7:25am: today seems a trend day and the market looks very strong.
7:35am: market strength.
7:46am: it should pullback a little bit.
LESSON: as long as the direction is align with the trend, entry point doesn’t matter.
8:23am: wave counting needs to be adjusted. Previous high will be take out. Currently XLF is lagging.
8:35am: wishful thinking is a more meaningful intraday pullback is imminent.
EOD: the market made a higher high today.
7:37am: gap down and filled in the gap. Market is neutral now. ES: bounced back up from the support level. It should penetrate 840 some time later. CPC is rising, TRIN is still quite high. Crude oil is down, dollar is pulling back a bit.
eur/usd: kiss back to the breakout level and possibly go higher.
7:58am: price up with rising CPC. See how it goes around the EMA50.
8:23am: XLF is weak. market is consolidating around EMA50.
8:31am: market breadth is weakening.
9:53am: consolidation on 5-min chart.
EOD: the market dropped down a little bit as expected. The lower edge of the ascending channel has been tested five times, now the question is whether it will hold the uptrend again? Let’s see how the market responses to FOMC meeting.
7:35am: ES bounced back up from the 847-848 support.
8:37am:ES cannot break the immediate support at 861.75.
10:02am: oil is dropping down, so is ES. EUR/USD favors the down side.
10:20am: prepare for more downside:
10:51am: EURO crashed. Wait for the response from the stock market. Sell signal on INDU hourly chart, confirmed by volume.
EOD summary:
INDU hourly chart has given a sell signal and this has been confirmed with the volume indicator. XLF is neutral with a little bit distribution pattern on the hourly chart, and buy signal on 15-min chart. SPX/ES wave counting is still the same, and more correction is needed. EUR/USD has broken down and the stock market should follow. The crude oil is neutral. Market breadth and most technical indicators are neutral, the market may seesaw for a longer period, no big sell off is expected.
[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.
