Money Flow for June Week 2

Further to my last Weekly Market Update, this week's update will look at:

• 6 Major Indices
• 9 Major Sectors
• SPX:VIX Ratio

6 Major Indices

As shown on the Weekly charts and the percentage gained/lost graph below of the Major Indices, all of them erased gains from last week's close and ended lower. The largest losses were made in the Nasdaq 100, followed by the Dow 30, S&P 500, Russell 2000, Dow Transports, and Dow Utilities.

As I mentioned in my last weekly update, and is still the case, price remains elevated, overcrowded, and overbought in all of them (see Stochastics indicator) on, not only their Weekly timeframe, but also their Monthly and Monthly Options Expiration timeframes. The one exception (on a Weekly timeframe only) is the Dow Utilities, which, so far, has held the 50 week moving average...it's still overbought on the other two timeframes.

9 Major Sectors

As shown on the Weekly charts and the percentage gained/lost graph of the Major Sectors, six of them erased gains made from the previous week. Financials was the biggest loser, followed by Energy, Industrials, Technology, Cyclicals, and Materials. The "defensive" sectors were flat on the week.

The above comments are also applicable to these Sectors with respect to elevated price and overbought territory on the same three timeframes.

SPX:VIX Ratio

The following 10-Year Weekly ratio chart of the SPX vs. the VIX shows that the SPX (as compared with volatility) has been unable to penetrate above the 2006/07 highs and has been, basically trading in a large, volatile, non-directional trading range between 95.00 and 140.00 since January of this year. Price closed a fraction below support of 95.00 on Friday and the Momentum indicator remains below zero.

Until we see a clear breakout and hold above this year's highs on the SPX, we will likely continue to see this kind of uncommitted volatility in its ratio. A resolution is needed in the current weekly trading range in the SPX, but it may, first, come to the downside before serious investors feel confident about buying into this market at better prices and value than we're seeing now. Downtrending momentum on this ratio does not favour buying stocks at the moment, and it has not yet reached an oversold level. 

This is a short summary this week, as there's not much more that I can say. Markets are likely awaiting the results of the upcoming Fed meeting and Chairman's press conference on Wednesday before making a major move either above or below their current weekly trading range, and we have the monthly and quarterly June Options Expiration occurring at the end of the week. These will, no doubt, add to the wild overnight and intraday volatile swings that we've seen over the past six weeks.

Enjoy your weekend and good luck next week! And, I'd like to wish all Dads a very Happy Father's Day on Sunday! 

My Grocery & Gasoline Bills Do Not Lie

So, no, Messrs. Central Bankers, I'm not imagining that my cost of living has gone up!

Data Source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

SOLD!

Data Source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

Data Source: ForexFactory

Subprime Mortgage "Smile-of-the-Day"

Bearish 'Evening Star'

We'll see if Monday's candle on the Broker/Dealer Index is a bearish 'Evening Star.' If we get confirmation today (Tuesday), we could see a drop in equities soon.

***UPDATE: As of today's close, the 'Evening Star' pattern has now been formed. We'll see if we get bearish follow-through next...if so, equities should follow or vice versa.

Of the 9 Major Sectors, Financials was the biggest loser in today's decline.

Draghi Quote of the Day

My 2 cents' worth on this: Perhaps...unless its Government confiscates its bank depositors' cash...precedent already set in Cyprus.

N.B. ZeroHedge article June 10, 2013 ~ "Greek Stocks Enter Bear Market"

Data Source: http://www.indexq.org/

***UPDATE June 11th @ 10:31 am EDT: The sell-off in Greece continues...

Although the following Daily chart of the Greek (Athens) General Share Index doesn't yet show today's (Tuesday's) candle, you can see that the current price has fallen below the 200 sma...major support sits at 800.

***UPDATE Tuesday, June 11th:

• See today's Bloomberg article entitled "Greece First Developed Market Cut to Emerging as UAE Raised." The article goes on to say that Greece has become the first developed nation to be cut to emerging-market status by MSCI Inc. after the local stock index plunged 83% since 2007.
• See today's NY Times article -- Greek government is closing down its state-run TV and radio broadcaster to cut costs.

"Reality"...Fact or Fiction? ;-)

Money Flow for June Week 1

Further to my last Weekly Market Update and its Addendum, this week's update will look at:

• 6 Major Indices
• 9 Major Sectors
• SPX:VIX Ratio
• SPLV vs. SPX vs. CRX
• Various World Markets
• Stocks Above 20/50/200-Day Moving Averages

Chocolate "Fix" Takes on a Whole New Meaning...

This (Canadian) news headline appeared today (you can read the article at this link):

Volume in the July Cocoa futures contract spiked in today's continued rally from the past few days up to a 50% Fibonacci retracement level, as shown on the Daily chart below.

At the moment, price is still subject to a bearish influence of a moving average "Death Cross" formation, as well as a confluence of this Fib level with a downtrend line and the upper Bollinger Band. A break and hold above this confluence resistance, followed by a rally with conviction may, ultimately, reverse this formation to a bullish "Golden Cross."

Emerging Markets ETF Breaks Below Channel

We may see some nice follow-thru on this EEM channel break and a correction down to major support at 36.50, as shown on this Weekly chart.

A drop below 0.98 on the AUD/CAD forex pair could send it down to the lower channel at 0.959ish or lower to 0.93, as shown on this Weekly chart.

I'll be watching the recent weakness on China's Shanghai Index for a potential drop and hold below both the 50 and 200 MAs, as shown on the Daily chart below.

So, further weakness in EEM, AUD/CAD, and China could pull US equities down further, especially if we see a continued drop in Japan's Nikkei Index, as I wrote about earlier today in this post.

Nikkei on its way to 12600?...or 11500?

It looks like Japan's Nikkei e-mini Futures Index (NKD) may well be on its way down to its next confluence support level of 12600, as I discussed in my post of May 24th, and as shown on the Weekly chart below. There is the potential for a bearish 3 Black Crows candle pattern to form, depending on where this week's candle closes. A close near its low this week, technically, portends further weakness.

A failure to hold that level, could send it down to 11500ish, or lower.

***UPDATE Thursday, June 6th @ 12:30 pm EDT: Here's an update of the Weekly chart of the NKD as of today's continued drop...low of the day, so far, is now 12310...low of the day, so far, on USD/JPY is now 95.89.

Trade Balance Widens for Canada and U.S.

Data released today (Tuesday) shows that trade balance widened for both Canada and the U.S., as shown on the graphs below.

The following is one explanation of the widening pertaining to the U.S.:
Source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

The USD/JPY rallied to 100.36 immediately upon the data release (100.41 is near-term resistance set in overnight trading). As of 10:15 am EDT, price has yet to break above resistance.

Japan's Nikkei 225 Futures Index (NKD) is  attempting to rally this week after a 3080 point drop that began two weeks ago and is trading just below what is now near-term resistance, as shown on the Weekly chart.

Two instruments to watch in the week(s) ahead...

Furthermore, the following data, also released pre-market today, shows an increase in retail sales...it seems the consumer is still spending.

A Case in Favour of Extending QE But at What Cost to America?

It looks like the Fed will have to continue carrying the financial aspects of the economy for awhile due to softening manufacturing data released today. However, I haven't seen any constructive bi-partisan fiscal policy emanate from Capital Hill that even attempts to support the Fed's actions. Instead, they've been silent, uncooperative, and unproductive since the 2008/09 financial crisis. 

Without, not only that critical, but also, pro-active political support, and with markets near their all-time highs, I don't see a case for continued market strength. And, the Fed's attempts at financial stability may, ultimately, be undermined and sabotaged by continued fiscal paralysis. Where's the leadership and the loyalty by all to serve in the public interest?

Data Source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

"Suggestion Box" ;-)