opinion, and I would not look to this sector to lead the general markets higher.
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