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Saturday, February 11, 2012

Money Flow - February 6-10, 2012

Further to my last weekly market update, here is a summary of where money flow ended for Week 2 of February, 2012.

First of all, the Weekly charts below of YM, ES, NQ & TF show that the week ended with some profit-taking after an attempt at a further rally. I would suggest that the lows of this past week's candles are important support levels to watch, for the following reasons.


The three  Daily charts below show that Stocks Above 20-Day, 50-Day, and 200-Day Averages pulled back to near-term support levels...important ones to watch over the coming days/weeks.




The VIX rose by 17.06%, as shown on the graph below.


Most Industry Groups lost on the week, except for minor gains in Internet and Biotech, as shown on the graph below.


Of the Sector ETFs, Materials lost the most, while Technology gained the most, followed by Consumer Staples, Utilities, and Consumer Discretionary, as shown on the graph below.


As shown on the graph below of a variety of ETFs, Agricultural Commodities lost the most, followed by Emerging Markets, European Financials, U.S. Financials, and Chinese Financials, while Commodities as a whole remained relatively flat.


As shown on the graph below, Oil gained the most, followed by Gold, and Copper lost the most, followed by Silver.


As shown on the graph below, the Russell 2000 Index lost the most, followed by Dow Transports, Emerging markets, Dow 30, S&P 500, and the Corporate Bond ETF (JNK). The Nasdaq 100 gained the most, followed by minor gains in the High Dividend-Paying Stocks, ETF (DVY), and Dow Utilities.


As shown on the currency graph below, the Euro gained the most, and the Aussie $ lost the most, followed by the Canadian $ and the British Pound. The U.S. $ also gained slightly.


I would generally conclude from these graphs that:
  • firstly, the VIX is an important index to watch to see if volatility continues to gather momentum, signalling further equity weakness
  • it will be important that the support levels on Charts 2, 3 & 4 are maintained if the equity bulls are going to resume their advance from here
  • while Technology finished strong on the week, I'd keep an eye on the NQ, as discussed in my February 9th post, and on AAPL, as discussed in my February 10th post, for any signs of developing weakness which may drag equities down
  • Small-cap stocks,  Emerging Markets, and Transportation took the biggest hit last week and were the most affected by the rise in volatility...ones to watch for accelerating declines if volatility continues to rise
  • any further drop in the Commodities sector could produce a drag/reversal on equity markets
  • any further drop in the U.S., European, and Chinese Financials sectors could produce a drag/reversal on equity markets
  • since the U.S. $ gained on the week, as well as the Euro, further commitment will be required by currency buyers in the coming days/weeks to produce clarification on which currency they will place their trust