Canada's BlackBerry 10, eh!

Best wishes to Canada's BlackBerry (formerly known as Research in Motion) on today's release of its new BlackBerry Z10 and Q10 (keyboard version) products.

Here is a link to BlackBerry's web site.

With respect to their company name change, the new ticker symbol in the U.S. will be BBRY and in Canada will be BB, effective next week (even though their company name change is effective immediately).

We'll see if price remains above its channel, following its high-volume breakout two weeks ago, as shown on the 5-Year Weekly chart below of RIMM (as it's currently listed in the U.S.).

"On This Day" ~ January 27, 2010

The first-generation iPad was announced and unveiled by Steve Jobs on January 27, 2010...you can read more about it at Wikipedia here.

Money Flow for January Week 4

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

• 6 Major Indices
• 9 Major Sectors
• Advance/Decline Issues Index
• SPX/VIX Ratio
• 30-Year Bonds
• U.S. $

6 Major Indices

As shown on the Weekly charts and 1-Week percentage gained/lost graphs below, all but one Major Index closed higher on the week than the prior week. Once again, the Dow Transports Index gained the most (and made a new life-time high), while the Nasdaq 100 lost a minor amount (as AAPL continued to decline and weigh on the NDX, as I last wrote about here). The Russell 2000 Index also made a new life-time high.

9 Major Sectors

As shown on the Weekly charts and 1-Week percentage gained/lost graphs below, all but one Major Sector closed higher on the week than the prior week. The Consumer Discretionary Sector gained the most and Consumer Staples gained the least, while Technology lost a minor amount. Consumer Discretionary, Consumer Staples, and Healthcare made new life-time highs, while other Sectors have quite a ways to go before claiming that title.

Advance/Decline Issues Index

The general stock market advance of the past week (and since 2009) can be seen on the first Weekly Advance/Decline Issues Index chart below, as it closed on Friday in positive territory above the zero level, but slightly below last week's close. 

The next Weekly Advance/Decline Issues Index chart below shows only the closes. You can see that, although most of the above Major Indices and Sectors gained on the week, they did so on slightly fewer issues than the prior week. 

Since June of 2012, there have been more closes in the +1000 to +2000 zone than in the -1000 to -2000 zone, showing that more issues participated in the advances than in any of the declines seen during the past seven months. 

Even though I mentioned in last week's market summary that these Indices and Sectors were in extreme overbought Stochastics territory (on a Weekly timeframe) and that we may see an increase in volatility, you can see from this chart that they did not close at the extreme +2000 level. Should the markets continue their push upwards over the next week(s), this chart may hold more of an indication as to when they may have reached a protracted and extreme overbought condition...particularly since there are still quite a few Major Sectors that still have quite a ways to go before making new life-time highs, and four of the six Major Indices also have yet to make that claim. 

In any event, it would seem that any closes above the -1000 level represent general buying opportunities...if we start seeing more Weekly closes below that level, it may be signifying that some serious selling has begun in equities...you can watch intraday timeframes for clues on short-term strength above either the zero level or -1000.

SPX/VIX Ratio

The 1-Year Daily ratio chart of the SPX:VIX shows that there was a slight increase in volatility in the SPX this week as the Momentum indicator lost some of its previous bullishness and closed just above the zero level. It's one to watch going forward to next week, as we may see a pickup in volatility as we approach the FOMC meeting on Wednesday, as well as month-end and all of its associated activity. Near-term support for this ratio sits at 116.50...a break and hold below will send volatility (VIX) up.

30-Year Bonds

Price closed just below major support, as shown on the following 5-Year Weekly chart of 30-Year Bonds...one to watch for a lower close on increasing volumes next Friday as a possible confirming signal that money is finally leaving Bonds to be deployed in equities this year, (and/or commodities as I recently wrote about here).

U.S. $

As shown on the 5-Year Weekly chart below of the U.S. $, price closed just below the 80.00 major support level...one to watch next week in reaction to Wednesday's FOMC announcement...there is no Fed Chairman press conference afterwards, so there may not be much in the way of any new policy emanating from this meeting.

Summary

In summary, we may see a general advance in equities for some time this year, punctuated by pullbacks, as buyers rotate into and out of various Sectors/Indices to relieve overbought scenarios and (for those that haven't already) to, perhaps, reach new all-time highs. 

Clues may be found in the Advance/Decline Issues Index, SPX:VIX ratio, 30-Year Bonds, and the U.S. $, as well as upcoming economic data releases, company earnings announcements, and, of course, domestic and global news releases. Some sectors in Commodities may also see some advancement, but, no doubt, the Fed will be keeping a close eye on inflation to keep things in check...their "transparency program," forward guidance forecasts, and future press conferences should also provide clarification on where economic conditions and unemployment stand and are headed, for the benefit of market participants. 

However, what may dampen the extent to which we may see an overall market rally this year is the latest Bank of Canada's monetary policy report that was released earlier this week, as I wrote about here. Their report is forecasting a slightly weaker global economic outlook than was projected in October, although global tail risks have diminished.

~~~

Enjoy your weekend and good luck next week!

Will AAPL Stabilize Around 400-420ish?

We didn't see the bounce in AAPL that I was wondering about in my post on January 5th. Momentum continued to the downside and price has pushed down to around 440 as I write this article around mid-day on Friday.

AAPL is still underperforming the NDX, as shown on the Weekly ratio chart below.

Price is approaching a 50% Fibonacci fanline at around the 420ish level, as shown on the Weekly AAPL chart below.

Major support lies somewhere around the 420-400ish level. It will be interesting to see if price begins to level out there, especially as it has now broken below its large uptrending channel from the 2009 lows.

Apple Inc. has also lost its place as the most valuable company in the world to Exxon Mobil.

BOC Maintains Overnight Rate Target at 1%

This statement released by the Bank of Canada today (Wednesday), reveals that it is "maintaining its target for the overnight rate a 1%...The Bank Rate is correspondingly 11/4% and the deposit rate is 3/4%."

This excerpt from their Monetary Policy Report Summary projects a slightly weaker global economic outlook. The full report can be read at this link.

At the time of writing this post, the USD/CAD Forex pair has spiked +.0073. As shown on the Weekly chart below, price is being drawn back to parity (which it just reached), or higher, and is still contained within a tightening large triangle. 

With both Canada and the U.S. vying for dollar devaluation, it will be interesting to see which way this pair ultimately moves...if it does move very far away from parity during 2013 and beyond. Currencies seem to be the "play du jour" lately -- we'll see for how long currency traders maintain an interest in this pair.

Japan's Nikkei Futures Index Rejected at Resistance

I last wrote about Japan's Nikkei E-mini Futures Index in my post of December 26, 2012.

Price continued to rally and, subsequently, reached the confluence resistance zone at 11000 last week, where it was rejected on the first attempt to push above, as shown on the Weekly chart below.

We'll see whether their Central Bank's/government's aggressive asset purchase/fiscal program (in line with their 2% inflation target) continues to produce the same kind of upward momentum that it's seen since the December lows, and for how long. In any event, we may see choppy (and potentially volatile) movement in between 11300 and 10390, until price breaks and holds convincingly above or below those levels.

From One Woman to Another... ;-)

"On This Day" ~ January 22, 1968

Rowan & Martin's Laugh-In premiered on television on January 22, 1968. Further details are provided at this Wikipedia link.

Commodities Poised For a Bounce?

An e-mail from one of my Blog readers this weekend inspired me to write about the following...so, first of all, thank you, kind reader, for writing.

With price sitting just above a major uptrend line from the 2007 lows, as well as horizontal price support, this Weekly ratio chart of DBC:SPX shows that price may be due for a bounce on DBC, the Commodities ETF. If price can rally, break and hold above, firstly 0.02 where there is a convergence of resistance of the 50 sma (blue), 78.6% Fibonacci retracement level, and a short-term downtrend line, it has a chance to reach the 0.022 level, which is currently sitting just above the 200 sma (red), and, potentially, the 61.8% Fibonacci retracement level just above 0.023, or higher.

If equities weaken, we may see this scenario occur. However, we could also see cash flowing into both equities and commodities. It may be that money is/will be flowing out of Bonds to fund such activity...I last wrote about 30-Year Bonds in my post of January 18th...they are worth tracking over the next week(s)...with the Fed busy buying Bonds, it may be difficult to determine how much private money is flowing out of them...time will tell, as may the charts. One thing that may provide a clue on this is if we see increased buying volumes on equities and commodities and increased selling volumes on Bonds.

Below are Weekly charts of DBC and the AUD/USD Forex pair. DBC has broken above a medium-term downtrend line and is sitting at its mid-Bollinger Band...and volumes have increased recently. AUD/USD looks poised for a breakout above its medium-term downtrend line...two to watch to confirm the above potentially bullish scenario for Commodities, in general.

I also wrote about the U.S. $ in the above-referenced post...also one to watch, along with volumes, to see whether the dollar weakens considerably to support such an equity/commodity-buying scenario.

As well, my last post outlined a bullish scenario for Platinum and Gold...two to watch to confirm any general bullishness in Commodities, as I've described above.

The Weekly chart below of Copper shows that it, too, is poised for a breakout, one way or the other.

Lastly, the Weekly chart below of Oil shows that, if price can remain within its large rising channel, it has a chance of reaching 100, or higher.

Conversely, any near-term meaningful weakening in DBC, AUD/USD, Platinum, Gold, Copper, and Oil may also negatively influence equities.

As I described in my post of January 18th, we may see an increase in volatility soon due to extreme overbought Stochastics levels (on a Weekly timeframe) in equities, and further hedge-buying in 30-Year Bonds and the U.S. $. I also wrote about stocks being at their extreme overbought levels in my post of January 19th.

Increasing volumes may hold the key in determining/confirming the seriousness and sustainability of any pullback or breakout.

Platinum and Gold

Since both have seen bullish action lately, I thought I'd compare Platinum and Gold.

The 5-Year Weekly chart below of Platinum shows that price has stalled at a confluence of an apex of a large triangle, a 60% Fibonacci retracement level, and the upper Bollinger Band. Note the recent volume spikes. If price can break and hold above 1714, it has a chance of reaching the top of the triangle at 1760ish, or 1800 (which is the upper Value Level of the Volume Profile shown along the right edge of the chart).

The 5-Year Weekly chart below of Gold shows that price has stalled around the 50 sma (red) at the 1660 level. The next major resistance level is at 1800, provided it can break and hold above the mid-Bollinger Band at 1717.30.

The 3-Year Weekly chart below shows Platinum, depicted in candles as the primary instrument, with Gold as secondary and shown as a line. Both Platinum and Gold have generally tended to move in tandem during this timeperiod. Platinum has stalled at a downtrend line, but the RSI is now rising and above 50.00 and the MACD has crossed up. At the moment, it is outperforming Gold. A break and hold above the downtrend line should favour continued buying in Platinum.

The 3-Year Weekly chart below is a ratio which depicts Platinum's relative strength as compared to Gold. It shows, more clearly, its recent strength on rising RSI, MACD, and Stochastics confirmation.

In conclusion, both Platinum and Gold have similar resistance/target price levels, although Platinum has been a bit stronger recently. It may be worthwhile watching both of them, in order to see which one may produce the first clue as to either continued strength (in both), or developing weakness (in both) during the next week(s) ahead.

%Stocks Above 20-50-200-Day Moving Averages

Price action on the following three charts confirms that stocks are, indeed, at or very near their extreme overbought levels, as I mentioned in my post of January 18th...not only in the shorter term, but also in the medium and longer terms, as well.

Equities could be in for a meaningful pullback soon.

Saturday Memories...

This brings back fond Saturday memories...hours spent glued to the TV watching Shindig! and American Bandstand to learn the latest dance moves to be deployed at our next Friday night local dance.

Those were the days...

Money Flow for January Week 3

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

• 6 Major Indices
• 9 Major Sectors
• 3 Days/Candle Charts on 7 Major Indices
• Index/Volatility Ratio Charts and AAPL:NDX Ratio Chart
• 30-Year Bonds
• U.S. $

6 Major Indices

As shown on the Weekly charts and 1-Week percentage gained/lost graphs below, all but one Major Index closed higher on the week than the prior week. The Dow Transports Index gained the most, while the Nasdaq 100 lost a minor amount.

I've also added a Year-to-date percentage gained/lost graph below. You can see that the Dow Transports is leading the gains, so far this year, followed by the Russell 2000, S&P 500, Dow 30, Nasdaq 100, and Dow Utilities. Utilities remains the laggard, for the year, while the Nasdaq remains the laggard for the past week...two to watch for either developing strength, or further weakness, which could weigh on the other Indices.

The following graph depicts total percentage gains/losses for these Indices for 2012. You can see that the Nasdaq 100 was the leader, followed by the Russell 2000, etc. It may be that the recent weakness in Technology is simply a case of profit-taking before portfolio re-balancing and buying resumes in that Sector...one to watch going forward in the near term. Perhaps we'll learn more after AAPL's earnings are released after hours on January 23rd.

9 Major Sectors

As shown on the Weekly charts and 1-Week percentage gained/lost graphs below, all but one Major Sector closed higher on the week than the prior week. The Energy Sector gained the most and Financials gained the least, while Technology lost a minor amount.

I've also added a Year-to-date percentage gained/lost graph below. You can see that most of them have gained approximately 5%. Technology and Utilities lag, but are in the green for 2013.

The following graph depicts total percentage gains/losses for these Sectors for 2012. You can see that Financials were the biggest sector gainers, while Utilities gained the least. It may be that the recent weakness in Financials is simply a case of profit-taking before portfolio re-balancing and buying resumes in that Sector...one to watch going forward in the near term as any major weakness may weigh negatively on equities, in general.

In any event, from a technical standpoint, 5 Major Indices and 8 Major Sectors are at an extreme overbought level at the top of their Stochastics cycle on a Weekly timeframe...the Utilities Index and Sector, are approaching an overbought level. We may see either a parabolic move up followed by a blow-off reversal, or we may see a measured/orderly pullback soon to relieve this condition. Either way, I wouldn't be surprised to see increased volatility enter into the markets soon.

3 Days/Candle Charts on 7 Major Indices

Each candle on the following three chartgrids represents 3 days. The current candle began today and will finish next Wednesday (since the markets are closed on Monday). 

S&P 100 Index (OEX)

• Price closed on Friday above both the longer-term major downtrend line from the 2000 highs and the shorter-term uptrend line from the 2011 lows.

DOW 30, S&P 500, Nasdaq 100, & Russell 2000 Indices

• The Dow 30 closed on Friday above both its longer-term major downtrend line from the 2007 highs and the shorter-term uptrend line from the 2011 lows. The S&P 500 and Russell 2000 Indices are still above their trendlines, while the Nasdaq 100 is still below its uptrend line...another verification of its weakness compared with the other Indices.

Dow 30, Dow Transports, & Dow Utilities Indices

• Along with the Dow 30, the Dow Transports Index is still trading above its trendline, while the Utilities Index is still below...another verification of its weakness compared with the other Indices.

Index/Volatility Ratio Charts and AAPL:NDX Ratio Chart

The four 10-Year Weekly ratio charts below compare the SPX, NDX, and RUT Indices to their respective Volatility Indices, and AAPL to the NDX.

Comparing relative strength during this 10-year time period among the 3 Index/Volatility ratios, the RUT is leading, followed by the NDX, then the SPX, because the Russell and Nasdaq are above their 2007 highs on these ratios, while the SPX is still approaching its highs. We may not see a meaningful pullback in the SPX (and possibly in equities, in general), until the 2007 highs have been reached on SPX:VIX...something to keep an eye on.

The AAPL:NDX ratio shows that price is approaching a level of minor support. As I mentioned above, we should see some clarification of near-term direction in AAPL after the markets have digested its earnings next week...one to watch as a possible positive or negative influence on equities, in general.

30-Year Bonds

As shown on the 5-Year Weekly chart below of 30-Year Bonds, price closed, once again, above major support. We may see further buying in bonds while equities remain at these extreme Weekly stochastics levels, as mentioned above...one to watch as possible hedge-buying continues.

U.S. $

As shown on the 5-Year Weekly chart below of the U.S. $, price closed, once again, above major support at 80.00. We may see further buying in the dollar while equities remain at these extreme Weekly stochastics levels, as mentioned above...one to watch as possible hedge-buying continues.

Summary

In summary, we may see an increase in volatility due to extreme overbought Stochastics levels (on a Weekly timeframe) in equities, and further hedge-buying in 30-Year Bonds and the U.S. $. In this regard, the Nasdaq 100, Utilities, Financials, and AAPL are worth keeping a close eye on in the coming week(s) as a possible gauge of further (and any meaningful) weakness in equity markets...particularly as these markets begin a new monthly Options Expiration period on Tuesday.

Enjoy your weekend and good luck next week!

Time Out For a Bit of Nature...

How the Stock Market Works

Major Index/Volatility Ratio Update

I last wrote about the comparison of three Major Indices with their Volatility Index counterparts on January 4th. While that post looked at a longer time period and mentioned major support and resistance levels, I'll provide an update for the shorter term.

As shown on the 1-Year Daily ratio chart below of the SPX:VIX, price closed on Friday at new highs. The Momentum indicator is still rising, but is approaching overbought territory -- cautioning that we may see a minor pullback in the near future, although there is no negative divergence. If we do see a minor drop, followed by a higher swing high in price on negative Momentum divergence, we may then see a larger pullback -- if not, then I'd look for a further rally in the SPX.

As shown on the 1-Year Daily ratio chart below of the NDX:VXN, price dropped then rallied this past week to close just below the last swing high. The Momentum indicator is still rising on positive divergence and still has a little way to go before it reaches the overbought territory. As I mentioned in my last post, we'll see if the NDX plays "catch up" with the other Major Indices, and this is one way to measure its strength.

As shown on the 1-Year Daily ratio chart below of the RUT:RVX, price closed near Wednesday's all-time high. The Momentum indicator is still rising and positive, but is approaching overbought territory -- cautioning that we may see a minor pullback in the near future, although there is no negative divergence. If we do see a minor drop, followed by a higher swing high in price on negative Momentum divergence, we may then see a larger pullback -- if not, then I'd look for a further rally in the RUT.

In conclusion, we may not see any relevant build in volatility until we get closer to the "Fiscal Cliff" and "Debt Ceiling Limit" deadlines around the end of February or early March.

Money Flow for January Week 2

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

• 6 Major Indices
• 9 Major Sectors
• Ratio Charts comparing the SPX to other Major World Indices
• Fed Monetary Stimulus Program "Canaries"
• Social Media Stocks and RIMM
• U.S. $
• 30-Year Bonds

~~~

***PLEASE NOTE that in the interest of conserving space on this post, I've provided links only to my charts and graphs again this week.

~~~

6 Major Indices

As shown on the 1-Year Daily thumbnail charts below, you can see that price is either pushing up to new highs (TRAN & RUT) or up towards last year's highs (SPX & INDU). UTIL & NDX are lagging at the moment. I'll be watching for signs of weakness in the leaders or strength in the laggards in the coming week(s).

• http://screencast.com/t/3Yyr61RJS

As shown on the 1-Week percentage gained/lost graph below, the NDX made the largest gains on the week, while the UTIL made losses. We'll see if the NDX continues to play catch-up to the other Indices now.

• http://screencast.com/t/MkgfbCw6XdS4

9 Major Sectors

As shown on the 1-Year Daily thumbnail charts below, most Sectors are continuing to push to new highs. Technology, Energy, and Utilities are lagging -- confirming the above Indices. We'll see if the markets continue to add risk next week(s), and if they begin to buy into XLK, XLE & XLU.

• http://screencast.com/t/N9ydWsyEzJyG

As shown on the 1-Week percentage gained/lost graph below, the largest gains were made in Healthcare, followed by Materials. Utilities made losses. 

• http://screencast.com/t/VE0Luq2h6

Ratio Charts comparing the SPX to other Major World Indices

I last wrote about these in my post of December 14, 2012.  I mentioned that the SPX was weaker than other Major World Indices and had been trending down from mid-2012. It was at/near some form of horizontal, downtrend, or moving average support level, but on accelerating bearish downward RSI below the 50.00 bull/bear level, and was the theme to watch going forward. 

As shown on the 3-Year Weekly ratio charts below, the SPX began to bounce last week, and it either continued modestly higher or retraced somewhat this week.

I'll be monitoring these ratio charts over the next week(s) to see if the buying in the SPX continues to outperform other Major World Indices -- the RSI, MACD, and Stochastics indicators are turning up (and the RSI is above 50.00 in some cases) to signal that this may continue -- and whether the U.S. is, in fact, the "best place to invest for 2013," as some analysts/fund managers have been claiming lately on (U.S.) national television.

• http://screencast.com/t/mtJONhIwY2
• http://screencast.com/t/T7hLZQ6E8
• http://screencast.com/t/ppH1R6kaEO
• http://screencast.com/t/N7iwNr6c7
• http://screencast.com/t/XwCLLbP9EQB
• http://screencast.com/t/sIR9xEj9r1y
• http://screencast.com/t/uccSEe3gLOWK
• http://screencast.com/t/CQw8P27M
• http://screencast.com/t/wJiAzBJgu
• http://screencast.com/t/nwPgZLjYoxSg
• http://screencast.com/t/IWFPgjKFlM
• http://screencast.com/t/SVcDAaayt

Fed Monetary Stimulus Program "Canaries"

I last wrote about these in my post of December 28, 2012. They had been losing steam as measured against either the SPX, or in the case of the European and Chinese Financials, against their country's Index.

As shown on the 3-Year Weekly charts below, the only one that has been picking up steam and outperforming its Index is the European Financial Sector. However, the others are poised for a breakout above major resistance levels and may hold clues for further accumulation of riskier assets -- ones to also watch over the coming week(s).

• http://screencast.com/t/gaieaLoM
• http://screencast.com/t/uiPtTbpS
• http://screencast.com/t/JrO2qd43
• http://screencast.com/t/Wmf3sIeWh
• http://screencast.com/t/ykNdq1iiyCK4
• http://screencast.com/t/Ibq0cOsI8DT

Social Media Stocks and RIMM

I last wrote about these stocks on December 14, 2012. We'd seen some buying on these beaten-down high beta stocks -- signalling an interest in riskier assets.

As shown on the 2-Year Weekly charts below, this past week was no exception -- also ones to watch going forward.

• http://screencast.com/t/KzgXqMy5MqZ

U.S. $

Please see my comments in my earlier post today (Friday) with reference to the U.S. $, Canadian $, the Homebuilders ETF, Lumber, Oil, and widening Trade Balance Deficits for the U.S. and Canada.

30-Year Bonds

As shown on the 5-Year Weekly chart below of 30-Year Bonds, price closed back above major support on the week on higher volumes than the prior holiday week. I'd watch for a break and hold below last week's low on accelerating volumes, before I'd conclude that selling has begun in earnest.

• http://screencast.com/t/7vEpUss4

Summary

In summary, we'll see whether: 

• risk-buying continues, particularly in U.S. markets as compared with other World markets, 
• AAPL stabilizes and bounces, or breaks down below major support around 500.00, as I discussed in my post of January 5th,
• money continues to flow out of the U.S. $, and 
• 30-Year Bonds stage a rally or drop and hold below major support.

I'd look for confirming volumes on any breakout/breakdown of these markets.

~~~

Enjoy your weekend, and good luck next week!

Trade Balance Deficit Widens for U.S. and Canada

Trade Balance data published today (Friday) shows an increased goods and services deficit for the U.S. and Canada, as shown on the graphs below.

It remains to be seen how these countries will grow their exports for 2013. Export demand and currency demand are important since "foreigners must buy the domestic currency to pay for the nation's exports...and export demand also impacts production and prices at domestic manufacturers."

The U.S. $ remains in a trading range, as shown on the Weekly chart below, in between the 50 (red) and 200 (pink) smas. At the time of writing this during market hours today, volumes have increased this week on the current bearish candle -- perhaps signalling/forecasting a further weakening of the dollar in order to stimulate demand for U.S. goods and services.

The USD/CAD forex pair remains in a large triangle formation, as shown on the Weekly chart below. At the moment, the U.S. $ is weaker and remains below parity. Rising prices on Oil and Lumber should continue to push the Canadian $ higher against the U.S. $ -- ultimately, favouring U.S. equities, and raising the cost of new homes, until the demand for them slows.

At the moment, Lumber is at 3-year highs (but the RSI, MACD, and Stochastics indicators are in overbought territory), and Oil is at resistance (the next major resistance level is 100), as shown on the Weekly charts below.

The Weekly chart below of the Homebuilders ETF (XHB) shows a desire of this market to break out to new 5-year highs, but price is at the top of a tightly-rising channel. The next major resistance level is around 30.00 -- one to watch for further direction, as any serious pullback in this ETF (and, possibly in Lumber and Oil) may negatively impact the equity market, in general.