Was today's (Friday's) world-market rally serious and sustainable, or simply a knee-jerk reaction to Japan's surprise NIRP (negative interest rate policy) announcement last night (including some shorter-term short-covering action) and "end-of-month window dressing" by fund managers?
Perhaps the following update to my last post will provide some further insight into that question, as I review a variety of markets.

YM, ES, NQ, TF and NKD E-Mini Futures Indices:

The following Daily Heikin Ashi candle chartgrid of these E-mini futures indices shows a potential bullish reversal pattern as of today's close. We'll need to see a higher closing candle on Monday to confirm that a continued rally is possible.

It's Now or Never For Bulls

The following Weekly Heikin Ashi candle chartgrid of these E-mini futures indices does not yet show a bullish reversal pattern. However, the NKD (Nikkei E-mini Futures Index) has paused in its downtrend, so it's hinting of a possible turnaround. We'll need to see how next week closes before rendering a position on a weekly timeframe.


oh canada oilIn my post of January 8, 2012, there was much talk of a potential recession coming to Canada.

Since then, you can see from the 5-Year comparison chart below of Canada's TSX and EEM (Emerging Markets ETF), that they have traded, essentially, lock-step. Both are in bear markets since their highs in September 2014 -- the TSX is -20.8% and EEM is -33.79%.

The Canadian Economy: Was This A Warning?

The next 3-Year comparison chart shows the big reason why...namely, the gyrating price (both to the upside and downside) of WTIC Crude Oil, which has had a major impact on Canada's TSX. Oil is -71.45% since June 2014.


capitulationI last wrote an update about the World Market Index on January 8thSince then, this index has continued to drop below the critical support level of 1600 and price now sits just below the next support level of 1550.

As you can see from the 5-Year Daily chart below, it's a long way down to major support at 1350. All three indicators point to lower prices...but, the swings are large, and we may see some kind of bounce, although it's not clear as to when or at what level that may occur.

If the U.S. markets are going to lead global markets to some kind of bounce, it's worthwhile monitoring the price action of the SPX and the SPX:VIX ratio, as I discussed in my post of January 15th, for possible clues as to timing of such a bounce.

World Market Index: Is This Capitulation?

Additionally, you can see from the 5-Year Daily comparison chart below of the SPX and USB (30-year U.S. Bonds) that, at times they traded in opposite directions, but were, more or less, in demand from the beginning of 2014, until January of last year, when they uncoupled, once more, and the swings on USB  became very volatile. Furthermore, we now see, once again, a bearish Death Cross formation on the SPX, which hints of further downside movement, as do the lower lows on the RSI and MACD indicators. So, let's examine the price action more closely on USB.


Further to my post of December 3, 2015, the price of the SPX:VIX ratio has broken below a critical level of 100.00 and has fallen into, what I call, the Fragile Zone.
I named it this because, as you can see from the ratio chart below (where each candle represents 1/4 of a year), price has now encroached into the last major bearish candle of Q3 of 2011, and has also fallen below the 60% Fibonacci retracement level taken from the 2009 lows of this ratio to its highs of 2014.

A hold below 80.00 could see the SPX plunge, particularly if this ratio drops and holds below 60.00. The declining Momentum indicator is hinting that further weakness is ahead for the SPX...as I mentioned here, with respect to the E-mini Futures Indices.


We can see from the 3-Year Daily comparison chart below that, for the most part, Gold, Platinum and WTI Crude Oil have traded in tandem, although Oil has seen far more volatile swings.

Since December of last year, Gold and Platinum have attempted to stabilize and rally from their 3-year lows, while Oil's attempted rally was very short-lived, and price continues to plummet to new lows...we'll see if today's (Wednesday's) volume spike signals capitulation, or not, as shown on the next chart (5-Year Daily).


Great Post from Strawberry Blonde - one of my favorite bloggers out there. Enjoy and I hope you can learn from it just as I have. ~ RM

SB's note: I originally wrote this post on February 24, 2013, but thought I'd share it again as we approach the end of 2015...and to wish a Happy Holidays to all...


merry christmasNo doubt, everyone has experienced some kind of loss over the years. Its consequences can be quite painful.

Last Monday (February 18th) my male pussycat, Smudge, who was 14 years old, passed away. He was with me from the age of 8 weeks. He's been my companion and comforter for the past two years since my husband died, and since Smudge's sister died three years ago. My family of four is now a family of one.

Within the space of four short days from when I first took Smudge to the Vet's (on February 15th) to his passing, I experienced a roller-coaster of emotions beginning with:


  • worry (as I suspected he was gravely ill);
  • which progressed to extreme panic and fear (of not knowing what decisions I'd have to make and the ensuing consequences);
  • and then moved on to profound sadness;
  • and then to numbness and disbelief;
  • and, now, to somewhere just slightly above (and more positive than) numbness, as I come to terms with what has happened and where I go from here.

These range of emotions, as well as losing those whom I love, have re-enforced the old saying that "nothing lasts forever." People, events, places, things, and stuff, in general, are transitory and are not ours to keep or possess, but, simply, to borrow and enjoy while they are in our lives. I'm finally realizing that to yearn for something or someone that is in our past (and gone) is not a healthy place to be...it uses up valuable energy and weakens my abilities to, firstly, decide what it is that I desire in life now, and, secondly, from recognizing it and acting on when it tries to show up and become a part of my new life.

You may wonder why I'm writing about this in my trading Blog. I realized today that I've experienced these same emotions when I've made trading losses.

  • First, the worry each morning (as a daytrader) that I won't be able to make money that day;
  • second, extreme panic and fear that I won't know what to do if the trade goes against me;
  • third, profound sadness when I've lost a trade;
  • fourth, numbness and disbelief that this loss happened to me;
  • and fifth, somewhere more positive than numbness as I try to assess the trade and move on to the next opportunity.

short trade covering

Markets that have rallied the most (within their respective groups) on a percentage basis this past week (showing percentage-gained above the zero level, as opposed to most of them being in the percentage-lost category, on a Year-to-Date basis):


$95.00 or $85.00 target?...both are major support levels, as shown on the Weekly chart below.
So far, price has been unable to break above major resistance (with volatility increasing within a broadening triangle formation), so it suggests that a top may be forming with further downside to follow.


The following 5-Year Daily chart depicts Light Crude Oil (as the primary instrument in candle format) and the S&P 500 Index (as the secondary instrument shown as a black line). There was a drastic shift in sentiment between these two markets when they began to diverge in mid-October, 2014.

While the price of Oil is making lower swing lows in its depressed downtrend -- and, in fact, made a new 5-year low today (December 7th) -- the RSI and PMO indicators have been making higher swing lows but have yet to make higher swing highs. So, while we're seeing possible hints of higher prices to come at some point in the future, it may be awhile yet before prices begin to stabilize, first. High-than-normal volumes this year haven't yet produced stable prices and may have contributed to the large swings in between 37.50 and 62.50 that we've been seeing. Until we see a sustained drop in volumes, we will likely see Oil continue to plunge to further new lows and/or persist in its wild daily erratic bearish and bullish spikes.


I can't get too excited about possible market follow-through in any one direction on the S&P 500 Index unless and until price breaks and holds either above 150 or below 100 on the SPX:VIX Daily ratio chart below.

Currently, price is still in what I call the "Major Conflict Zone." Yes, I realize it's a huge range, but that's the way 2015 has gone. In my opinion, I think 2016 will see greater volatility and much larger swings than we've seen this year...hang onto your (Santa) hats, folks!


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