TIP
Had a very bullish week. It broke a price action pattern and made dizzying highs. The MACD bullish divergence did happen and the TIPs look a little overbought, but still bullish. Weekly charts have at least another week of bullishness, although the daily charts are a overdone, indicating a short term pullback early in the week.
JNK
The coporate junk bonds did complete the 2 weeks of bullish up- close for the weekly charts and it is about ready for a correction based on bearish divergences. Similarly, the indicators for the daily charts are telling of a likely reversal with weak higher highs over the past week. The MACDH is getting a little messy and it may be the week of discernment for this.
HYG looks similar as well.
/HG
Copper did get a bashing week with a major reversal in prices. On the weekly, the bearish divergence looks yummy and already gaining momentum to equilibrate. The daily prices are a little extreme and should see a stall and more downside in the coming weeks. The open interest indicates a lot of shorting activity for copper… this does not bode well for the metal price although it has hit a support level.
I concluded a in my last analysis that according to the leading indicators (Napier’s), there seems to be indications that the market is toppy. Both JNK and especially HG already started the downleg and evening out the divergence. Furthermore, we had a weak spike that formed a lower high (LH) this week. I am a little miffed by the extreme TIP bullishness… and I do wonder has this anything to do inflation. With 2 out of three of the Napier’s leading indicators going bear, and TIP being bullish, I would wait to see if TIP can break and stay above 106.38, which I do not expect so at this point. Once TIP reverses, all the leading indicators should be telling us a very coherent picture.
/DX
The USD is gained ground basically due to the Euro losing ground. This affected Crude and other commodities, but surprisingly, not Gold. Something is up there… For the USD, it is due for a correction in the early part of this week, and should gain more ground later in the week. For this to happen, the Euro should be heading up with news that Greece is “stabilizing” by accepting the bailout package just on Sunday. An attempt was made to breakthough 82.06, but that proved to be a good resistance level. The USD should revisit the 81.40 support this week.
SPX
Over the last two weeks, there was the expected weak spike up, and then the past week was a very interesting week. It began with a high of 1219.8 and then fell 25 points the next day. This was followed by a recovery of at least 20 points over the next two days and Friday was a reversal of that, losing 20 points again. This is a top forming pattern. Weekly and daily charts are indicating the equilibration of the bearish divergence is in place.
2 weeks ago, I posted” The daily charts are just about ready to have a mild correction (expect 1160-1180) but I am expecting a lower high to form, perhaps the week after, with a small rally after the coming week’s correction only to fail at 1210.”
We got that alright… and moving forward, it should break past 1180 and end up much lower. Today’s news is showing a line-up of news that should just about ”align the stars”. Over the weekend, China increased the RRR of the banks further, and Asian markets reacted rather badly. Greece accepted the aid package and in response, the European markets did not view it with any good outcome nonetheless. That’s the news and global market reactions. Last Friday, the SPX posted a bearish engulfing pattern establishing a lower high on the daily charts. This has a couple of implications… that the next 2-3 days should see a follow through of down days, and if so, it would
Gold /GC
The weekly charts appear much more bullish than 2 weeks ago. And much more so for the next month at least, looking for 1350. The daily chart previously appeared to be bearish, but it just bounced off support and started taking off, making a bullish rally in Gold. Perhaps Greece and Euro paranoia accentuated Gold’s climb, and it is starting to be a little overbought in the daily charts. The open interest on Gold shows that there is inflow of money into gold. I would be bullish on Gold for the next two weeks or so, but I am expecting near term resistance at 1185, before a target of 1214 is achieved. The main strength in Gold is visual with rising Gold prices in the face of a rising USD (of which the USD is rising due to falling Euro).
Crude /CL
Crude did close way below 83, but bounced back up above 85. The correction appears to be completed and it is back to being overbought in the daily charts. The weekly charts indicate that there is still an uptrend, and appears to have a spike in crude prices for this week.
VIX
The VIX weekly charts are really showing that it is time for volatility to increase. The daily VIX charts are way off into the upper extremes and it can remain there for some time, although over the next week, it should moderate lower slightly before another rally. We should see more volatility in the weeks to come as well as this being one of the stars to align for a market reversal.
SYNOPSIS
I posted this the last time I did the WMA 2 weeks ago…” I am still expecting a small relief rally which should fail the last high, and this needs another 2-3 more shocking events (including the PIIGS which have been sidelined since mid last week).
Last week was the turnaround, and the coming week will seal it if it is to happen.”
Clearly, it happened. From many perspectives, this looks like a highly probably top. On the SPX there is a head & shoulders pattern, with a bearish engulfing on the weekly charts, while the oscillators are showing bearish divergences and are in the overbought territory. The VIX is supported nicely and has bullish divergence closing. The Euro is in trouble and China is restraining. Gold is also starting its rally, while crude is deciding. The Napier’s leading indicators are mostly leading bearish with TIPS making a beeline the opposite way. Once this turns around, it will get ugly.
Furthermore, it is May 2010. Early this year, every analyst decided that 1H10 would be bullish with 2H10 having downside correction. May holds the adage of “sell in May and go away”. Almost all the indicators/oscillators are in the overbought region, or just exiting it. Greece has a dateline (deadline) mid May for the EU/IMF funds to flow in, while we have not even seen/heard/read of anything really concrete to start the process of actually aiding Greece. This IMHO, is reminiscent of Lehman Bros pre-trigger in 2008. Whether or not this alignment of the stars actually starts the snowball rolling, remains to be seen… but in terms of probability, I know where I am.
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 3, 2010
Sunday, May 2, 2010
And the tank continues – Market Analysis for 03/05/2010 by Singaporeseeds
Weekly chart for Dow
Daily chart for Dow
Weekly chart for S&P 500
Daily chart for S&P 500
On weekly charts, both S&P 500 and Dow hit the 200 week moving average and failed to break above. On daily, both made a lower high.
I believe we had already began the long awaited correction. I believe we will be making new highs after this correction but we would have to continue to monitor the situation. On the S&P, my first support would be at the 50 day moving average at around 1165 and the next support would be at the January highs of 1143.
Gold
Daily chart for Gold
Gold seems to have found support and is poised to break it’s previous high of 1215. From December 2009 till now, it has formed a inverted head and shoulders pattern and has bounced off the head and shoulders support at 1130 around mid April 2010. Gold should be breaking up to around 1230 in the next few weeks.
Crude Oil
Daily chart for Crude Oil
Crude bounced off support at 82.50 a few days ago. I do not think that it will be making new highs but I’m getting some signals that are showing otherwise. I will be looking closely at crude over the next few days.
Daily chart for Dow
Weekly chart for S&P 500
Daily chart for S&P 500
On weekly charts, both S&P 500 and Dow hit the 200 week moving average and failed to break above. On daily, both made a lower high.
I believe we had already began the long awaited correction. I believe we will be making new highs after this correction but we would have to continue to monitor the situation. On the S&P, my first support would be at the 50 day moving average at around 1165 and the next support would be at the January highs of 1143.
Gold
Daily chart for Gold
Gold seems to have found support and is poised to break it’s previous high of 1215. From December 2009 till now, it has formed a inverted head and shoulders pattern and has bounced off the head and shoulders support at 1130 around mid April 2010. Gold should be breaking up to around 1230 in the next few weeks.
Crude Oil
Daily chart for Crude Oil
Crude bounced off support at 82.50 a few days ago. I do not think that it will be making new highs but I’m getting some signals that are showing otherwise. I will be looking closely at crude over the next few days.
Thursday, April 29, 2010
Wealth Academy Expo 2010
Contact me at singaporeseeds@gmail.com if you are interested. Tickets are going at $10 per person if you order the tickets directly from me.
Wednesday, April 28, 2010
FAKED OUT BY THE SPIKE – Market Analysis for 28th April 2010 by Singaporeseeds
Daily charts for Dow
Daily charts for S&P500
Daily charts for NASDAQ
What a big difference 2 days make. The markets got spooked by the problems in Greece and turned abruptly over the last 2 days. On daily charts, the Dow has formed an evening star while S&P 500 and NASDAQ had formed a three inside down pattern. All 3 patterns are highly reliable reversal patterns.
Today we are expecting the FOMC statement at 2pm US Eastern time and the market should be muted until the release of this statement. Over the next few days, I am expecting a market correction to 10,710 for Dow, 1,150 for S&P 500 and 2,400 for NASDAQ. I believe the FOMC statement should help the market achieve this.
Crude Oil
Daily chart for Crude Oil
Crude is at 82.50 support now and should be breaking below over the next few days. My initial target is 79, followed by 70.
Daily charts for S&P500
Daily charts for NASDAQ
What a big difference 2 days make. The markets got spooked by the problems in Greece and turned abruptly over the last 2 days. On daily charts, the Dow has formed an evening star while S&P 500 and NASDAQ had formed a three inside down pattern. All 3 patterns are highly reliable reversal patterns.
Today we are expecting the FOMC statement at 2pm US Eastern time and the market should be muted until the release of this statement. Over the next few days, I am expecting a market correction to 10,710 for Dow, 1,150 for S&P 500 and 2,400 for NASDAQ. I believe the FOMC statement should help the market achieve this.
Crude Oil
Daily chart for Crude Oil
Crude is at 82.50 support now and should be breaking below over the next few days. My initial target is 79, followed by 70.
Monday, April 26, 2010
THIS RALLY HAS NO END – Market Analysis for 26th April 2010 by Singaporeseeds
Weekly charts for the Dow
Daily charts for the Dow
Weekly charts for the S&P 500
Daily charts for the S&P 500
Weekly charts for NASDAQ
Daily charts for NASDAQ
All 3 indexes broke to new highs on Friday. This is one of the most bullish rallies ever. It looks even more so for NASDAQ, which has rallied past 70% since its 2008 bottom. I have 2 significant resistance levels on the S&P at 1225 and 1250. This would be 11250 and 11470 on the Dow. The market is poised to make a new high to these levels before there can be any market reversals. The previous high of 1210 on the S&P and 1110 on the Dow will now be support for any price movement.
Daily chart of GS
It is interesting to note that GS is forming a pennant on daily charts. Any break of the pennant at support at 157 and resistance at 160 will indicate that GS will be moving around 20 points down and up respectively.
Daily chart of XLF
It is interesting to note that the finance sector did not make a new high along with the market indexes. It actually seems to be continuing its trend down but we shall see more in the next few days. GS will be a major mover of this index.
Conclusion:
I do not think the rally will last more than a week. We should be finally making a correction starting from sometime this week. However I will be monitoring XLF as the sector had been leading the market and should lead the market in the corrections too.
Daily chart for Crude Oil
Crude is still bouncing off support and its 50 day moving average at 82.50. It’s interesting to note how strong resistance became strong support. I believe crude will be tanking over the next few days to 79. We shall see how it turns out.
Daily charts for the Dow
Weekly charts for the S&P 500
Daily charts for the S&P 500
Weekly charts for NASDAQ
Daily charts for NASDAQ
All 3 indexes broke to new highs on Friday. This is one of the most bullish rallies ever. It looks even more so for NASDAQ, which has rallied past 70% since its 2008 bottom. I have 2 significant resistance levels on the S&P at 1225 and 1250. This would be 11250 and 11470 on the Dow. The market is poised to make a new high to these levels before there can be any market reversals. The previous high of 1210 on the S&P and 1110 on the Dow will now be support for any price movement.
Daily chart of GS
It is interesting to note that GS is forming a pennant on daily charts. Any break of the pennant at support at 157 and resistance at 160 will indicate that GS will be moving around 20 points down and up respectively.
Daily chart of XLF
It is interesting to note that the finance sector did not make a new high along with the market indexes. It actually seems to be continuing its trend down but we shall see more in the next few days. GS will be a major mover of this index.
Conclusion:
I do not think the rally will last more than a week. We should be finally making a correction starting from sometime this week. However I will be monitoring XLF as the sector had been leading the market and should lead the market in the corrections too.
Daily chart for Crude Oil
Crude is still bouncing off support and its 50 day moving average at 82.50. It’s interesting to note how strong resistance became strong support. I believe crude will be tanking over the next few days to 79. We shall see how it turns out.
Thursday, April 22, 2010
Failure at 1200 – Market Analysis for 22/04/2010 by Singaporeseeds
Weekly chart of S&P 500
Daily chart of S&P 500
On daily charts, S&P 500 had failed to rally above resistance at 1210 over the past 2 days. I will be keeping a close eye at this level. The bearish reversal signal is still intact and although there may be intraday breaches, but I do not expect the S&P rally above 1210 for at least the next few weeks.
I believe the S&P will tank below its 20 day moving average (the blue line) in the next few days. The low volume rally off the February 2010 lows had pushed the S&P way above its 50 day moving average and a short term correction to the 50 day moving average may be possible within the next 2 weeks.
Crude Oil
Daily chart of crude
Crude bounced off support at 82.50 on Monday and constipated around the 84 level. The downtrend for crude is still intact and we should be seeing some weakness in the next few days down to support at 79.50.
Daily chart of S&P 500
On daily charts, S&P 500 had failed to rally above resistance at 1210 over the past 2 days. I will be keeping a close eye at this level. The bearish reversal signal is still intact and although there may be intraday breaches, but I do not expect the S&P rally above 1210 for at least the next few weeks.
I believe the S&P will tank below its 20 day moving average (the blue line) in the next few days. The low volume rally off the February 2010 lows had pushed the S&P way above its 50 day moving average and a short term correction to the 50 day moving average may be possible within the next 2 weeks.
Crude Oil
Daily chart of crude
Crude bounced off support at 82.50 on Monday and constipated around the 84 level. The downtrend for crude is still intact and we should be seeing some weakness in the next few days down to support at 79.50.
Sunday, April 18, 2010
The Greed of Goldman – Market Analysis for 19th April 2010 by Singaporeseeds
GS
Thought I should analyze the chart of Goldman Sachs since they were leading the entire market on Friday. They should have seen it coming to them.
Weekly Chart of GS
On the weekly charts, the tank brought GS to below the important 50 and 200 weekly moving average. Just scroll back and observe how well GS reacts to it.
Daily Chart of GS
The huge tank on Friday brought GS right below all my moving averages. There’s a strong support at 160 which may take a few attempts to break. We might be seeing a bounce on Monday to the resistance range from 165-168 as indicated by the 50, 200 and 1000 day moving averages. I do not think GS will be able to rally above these levels and will continue the tank to around the 140 price level.
DOW
Weekly Chart of the Dow
Daily chart of the Dow
The Dow breaks out of its psychologically important level of 11,000 on Wednesday and then forms an evening star by Friday and is right below the 1000 day moving average. On weekly charts, the Dow forms a doji right below the 200 week moving average.
S&P500
Weekly Chart of the S&P
Daily chart of the S&P
The setup for the S&P is very similar to the Dow. Bearish doji right below the 200 week moving average on the weekly charts. On the daily charts, an evening star just below some significant trendline resistances that I had in my charts since Jan 2010.
Weekly Chart of the Nasdaq
Daily chart of the Nasdaq
The NASDAQ is looking least bearish of all though the Fibonacci retracement levels are indicating that there may not be much bullishness left.
Conclusion:
I believe we had just seen the top of the markets and we are now at the beginning of the correction. On Monday, we might have a bounce for the 3 indexes that should not go beyond 50% of the tank on Friday. However if we manage to break above the previous high that we had establish last Thursday, then this reversal signal would then be a false one and we will continue to rally.
Crude Oil
Daily chart of crude
Quote from my market analysis of Crude last Friday:
“Crude recently broke it's previous high and resistance at 82.50. It broke and came back to test support on Tuesday and rallied over the last 3 days together with the S&P. I have a first target at 87.15 which it is at now. The next 2 targets are at 92 and 96.70. However seeing the bearish divergence that crude has made for this last rally, i do not think it should be able to break even my first target level.”
Crude spent the whole of Friday tanking. It should continue to tank until its first significant support at 82.50. I believe crude will trend down over the next few weeks until support at 71.
Thought I should analyze the chart of Goldman Sachs since they were leading the entire market on Friday. They should have seen it coming to them.
Weekly Chart of GS
On the weekly charts, the tank brought GS to below the important 50 and 200 weekly moving average. Just scroll back and observe how well GS reacts to it.
Daily Chart of GS
The huge tank on Friday brought GS right below all my moving averages. There’s a strong support at 160 which may take a few attempts to break. We might be seeing a bounce on Monday to the resistance range from 165-168 as indicated by the 50, 200 and 1000 day moving averages. I do not think GS will be able to rally above these levels and will continue the tank to around the 140 price level.
DOW
Weekly Chart of the Dow
Daily chart of the Dow
The Dow breaks out of its psychologically important level of 11,000 on Wednesday and then forms an evening star by Friday and is right below the 1000 day moving average. On weekly charts, the Dow forms a doji right below the 200 week moving average.
S&P500
Weekly Chart of the S&P
Daily chart of the S&P
The setup for the S&P is very similar to the Dow. Bearish doji right below the 200 week moving average on the weekly charts. On the daily charts, an evening star just below some significant trendline resistances that I had in my charts since Jan 2010.
Weekly Chart of the Nasdaq
Daily chart of the Nasdaq
The NASDAQ is looking least bearish of all though the Fibonacci retracement levels are indicating that there may not be much bullishness left.
Conclusion:
I believe we had just seen the top of the markets and we are now at the beginning of the correction. On Monday, we might have a bounce for the 3 indexes that should not go beyond 50% of the tank on Friday. However if we manage to break above the previous high that we had establish last Thursday, then this reversal signal would then be a false one and we will continue to rally.
Crude Oil
Daily chart of crude
Quote from my market analysis of Crude last Friday:
“Crude recently broke it's previous high and resistance at 82.50. It broke and came back to test support on Tuesday and rallied over the last 3 days together with the S&P. I have a first target at 87.15 which it is at now. The next 2 targets are at 92 and 96.70. However seeing the bearish divergence that crude has made for this last rally, i do not think it should be able to break even my first target level.”
Crude spent the whole of Friday tanking. It should continue to tank until its first significant support at 82.50. I believe crude will trend down over the next few weeks until support at 71.
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