Add a potential downside target of 7.75 for GDX (Gold Miners) into the mix, and you'll definitely see volatility spike...
Convertible at Beach
Tuesday, March 03, 2015
Volatile Glitter
My gut tells me that GOLD volatility is about to hit the fan...as long as the RSI remains below the 50 level, and as long as price remains under the bearish influences of the moving average Death Cross, a break and hold below the 1200 level could, finally, see GOLD reach a potential target of 1150 or even 1000 (rather quickly), as I mentioned in my last post on GOLD.
Add a potential downside target of 7.75 for GDX (Gold Miners) into the mix, and you'll definitely see volatility spike...
Add a potential downside target of 7.75 for GDX (Gold Miners) into the mix, and you'll definitely see volatility spike...
Friday, February 27, 2015
Tuesday, February 24, 2015
The Line-in-Sand Level for SPX:VIX Ratio
150.00 is the Bull/Bear Line-in-Sand level for the SPX:VIX ratio as shown on the Daily chart below.
Price closed today (Tuesday) at 154.53...failure to hold 150.00 could see a serious correction in equities and possible break of the critical 60.00 level, which has been threatened numerous times since mid-October 2014.
Momentum has been choppy and rising tentatively since mid-January of this year, but has yet to make a new all-time high. Price has definitely not made an all-time high on this ratio, and is not confirming the all-time high set on the SPX, as shown on the second Daily chart. As well, momentum on the SPX has also been choppy and rising tentatively since mid-January of this year, but has yet to make a new all-time high. These three observations tell me that, although the SPX remains in uptrend, it is rising in a choppy, tentative and fragile manner at current levels. Furthermore, the SPX will reach a major external Fibonacci level (161.8%) at 2138, where we may see some major profit-taking occur on rising volatility.
Price closed today (Tuesday) at 154.53...failure to hold 150.00 could see a serious correction in equities and possible break of the critical 60.00 level, which has been threatened numerous times since mid-October 2014.
Momentum has been choppy and rising tentatively since mid-January of this year, but has yet to make a new all-time high. Price has definitely not made an all-time high on this ratio, and is not confirming the all-time high set on the SPX, as shown on the second Daily chart. As well, momentum on the SPX has also been choppy and rising tentatively since mid-January of this year, but has yet to make a new all-time high. These three observations tell me that, although the SPX remains in uptrend, it is rising in a choppy, tentative and fragile manner at current levels. Furthermore, the SPX will reach a major external Fibonacci level (161.8%) at 2138, where we may see some major profit-taking occur on rising volatility.
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| SPX:VIX Daily Ratio Chart |
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| SPX Daily Chart |
Wednesday, February 11, 2015
Homebuilders Sector at a Critical Level
The following Daily chart of the Homebuilders Sector (XHB) shows, that it reached a new 3-year high today (Wednesday), but not a new closing high. However, the RSI, MACD and Stochastics indicators are not yet confirming a move higher. Note the high volume activity since the beginning of this year...signalling major rotation in and out of this sector, perhaps, in readiness for a big move one way or the other.
When compared with the Financials Sector (XLF), the following Daily ratio chart of XHB:XLF shows that the XHB weakened from the beginning of 2013 until mid-October 2014, while XLF outperformed. At the moment, price has bumped up against major resistance at 1.50 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 1.40/38 level before the next major move is established.
When compared with the S&P 500 Index ($SPX), the following Daily ratio chart of XHB:$SPX shows that the XHB weakened from mid-2013 until mid-October 2014, while the $SPX outperformed. At the moment, price has bumped up against major resistance at 0.0175 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 0.0165/60 level before the next major move is established.
Since the "continued recovery" in the U.S. is seen to be dependent, in part, on strong homebuilding activity, it may be worth measuring its "strength" against the above sector and index over the near and longer terms...I wouldn't be surprised to see some weakness of the XHB against these in the short term.
When compared with the Financials Sector (XLF), the following Daily ratio chart of XHB:XLF shows that the XHB weakened from the beginning of 2013 until mid-October 2014, while XLF outperformed. At the moment, price has bumped up against major resistance at 1.50 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 1.40/38 level before the next major move is established.
When compared with the S&P 500 Index ($SPX), the following Daily ratio chart of XHB:$SPX shows that the XHB weakened from mid-2013 until mid-October 2014, while the $SPX outperformed. At the moment, price has bumped up against major resistance at 0.0175 and the RSI, MACD and Stochastics indicators are not confirming another move up yet, even though we now have a bullish Golden Cross of the moving averages. We may see a retest, first, of these averages around the 0.0165/60 level before the next major move is established.
Since the "continued recovery" in the U.S. is seen to be dependent, in part, on strong homebuilding activity, it may be worth measuring its "strength" against the above sector and index over the near and longer terms...I wouldn't be surprised to see some weakness of the XHB against these in the short term.
Wednesday, January 28, 2015
On Vacation
As of today, I'm on vacation for one to two weeks, so no posts until then. Best of luck with your trading in the meantime!
Tuesday, January 27, 2015
Gold Rush or Dump?
A break & hold below 1270/60 on Gold could send it tumbling (quite hard this time) to 1150 or lower (ultimately 1000).
1314 is the near-term resistance level to overcome before running into major resistance at 1550, in my opinion, (based on my analysis of price, Fibonacci, channel, and volume profile data), as shown on the 5-Year Weekly chart below.
1314 is the near-term resistance level to overcome before running into major resistance at 1550, in my opinion, (based on my analysis of price, Fibonacci, channel, and volume profile data), as shown on the 5-Year Weekly chart below.
Saturday, January 24, 2015
Where Has Money Been Invested This Year?
See for yourself...
The following Year-To-Date percentage gained/lost graphs of World Markets are presented without individual comment. A general observation is that money has begun to flow into non-U.S. markets. I'd also add that fund managers will likely be looking to top up their accounts for January's month-end...as such, we may not see new trends emerge until February.
The following Year-To-Date percentage gained/lost graphs of World Markets are presented without individual comment. A general observation is that money has begun to flow into non-U.S. markets. I'd also add that fund managers will likely be looking to top up their accounts for January's month-end...as such, we may not see new trends emerge until February.
Thursday, January 22, 2015
Possible Bounce in Store for Euro
Further to my recent posts here and here, the EUR/USD Forex pair has reached a potential (double Fibonacci) support level between 1.1205 and 1.13, as shown on the following Weekly chart. A possible bounce is in store for the Euro.
Failure to begin stabilizing at this level and reclaim the major resistance level between 1.19 and 1.2125 (seen pre- and post-2007/08 financial crisis) could send the Euro plunging down to the 2000 lows of 0.8227. I can't imgine that's what Mr. Draghi has in mind with his ECB QE policy announcment earlier today...although stranger things have happened.
Failure to begin stabilizing at this level and reclaim the major resistance level between 1.19 and 1.2125 (seen pre- and post-2007/08 financial crisis) could send the Euro plunging down to the 2000 lows of 0.8227. I can't imgine that's what Mr. Draghi has in mind with his ECB QE policy announcment earlier today...although stranger things have happened.
Wednesday, January 21, 2015
US $ At An "Interesting" Level
USD hit major price and double-Fibonacci resistance at 93.00, as shown on the following Weekly chart. A break and hold above that level could prove "interesting" for other world currencies (Euro, Canadian $, Swiss Franc, Japanese Yen, etc.)...(at the time of writing this post, the Canadian $ is -1.83 at 80.77).Volatility in currencies has certainly been the norm, of late.
Sunday, January 18, 2015
Will Euro Follow Swiss Franc's Meteoric Rise?
In my post of December 16, 2014, I stated:
" It may be that we will see larger volatility ensue in currencies, before they play out to any great extent (or near-term trends become very clear) in world indices."
The RSI, MACD and Stochastics indicators on the following Daily ratio chart below of the SPX vs Swiss Franc ($SPX:$XSF) were forecasting a weakening of the SPX compared to the XSF from last November.
Who knew we'd see a drop of 18.75% (of the Swiss Franc) in one day (last Thursday)! A drop and hold below its (the SPX:XSF ratio) current major support level of 17 (formed from early-to mid-2014) could roil equity markets globally.
The RSI, MACD and Stochastics indicators on the following Daily ratio chart below of the SPX vs Euro ($SPX:$XEU) are also forecasting a weakening of the SPX compared to the XEU from last November.
Perhaps we'll see a repeat of the above price action when the ECB's President Draghi speaks on January 22nd...if so, price could plunge to somewhere between 13.5 and 14.0 at major support...or lower...one to watch in the near term, along with world markets!
" It may be that we will see larger volatility ensue in currencies, before they play out to any great extent (or near-term trends become very clear) in world indices."
The RSI, MACD and Stochastics indicators on the following Daily ratio chart below of the SPX vs Swiss Franc ($SPX:$XSF) were forecasting a weakening of the SPX compared to the XSF from last November.
Who knew we'd see a drop of 18.75% (of the Swiss Franc) in one day (last Thursday)! A drop and hold below its (the SPX:XSF ratio) current major support level of 17 (formed from early-to mid-2014) could roil equity markets globally.
The RSI, MACD and Stochastics indicators on the following Daily ratio chart below of the SPX vs Euro ($SPX:$XEU) are also forecasting a weakening of the SPX compared to the XEU from last November.
Perhaps we'll see a repeat of the above price action when the ECB's President Draghi speaks on January 22nd...if so, price could plunge to somewhere between 13.5 and 14.0 at major support...or lower...one to watch in the near term, along with world markets!
Friday, January 16, 2015
Percentage of Stocks Above 50 & 200 Day MA Flirting With Major Support
The two charts below of the percentage of stocks above their 50 and 200 day moving averages, respectively, show that they are flirting with major support (at the 35 level and the 60 level, respectively). A drop and hold below those levels could see these percentages free-fall for awhile down to their 3-year lows, or lower.
Note the downward-sloping highs on the second chart from last July...indicating that, longer term, the percentage of stocks above the 200 MA has been waning and making successive lower highs, and warning of a weakening market, in general.
Correlated with a break and hold below those would be a break and hold below, firstly, 2000 on the SPX, then, 1966 (200 MA)...we could, then, very well see a re-test of 1850 or 1800 (or lower) in short order.
No wonder we've seen some very volatile overnight and intraday swings since last July. I expect to see that volatility continue until we see a clear break and hold above 2100 on the SPX, along with a bullish cross-over (and hold) of the 50 MA above the 200 MA on the second chart (above).
Note the downward-sloping highs on the second chart from last July...indicating that, longer term, the percentage of stocks above the 200 MA has been waning and making successive lower highs, and warning of a weakening market, in general.
Correlated with a break and hold below those would be a break and hold below, firstly, 2000 on the SPX, then, 1966 (200 MA)...we could, then, very well see a re-test of 1850 or 1800 (or lower) in short order.
No wonder we've seen some very volatile overnight and intraday swings since last July. I expect to see that volatility continue until we see a clear break and hold above 2100 on the SPX, along with a bullish cross-over (and hold) of the 50 MA above the 200 MA on the second chart (above).
Wednesday, January 14, 2015
Copper Breaks Through Major Support Level & Could Re-test 2008 Lows
The following Weekly chart of Copper shows that price has broken below a major support level of 2.5517 (confluence of Fibonacci Retracement, Fibonacci Fanlines, and downtrending channel) and is hovering above price support level of 2.385.
Failure to reclaim and hold above what is now major resistance at 2.5517 and a drop and hold below 2.385 could see Copper plunging to 2008 lows of 1.255.
Failure to reclaim and hold above what is now major resistance at 2.5517 and a drop and hold below 2.385 could see Copper plunging to 2008 lows of 1.255.
Sunday, January 11, 2015
French CAC Index Lagging
Of the 6 World Indices below, the French CAC Index is lagging. It's been relatively weak since September 2011, and has failed to reach new highs (and been in a major decline) since August 2000. A drop and hold below the major support level of 4,000 could spell some major problems for France and other EU countries.
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| S&P 500 Index |
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| Canada's TSX Index |
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| China's Shanghai Index |
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| U.K.'S FTSE 100 Index |
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| Germany's DAX Index |
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| France's CAC Index |
Friday, January 09, 2015
Dow 30 Index Will Set the Direction
My 2 cents' worth today...just a general comment...further to my post of December 25th, I think the Dow 30 will either lead the other Major Indices higher or lower...that's the one to watch closely from today onward over the near term.
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