Market Update

EUR/USD daily.  It’s due for a pullback.

SPX hourly.  In consolidation and may breakout at the upside.

Sector overview.  Techs and Industrials are very bullish, so is the market outlook.

XLF hourly.  Looking forward to upside breakout.

FAZ hourly.

EWZ daily (negative divergence, may pullback) EWZ hourly

Crude oil.  looking for more pullback in short term and more upside.

Market Update (2009-11-16)

Today the market has decisively broken the resistance at 1100 and made a new high.  In the previous weeks the volume had been increasing with the rally, however today’s volume was substantially higher.  After the previous major accumulation day, today’s strong market breadth (NYUPV:NYDNV=7.37) has further affirmed the uptrend.  The last three day’s consolidation (a flag pattern) fixed a few overbought conditions on technical indicators.  At the moment the market may revisit the nearest support but large pullback may not be likely.  On the SPX intermediate-term daily chart, negative divergence on several indicators are still there but we have yet to see when it will become a real problem.  On SPY 30-min chart, all indicators show negative divergence which could lead to minor consolidation or pullback.

SPX daily

XLF is quite weak in these days.  On the hourly chart, the trend is up and a bullish flag pattern formed.  The volume increased a little bit but not very significant.  The nearest resistance is 15.38.

XLF hourly

QQQQ broke out from the consolidation today and revisited the nearest support at 44.16.  RSI and MACD have a little bit divergence so further pullback may be expected, but i guess it will be bounced back up again at around 43.75.

QQQQ hourly

As previously mentioned, US dollar more or less indicates where the broad market will go over the intermediate term.  On the daily chart, one can see that there is no sign of downtrend being reverted.

US Dollar index daily

Summary: uptrend has been confirmed.  A pullback (or consolidation in certain sectors) may happen but it would be a buyable dip rather than a short opportunity.

Market Update

Today the market rallied massively and made a Major Accumulation Day.  Major indices went up more than 2%, financials went up by 3.56%, SPX is approaching the previous high at 1101.36.  The ratio between advanced volume and declined volume in NYSE was 18.24, which is the highest in recent four months.  Personally I think the trend over all time frames of the market is back to up again.  In the last week, there were two major distribution days and it seemed that a down leg had started, but today’s strong rally should have negated this – especially if we see another major accumulation day in the short term.

US dollar index – daily

US dollar is turning down again, now it’s at the lowest point since last September.  Looking at the trend in gold, they are very consistent.  Therefore I think this downtrend will not change in the short or intermediate term.  Crude oil is trading in a consolidation range but there is no sign of major pullback at the moment.  Consequently I don’t think the broad market is or will have a down leg very soon.

XLF hourly

XLF seems back to uptrend today after resolving from the symmetric triangle pattern.  It is now approaching to the breakdown level at ~14.85 and may very likely go above it shortly.  However the massively resistance at 15.4 still looks quite strong.

Over the short term, some technical indicators on intraday charts are overbought or will be so if the market goes up again.  The volume in recent weeks were declining, which is also a bearish sign.  A pullback around this level will be necessary and healthy, and it will not be an evidence of hypothesis down leg.

Summary of market outlook: market is bullish, and the trend is still up over all time frames.  However, there may be risk of possible pullback in the short term.

Market update

The market pulled back more today.  The volume increased a little bit, but the volatility spiked up (see VIX daily).  This is the second consecutive down day, the short term trend is obviously down but it is interesting to see how resilient the intermediate term uptrend is.  On the bright side,

• the market is close to overbought in the short term, and there is a few positive divergence on the intraday charts (see SPY 30min and SPY 15min).
• Although the technical indicators on the daily chart start to point down, there is no lower low at the moment on major indices.
• The unusually high TRIN often causes strong bounce back up on the next day.
• CPCE and CPC still look neutral to bullish, at least there is no significant concern.
• The rally on US dollar will meet resistance on MA very soon and we have to see if the big downtrend is really reversed or not.
• The pullback on crude oil is approaching to a support level, we are not sure if this level will break.

However, we should be very cautious to the giant rising wedge, negative divergence, and sell signals on intermediate term trend (see SPX Intermediate-term Trading Signals).  A lower low is made on SPX daily chart will be an evidence that the uptrend is materially changed and the basic strategy should be changed.  At the moment, I doubt if it will happen.

Summary: both intermediate term (in term of technical indicators) and short term trends are confirmed to be down; however in the short term the market may bounce back up.

SPX hourly (my wild guess is to kiss back 1075-1080 at least)

  XLF hourly (unless the resistance is taken, the rally is gone)

XLF daily (more pullback? but it’s still higher high and higher low)

US Dollar daily (see if the magic MA resistance will work again)

Crude oil daily (test the support?)

Market update

Today the market went up again with decreasing volume.  The trend in all time frames is still up, however it’s important to check if the market is in distribution or not.  At bull’s side, the market is up and there is no sign of trend reversal at the moment.  At bear’s side, negative divergence on several technical indicators on SPX daily haven’t been resolved since August, and the rising wedge is still there.  On the SPX hourly chart and other intraday charts (see SPY 30min, SPY 15min charts), negative divergence is also significant.  The market breadth doesn’t looks so strong especially in the afternoon.  The TICK and TRIN indicators were neutral to a little bit bearish, and the end of day action looks bearish.  VIX has been up a little from all year low but it’s still oversold. Financials dropped below 15.4 where it broke out last week. Therefore, a pullback in the short term will be expected.

SPX hourly XLF hourly

However, the market outlook in the intermediate term is still promising.  The important support level of US dollar is broken and the next support is still far away.  Crude oil has got out of the consolidation, the rally is resumed.  Major pullback on the gold price seems unlikely at the moment.

US dollar daily Crude oil daily

Summary: short term the market may have a moderate pullback.  However the trend is still up.