[Last weekly analysis.] In the seventh week, the market backed off a little bit. On SPX index futures it’s actually flat. Essentially the market was trying to break the consolidation region then bounced back down significantly (the long shadow), now it is trying one more time. The upward momentum is weakening nevertheless, so a pullback week is expected.
Overview of World Markets and Sectors
Nothing to say, the uptrend is not changed at the moment while the emerging market is still leading.
The next chart shows the MSCI World/EAFE/Emerging Market, Shanghai Stock Exchange Composite Index, Hang Seng Index, and Nikkei 225 index. No higher high in the past week, which is the first sign of weakness.
Major indices, commodities, and US dollar are shown in the next chart. The weakening of US dollar has pushed up the oil and commodities and may continue to do so. Gold is bouncing back up, and this is fishy. All other markets seem strong, specially the Nasdaq and transportations.
Sector overview chart. Industrials, materials, and technology are bullish. There is no obvious sign of weakness.
SPX
The rising wedge mentioned in the last weekly report has changed to an ascending channel as expected, the upside target over the intermediate term is still the same. Note that MACD is tempting to give a negative crossover.
XLF and SKF
XLF has not made a higher high in the last week, so the counting is changed. Monday will be crucial for XLF, a new high will lead to a more bullish outlook in the intermediate term.
Currency Futures and Forex
US dollar: now the downtrend is resumed which is confirmed by both the EMA crossover and price pattern.
USD/SGD: the trend is down. No immediate support below the current level.
EUR/USD: uptrend … watch out the overhead trend line.
Commodities
Crude oil: uptrend may be resumed due to the weakening dollar. No chart update.
Gold: uptrend in the short term, however it should breakout from the descending channel in order to confirm the uptrend in the intermediate term.
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