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This week's update will look at:

  • 6 Major Indices
  • 9 Major Sectors
  • Various World Markets

6 Major Indices

 
As shown on the Weekly charts and the percentage gained/lost graph below of the Major Indices, this past week saw profit-taking in all of them, with the greatest losses occurring in the Dow Utilities.
 
This small drop on the week, percentage-wise, is hardly surprising, given the highly elevated stance of prices relative to their Stochastics cycle and Bollinger Bands on, not only a weekly timeframe, but also on a monthly Options Expiration timeframe, as I outlined in my last weekly market update.
 
It will take a more substantial pullback to relieve these over-extended conditions...whether we see that next week remains to be seen.
 
Money Flow for May Week 4

 

Money Flow for May Week 4
 

9 Major Sectors

 
As shown on the Weekly charts and the percentage gained/lost graph below of the Major Sectors, this week saw the largest percentage drop in Utilities. Health Care was flat.
Read more...

I showed a 3-year comparison of price action on the SPX to the Commodities Index (CRX) in my post of April 5th.
In it, I mentioned the correlation between the two and the instances where, mainly, the CRX would lead an ultimate drop in equities, by putting in negative price divergence before the SPX.

The following chart shows that, since the time of my post, the CRX has put in another lower swing low and has not yet made a higher swing high in its present (large) negative divergence that begins from February of this year, while the SPX has continued its meteoric climb.
If commodities continue their weakness and equities do not follow suit, I will wonder what has changed since February to cause this disconnect between the two.

Read more...

The argument that I've heard repeated ad nauseam as a reason why stocks should simply go up "until the Fed takes the punch bowl away" (even at current market all-time highs) has been, "It's different this time." I even heard a comparison today that we're in a market environment like the mid-90s.

I'd just take a minute to remind traders that Baby Boomers, who were heavily into acquiring all kinds of assets/products/services/loans for themselves and their growing children/teenagers in the 90s, are now facing retirement and are no longer "spending like there's no tomorrow" on the same kind of stuff. 

Read more...

This week's update will look at:

  • 6 Major Indices
  • 9 Major Sectors
  • Various World Markets

 

6 Major Indices

 
As shown on the Weekly charts and the percentage gained/lost graph below of the Major Indices, the largest gains were made in the Dow Transports, followed by the Russell 2000, S&P 500, Nasdaq 100, Dow 30, and Dow Utilities.
 
On a weekly basis, these indices remain in a highly elevated stance relative to their Stochastics cycle, and, with the exception of Utilities, they closed the week at or above their upper Bollinger Band.
 
The same can be said when one looks at a timeframe in which each candle represents a one-month Options Expiry period (the current candle closed on Friday), as is shown on the next charts...with one difference...Utilities closed at its upper Bollinger Band after pulling back from its prior close above at the end of the last options expiration period.
 
If one is just going long here, be aware that you are doing so, not only at the upper end of their weekly and options expiry time cycles, but also very mature cycles, as well as at or above their upper Bollinger Bands.
 
I'd suggest that if we don't see some sort of orderly pullback from these levels, we may see a parabolic move to the upside, followed by, what could be, a swift and violent/volatile correction -- something to which I alluded in my earlier post today (Friday) relative to this week's move in the U.S. $ [and for which I was ridiculed at another site where I guest-post articles...so no, I wasn't "smoking" anything (I'm a coffee-hound and teetotaller) and I always trade with a clear head (I take my work very seriously and my analyses are not done without careful scrutiny)...the only thing that may affect my mind is age...and I can't do anything about that!]. :-)
In any event, combine the high price of the U.S. $ with the high prices of equities (all-time highs in many cases), and that makes it unattractive for new foreign investment at the moment.
 
Money Flow for May Week 3
Read more...

Somebody's loading up on U.S. $...a forecast of things to come (e.g., a correction in stocks)?

Protection via the U.S. $
Read more...

You can see from the percentage gained/lost graphs below which markets are leading in their rally, and which ones are leading in their decline, for the first three days of this week.

My only comment is that, so far, it's a "risk-on" week for equities, the U.S. $, most of the major EU countries, and some of the social media stocks, and it's a "risk-off" week for commodities, emerging markets, most BRIC countries, and 30-Year Bonds.
We'll see how they finish up the week.

Money Flow to mid-Week
Read more...

The Aussie $ is hugging support as I write this around 12:30 pm EST on Monday.

Currencies Signalling Weakness Ahead for China?


I'll need to see China's Shanghai Index advance and hold above the Daily 50 MA to, potentially, support any attempted rally in the AUD/USD forex pair.

Currencies Signalling Weakness Ahead for China?


A drop and hold below 1.00 on the AUD/CAD forex pair could signal harder times ahead for China, particularly if the above scenarios do not materialize, and as it faces increasing competition from other Asian exporters (Japan, especially, with its devalued Yen) .

Read more...

This week's update will look at:

  • 6 Major Indices
  • 9 Major Sectors
  • Number of Stocks Above 20/50/200-Day Moving Averages
  • Various World Markets

6 Major Indices

 
As shown on the Weekly charts and the percentage gained/lost graph below of the Major Indices, the largest gains were made in the Dow Transports, followed by the Russell 2000, Nasdaq 100, S&P 500, and the Dow 30. In continuing last week's theme, there was more profit-taking in the Dow Utilities.
 
Money Flow for May Week 2

 

Money Flow for May Week 2
 

9 Major Sectors

 
As shown on the Weekly charts and the percentage gained/lost graph below of the Major Sectors, the largest gains were made in Industrials, followed by Cyclicals, Financials, Materials, Technology, Health Care, and Energy. Consumer Staples were basically flat, and further profits were taken in Utilities.
 
Money Flow for May Week 2

 

Money Flow for May Week 2
 

Number of Stocks Above 20/50/200-Day Moving Averages

 
Below are three 5-Year Weekly charts showing the number of stocks (on a percentage basis) above 20/50/200-Day moving averages.
 
You can see from the first two charts that, on a short-term and medium-term basis, stocks only have a short way to go before they hit their major resistance levels. However, the last chart shows that, on a long-term basis, stocks have already hit a minor resistance level (established this year), and are approaching major resistance levels (established in 2009 and 2010).
 
With such exuberance as is being displayed in a variety of markets around the world (supported by various Central Bank quantitative easing programs), we may very well see stocks continue to push up, generally speaking, until these major resistance levels have been reached. Such an occasion may occur when (and if) the SPX:VIX ratio hits its all-time major resistance level of 150.00 (established right before the financial crisis), as shown on the next 10-Year Weekly ratio chart.
Read more...

Data released today (Tuesday) shows a drop in week-to-week and year-to-year store sales, as shown below...will see if this weakness persists in the weeks ahead.

W/W and Y/Y Store Sales Decline ...

 

Source: Strawberry Blonde

This week's update will look at:

  • 6 Major Indices
  • 9 Major Sectors
  • SPX:VIX Ratio
  • Hypothetical Portfolio
  • Copper
  • Lumber
  • Homebuilders ETF
  • Emerging Markets ETF
  • 30-Year Bonds

6 Major Indices

 
As shown on the Weekly charts and the percentage gained/lost graphs below of the Major Indices, the largest gains were made in the Nasdaq 100, followed by the Russell 2000, S&P 500, Dow 30, and Dow Transports. There was some profit-taking in the Dow Utilities.
 
Money Flow for May Week 1
Read more...

More Articles...

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