WMA 27 June 2010 - Bullish currents under the range

TIP - The weekly TIP chart is showing growing strength in the bullish rally. Having said that, there appears to be a bearish divergence forming on this weekly chart as well, at least hinted by the MACD histograms and volume. For now, the bullish run should last another 2 months, taking the calendar into August at least. The daily chart looks bullish as well, supporting the weekly rally.

JNK – The weekly JNK charts is indicating a bullish rally that should continue despite hitting a resistance last week. The daily chart had recently made a series of higher lows, and then rallied and retraced (over the last week). It appears to be making an attempt to reverse after bouncing off the 62% retracement level.

DBB / /HG
Copper had a beautifully bullish week, after almost 2 dismal months. For now, the weekly bearish divergence appears to have been done and copper prices are recovering with gusto. The daily charts show of a higher low, with supporting indicators making higher highs, showing strength in the rally

According to the above leading indicators, we are in for another bullish rally in the market as all indicators are bullish and show strength in the not so nascent rally.

/DX
The weekly USD futures chart show a parabolic climb that is returning to reality, and along with much gusto. The daily chart is resuming the downtrend and its acceleration should be continuing.

SPX / S&P500
The weekly chart posted a bearish engulfing in a retracement rally and for now, the S&P500 looks bearish for another downleg. The daily charts indicate a bearish week ahead and it remains to be seen if the bullish divergence is to continue developing, which needs to bring the SPX below 1060, testing 1040 or beyond briefly.

/GC / Gold – The weekly chart are still indicating a bullish rally for Gold. The daily chart show a bullish breakout of the range resistance which should clock another historical high in Gold price this coming week, albeit bearish divergence formations in the daily indicators.

/CL / Crude – The Crude oil weekly chart show that the long term bearish divergence may have equilibrated, and the crude rally is continuing. The Daily chart has consistently shown higher lows and higher highs, and this rally should break 86 in the next month.

VIX / VXX – The weekly VIX chart is just about to get bearish, although it closed with a bullish engulfing, and the indicators are bearish. This is a little paradoxical. The daily chart closed the week with a bearish harami but the indicators were not very bearish.


From the market scans, it looks like the equities market should be turning bullish sometime this week, which the leading indicators are showing. While the USD would be downtrending, and the VIX should follow suit as well. These are admittedly not the very obvious but underlying indications are prevalent. Gold should clock a new historical high this week and Crude looks for continued strength in the rally.

The MadScientist – 27 June 2010

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.