TIP
TIP had a weak week, until Friday where is gapped up, closed the intraday gap and then rallied to end above the EMA lines. It tells of further rallying next week, which would put at least another two weeks of rally in place.
JNK
The coporate bonds on the weekly, if it is to equilibrate the bearish divergence appears to have much more to go in time period, but in price it appears to have gone the distance. Three of the past four weeks have resulted in long shadows which are indicating that there is a lot of buying power when prices fall. A number of indicators are also telling of building up underlying strength. The daily charts have a higher low in price and indicators and ended the week with a gap up. IF this is a runaway gap, we would be in for a rather huge rally.
/HG
Copper prices have not looked very well recently, but one can notice the long lower shadows in the recent weeks. A less convincing indicator bounce is suggested. In the daily charts, copper registered a higher low but for now, but the indication of a rally is less convincing – at least for now.
Napier’s indicators are aligning towards a downtrend reversal into a potential rally.
SPX/SPY (S&P500)
Last week’s call for a bullish week ended nicely with a long legged small body candle which looks like a spinning top. The coming week, ending bullishly would complete the morning star candle formation, which would be very bullish on a weekly chart. Note also the 3 of the past 4 weeks had long lower shadows on the weekly candles indicating a lot of bottom buying that follows market dips.
The weekly SPY charts looks as if there is more to equilibrate the bearish divergence, but indicators are starting to show a short term rally. This rally should not close above 1111, otherwise the rally would be continuing. Similarly, the daily charts have indicators that are showing short term bullish divergences. However, Friday ended with a matching high that closed down more than 50% of the previous candle… looks like Tuesday may close down, and if so, we are looking for a higher low (>1074) to form later in the week.
/DX
The USD futures weekly charts did go parabolic, and appears to have strength for another rally. However, a possible double top could be in the making, with bearish divergences forming on the daily charts along with falling open interest, although the rate of falling open interest is less this past week. Appears that there may be another spike, and then a correction should be in place.
/GC
Weekly gold futures is building up a bearish divergence but a spike is indicated in the charts. The daily charts show the previous week’s correction in gold to the trendline having a fake breakdown and a small rally, with more to follow. Gold looks bullish for the short term.
/CL
Crude finally got a reprive from its rather extreme fall. Early in the week, a long dragonfly doji started a strong reversal to the upside. This should follow though above 75.80, otherwise a resumption of the downtrend would be in place. Let’s see what happens to this one…
VIX
The VIX has a bearish divergence forming… if it is to go down further, it would mean that the weekly bullish divergence completed. However, the daily chart containing the bearish divergence looks weak on the RSI, but possibly may spike higher in the coming 4 weeks. Watching the VIX breaking below or staying above 30 would be the key to the coming market direction.
SYNOPSIS
From last week’s WMA - “I am expecting a bullish week. Be it a minor bullish retracement or otherwise, there is one thing that would be clear… it would be volatile.”
Indeed it was so.
This coming rather short week (Monday is Memorial Day holiday) and the NFP on Friday, should put a great deal of volatility in the markets. The initial rally has been done, and with markets “near value” for the time being, it is getting difficult to make a good call. However, the leading indicators as well as underlying indicators are pointing to another bullish week.
Note: Any material posted here is of my sole opinion, and my opinion may differ from others. It is definitely NOT a solicitation to do anything else as a consequence of reading this material. The material presented here is intended for educational purposes only.
Monday, May 31, 2010
Thursday, May 27, 2010
Another Failed Bounce - Market Analysis for 27th May 2010 by Singaporeseeds
Daily charts for S&P
S&P did a nice upward move throughout the whole day only to fail in the last 2 hours. It closed below my lower MOBO band. This indicates that the downward momentum is still strong. The February lows of 1050 are still holding for now. As long as this low is not breached, a bounce is still possible.
As of now, overnight futures have rallied by over 20 points on the S&P. S&P has to close above 1080 soon otherwise we might be going through a few more days of weakness before a rally occurs. I still believe that the downtrend should end by Friday this week. Hence the market would have to close and hold above 1080 by end of the week.
S&P did a nice upward move throughout the whole day only to fail in the last 2 hours. It closed below my lower MOBO band. This indicates that the downward momentum is still strong. The February lows of 1050 are still holding for now. As long as this low is not breached, a bounce is still possible.
As of now, overnight futures have rallied by over 20 points on the S&P. S&P has to close above 1080 soon otherwise we might be going through a few more days of weakness before a rally occurs. I still believe that the downtrend should end by Friday this week. Hence the market would have to close and hold above 1080 by end of the week.
Wednesday, May 26, 2010
And Here We Bounce – Market Analysis for 26th May 2010 by Singaporeseeds
Monthly charts for Dow
Weekly charts for Dow
Daily charts for Dow
On monthly charts, Dow did a bearish engulfing and is at MOBO lower band support now. Weekly it’s at the 50 SMA support (red line) and on daily it was a hammer candlestick pattern. On daily charts it had tanked too far out from the MOBO bands and I believe it would be rallying over the next few days to test the 10,250 resistance level.
Monthly charts for S&P
Weekly charts for S&P
Daily charts for S&P
On monthly charts, S&P is at the 200 SMA and lower MOBO band support. On weekly, it is also at the 50 SMA support level (red line) and Tuesday was a hammer candlestick pattern. This is very similar to the Dow and I believe it should be rallying to 1100 over the next few days. As the hammer candle stick pattern with a bullish confirmation on the next day indicates the start of a bullish trend, I will be monitoring the market movements tonight.
Monthly charts for NASDAQ
Weekly charts for NASDAQ
Daily charts for NASDAQ
NASDAQ had been the most bullish throughout this huge bull run from March 2009 and hence NASDAQ had corrected the most during this correction. However on monthly and weekly charts, NASDAQ is still above its 50 SMA. On a weekly and monthly basis, I believe it should bounce at this stage. Although there are 2 more days before the end of May, my charts are indicating that June 2010 would be a bullish month. We shall be able to know whether this bullish month will be a bear trap or the continuation of the March 2009 rally in the next few weeks to come.
Weekly charts for Dow
Daily charts for Dow
On monthly charts, Dow did a bearish engulfing and is at MOBO lower band support now. Weekly it’s at the 50 SMA support (red line) and on daily it was a hammer candlestick pattern. On daily charts it had tanked too far out from the MOBO bands and I believe it would be rallying over the next few days to test the 10,250 resistance level.
Monthly charts for S&P
Weekly charts for S&P
Daily charts for S&P
On monthly charts, S&P is at the 200 SMA and lower MOBO band support. On weekly, it is also at the 50 SMA support level (red line) and Tuesday was a hammer candlestick pattern. This is very similar to the Dow and I believe it should be rallying to 1100 over the next few days. As the hammer candle stick pattern with a bullish confirmation on the next day indicates the start of a bullish trend, I will be monitoring the market movements tonight.
Monthly charts for NASDAQ
Weekly charts for NASDAQ
Daily charts for NASDAQ
NASDAQ had been the most bullish throughout this huge bull run from March 2009 and hence NASDAQ had corrected the most during this correction. However on monthly and weekly charts, NASDAQ is still above its 50 SMA. On a weekly and monthly basis, I believe it should bounce at this stage. Although there are 2 more days before the end of May, my charts are indicating that June 2010 would be a bullish month. We shall be able to know whether this bullish month will be a bear trap or the continuation of the March 2009 rally in the next few weeks to come.
Sunday, May 23, 2010
WMA 23rd May 2010 – for trading week ending 28th May 2010
In last week’s analysis, I posted “The overall activity of the market appears to show that the relief bounce is over. I am discounting that for now, preferring to observe. No doubt I still maintain that the market is likely to have topped out for a significant correction, perhaps not before an attempt to fail the top again.” Midweek, the markets confirmed a quick dive to the lows, failing the 50MA twice, and breaking support levels. Let’s see how it all ended and what to expect for the coming week…
TIP
During the week, the TIPS tanked to value and at the end of the week, rallied up again with candles that have long low tails. From the daily charts, it looks like a continuation rally is in the cards and should be revealed later this coming week.
JNK
The corporate junk bonds did equllibrate the bearish divergence with a bang like the overall markets. On the daily charts, it looks like it has some more to go. Weekly charts look much worse really… there is likely to be much more.
The daily charts are showing something interesting… that although mid last week there was a gap down commitment it appears to have reversed abruptly with a bullish engulfing and short term bullish divergence on my indicators. This bullishness should continue for 2-3 days till mid-week.
/HG
Copper started out the week bad, with prices falling and then it stalled, only for the week to end with prices rallying almost back to where the week started. This ended the week with a slightly deformed looking hammer. The daily charts show a short term bullish divergence.
This week, Napier’s leading indicators are realigning for a possible rally. The TIPS are about to continue the rally, JNK and copper ending the week with short term bullish divergences. It looks like that coming week would have a higher probability of being bullish.
/DX
The USD (futures) went parabolic mid-week and started correcting. This was indicated by the drop in open interest as large players were closing their positions on the USD rally. The weekly charts show that the resistance level at 86.35 held, and with the parabolic run-up, the USD should be correcting to about 84.
SPX
The SPX/SPY ended the previous week with a long legged hammer indicating a possible upside, and at that weekend, it looked as if the market was not yet committed. Once the week opened, by Tuesday, it was clear as daylight that the lows of the 6th of May would be tested. This was followed by a gap down on Thursday with Friday opening hours testing the lows of 6th May. Friday then closed to complete a piercing pattern. Although the weekly chart has indicated a significant correction, led off by a weekly bearish divergence, the weekly bearish divergence has not equilibrated, and should take weeks more to do so. However, the increase in volatility may have made up for it, and the daily charts now indicate that the coming week should be bullish. Friday’s piercing pattern is one such indication, and closing the gap by SPX breaking out over 1115 would confirm a short term rally is at hand. Other indicators also suggest that a short term reversal is in the making as of last Friday.
Gold /GC
On the weekly charts, an interesting development has appeared… While Gold has shown its relevance in times of risk aversion, particularly with the recent events in Europe, it is building some bearish divergence in the long term weekly charts despite making new highs. The daily charts show clearly that Gold had clocked a parabolic move and duly corrected last week. The indicators suggest a steeper Gold correction to come, bringing prices to 1150 thereabouts.
Crude /CL
Crude had a thrashing week, clearly equilibrating the weekly bearish divergence. On the weekly charts, there appears to have more to come in the next few months. However, the daily charts are starting to signal a probable rally to 75, given the extreme oversold condition of crude. Interestingly, crude closed on Friday with a bullish harami and indicators are showing a possible reversal up.
VIX
The VIX weekly charts show that the increase in volatility is clearly a manifestation of the bullish divergence. It still looks like volatility would be abundant over the next month or so, but a sudden reversal may be in place as the VIX is rather extreme. The daily charts are clearer with a bearish divergence, and a Friday close to form a bearish engulfing. The immediate VIX support at 35, once broken, should see the next support at 25.
SYNOPSIS
From a quick scan of the market based on my usual charts, it is clear to me that the coming week is likely to be very bullish. This is apparently very clear in almost all the charts that had been featured in my WMA. As I began doing this WMA, I was a little wary of my bias, as I had 3 people ask me on Friday itself about the possibility of getting into the market to buy up recently beaten stocks. It appeared that greed has taken the average Joe out there and thus it would be showing up in the charts. Amazingly, it appears to be so.
I am expecting a bullish week. Be it a minor bullish retracement or otherwise, there is one thing that would be clear… it would be volatile.
Note: Any material posted here is of my sole opinion, and my opinion may differ from others. It is definitely NOT a solicitation to do anything else as a consequence of reading this material. The material presented here is intended for educational purposes only.
TIP
During the week, the TIPS tanked to value and at the end of the week, rallied up again with candles that have long low tails. From the daily charts, it looks like a continuation rally is in the cards and should be revealed later this coming week.
JNK
The corporate junk bonds did equllibrate the bearish divergence with a bang like the overall markets. On the daily charts, it looks like it has some more to go. Weekly charts look much worse really… there is likely to be much more.
The daily charts are showing something interesting… that although mid last week there was a gap down commitment it appears to have reversed abruptly with a bullish engulfing and short term bullish divergence on my indicators. This bullishness should continue for 2-3 days till mid-week.
/HG
Copper started out the week bad, with prices falling and then it stalled, only for the week to end with prices rallying almost back to where the week started. This ended the week with a slightly deformed looking hammer. The daily charts show a short term bullish divergence.
This week, Napier’s leading indicators are realigning for a possible rally. The TIPS are about to continue the rally, JNK and copper ending the week with short term bullish divergences. It looks like that coming week would have a higher probability of being bullish.
/DX
The USD (futures) went parabolic mid-week and started correcting. This was indicated by the drop in open interest as large players were closing their positions on the USD rally. The weekly charts show that the resistance level at 86.35 held, and with the parabolic run-up, the USD should be correcting to about 84.
SPX
The SPX/SPY ended the previous week with a long legged hammer indicating a possible upside, and at that weekend, it looked as if the market was not yet committed. Once the week opened, by Tuesday, it was clear as daylight that the lows of the 6th of May would be tested. This was followed by a gap down on Thursday with Friday opening hours testing the lows of 6th May. Friday then closed to complete a piercing pattern. Although the weekly chart has indicated a significant correction, led off by a weekly bearish divergence, the weekly bearish divergence has not equilibrated, and should take weeks more to do so. However, the increase in volatility may have made up for it, and the daily charts now indicate that the coming week should be bullish. Friday’s piercing pattern is one such indication, and closing the gap by SPX breaking out over 1115 would confirm a short term rally is at hand. Other indicators also suggest that a short term reversal is in the making as of last Friday.
Gold /GC
On the weekly charts, an interesting development has appeared… While Gold has shown its relevance in times of risk aversion, particularly with the recent events in Europe, it is building some bearish divergence in the long term weekly charts despite making new highs. The daily charts show clearly that Gold had clocked a parabolic move and duly corrected last week. The indicators suggest a steeper Gold correction to come, bringing prices to 1150 thereabouts.
Crude /CL
Crude had a thrashing week, clearly equilibrating the weekly bearish divergence. On the weekly charts, there appears to have more to come in the next few months. However, the daily charts are starting to signal a probable rally to 75, given the extreme oversold condition of crude. Interestingly, crude closed on Friday with a bullish harami and indicators are showing a possible reversal up.
VIX
The VIX weekly charts show that the increase in volatility is clearly a manifestation of the bullish divergence. It still looks like volatility would be abundant over the next month or so, but a sudden reversal may be in place as the VIX is rather extreme. The daily charts are clearer with a bearish divergence, and a Friday close to form a bearish engulfing. The immediate VIX support at 35, once broken, should see the next support at 25.
SYNOPSIS
From a quick scan of the market based on my usual charts, it is clear to me that the coming week is likely to be very bullish. This is apparently very clear in almost all the charts that had been featured in my WMA. As I began doing this WMA, I was a little wary of my bias, as I had 3 people ask me on Friday itself about the possibility of getting into the market to buy up recently beaten stocks. It appeared that greed has taken the average Joe out there and thus it would be showing up in the charts. Amazingly, it appears to be so.
I am expecting a bullish week. Be it a minor bullish retracement or otherwise, there is one thing that would be clear… it would be volatile.
Note: Any material posted here is of my sole opinion, and my opinion may differ from others. It is definitely NOT a solicitation to do anything else as a consequence of reading this material. The material presented here is intended for educational purposes only.
Thursday, May 20, 2010
Continuing the Downtrend – Market Analysis for 20/05/2010 by Singaporeseeds
Daily charts for S&P futures
S&P kept out of my MOBO bands since breaking out of it on Tuesday. We are continuing this down move to my target at 1080. I do not think the S&P is ready for a down move below the Feb 2010 lows. This will be around 1050. I believe this is just a correction in the big rally from March 2009. We should be making a new irrational high before this rally finally ends.
S&P kept out of my MOBO bands since breaking out of it on Tuesday. We are continuing this down move to my target at 1080. I do not think the S&P is ready for a down move below the Feb 2010 lows. This will be around 1050. I believe this is just a correction in the big rally from March 2009. We should be making a new irrational high before this rally finally ends.
Wednesday, May 19, 2010
CONFIRMATION OF A STRONG DOWNTREND – Market Analysis for 19/05/2010 by Singaporeseeds
Daily charts for Dow
Daily charts for S&P 500
Daily charts for NASDAQ
The indexes moved down as expected and all 3 indexes have broken MOBO support. As long as the indexes do not keep above the lower MOBO band for more than a day, we should see some strong downward momentum over the next few days. My first support for S&P is at the 200 day moving average at around 1110 and then my final support at 1050. I do not think the index should drop lower than that but we shall have to continue to observe the situation. The USD is making some nasty moves that I think should be a precursor for worse things to come.
USD index (UUP)
Daily chart for UUP
As you can see from the daily chart of UUP, USD gapped up and strongly broke fibo XOP resistance. Whenever I see such a strong movement, most often than not, we should see price coming back to test XOP (25.06) again as support before continuing the rally all the way to XXOP at 26.55, which coincidentally was the previous high reached during the panic of October 2008. If this Fibonacci setup on the USD plays out and reaches 26.55, we shall be experiencing a panic within the next 2-3 months.
Natural Gas (UNG)
Daily chart for UNG
UNG tested strong resistance at 7.68 and is currently coming back down. I am expecting UNG to bounce off its 50 day moving average at around 7.36 before turning up to make a high. I believe UNG is in the initial stages of a rally.
Daily charts for S&P 500
Daily charts for NASDAQ
The indexes moved down as expected and all 3 indexes have broken MOBO support. As long as the indexes do not keep above the lower MOBO band for more than a day, we should see some strong downward momentum over the next few days. My first support for S&P is at the 200 day moving average at around 1110 and then my final support at 1050. I do not think the index should drop lower than that but we shall have to continue to observe the situation. The USD is making some nasty moves that I think should be a precursor for worse things to come.
USD index (UUP)
Daily chart for UUP
As you can see from the daily chart of UUP, USD gapped up and strongly broke fibo XOP resistance. Whenever I see such a strong movement, most often than not, we should see price coming back to test XOP (25.06) again as support before continuing the rally all the way to XXOP at 26.55, which coincidentally was the previous high reached during the panic of October 2008. If this Fibonacci setup on the USD plays out and reaches 26.55, we shall be experiencing a panic within the next 2-3 months.
Natural Gas (UNG)
Daily chart for UNG
UNG tested strong resistance at 7.68 and is currently coming back down. I am expecting UNG to bounce off its 50 day moving average at around 7.36 before turning up to make a high. I believe UNG is in the initial stages of a rally.
Monday, May 17, 2010
Higher Low or Lower Low? – Market Analysis for 17th May 2010 by Singaporeseeds
The markets finally gave way on Friday and made a nice down move. Volatility has been expanding over the past few weeks and I believe we should see such big movements quite frequently over the next few weeks to come.
Daily Chart of the Dow
Daily Charts of the S&P
Daily Charts of NASDAQ
As you can see on the charts, all three indexes failed to break above their respective 50 day moving averages. Now that we have failed the 50, I have 2 more support levels and that’s the MOBO support and the 200 day moving average. All 3 indexes broke MOBO support on Friday but rallied at the last hour to close right above it. A break of this support indicates that there is strong momentum down. I will be looking at this support level closely this week. A break of this level would mean that we may be going down to meet the 200 day moving average at around 10250 for Dow, 1110 for S&P and 2250 for NASDAQ.
Daily Chart of the Dow
Daily Charts of the S&P
Daily Charts of NASDAQ
As you can see on the charts, all three indexes failed to break above their respective 50 day moving averages. Now that we have failed the 50, I have 2 more support levels and that’s the MOBO support and the 200 day moving average. All 3 indexes broke MOBO support on Friday but rallied at the last hour to close right above it. A break of this support indicates that there is strong momentum down. I will be looking at this support level closely this week. A break of this level would mean that we may be going down to meet the 200 day moving average at around 10250 for Dow, 1110 for S&P and 2250 for NASDAQ.
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