Convertible at Beach
Tuesday, May 22, 2012
Richmond Manufacturing Index in Decline
Data released on Tuesday shows that the Richmond Manufacturing Index declined, and, as shown on the graph below, it's pretty evident that manufacturing conditions have been in general decline since April 2010.
Saturday, May 19, 2012
Canada's Business News Network
A reader asked if I would do a post recommending Canadian on-line links to the world's financial markets.
Here's my take (as a Canadian)...
During my trading day I have my TV tuned to BNN (Business News Network). It's Canada's only television service devoted exclusively to business, finance, and the markets. Their commentators are very professional, extremely knowledgeable in all world and financial affairs, and deliver unbiased information.
For those whose TV providers do not transmit this program, you may receive information from their above web link. There, you will find links to their bloggers, as well as to their latest services ~ mobile real-time TV (for smartphones and tablets), live video stream (an inexpensive subscription to live, high-speed video stream), and Twitter.
You will be continually updated throughout the day (with repeat segments in the evening in case you missed them earlier in the day), not just on Canadian content/issues, but also on world issues (there is a heavy emphasis on their reporting of world issues as they unfold...and without delay, I would add).
Their network and commentators are second to none...trust me! I also find their guests very interesting and knowledgeable (they range from traders, to fund managers, analysts/researchers, current/former politicians, current/former banking officials, current/former world leaders, large/small business CEOs, etc.).
BNN has my full endorsement. You will find the link to their website along the right side of my Blog under Sites I Visit. By the way, I'm not affiliated with BNN in any way.
I hope this was useful in your pursuit of knowledge.
Here's my take (as a Canadian)...
During my trading day I have my TV tuned to BNN (Business News Network). It's Canada's only television service devoted exclusively to business, finance, and the markets. Their commentators are very professional, extremely knowledgeable in all world and financial affairs, and deliver unbiased information.
For those whose TV providers do not transmit this program, you may receive information from their above web link. There, you will find links to their bloggers, as well as to their latest services ~ mobile real-time TV (for smartphones and tablets), live video stream (an inexpensive subscription to live, high-speed video stream), and Twitter.
You will be continually updated throughout the day (with repeat segments in the evening in case you missed them earlier in the day), not just on Canadian content/issues, but also on world issues (there is a heavy emphasis on their reporting of world issues as they unfold...and without delay, I would add).
Their network and commentators are second to none...trust me! I also find their guests very interesting and knowledgeable (they range from traders, to fund managers, analysts/researchers, current/former politicians, current/former banking officials, current/former world leaders, large/small business CEOs, etc.).
BNN has my full endorsement. You will find the link to their website along the right side of my Blog under Sites I Visit. By the way, I'm not affiliated with BNN in any way.
I hope this was useful in your pursuit of knowledge.
Friday, May 18, 2012
Money Flow for May Week 3
Further to my last weekly market update, here is a summary of where money flow ended for Week 3 of May 2012.
The Weekly charts below of YM, ES, NQ & TF show that they all closed much lower than the prior week on higher volumes. They have now broken out of their ranges from January. The YM, ES & NQ are sitting above their weekly 50 sma, while the TF has closed below...whether they find short-term support at these levels remains to be seen.
As I mentioned in my market update of April 13th, I'm assigning a weekly bullish or bearish rating on YM, ES, NQ & TF until the end of this year. Please refer to that post for the parameters, and to the Weekly charts below. As of this past week's close, the ratings for next week are as follows:
What I've been saying for a few weeks now:
"I'll re-iterate what I said in my last post about the NQ, namely: The NQ's volume in the Volume Profile from February onwards is very thin, which signals a potential weakness/problem in this e-mini futures index being able to advance much further and hold above its 2011 highs. I wouldn't be surprised to see price drop back to this level at some point and further buying volumes finally enter to support a convincing rally...no doubt this would have a negative impact/drag on the other three indices."
In this regard, since the NQ has almost reached the 2011 highs, we'll see if price begins to stabilize (or not) over the next week(s).
The 4-Hour charts below of YM, ES, NQ & TF show their respective intraday ranges from the latter part of March to Friday's close. The YM & TF are just above the (external) 161.8% Fibonacci retracement level, and the ES & NQ are just above the (external) 200% level. My short-term targets, if they broke and held below their Fibonacci ranges, were:
The three Daily charts below depict support and resistance levels on the percentage of Stocks Above 20-Day, 50-Day, and 200-Day Averages.
Stocks Above 20-Day Average remained below last week's gap down and closed well below last week at 11.33%.
Stocks Above 50-Day Average closed well below last week at 17.24%.
Stocks Above 200-Day Average closed well below last week at 46.89%.
I'd conclude that, in the short term and the medium term stocks are a SELL under 20%, and in the longer term stocks are mildly bearish beneath 50% to 40%...as has been the case for the past eight weeks, all are still on negative watch for further potential weakness.
The VIX rose on the week (by 14.77%), as shown on the graph below.
Further to the comments in my last weekly market update, the Daily ratio chart below of the SPX:VIX shows that that the SPX broke and closed below the 200 sma. The RSI, MACD, and Stochastics indicators are still trending down...however, the Stochastics is attempting to reverse. Near-term support is at 50.00, followed by 40.00. Near-term resistance is at the 200 sma at 55.95, followed by 65.00.
The Daily chart below of the VIX shows that price broke out of its yellow triangle to the upside. I'll watch to see if near-term support at 23.44 holds as support...with 21.00 as major support. Near-term resistance sits around 27.00...a break and hold above could send the VIX up to the triangle target of 33.22...one to watch for follow-through on intraday and daily price action.
As shown on the graph below of the Industry Groups, they all declined, with the exception of Gold/Silver. Semis, Biotech, Oil Services, Banks, and Brokers led the losses.
As shown on the graph below of the Major Sectors, they all declined, with Materials, and Financials leading the losses. Consumer staples, Healthcare, and Utilities lost the least...markets still favour the defensives, even in declines.
As shown on the graph below, there were gains in the Agricultural ETF (DBA). The biggest losses were in the European Financials ETF (EUFN), followed by the U.S. Financials ETF (XLF), the Chinese Financials ETF (GXC), and the Emerging Markets ETF (EEM). The Commodities ETF (DBC) was basically flat.
As shown on the Daily charts below of EEM and the BRIC countries, they are in downtrend, although the Chinese stock index is trying to stabilize...ones to watch over the next week(s).
The EEM and the BRIC countries are also depicted in the graph below. The Russian Index lost the most this week, followed by Brazil, EEM, China, and India.
As shown on the graph below, gains were made in Gold and Silver, and losses were made in Oil and Copper.
The following four Weekly charts of Gold, Oil, Copper, and Silver show support and resistance levels...ones to watch, particularly Oil and Copper.
As shown on the graph below of the Major Indices, the Dow Transports, Nasdaq 100, Russell 2000, and the S&P 500 were the biggest losers, followed by the Dow 30, and the Dow Utilities. Losses were also made by the Emerging Markets ETF (EEM), the High Dividend-Paying Stocks ETF (DVY), and Corporate Bonds (JNK).
As shown on the currency graph below, money flowed into the U.S. $, and out of the Canadian $, the British Pound, the Aussie $, and the Euro.
The Daily ratio chart below of the SPX:U.S. $ shows that the SPX continued to weaken in comparison to the $ and now sits just below major support at 16.00 and the 200 sma at 16.30...this is worth tracking daily because a failure to regain and hold above what is now major resistance could send the SPX tumbling on accelerating downside momentum. The RSI, MACD, and Stochastics indicators are still trending down, although Stochastics is attempting to cross up.
The next chart of interest is the Weekly chart below of the 30-Year Bonds (ZB). Price closed at a trendline and Fibonacci fan line confluence resistance point on high volumes. Whether accelerating momentum will carry it higher remains to be seen.
In summary, I'll be watching to see whether more volumes enter the markets next week during intraday action, and in which direction they dominate (and whether they can be sustained), in order to judge relevant moves with conviction. As well, I'll be watching for either rising or declining volatility (as depicted by the VIX), and money flow into/out of the U.S. $, Bonds, and the Financials stocks (which are in correction mode and have yet to stabilize, as shown on the chartgrid below).
Enjoy your weekend!
The Weekly charts below of YM, ES, NQ & TF show that they all closed much lower than the prior week on higher volumes. They have now broken out of their ranges from January. The YM, ES & NQ are sitting above their weekly 50 sma, while the TF has closed below...whether they find short-term support at these levels remains to be seen.
As I mentioned in my market update of April 13th, I'm assigning a weekly bullish or bearish rating on YM, ES, NQ & TF until the end of this year. Please refer to that post for the parameters, and to the Weekly charts below. As of this past week's close, the ratings for next week are as follows:
- YM = bearish (approaching MAJOR BREAKDOWN)
- ES = bearish (approaching MAJOR BREAKDOWN)
- NQ = mildly bearish (approaching moderately bearish)
- TF = bearish (bordering on MAJOR BREAKDOWN)
What I've been saying for a few weeks now:
"I'll re-iterate what I said in my last post about the NQ, namely: The NQ's volume in the Volume Profile from February onwards is very thin, which signals a potential weakness/problem in this e-mini futures index being able to advance much further and hold above its 2011 highs. I wouldn't be surprised to see price drop back to this level at some point and further buying volumes finally enter to support a convincing rally...no doubt this would have a negative impact/drag on the other three indices."
In this regard, since the NQ has almost reached the 2011 highs, we'll see if price begins to stabilize (or not) over the next week(s).
The 4-Hour charts below of YM, ES, NQ & TF show their respective intraday ranges from the latter part of March to Friday's close. The YM & TF are just above the (external) 161.8% Fibonacci retracement level, and the ES & NQ are just above the (external) 200% level. My short-term targets, if they broke and held below their Fibonacci ranges, were:
- YM = 12012
- ES = 1285.25
- NQ = 2458
- TF = 709.40
The three Daily charts below depict support and resistance levels on the percentage of Stocks Above 20-Day, 50-Day, and 200-Day Averages.
Stocks Above 20-Day Average remained below last week's gap down and closed well below last week at 11.33%.
Stocks Above 50-Day Average closed well below last week at 17.24%.
Stocks Above 200-Day Average closed well below last week at 46.89%.
I'd conclude that, in the short term and the medium term stocks are a SELL under 20%, and in the longer term stocks are mildly bearish beneath 50% to 40%...as has been the case for the past eight weeks, all are still on negative watch for further potential weakness.
The VIX rose on the week (by 14.77%), as shown on the graph below.
Further to the comments in my last weekly market update, the Daily ratio chart below of the SPX:VIX shows that that the SPX broke and closed below the 200 sma. The RSI, MACD, and Stochastics indicators are still trending down...however, the Stochastics is attempting to reverse. Near-term support is at 50.00, followed by 40.00. Near-term resistance is at the 200 sma at 55.95, followed by 65.00.
The Daily chart below of the VIX shows that price broke out of its yellow triangle to the upside. I'll watch to see if near-term support at 23.44 holds as support...with 21.00 as major support. Near-term resistance sits around 27.00...a break and hold above could send the VIX up to the triangle target of 33.22...one to watch for follow-through on intraday and daily price action.
As shown on the graph below of the Industry Groups, they all declined, with the exception of Gold/Silver. Semis, Biotech, Oil Services, Banks, and Brokers led the losses.
As shown on the graph below of the Major Sectors, they all declined, with Materials, and Financials leading the losses. Consumer staples, Healthcare, and Utilities lost the least...markets still favour the defensives, even in declines.
As shown on the graph below, there were gains in the Agricultural ETF (DBA). The biggest losses were in the European Financials ETF (EUFN), followed by the U.S. Financials ETF (XLF), the Chinese Financials ETF (GXC), and the Emerging Markets ETF (EEM). The Commodities ETF (DBC) was basically flat.
As shown on the Daily charts below of EEM and the BRIC countries, they are in downtrend, although the Chinese stock index is trying to stabilize...ones to watch over the next week(s).
The EEM and the BRIC countries are also depicted in the graph below. The Russian Index lost the most this week, followed by Brazil, EEM, China, and India.
As shown on the graph below, gains were made in Gold and Silver, and losses were made in Oil and Copper.
The following four Weekly charts of Gold, Oil, Copper, and Silver show support and resistance levels...ones to watch, particularly Oil and Copper.
As shown on the graph below of the Major Indices, the Dow Transports, Nasdaq 100, Russell 2000, and the S&P 500 were the biggest losers, followed by the Dow 30, and the Dow Utilities. Losses were also made by the Emerging Markets ETF (EEM), the High Dividend-Paying Stocks ETF (DVY), and Corporate Bonds (JNK).
As shown on the currency graph below, money flowed into the U.S. $, and out of the Canadian $, the British Pound, the Aussie $, and the Euro.
The Daily ratio chart below of the SPX:U.S. $ shows that the SPX continued to weaken in comparison to the $ and now sits just below major support at 16.00 and the 200 sma at 16.30...this is worth tracking daily because a failure to regain and hold above what is now major resistance could send the SPX tumbling on accelerating downside momentum. The RSI, MACD, and Stochastics indicators are still trending down, although Stochastics is attempting to cross up.
The next chart of interest is the Weekly chart below of the 30-Year Bonds (ZB). Price closed at a trendline and Fibonacci fan line confluence resistance point on high volumes. Whether accelerating momentum will carry it higher remains to be seen.
In summary, I'll be watching to see whether more volumes enter the markets next week during intraday action, and in which direction they dominate (and whether they can be sustained), in order to judge relevant moves with conviction. As well, I'll be watching for either rising or declining volatility (as depicted by the VIX), and money flow into/out of the U.S. $, Bonds, and the Financials stocks (which are in correction mode and have yet to stabilize, as shown on the chartgrid below).
Enjoy your weekend!
Thursday, May 17, 2012
Charts of Interest for May 18th
Charts of interest that I'll be watching on Friday (and next week) to see if bulls maintain control of bonds and U.S. $, and if the selling continues in equities...
Tuesday, May 15, 2012
Toronto's TSX Index, Commodities, and AUD/USD
On Tuesday, Toronto's TSX Index closed below major support and below December 2011 lows, as shown on the Daily chart below. The RSI, MACD, and Stochastics indicators are still trending down. The 50 sma has now crossed below the 200 sma and we now have a bearish "Death Cross" formation on this index.
Inasmuch as the TSX Index is weighted in favour of commodities, I'm also discussing the two Daily charts below of the Commodities ETF (DBC) and the AUD/USD forex pair, which show their continued decline below major support. Price is trading close to December 2011 lows, and the MACD and Stochastics indicators are still trending down.
I'll be monitoring these to see what happens upon a "Death Cross" formation, which appears imminent. For now, the trend is still down on all three instruments. I expect that any further decline in commodities will drag U.S. equities down, as well.
Inasmuch as the TSX Index is weighted in favour of commodities, I'm also discussing the two Daily charts below of the Commodities ETF (DBC) and the AUD/USD forex pair, which show their continued decline below major support. Price is trading close to December 2011 lows, and the MACD and Stochastics indicators are still trending down.
I'll be monitoring these to see what happens upon a "Death Cross" formation, which appears imminent. For now, the trend is still down on all three instruments. I expect that any further decline in commodities will drag U.S. equities down, as well.
Monday, May 14, 2012
Risk-on Risk-off Trades in JPM from 1990
Further to the comments in my post of May 11th pertaining to JPM, the Monthly comparison chart below of JPM (purple), the four Major Indices, and the Financials ETF (XLF) shows the major swings of JPM from 1990 to Monday's close.
As you can see, its swings have been very much more volatile and large in comparison with the Dow 30, S&P 500, Russell 2000, and XLF. It has, however, behaved more in line with the Nasdaq 100 Index (green). Both of these instruments have traded much more aggressively over the past 22 years, indicating a much greater appetite for risk than the others. However, when losses have happened, they have also happened to a much greater extent in these two on a percentage basis than in the others.
The price of JPM now sits down at 1998 levels, and, at the moment, the risk trade in it is OFF. I'll continue to monitor it relative to these indices and XLF in order to gauge its relative strength/weakness over the next weeks/months.
As you can see, its swings have been very much more volatile and large in comparison with the Dow 30, S&P 500, Russell 2000, and XLF. It has, however, behaved more in line with the Nasdaq 100 Index (green). Both of these instruments have traded much more aggressively over the past 22 years, indicating a much greater appetite for risk than the others. However, when losses have happened, they have also happened to a much greater extent in these two on a percentage basis than in the others.
The price of JPM now sits down at 1998 levels, and, at the moment, the risk trade in it is OFF. I'll continue to monitor it relative to these indices and XLF in order to gauge its relative strength/weakness over the next weeks/months.
Sunday, May 13, 2012
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