Market Update

The market is going up every day, no much to say~~~… First of all, EMA13 on the SPX weekly chart (see below) has crossed over EMA34, which means a bull market may have started technically.  Strong uptrend across all time frames is not weakening at all, today the market almost made a major accumulation day again after last Friday’s consolidation (refer to 7.1.3 Major Accumulation/Distribution Days).  Financial sector gapped up and made a high of the year today.  Notice that CPC is now 0.76 and the firework setup has been triggered again (refer to 7.3.2 Firework Trading Setup).  Keeping in mind the uptrend and basic strategy of buying on (or without) dip, we may also notice that the market is going up on declining volume from last Thursday, and the divergence between VIX and SPX is becoming more severe (refer to 2.0.0 Volatility Index (Daily)).  Additionally, there are too many unfilled gaps on the way up, and the negative divergence on SPY intraday charts hasn’t been fixed.  If a pullback occurs, it might be quick and ugly.  Finally the trading volume between 38.2% retracement 1014 and 61.8% 1229 is very light, eventually the market might quickly penetrate this region and surprise everyone (refer to SPX weekly).

SPX weekly  SPX hourly

Market Update

Today the market is going up again.  We could call it as a “climax run” in the big context of bear market.  However from technical point of view, a new bull market may have started.  In the following SPX weekly chart, a bear market can be identified as the downward crossover between EMA13 and EMA34, and a bull market will be started roughly when EMA13 goes above EMA34.  Now a bullish crossover almost happens unless the market drops down from here for two or more consecutive weeks.  Personally I don’t yet believe a bear market is gone so quickly, but it’s important to keep in mind that the trend is “UP”.

SPX weekly

On 0.0.3 SPX Intermediate-term Trading Signals, not surprisingly all intermediate signals are buy, and there are several overbought signals on the chart.  The breakout of megaphone pattern could be at either side, and we don’t need to bet on it.  Short-term signals are mostly overbought on 0.0.2 SPY Short-term Trading Signals and intraday charts.  However note that range-bounding signals doesn’t work very well in a trending market since the indicators will approach to an extreme after certain period of time by definition.  On SPY 30-min chart, two bearish rising wedge are forming and this argues that a severe pullback may occur later.  Today CPC is below 0.8 again and this has triggered the firework setup on 2.8.1 CBOE Options Total Put/Call Ratio.  Financial sector broke out at the upside after the last Friday consolidation with increased volume.  Although it is lagging behind the broad market, there is currently no sign of weakening.  From purely TA’s perspective, my opinion is to gradually increase intermediate-term long positions and buy dip if there is any.

SPX hourly

Chart update

SPX P&F.  Trend reversed.  Overhead resistance 930.

SPX hourly.

SPX weekly.

World markets relative strength: uptrend reversed.

2009-06-12 Chart update

SPX weekly, still the uptrend.

World market weekly Relative strength

SPX P&F chart, key support at 930.

SPX hourly.

2009-06-05 Market Watch: weekly analysis

[Last weekly analysis.]  In the last week, the market broke out of the consolidation region with increasing volume and briefly went over the previous swing high on the weekly chart.  The trend is confirmed to be up.  Also note that if EMA13 crosses over EMA34, the bear market should be considered as finished and the big trend will be up.

SPX weekly

Overview of World Markets and Sectors

From the following charts, US market is going up again after a minor consolidation while other markets are even more bullish.  We can also see that the emerging market shows the greatest strength.  Although the big rally might be primarily led by commodities, this is certainly a good sign.

World markets weekly relative strength

The next chart shows the MSCI World/EAFE/Emerging Market, Shanghai Stock Exchange Composite Index, Hang Seng Index, and Nikkei 225 index.  While the charts look choppy the trend is all up.

Major indices, commodities, and US dollar are shown in the next chart.  Stock market is heading higher, crude oil is going up without pulling back, while the US dollar is bouncing back and causes the consolidation of commodities.

Sector overview chart.  Technology and Industrials closed at a new high, while financials are falling behind (pay attention to MA20).  No sector is significantly weak.

Emerging market charts:

EEM weekly.  Up trend confirmed?

VIX: volatility has been back to normal range.

TED spread: back to normal. 

SPX/ES

The intermediate term trend is still up although some negative divergence can be clearly seen on the daily chart.  Before breaking down 923, the trend will remain to be up.

Daily chart update negative divergence

From the perspective of Elliott waves, the impulsive wave might be complete and the market may consolidate for a while or pull back.  If ES goes above 947.5 then this counting will be negated and we will look forward to a new high.  If ES falls below 923, we might see a deep pullback.

ESM9 2-h

P&F chart: the trend is still up; major support is at 875; immediate support is at 930; if SPX falls below 925, an intermediate term downtrend may be unfolding.

Trading idea: wait for the pullback, buy dip if:

• RSI8 falls below 30 and goes over 30 on SPX hourly chart.
• EMA7 crosses above EMA21 on SPX hourly chart.

XLF and SKF

XLF is unable to make a new high while the broad market goes higher.  The key resistance is at 13.  It seems that the consolidation will last for a while.

XLF daily XLF hourly

Currency Futures and Forex

EUR/USD: the uptrend is likely reversed.

EUR/USD daily

USD/SGD: positive divergence plays out, and the trend is being reversed up.

USD/SGD daily

Commodities

Crude oil: the uptrend is still very strong, and the strategy is to buy dip.

$WTIC monthly $WTIC daily