I don’t have too much to say at this point – except that copper is making me a bit nervous:
As you know those divergences usually end in tears. But as long as HG can remain above 4.2 we should be okay – if it drops through that mark equities may get hit in the process. This is the only fly in the bullish ointment I see right now – but it’s usually one I take very seriously. I also think that we may be due for a little reversal in equities by the end of this week – let’s see how high they can push it until then.
Alright, here is one setup on the FX side that sprung out at me:
[amprotect=nonmember] FX setup and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
As you know currencies often blow beyond what one thought would be firm resistance. So I would give this at least until 118.5 and then try for a play back to 114ish. I just looked at a shorter term chart and we may run up a tiny bit more – so be patient and make sure you get a good fill.
I’m going to dig around for a few more of these – if I find anything I’ll post it below. So reload this page every 15 minutes or so.
As so many times before in the past two years the inflationists won the game:
Every once in a while I put this chart up for everyone to keep an appropriate perspective. In gold the SPX as it’s trading – in purple the SPX as measured in gold (yes, I should swap those colors next time). In the end what you see in your equities portfolio is nothing but an illusion.
That’s right – I’m hip! I’m with it! Down with the man!
Alright, let me snap my lower back into place as it’s time for my long overdue trend chart roll call:
[amprotect=nonmember] Charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
My CPCE Deluxe chart is our first runner up. I was a bit surprised when the smoothed signal made it through my resistance line. Didn’t last long however and we are now back inside. That does not necessarily mean we drop to 0.40 again but there is plenty of bullish potential, should the longs have the mojo to make a run for it.
QE2 or not – the percentage of stocks in the SPX trading above their 200-day SMA has barely moved during the March tumble.
A bit more short term here are all SPX stocks above their 50-day SMA. A little bit of a drop here as expected but when compared with the past few years the current readings at the 1300 mark (follow the tan line) are higher than what they used to be during the 2007 bull market. Are we more overbought? For sure! Can it be sustained? Well, so far there are few indications that we could not run higher before the house of cards starts tumbling down.
Similar chart but I’m correlating the SPXA50 with volatility. As you can see SPXA50/VIX is usually in sync but when it starts falling behind upside risk is becoming a concern. Very interesting and it’s a medium term chart we should consult more often.
Here I am dividing the NYMO (a medium term trend indicator) by put/call interest – yes, it’s kind of exotic but the result produces support lines that I have learned to respect.
Same game but instead of the CBOE put/call ratio we are correlating the NYMO with the Bullish Percent Index, a more long term momentum measure (based on P&F buy signals). And again we have arrive at an important buy line that has been spot on for over a year now. Also notice that there is no clear sell line anymore – and that also holds true for the previous chart.
Last but not least we are taking all NYSE stocks above their 50-day SMA and divide it by declining volume. In essence that is my bullshit meter. As those levels are dropping either declining volume appears to be on the increase or the number of stocks above their 50-day SMA are increasing. Whatever combination is at play the reliability of that downward channel is almost uncanny and although I don’t see clear selling opportunities the buy setups are great for getting positioned.
Also notice that since the re-emergence of POMO acutions what used to be resistance is now support. Any damage to equities is clearly being mitigated and carefully managed.
Bonus chart! I don’t really trade crude at all but if I would this seems like a good spot to either go short or long. A breach of the upper resistance line would catapult crude toward 130 (and Mole would have to dust off his bicycle). But until that happens selling this resistance line appears to be good medicine.
Unless proven otherwise, this is still a buyers market – until of course the day when these charts tell me otherwise.
Absolutely no participation today – basically a continuation of a phenomenon we saw on Friday. And clearly evidenced by the Zero Lite:
It really seems like they ramped this thing across SPX 1300, ran a few stops and then walked away to spend a week in the Hamptons. The drop in the last hour was of no surprise to me, when there is zero participation nobody wants to be caught holding the bag. I would not want to be long here right now as it’s very much possible that what we saw last week was nothing but distribution (i.e. a short squeeze and selling into strength). If the longs want to keep their coveted 1300 mark they’ll have to do better than this. Very strange tape…
ZeroFX is showing us nice divergences – I particularly enjoy the EUR/USD side. Maybe I need to slow this thing down a bit as it seems a lot more responsive than the S&P Zero – we shall see and I don’t want to jump to conclusions. The USD/JPY seems harder to swing trade – just look at those candles. Perhaps we’ll settle for a different FX pair in the end – please cast your votes but bear in mind that we want pairs that can be scalped or swing traded. Also – you can pick up to four favorites – not just one.
Geronimo lost one today – no surprise in a completely sideways tape. This also confirms that the boyz are probably not even trying, which gives credence to more bearish tape to come. It’s quite simple – if institutions walked away after SPX 1300 then it could be that retail traders are now the ones holding the bag. And you know how that usually ends up (i.e. retail schmucks taking it up the rear).
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