ECB President Draghi's press conference today didn't tell me anything new. All I heard was that the ECB stands ready with monetary support, subject to conditions, to those Euro area countries that request a bailout...something he's been repeating since June.
I wonder what progress, if any, the EU has made on actually implementing meaningful fiscal/monetary/financial/economic/political reforms...from my viewpoint, it appears that nothing is being done to rectify a fractured and ailing Euro zone, which is in recession, and as unemployment rises to 11.6% in the Euro area.
Paris Cafe
Thursday, November 08, 2012
Wednesday, November 07, 2012
John Boehner's Speech Today
Today's speech given by Republican Speaker of the U.S. House of Representatives, John Boehner, did not fill me with any great confidence that an actual meaningful compromise would be reached on the Fiscal Cliff issue before it's due to take effect by January 1, 2013.
It simply amazes me how anyone can think that not raising taxes will ever deal with the ever-increasing U.S. National Debt, which is over $16 Trillion.
World confidence in the U.S. will rest on whether the Republicans are prepared to work with their Democratic counter-parties and President, not just on this issue, but on all issues over the next four years. It's my opinion that this unwillingness to reach compromises, as demonstrated over the past four years, has already hurt the ability of America to recover from the last credit crises in a timely manner. Excessive money-printing by the Fed in the future without political/fiscal action will, no doubt, be seen as a smoke-screen for lack of political will...this will damage the U.S. recovery efforts even further.
***The war between its own political parties is a greater threat to America than any threat from its enemies.
I remain...unconvinced, but hopeful.
It simply amazes me how anyone can think that not raising taxes will ever deal with the ever-increasing U.S. National Debt, which is over $16 Trillion.
World confidence in the U.S. will rest on whether the Republicans are prepared to work with their Democratic counter-parties and President, not just on this issue, but on all issues over the next four years. It's my opinion that this unwillingness to reach compromises, as demonstrated over the past four years, has already hurt the ability of America to recover from the last credit crises in a timely manner. Excessive money-printing by the Fed in the future without political/fiscal action will, no doubt, be seen as a smoke-screen for lack of political will...this will damage the U.S. recovery efforts even further.
***The war between its own political parties is a greater threat to America than any threat from its enemies.
I remain...unconvinced, but hopeful.
Bearish Trendline Breaks on the Major Indices
Each candle on the charts below represents a period of three (3) days. The current candle closed today (Wednesday). I wanted to look at this timeframe on the assumption that the two-day rally (which began on Monday this week) was simply a pre-election dead-cat bounce, and to see how much lower today's close was compared to Friday's close. Here are the figures for each of the Major Indices.
S&P 100 Index
Dow 30 Index
S&P 100 Index
- Friday's close = 646.88
- Today's close = 636.27
- Today's close dropped 10.61 points from Friday's close
Dow 30 Index
- Friday's close = 13093.16
- Today's close = 12932.73
- Today's close dropped 160.43 points from Friday's close
- Friday's close = 1414.20
- Today's close = 1394.53
- Today's close dropped 19.67 points from Friday's close
- Friday's close = 2656.28
- Today's close = 2612.69
- Today's close dropped 43.59 points from Friday's close
- Friday's close = 814.37
- Today's close = 804.52
- Today's close dropped 9.85 points from Friday's close
- Friday's close = 469.78
- Today's close = 452.30
- Today's close dropped 17.48 points from Friday's close
- Friday's close = 5110.17
- Today's close = 5103.52
- Today's close dropped 6.65 points from Friday's close
- S&P 100
- Dow 30
- Nasdaq 100
- Russell 2000
- Dow Utilities
- Dow Transportation
Germany's Weakening Data
Data released at 6:00 am EST today shows the continued decline in German Industrial Production, which sparked a big decline in the U.S. E-mini futures indices.
The indices continued to drop as ECB President Draghi delivered a speech at 7:10 am EST in which he said that "Germany has so far been largely insulated from some of the difficulties elsewhere in the euro area. But the latest data suggest that these developments are now starting to affect the German economy. This is also evident in the KfW-ifo-Mittelstandsbarometer." You can read his entire speech here: http://www.ecb.int/press/key/date/2012/html/sp121107.en.html
The indices continued to drop as ECB President Draghi delivered a speech at 7:10 am EST in which he said that "Germany has so far been largely insulated from some of the difficulties elsewhere in the euro area. But the latest data suggest that these developments are now starting to affect the German economy. This is also evident in the KfW-ifo-Mittelstandsbarometer." You can read his entire speech here: http://www.ecb.int/press/key/date/2012/html/sp121107.en.html
Before and After
E-Day's relief rally didn't last long...
A break and hold below 13000 on YM, 1400 on ES, and 800 on TF would confirm a "Head & Shoulders" pattern, with the neckline at these levels. The downside targets would be 12400 on YM, 1330 on ES, and 735 on TF.
A break and hold below 13000 on YM, 1400 on ES, and 800 on TF would confirm a "Head & Shoulders" pattern, with the neckline at these levels. The downside targets would be 12400 on YM, 1330 on ES, and 735 on TF.
Lumber Futures Close to Triple-Top Major Resistance
Lumber futures are close to triple-top major resistance, as shown on the Weekly chart below. This latest rally from the September lows has occurred on declining weekly volumes. Expensive lumber would make it difficult for hombuilders' profits to continue to expand at the same rate that they enjoyed prior to the rally, which began in October 2011, producing an approximate 64% rise in lumber prices.
If lumber stays elevated, no doubt we'll see rising new home prices...perhaps quite sharply. This could be what Ben Bernanke is banking on...but, this could backfire if new home sales drop off dramatically and then continue to decline. We'll see if lumber prices start to moderate any time soon.
If lumber stays elevated, no doubt we'll see rising new home prices...perhaps quite sharply. This could be what Ben Bernanke is banking on...but, this could backfire if new home sales drop off dramatically and then continue to decline. We'll see if lumber prices start to moderate any time soon.
Tuesday, November 06, 2012
A Comparison of Recent Price Action on the 4 Major Indices
Below are several charts comparing price action among the Dow 30, S&P 500, Nasdaq 100, and Russell 2000 Indices.
The first chart shows the price action over the past three days, beginning with Friday's big decline. With yesterday's and today's (Tuesday's) combined bounce, the INDU and SPX have closed higher than Friday's open, while the NDX and RUT are still below.
The next chart shows yesterday's and today's bounce. The RUT is leading in terms of percentage gained over the past two days and is the one to watch to see if this leadership holds on any further rally, or if meaningful weakness enters that could, ultimately, drag the others down.
The NDX was the weakest on the two-day bounce, perhaps because of AAPL's relative weakness, which is reflected in this year-to-date Daily ratio chart comparing AAPL to the NDX (the Momentum Indicator is still below zero as price struggles below resistance)...also, two important ones to watch for either a strengthening or for further relative weakness, which could lead to the resumption of a decline in both.
The first chart shows the price action over the past three days, beginning with Friday's big decline. With yesterday's and today's (Tuesday's) combined bounce, the INDU and SPX have closed higher than Friday's open, while the NDX and RUT are still below.
The NDX was the weakest on the two-day bounce, perhaps because of AAPL's relative weakness, which is reflected in this year-to-date Daily ratio chart comparing AAPL to the NDX (the Momentum Indicator is still below zero as price struggles below resistance)...also, two important ones to watch for either a strengthening or for further relative weakness, which could lead to the resumption of a decline in both.
Monday, November 05, 2012
My 2 Cents' Worth on the 11/06/2012 U.S. Election
Unless the new President (either Obama or Romney) gets in with a majority win tomorrow in the House of Representatives and the Senate, and the party's policies going forward become clear, I think the markets:
- will remain choppy and volatile, with little follow-through on price action and volumes
- will remain uncertain until the end of the year, in particular re: the Fiscal Cliff issue and the Debt Ceiling issue (the limit is currently $16.394T)
- will remain reactive to news-related items
- and would have to rely on the Fed continuing with their easy-money (and, potentially, expanded) policy, assuming no bi-partisanship deals can be struck on major issues
Saturday, November 03, 2012
Global View of Hurricane Sandy's Life to Landfall
From YouTube: "An animation of satellite observations from Oct. 21-30, 2012, shows the birth of Tropical Storm Sandy in the Caribbean Sea, the intensification and movement of Sandy in the Atlantic Ocean along the U.S. East Coast, and the landfall of Hurricane Sandy in New Jersey on Oct. 29. This visualization was created by the NASA GOES Project at NASA Goddard Space Flight Center, Greenbelt, Md., using observations from NOAA's GOES-13 and GOES-15 satellites."
Friday, November 02, 2012
Support and Resistance Levels (November 2, 2012)
Below are a variety of instruments with support and resistance levels shown on them...some are Weekly and some are Daily charts. There is no commentary, as they should be self-explanatory.
Money Flow for October Week 5
Further to my last weekly market update, this week's update will look at:
Trading was mixed in the Major Indices during this 3-day week, as some closed slightly higher, and some closed lower, as shown on the Weekly charts and the 1-Week percentage gained/lost graph below.
Trading was also mixed in the Major Sectors during this 3-day week, as some closed higher, and some closed lower, as shown on the Weekly charts and the 1-Week percentage gained/lost graph below.
In general, it would appear that this week's gains vs. losses in specific Indices and Sectors can be primarily attributed to the devastating effects caused by Hurricane Sandy. Most of the Indices and Sectors are trading at/near their mid-Bollinger Band on the Weekly timeframe. This week's trading can be described as volatile, at best. With the U.S. elections coming up on Tuesday, bringing with it more volatility and uncertainty, I can only suggest monitoring price action on these around their mid-Bollinger Band in order to gauge relative strength (above) or weakness (below). Generally speaking, those Indices and Sectors currently above the mid-Bollinger Band are outperforming those below. Whether this continues next week, or in the weeks ahead, remains to be seen.
On a Daily timeframe, I'm watching for a break and hold below the last swing low (on the following three ratio charts comparing the SPX, RUT, and NDX Indices with their respective Volatility Indices) to confirm that further selling/weakness is occurring in the SPX, RUT, and NDX on accelerating volatility momentum. In all three, the Momentum Indicator is still in bearish territory below the zero level and is suggesting further weakness ahead for the SPX, RUT, and NDX, as they were unable to hold onto Thursday's gains and as price closed, once again, below near-term resistance levels.
I've added a Daily ratio chart of AAPL:NDX, as well. I've discussed AAPL in several posts recently, most notably in the first one on October 23rd. I've been watching for a break below its near-term support level, and that occurred in Friday's action. Momentum is accelerating to the downside and is well below the zero level. Further action below the zero level is subject to bearish influences of more weakness and volatility. It's one that I'll continue monitoring over the days/weeks ahead inasmuch as it's such an influential stock in the Nasdaq 100, S&P 500, and S&P 100 Indices.
P.S. Just a reminder that Daylight Savings ends November 4th.
Enjoy your weekend and good luck next week!
N.B. I'll be posting a number of charts showing support and resistance levels for a variety of instruments during the course of the weekend, so please check my Blog for that post.
- 6 Major Indices
- 9 Major Sectors
- 3 Ratio Charts of the SPX:VIX, RUT:RVX, and NDX:VXN
- Ratio Chart of AAPL:NDX
6 Major Indices
Trading was mixed in the Major Indices during this 3-day week, as some closed slightly higher, and some closed lower, as shown on the Weekly charts and the 1-Week percentage gained/lost graph below.
9 Major Sectors
Trading was also mixed in the Major Sectors during this 3-day week, as some closed higher, and some closed lower, as shown on the Weekly charts and the 1-Week percentage gained/lost graph below.
In general, it would appear that this week's gains vs. losses in specific Indices and Sectors can be primarily attributed to the devastating effects caused by Hurricane Sandy. Most of the Indices and Sectors are trading at/near their mid-Bollinger Band on the Weekly timeframe. This week's trading can be described as volatile, at best. With the U.S. elections coming up on Tuesday, bringing with it more volatility and uncertainty, I can only suggest monitoring price action on these around their mid-Bollinger Band in order to gauge relative strength (above) or weakness (below). Generally speaking, those Indices and Sectors currently above the mid-Bollinger Band are outperforming those below. Whether this continues next week, or in the weeks ahead, remains to be seen.
3 Ratio Charts of the SPX:VIX, RUT:RVX, and NDX:VXN
On a Daily timeframe, I'm watching for a break and hold below the last swing low (on the following three ratio charts comparing the SPX, RUT, and NDX Indices with their respective Volatility Indices) to confirm that further selling/weakness is occurring in the SPX, RUT, and NDX on accelerating volatility momentum. In all three, the Momentum Indicator is still in bearish territory below the zero level and is suggesting further weakness ahead for the SPX, RUT, and NDX, as they were unable to hold onto Thursday's gains and as price closed, once again, below near-term resistance levels.
Ratio Chart of AAPL:NDX
I've added a Daily ratio chart of AAPL:NDX, as well. I've discussed AAPL in several posts recently, most notably in the first one on October 23rd. I've been watching for a break below its near-term support level, and that occurred in Friday's action. Momentum is accelerating to the downside and is well below the zero level. Further action below the zero level is subject to bearish influences of more weakness and volatility. It's one that I'll continue monitoring over the days/weeks ahead inasmuch as it's such an influential stock in the Nasdaq 100, S&P 500, and S&P 100 Indices.
P.S. Just a reminder that Daylight Savings ends November 4th.
Enjoy your weekend and good luck next week!
N.B. I'll be posting a number of charts showing support and resistance levels for a variety of instruments during the course of the weekend, so please check my Blog for that post.
Unemployment Rate Ticks Up...Commodities Weaken
Data released today (Friday) shows that unemployment rose from 7.8% to 7.9%, spoiling a two-month decline, as shown on the graph below.
Equity markets are down a bit (at the time of writing this intraday), as shown on the Daily charts below of the YM, ES, NQ & TF, while most commodities have taken a big hit.
The Daily charts below show this morning's weakness in the Commodities ETF (DBC) and the AUD/USD forex pair. DBC has dropped below near-term support and is in danger of further weakness, and AUD/USD is close to forming a moving average "Death Cross," once again.
Equity markets are down a bit (at the time of writing this intraday), as shown on the Daily charts below of the YM, ES, NQ & TF, while most commodities have taken a big hit.
The Daily charts below show this morning's weakness in the Commodities ETF (DBC) and the AUD/USD forex pair. DBC has dropped below near-term support and is in danger of further weakness, and AUD/USD is close to forming a moving average "Death Cross," once again.
Thursday, November 01, 2012
Channel Backtest Underway on the E-minis
The YM, ES, NQ & TF are in the process of backtesting the underside of their rising channel, as shown on the Daily charts below.
The TF has already penetrated the channel and leads in strength on this bounce over the past three days. The NQ closed just inside the channel today (Thursday)...one to watch over the next few days to see if it can remain in the channel. A failure to remain in the channel and follow through now on a sustained and convincing bounce will cause me to assume that selling is not yet finished in the short term.
The Daily ratio charts below of the SPX:VIX, RUT:RVX, and NDX:VXN (which compare the Indices to their Volatility Indices) show a bounce to and close just above near-term resistance today. Their Momentum Indicator remains well below zero and, therefore, the Indices remain subject to further bearish influences, particularly if they fall below these resistance-now-turned-support levels.
As with the NQ above, follow through on the buying side from today is now key to any kind of sustained strength in these indices...otherwise, this seems to be the point at which serious selling will likely resume.
The above RUT:RVX chart is confirming the TF's leadership on the recent bounce and is the one to watch for either continued strength or a resumption of weakness. This may be tracked more clearly on the Daily comparison chart below of the Dow 30, S&P 500, Nasdaq 100, and Russell 2000 Indices. At the moment, the Nasdaq is lagging and the Russell is leading. You can find a link to this chart here.
I'll also be keeping a close watch on AAPL, as I discussed in my post of October 23rd. AAPL is still showing relative weakness compared with the Nasdaq 100 Index (NDX), as shown below on the Daily ratio chart of AAPL:NDX. The Momentum Indicator remains well below zero and continues to decline, which suggests that further weakness is in store for AAPL.
The TF has already penetrated the channel and leads in strength on this bounce over the past three days. The NQ closed just inside the channel today (Thursday)...one to watch over the next few days to see if it can remain in the channel. A failure to remain in the channel and follow through now on a sustained and convincing bounce will cause me to assume that selling is not yet finished in the short term.
The Daily ratio charts below of the SPX:VIX, RUT:RVX, and NDX:VXN (which compare the Indices to their Volatility Indices) show a bounce to and close just above near-term resistance today. Their Momentum Indicator remains well below zero and, therefore, the Indices remain subject to further bearish influences, particularly if they fall below these resistance-now-turned-support levels.
As with the NQ above, follow through on the buying side from today is now key to any kind of sustained strength in these indices...otherwise, this seems to be the point at which serious selling will likely resume.
The above RUT:RVX chart is confirming the TF's leadership on the recent bounce and is the one to watch for either continued strength or a resumption of weakness. This may be tracked more clearly on the Daily comparison chart below of the Dow 30, S&P 500, Nasdaq 100, and Russell 2000 Indices. At the moment, the Nasdaq is lagging and the Russell is leading. You can find a link to this chart here.
I'll also be keeping a close watch on AAPL, as I discussed in my post of October 23rd. AAPL is still showing relative weakness compared with the Nasdaq 100 Index (NDX), as shown below on the Daily ratio chart of AAPL:NDX. The Momentum Indicator remains well below zero and continues to decline, which suggests that further weakness is in store for AAPL.
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