12.23.09

US Equities

The SPX printed new closing and intra-day highs yesterday, closing where the post Nov 2 advance equals 38.2% of the July-October advance.  It also broke out of its month-long trading range.  The break out targets a minimum move to 1,132. The Advance-Decline actually dropped today as did the A/D ratio.  Negative RSI divergences still with us.  The Dow has still not made a new high so there is a divergence in price between the indices.  The NASDAQ has entered its 'kill zone' as price has entered a DiNapoli confluence zone, 2250-2265, just as the de-trended oscillator is flashing a sell signal.

Foreign Equities

EEM consolidating its Dec 17 drop.  Despite various buy signals, no sign of upward reversal.

The Nikkei has broken up the horizontal support resistance line previously mentioned.  Buy on dips.

US Treasuries

Who said treasuries were safe!?  Yesterday turned our painful, deflation inspired, bullish bond forecast from painful to just plain insulting.  We don't see support in the 30-year until 115. TLT support at 7/27 low and Fib support near 90.

Currencies

If the Japanese Yen breaks yesterday's close, there is nothing but a big air pocket down to 107.50 or below.  A falling Yen makes perfect sense with a rising Nikkei.  The Dollar had another good day.  It's trying to break through yet another confluence zone which should be providing resistance.  We wouldn't want to buy this one just to see it correct as that could be a painful experience.

Commodities

Crude back up to resistance at 74.50.  Watch for breakout

Gold closed at 1086, solidly in the confluence zone.  A break of today's low targets 1,040.

12.22.09

US Equities

Several negative divergences yesterday in the internal indicators (A/D Line & Ratio, McClellan Oscillator, New Highs, 3-day RSI, etc, etc.  One stand out is the Total Put/Call Ratio which dropped to 0.62 - the lowest level since August 21st.  This is a sign of extreme complacency.  Put this observation together with a low VIX and investors (investors?) must be thinking a Santa Claus rally is upon us.  The S&P failed to make a new closing high by only 6bps however the Dow is almost 100 points from taking out its prior closing high (12/14).  The NASDAQ managed a new closing high today at 2237.  Heavy Fibonacci resistance zone at 2250-2270.  Despite the new high, 3-day RSI was unable to move over 80 and printed a negative divergence.  14-day RSI is at 2 deviations above it's 20 day moving average.  With BWI in a sell mode, that constitutes a sell signal.  Bottom Line: feeling very negative on US equities today.

Foreign Equities

Emerging Markets failed to participate with US markets today.  EEM lost a nickel. 

Nikkei unable to break through resistance cited in yesterday's Market Update.  We're waiting and watching for an opportunity to short the index.

US Treasuries

Ouch!  The 30-year bond (and 10-year) breached the advancing trendline we've mentioned previously.  But with positive divergences in RSI, (TLT, too) it makes it hard to let go of long positions.  The bond dropped into a Fibonacci convergence zone yesterday so between that and the positive divergence in RSI we'll give this another day before tucking our tails between our legs and heading home.

Currencies

The Dollar was up again yesterday.  Wait for correction before going long.

The Yen dropped to 109.71 and into a DiNapoli confluence zone.  This drop is very similiar in size to previous drops during the post-April advance.  This could be a good place to step aside from short positions and await a buying opportunity.

Commodities

CCI dropped yesterday to 477.50.  Stochastics (21/14 and 14/3) and MACD are all aligned to the downside again.  Advancing trendline passes through 470 today.  Crude pulled back less than $1 yesterday.  We now see a downside target of $67.  Overhead resistance at $74.50.  Gold found support at our previously mentioned 1,090 support level before closing at 1,095. 

12.21.09

See December 21st Market Commentary

12.18.09

US Equities

The move down in equities today gave a clear sell signal with the SPX RSI dropping beneath the level we mentioned in yesterday's commentary.  The SPX close and low were exactly 38.2% of distance of the 12/4-12/9 decline.  Still watching for support at 1087 (Dow 10,286).  Next support 1075, 1060-1065. 

Foreign Equities

EEM fell along with US stocks yesterday.  BWI still in buy mode but it wouldn't have to move much to make a new low sending it into its sell mode.  Treat as if it were US equity for now.  Expect support at 39.50.  Nikkei dropping as I type Thursday evening.

US Treasuries

Patience and tenacity may have paid off as treasuries jumped up as the equity markets sold off yesterday.  The 10-year note stopped, not just at its advancing trendline, but at a point where the decline since 12/8 is 61.8% of the 11/27-12/4 decline.  Still targeting 122-122.5 on the 10-year, 105 for TLT.  CCM buy signal today on 10-year .

Commodities

Gold took another hard spill today, closing at 1106.80.  Getting close to the first targeted support zone of 1090.

Crude Oil printed a spinning top candlestick showing indecision and indicating that the bulls are losing momentum.  Crude's BWI has rolled over indicating declining momentum/volatility.  3-day RSI has been unable to exceed 80.

Currencies

Another big day for the Dollar, DXY.  The Yen is showing some indecision (3-day RSI unable to breach 20 again) but BWI hasn't shown any sign of rolling over so we'll give the downtrend the benefit of the doubt.

12.17.09

US Equities

All three US equity indexes we follow, SPX , DOW and NASDAQ Composite have seen their BWI move into the sell mode. 

Dow: the advance since July 9th is now equal to the March/June advance.  The drop in the RSI yesterday could be interpreted as a CCM sell signal but the rise in RSI since Dec 8 has been too steep to make us totally comfortable calling a top.  If we could see 3-day RSI move below 20 that would probably do it.  We will be watching our internal indicators in the meantime.  Bottom line: We think this market is in the "kill-zone" and are looking for a tradeable decline from this area.

SPX: a move by 14-day RSI below 54.73 would be a sell trigger.

Foreign Equities

Nikkei: The Nikkei has moved back up to old support/resistance.  Negative divergences in de-trended oscillator as well as RSI (not shown)

US Treasuries

Our bullish call on treasuries is hanging in there by the skin of its teeth.  We'll hold for another day.

Commmodities

Crude Oil got a nice bounce today back up to a declining trendline.  The BWI has started to rollover.  It needs to drop a long way before changing modes to a buy.  Buy-stops are probably in order for short positons.

Currencies

Nothing to report today

12.16.09

US Equities

The Nasdaq Composite's BWI moved into a sell mode yesterday.  While RSI (14-day) could be construed as giving a sell-signal, with 3-day RSI having just recently been above 80 we're not anxious to call for selling the index.  The S&P's BWI is acting in an unprecedented fashion.  Suffice it to say that the hourly chart since 12/9 was broken immediately yesterday morning, during the 2nd half hour the index rose to give the broken trendline a 'kiss goodbye' and then fell for the remainder of the session.  At this point we're retracting our buy recommendation.

The Put/Call ratio, overlaid with Bollinger Bands (14 day, 1 standard deviation) gave a sell signal yesterday.  It was not joined by any of our other internal indicators in giving this signal

Foreign Equities

EEM printed a shooting star candlestick yesterday which is normally a bearish sign.  BWI did flip into buy-mode yesterday, however without a trigger from RSI to buy, the mode switch means nothing. A buy signal could be triggered today with a move by 14-day RSI through 54.19.  Nikkei still digesting the big "meal" it had last week.

US Treasuries

It's make it or break it time for treasuries.  The 10-year needs to hold its trendline to keep us long.

Commodities

Gold and Crude Oil both tried for small bounces today.  Both are oversold but no reason seen at this point to cover shorts

Currencies

DXY had another big day breaking through resistance at 76.60.  Rather surprising that commodities held as well as they did.  BWI for the EURO finally confirmed what we already knew, the Euro is on a sell signal.  A rising Dollar should start to drag down equities before long.  The Yen fell again to close at 111.49.  First support near 109.  Targeting 106.  Long-term target 120.

12.15.09

US Equities

The CCM gave a buy signal on the SPX yesterday.  We are now watching resistance between 1125 (50% retracement of the post-Oct'07 decline) and 1150 (DiNapoli levels).  Seasonality is positive this time of year through early January. 

Foreign Equities

No comparable signal for EEM

Nikkei consolidating recent gains  No signal to alter long positions

US Treasuries

The long bond and TLT both registered buy signals yesterday while BWI confirmed the downtrend in the 10-year.  During the past few months the 30-year and 10-year bonds have been out of synch with each other and TLT has been giving the same signals as the 10-year.  Now it looks like TLT wants to follow the 30-year bond.  We're confused by all this too.  Both TLT and the 30-year have formed swing pivots (bullish) over the last 3 days while the 10-year continues to struggle. At this point, hold TLT.

Commodities

Gold - staying short

Crude Oil - finding some support at this level as suggested previously by DiNapoli levels.

Currencies

Yen is on a sell signal

Dollar on a buy signal

Euro is following the normal inverse of the Dollar

12.14.09

See Market Update

12.11.09

US Equities

The 1079-1083 range of support for the SPX still holding strong.  The big index gapped up yesterday to close at 1102.35 kissing the underside of a Fibonacci trendline.  14-day RSI failed to give a buy signal.  A buy would be triggered today with a close over 56.15 by RSI.  Today is the target date for another 107 day cycle top.  Usually a 2 day window either side of the target date.

Foreign Equities

Emerging Markets

EEM bounced today along with domestic markets.  Solidly on a sell CCM sell signal but still waiting for 3-day RSI to dip below 20.  The Nikkei has slid the last couple of days but CCM still on a buy signal. 

US Treasuries

Sloppy bond auctions both yesterday (10-year notes) and today's 30-year bond made for a difficult two days for bond holders.  TLT felt even worse than the two previously mentioned bond maturities.  Fib trendline model pointing to a potential bottom yesterday which would make sense given the 107 day cycle high expected today in equities.  BWI still in buy mode for all 10,30, and TLT.  Just waiting for buy trigger from RSI.  Won't take much.  Pretty much any move up should do it.  However, any close below yesterday's level would have me running for the exits.

Commodities

The CCI index got a slight bounce yesterday.  We're expecting some sort of consolidation until the index can breach the advancing trendline mentioned yesterday.  Gold holding 1120 support but we're not looking to buy prior to 1090 at the soonest.  Crude Oil may be in the 'kill zone' for short sellers as there appears to be good support at 70.  We'll wait for a buy signal from CCM but crude did find support at a Fib trendline yesterday.

Currencies

The Dollar, DXY, has had a nice December so far, rising from a low near 74 to Tuesday's closing high of 76.31 (doesn't sound like much, does it?).  We're seeing resistance coming up at 76.60.  BWI still in sell mode but getting so close to it's upper Bollinger Band that it could flip to the buy mode.  Detrended oscillator giving a sell signal.  Waiting...watching.  The Japanese Yen bounced after non-farm payrolls but the BWI is still in the sell mode.  "Technically" CCM gave a sell signal yesterday but we're hesitatant to take a signal from a RSI which has bounced straight up like this.  3-day RSI has shown no sign that we should be long.  Let's see what happens today.

12.10.10

US Equities

SPX dipped briefly below that 1087 support level discussed yesterday but bounced and closed up 4pts at 1095.95 on Wednesday.  The detrended oscillator (not shown) became oversold on Tuesday and predicted yesterday's bounce.  That, plus the 107 day cycle top expected this Friday, and we would expect the market to have an upward bias for the remainder of the week.  As the SPX's BWI is in the buy mode, we'll be watching to see if 14-day RSI can break through 56 where the RSI declining trendline crosses on Friday.  Doing so would constitute a buy trigger.

Foreign Equities

Nothing new here.

US Treasuries

Ditto

Commodities

Continuous Commodity Index

The equally weighted index triggered a CCM sell signal on 12/3.  Those wishing to get short may have to wait as the index not only has its post-July advancing trendline coming up to provide support (if only temporarily) but the detrended oscillator is now over-sold implying some sort of bounce is pending.  We don't believe the trend line will hold long enough to provide for another advance as the Fibonacci trendline model has indicated a full-blown top on 12/1.

Gold

Gold came down to fill the gap at 1121-1131 yesterday.  Gold is due for some kind of bounce here but there is no reason to think we've seen the worst yet.  Support at 1090 and 1040

Japanese Yen

The Yen bounced for the third day in a row yesterday, but at this point there is no reason to think this is anything more than a bounce.

12.09.09

US Equities

Nice day Tuesday...if you were short.  The Dow stopped right on a Fibonacci trendline but CCM gave a fresh sell signal.  The S&P broke its respective Fib trendline but BWI is still on a buy signal and 3-day RSI refuses to breach 20 which would make us feel better about being short the SPX even though BWI is in the buy mode.  Although stochastics and MACD are rolling over, a break under 1087 is needed to become totally comfortable with a short position in the SPX.

Foreign Equities

The Nikkei continued its 'growth spurt' last night but is down 105pts as I type this Tuesday evening.  EEM is definitely a short situation.  If long, get out.  50-day moving average at 40.29 (where it bounced last time) and better support at 37.50. 

US Treasuries

Despite stochastics and MACD rolling over, The ten-year note bounced just as the detrended oscillator and CCM predicted on 12/4/09.  BWI trying to rollover and could take out previous low in the next day or two so don't get in a hurry to buy.  Keep a close eye on this one.  Ditto for TLT.

Commodities

Gold found some support at todays close.  Slight support and a Fib trendline stopped the descent.  If it breaks through here (despite being very over-sold), next decent support not until 1090.

Crude Oil definitely a short situation.  The de-trended oscillator, however, has gotten oversold and it might behoove short sellers to wait for a bounce.  Otherwise, you don't want to have mom in Crude oil.

Currencies

Another nice bounce in the Dollar today.  Everything BUT the CCM says this is a buy.  We're going to wait until it takes out the previous closing high at 76.39 before using our money. Perhaps if you've got some TARP money lieing around...

Long Euro positions took it in the shorts today as the Euro has now breached both its long-term, advancing trendline and its 50-day moving average.

Japanese Yen bounced as its de-trended oscillator predicted.  Stochastics and MACD still pointing down but they are less sensitive.  CCM still on a sell signal so no rush to get in.  Price target 120.

12/8/09

US Equities

Slow, inside day yesterday in the equity markets; S&P down, Dow up.  Stochastics and MACD rolling over (negative sign).  A drop below 56.47 in the DOW's 14-day RSI would be another sell signal.  Overhead resistance for SPX at 1120 which is the 50% retracement of the entire bear market since October '07.

SOX, Semiconductor index, looking like it could stretch to ~341.

Emerging Markets

Marginally more excitement in EEM yesterday than US indices (marginally).  3-day RSI still unable to show any real strength via a move above 80.  CCM still on a sell signal.  Time-wise, today a good place for a turn in direction.

US Treasuries

TLT held support yesterday and declining triangle, etc still targeting 101 but the pattern is starting to resemble a head and shoulders which would have negative implications.  A break of 92 would be "disturbing". 

Gold

While gold managed to close up off its open it was still down for the day.  Interestingly, 3-day RSI has not managed to break below 20.  CCM on sell signal.  This is a correction in the long-term uptrend for gold but don't get in any hurry to buy as it will, no doubt, take awhile to work off the overbought condition generated during the last 3 months.

Crude Oil

Oh, Mea Culpa!  We broke our own rules recently.  Suffice it to say that oil is NOT in a buy mode, it is in a sell mode.  Having said that, the correction since Oct 21 still looks, well...corrective.  Not changing our target of 89 at this point. 

US Dollar

Contrary to the 'contrarians' the CCM gave a sell signal on the Dollar last Friday and a buy signal on the Euro..  Not looking for a new low on the Dollar, however.  Just a return to the Nov 25 low sometime around Dec 16.  Targeting a higher high in the Euro, however, closer to 1.54

12/7/09

See December 7th Market Update

12/4/09

Equities

The total put/call ratio breached 1 standard deviation below its 14-day moving average yesterday.  This is often a good sell signal.

Emerging Markets

EEM created a bearish engulfing candlestick yesterday, a negative, short-term sign.  EEM is still on a definite sell signal.  3-day RSI has been unable to break over 80 since Nov.11 which helps to confirm the lastest pop up was a rally in a bigger downtrend.

Commodities

No changes in gold or crude oil.  Still awaiting signals

Sugar

Sugar is looking interesting here after spending the last 3 months in a triangle, normally considered a continuation pattern.  CCM has given a buy signal but we'd wait for a break of the declining trendline passing through 23.13 today.  Stochastics and MACD have all turned up.

Japanese Yen

The Yen continued dropping yesterday.  Test of trendline support expected today at 112.86.  Possible bottom as Non-Farm Payrolls to be released today.  Both short and long-term stochastics have rolled over giving a bearish signal.

12/3/09

Equities

A doji candlestick formed in the S&P yesterday.  This is a sign of potential reversal.  Its implications are short-term but its something to be aware of.  BWI still in buy mode but RSI has yet to trigger a buy signal.  Still seeing negative divergences in both 3day and 14 day RSI.  Divergences can be broken, however.  A closing high above 1,118 will have us thinking a final upleg is upon us and would target 1138-1155.

Sentiment

Investors Intelligence % bears at 16.7% - a very low reading (very few bears) and contrarian bearish.

Nikkei

The Japanese market has been on fire with the dropping Yen acting as fuel.  BWI is in the sell mode but you wouldn't know it from these last few days.  As I type these words Wednesday night, the index is up another 300 points over what the chart below is showing.  I'm watching this one for a shorting opportunity.

TLT

Not much new here.  Like SPX, lots of indecision.  Still targeting 101-105

Euro

Target 154-155.  Moving inversely to the USD, as expected.  Fresh buy signal last Monday.

Japanese Yen

Sell signal in the Yen yesterday.  Yen has a history of dropping into non-farm payrolls.  This should be thought of as a buying opportunity.  Targeting 120

Gold

BWI in sell mode.  RSI negative divergences in place.  Good possibility that yesterday was an intermediate top.  A drop in 14-day RSI under 79.62 will be a sell trigger.

Crude Oil

Crude is having a tough time breaking out of that pennant formation discussed previously but yesterday BWI went into a buy mode so it should just be a matter of time.  Positive RSI divergences in place.  Buy on a break out.

12/2/09

Equities

The CCM gave a buy signal on the NASDAQ Composite yesterday.  That signal has not been confirmed by either the SPX or Dow.  SPX 14-d RSI needs to exceed 59.27 on the close today to give a buy signal.  RSI still exhibiting negative divergences in equity indices.  Nikkei has had a couple of nice days.  It will take very little downside, however, to give a fresh sell signal.  EEM got a good bounce yesterday too.  Still in sell mode and negative divergence in RSI.  Hold shorts unless old closing high (42.07) is surpassed.

Commodities

Gold made a new high yesterday but with negative divergences in RSI, both 3-day and 14-day.  14-d RSI under 78.86 today will trigger a sell signal.  Any drop should be considered a buying opportunity...but don't get in a hurry to buy.

Crude Oil struggling to give a buy signal...but not yet.  Perhaps today.

Currencies

Still targeting 73 in the Dollar, DXY

Euro gave a buy signal yesterday, target 154-155

Japanese Yen gave a hard sell signal.  Solid signal for aggressive traders.  Safer to wait for break of advancing trendline on RSI which passes through 67.41 on 12/2/09

11-30-09 

U.S. Equities

Even with the markets closed last Thursday, Lindsay's 107 day cycle came like clockwork to global markets (Market Update 11-23-09) with news of Dubai World seeking debt relief and sending investors running for the exits.

The Dow fell on Friday and closed at 10,309.90, just over solid support (~10,250).  Some support at 10,100 but next solid support at 9,950.  Friday's drop moved the Dow CCM solidly into a 'sell' signal. 

The S&P 500 closed right on the 23.6% Fibonacci retracement of the November advance.  The SPX's BWI moved into a buy mode but it would take an extreme move up to trigger a buy signal in RSI.  Good support at Friday's low (1,083).  Next support ~1,075.  Friday's drop breached the post-March uptrend line. 

U.S. Treasuries

Both the long-bond, as well as TLT, are solidly in buy modes.  The declining triangle in TLT indicates a minimum move to 101.00 and once resistance at 99 is penetrated the next level of resistance is not until just under 105.

Nikkei

The Japanese market dropped hard on Friday stopping at minor support near 9,100.  The Nikkei has now wiped out its entire post-November advance.  This, despite continued good economic news.  I see good support at 8,600 and near 7,400. 

MSCI Emerging Markets

The index tested its 50-day moving average on Friday and closed above it.  Not much support between Friday's low and 37-37.50.  BWI moved to buy mode but could easily flip back to sell mode prior to a buy being triggered by RSI. 3-day RSI still not confirming sell signal given on Nov 18.

U.S. Dollar

The bandwidth indicator for DXY has moved to the sell mode.  It won't take much of a move down in RSI to trigger a sell signal at this point.  Downside target 73.  It will be interesting to see if the Dollar de-couples from its inverse relationship to equities.

Euro

Ditto for the Euro but in reverse. Stiff resistance at 1.54-1.55

Japanese Yen

The Yen went parabolic last week but it tends to decline into non-Farm payrolls so, between that and the Yen's BWI has gone into a sell mode, this week could be interesting.  Waiting for an RSI trend line break to tigger a sell signal.  Tough resistance at 121-122.  No reason to think a coming dip means the advance is finished.

Continuous Commodity Index

CCI hit 483 last week, very close to our 485 target.  BWI is still in a sell mode and RSI is on the verge of giving a sell trigger.  This index deserves close scrutiny despite the fact that late December looks like a better time than the immediate future for a top.

Gold

Gold formed a big, ugly, black candlestick right at the resistance level we mentioned in last week's Market Update, 1160-1170.  BWI is close to going to sell mode and when it does that will most likely be the trigger itself as RSI has already rolled over and declining.  Longer term, that inverted head and shoulders still targets a minimum move to $1,300.

Crude Oil

Crude has been coiling like a snake since late October, gathering its energy, ready to strike.  We have a number of reasons to think the strike will be upwards.  It has created a pennant formation which is a continuation pattern.  Overhead resistance at 89-90 corresponds to a 50% retracement of the 2008 decline.  Buy crude with a break above the top of the pennant.

11-26-09

The Dollar's break below support yesterday was met with near silence as was the news that Dubai World was seeking a delay from creditors in paying the interest due on its debt.  That has changed today while, though US markets are closed, overseas markets are clearly reflecting the Dubai situation and the DXY is getting a bit of a bounce.