Money Flow for September Week 1

Further to my last weekly market update, this week's update will look at graphs and charts for:

• 6 Major U.S. Indices
• 9 Major U.S. Sectors
• Germany, France, and the PIIGS Countries
• Emerging Markets Sector (EEM) and the BRIC Countries
• Canadian, Japanese, and the World Indices
• Commodities
• 7 Major Currencies
• 30-Year Bonds
• SPX:VIX and RUT:RVX Ratio Pairs

Very simply, you can see from the following series of graphs depicting percentage gained/lost for the past week, and the corresponding 1-Year Daily chartgrids, that they all ended the week higher, with the exception of Japan's Nikkei Index, the Agriculture ETF (DBA), the U.S. $, and 30-Year Bonds.

The global rally in the "Risk-on" trade was fueled by the ECB's proposed conditional/sterilized (i.e. no new money printing) bond buying program and China's fixed asset spending/stimulus program, which were announced this past week.

Price is either: at/near a prior 1-year high, making new highs for the year, at horizontal overhead price resistance levels, at uptrending channel levels/resistance, at downtrend channel resistance, or at moving average resistance.

Any that are in uptrend should look to their 20 sma for near-term support, followed by the 50 sma, on any pullback from here.

Any further rally would, no doubt, be fueled by positive news on a variety of events during the upcoming week, including Germany's Constitutional Court ruling on the legality of the ESM on September 12 (which will have a bearing on the ECB's ability to implement its bond buying program), the Dutch election on September 12, and the Fed meeting/Chairman Bernanke's press conference on September 13. There are also Eurogroup meetings and European Council Finance Ministers meetings next weekend, which may affect price action at the beginning of that OPEX week.

The Weekly chart below shows the profit-taking that's been occurring since the beginning of June on the 30-Year Bonds as it begins to form a "diamond" (potentially topping) pattern. For the moment, it's holding at trendline and near-term support as it closed just above its middle Bollinger Band. It's one to watch to see which direction is held by the eventual break of the diamond apex.

Volatility dropped over the past three days, as the SPX:VIX and the RUT:RVX ratio pairs bounced back above the bottom channel after a brief dip below, as shown on the two Year-to-Date Daily charts below.

Ideally, any further equity rally should see these two hold above the bottom of the channel, particularly on any pullback in the SPX and the RUT to their 20 sma on the Daily timeframe, as mentioned near the beginning of this post...otherwise, this three-month rally in Global equities may be finished for the time being as price, potentially, corrects to the 50 sma, or lower.

Enjoy your weekend and good luck next week!