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

Protection via the U.S. $
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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
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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.
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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
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Further to my recent post wherein I introduced a hypothetical portfolio of indices, ETFs, and the 30-Year Bond (in order to broadly track "value" vs. "growth" sentiment), I would offer the following graph which depicts the percentages gained/lost so far this week (as of Thursday's close).

Market participants favoured the Technology sector, followed by Emerging Markets, Cyclicals, Large-caps, Commodities, Small-caps, and Financials. Homebuilders has been flat and some profits have been taken in the Health Care Sector. Some money was then allocated into 30-Year Bonds.

While there was a blip in volatility on Wednesday, the VIX dropped back below 14.00 on Thursday.

We can see that markets have been willing to add a fair bit of "risk." While volatility remains low, I'd suggest that we'll see the markets continue to buy into the "growth" sectors, along with "value" until this sentiment changes.
This weekend's market update will look at a broader flow of money for the entire week, so be sure to check back for that post.

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Further to my last post, this update shows that money flow, as of 10:30 am today (Wednesday), has been out of equities and commodities and into 30-Year Bonds, as shown on the graph below.
We'll see if that holds, worsens, or reverses after the release of the Fed meeting rate announcement and press statement today at 2:00 pm EST.

 
Risk-off May Day


There's been a slight uptick in volatility today, as shown on the Daily chart of the VIX below. 14.00 seems to be a popular resistance/support level recently, so we'll see if it holds above (where it's sitting at the moment).

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Just for fun, I thought I'd look at a few instruments to see their comparative growth during a one-year period as a broad measure of where "value" vs. "growth" sentiment currently is in a so-called "balanced portfolio." There are 10 in total, since that's the number I'm limited to showing on one graph.

Then, if one were so inclined, one could track the performance of this group for the rest of 2013 year to get an idea of general market trend, risk appetite, and the momentum of both.

The selections are based on the "low-growth macro-economic environment" and on the assumptions that the "BUZZ WORDS" will be with us and will continue to define World Central Bank and global market activity for the rest of the year.
I, therefore, dub this a "hypothetical canary portfolio." 

As shown on the 1-year percentage gained/lost graph below, I've selected three of the Major Indices, the Commodities Index, the Financial, Health Care, and Cyclical Sectors, the Home Builder and Emerging Markets ETFs, and 30-Year Bonds. I thought such a basket could represent a good cross-section of "value vs. growth segments" and be worth monitoring. No doubt there are many other portfolio combinations, but this is the mix that I've chosen.
You can see that the Homebuilders ETF has gained the most, followed by Health Care, Financials, Cyclicals, Small-Caps, and Large-Caps. During the past year, Technology, Emerging Markets, 30-Year Bonds, and Commodities have lagged. We'll see whether traders step in any time soon to add these laggards (except Bonds) into their portfolios, thereby increasing "risk" in this projected "low-growth macro-economic environment." Whether they rotate out of the "leading value instruments" and/or Bonds in order to fund such acquisitions remains to be seen.

 
 
A Hypothetical Canary Portfolio

 

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