Money Flow -- Weekly (June Week 4), Monthly (June), Quarterly (Q2 2013)

Further to my last Weekly Market Update, this week's update will look at charts and percentage gained/lost graphs of the four Major Indices for the past week, month, and quarter (my Q1 2013 market wrap-up can be seen here). 

Is Alcoa a Harbinger of Things to Come?

AA's earnings come out July 8th. This US "economic bellweather" has made DECREASING advances on a continuing basis since it bottomed in 2009, has been in a downtrend since April 2011, and it's threatening to drop below that bottom.

Has AA had its day or is it a harbinger of things to come in the general markets, as I wrote about on April 8th?

Gold Update

It would appear that Gold is on its way to 1150, or lower, as I last discussed in my post of April 22nd.

As I write this in overnight trading, Gold is now priced at 1197.50.

The GDP estimate for Q1 of 2013, to which I referred in that earlier post, has now been revised. As I mentioned in my post of June 26th, the final number came in at 1.8%...considerably lower than the 3% forecast in April. The trend continues down, as shown on the graph below.

*UPDATE June 28th @ 11:00 am: A low of 1179.40 has been made in overnight trading...whether we see a meaningful bounce from here remains to be seen. Here's a shot of the updated Weekly chart. You can see that price blew right through thin volumes on the Volume Profile along the right side of the chart at 1300.

GS:SPX Ratio

Watching the GS:SPX ratio for possible clues to equity market strength...price closed today just below 60-day 60-minute resistance.

You can see it's important for GS to hold above the 150.00 level and, particularly, above the 200 sma (pink)...price is still subject to the negative influences of the bearish "Death Cross" formation on the following Weekly chart and is grappling with negative divergences on the MACD, Stochastics, and RSI indicators. Weakening Financials may pose a problem for the SPX.

*UPDATE June 27th:

GS ran out of steam today into the close, but this GS:SPX ratio has popped back above near-term support of 0.095...momentum is back above zero...a break either above or below this large descending triangle is imminent...momentum will need to confirm any sustained move.

Mixed Data Signals for the Fed to Consider

A formula for (sustainable and long-term) success for the US? ~ Mixed economic data + a market heavily manipulated by the Fed + weak global growth + weak commodities + a lack of cohesive and progressive fiscal economic policy = volatile chop

Source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

Chicago Fed National Activity Index in Decline

We may see less than stellar Q2 earnings releases, as a result of this data...

Data source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

China's Shanghai Index Near 3-Year Lows

A close and hold below last year's low of 1949.46 could spell more trouble ahead for China's Shanghai Index, especially if the moving averages cross over again to form another bearish "Death Cross." There's no positive divergence and no indication of a reversal yet on the RSI, MACD, and Stochastics indicators to suggest that a bounce is imminent.

*UPDATE June 25th @ 11:00 am: 

The following chart shows a longer view of the Shanghai Index and shows today's closing price. You can see the weakness and downtrend that it's been in since October 2007.

The next 5-day chart shows Tuesday's intraday action...a move below last year's low and recovery to close above.

From both charts, it would appear that 2000 represents a fair value for the Shanghai to achieve and maintain to signal any kind of committed growth and renewed strength.

*UPDATE June 27th @ 12:00 noon: An interesting article on China: Bloomberg

Money Flow for June Week 3

Further to my last Weekly Market Update, this week's update will simply show percentage gained/lost graphs of World Market action for the week.

You can see that, with the exception of Japan's Nikkei, the U.S. $, and Lumber, they all declined. What I like about this graph format is the fact that we can see, at a glance, where money flow has been directed this past week in various world markets, and to see the "outliers"...that is, which markets gained or lost the most amount compared to the others...ones to watch going forward to see if they continue leading in strength or weakness and what effect they may have on other instruments (e.g., Greece, Japan, Homebuilders, Metals, the BRIC countries, the U.S. $, and Bonds), as well as the TNX:SPX ratio, as outlined in my post of June 17th.

Inasmuch as next week is full of economic data, is the end of the month, is the end of Q2 for 2013, will see nine FOMC members speak at various venues, and will see Fed POMO activity on all five days, I wouldn't be surprised to see intraday and overnight volatility increase as market participants attempt to interpret, what will likely be, conflicting information, data, and viewpoints, not to mention reaction to further domestic and foreign news at it unfolds. As such, we could see choppy, non-directional trading with large, volatile swings dominating...it should be an "interesting" week.

World Markets Sell Off

World markets sold off today to continue yesterday's broad-market decline...

Source: http://www.indexq.org/

None of the 9 Major Sectors in the U.S. outperformed the others, as they all lost between 2.5 and 3.0%...

We'll see if the selling continues or even accelerates, world-wide, over the next day(s). No doubt, traders will be watching various world government bond yields...we may see further clues (related to the SPX) in my updated notation made today in my last post regarding the TNX:SPX ratio.

TNX:SPX Ratio

TNX 10-Yr Weekly:

TNX:SPX 10-Yr Weekly ratio:

TNX 2-Yr Daily:

TNX:SPX 2-Yr Daily ratio:

Resistance and support on TNX Daily @ 23.00 & 21.00
Resistance and support on TNX:SPX Daily ratio @ 0.014 and 0.013

I'll be watching the ratio closely over the next while...looking for either continued strength in TNX vs. SPX, or a retreat of rising rates against any further strength in the SPX.

The Fed may have to increase its bond purchases from $85B/month if it is going to continue to suppress rates on any further meaningful and sustainable advance in equities beyond current levels.

***UPDATE June 20th (10:15 am ET): Prior resistance of 0.014 is now broken on TNX:SPX ratio...next resistance level is 0.015 on rising momentum.

***UPDATE June 21st: Prior resistance of 0.015 is now broken on the TNX:SPX ratio to form near-term support and closed today at 0.016. You can see from this link (and below) that all indicators are at elevated levels now, but have yet to begin to decline...ones to watch for any evidence of slowing momentum in rising yield. The next resistance levels are at 0.018 and 0.020.

Fed Can Take Its Foot Off the Gas Now

Data released today shows that, for the first time since March 2006, the NAHB Housing Market Index has climbed above 50, as shown below...well before the financial crisis hit the markets.

Perhaps it really is time for the Fed to take its foot off the gas pedal and allow markets to reflect true economics and the laws of supply and demand, as they're supposed to function, and let appropriate fiscal policies be set accordingly.

"Men Don't Know the Style in NYC!" ;-)

Money Flow for June Week 2

Further to my last Weekly Market Update, this week's update will look at:

• 6 Major Indices
• 9 Major Sectors
• SPX:VIX Ratio

6 Major Indices

As shown on the Weekly charts and the percentage gained/lost graph below of the Major Indices, all of them erased gains from last week's close and ended lower. The largest losses were made in the Nasdaq 100, followed by the Dow 30, S&P 500, Russell 2000, Dow Transports, and Dow Utilities.

As I mentioned in my last weekly update, and is still the case, price remains elevated, overcrowded, and overbought in all of them (see Stochastics indicator) on, not only their Weekly timeframe, but also their Monthly and Monthly Options Expiration timeframes. The one exception (on a Weekly timeframe only) is the Dow Utilities, which, so far, has held the 50 week moving average...it's still overbought on the other two timeframes.

9 Major Sectors

As shown on the Weekly charts and the percentage gained/lost graph of the Major Sectors, six of them erased gains made from the previous week. Financials was the biggest loser, followed by Energy, Industrials, Technology, Cyclicals, and Materials. The "defensive" sectors were flat on the week.

The above comments are also applicable to these Sectors with respect to elevated price and overbought territory on the same three timeframes.

SPX:VIX Ratio

The following 10-Year Weekly ratio chart of the SPX vs. the VIX shows that the SPX (as compared with volatility) has been unable to penetrate above the 2006/07 highs and has been, basically trading in a large, volatile, non-directional trading range between 95.00 and 140.00 since January of this year. Price closed a fraction below support of 95.00 on Friday and the Momentum indicator remains below zero.

Until we see a clear breakout and hold above this year's highs on the SPX, we will likely continue to see this kind of uncommitted volatility in its ratio. A resolution is needed in the current weekly trading range in the SPX, but it may, first, come to the downside before serious investors feel confident about buying into this market at better prices and value than we're seeing now. Downtrending momentum on this ratio does not favour buying stocks at the moment, and it has not yet reached an oversold level. 

This is a short summary this week, as there's not much more that I can say. Markets are likely awaiting the results of the upcoming Fed meeting and Chairman's press conference on Wednesday before making a major move either above or below their current weekly trading range, and we have the monthly and quarterly June Options Expiration occurring at the end of the week. These will, no doubt, add to the wild overnight and intraday volatile swings that we've seen over the past six weeks.

Enjoy your weekend and good luck next week! And, I'd like to wish all Dads a very Happy Father's Day on Sunday! 

My Grocery & Gasoline Bills Do Not Lie

So, no, Messrs. Central Bankers, I'm not imagining that my cost of living has gone up!

Data Source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

SOLD!

Data Source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

Data Source: ForexFactory

Subprime Mortgage "Smile-of-the-Day"

Bearish 'Evening Star'

We'll see if Monday's candle on the Broker/Dealer Index is a bearish 'Evening Star.' If we get confirmation today (Tuesday), we could see a drop in equities soon.

***UPDATE: As of today's close, the 'Evening Star' pattern has now been formed. We'll see if we get bearish follow-through next...if so, equities should follow or vice versa.

Of the 9 Major Sectors, Financials was the biggest loser in today's decline.

Draghi Quote of the Day

My 2 cents' worth on this: Perhaps...unless its Government confiscates its bank depositors' cash...precedent already set in Cyprus.

N.B. ZeroHedge article June 10, 2013 ~ "Greek Stocks Enter Bear Market"

Data Source: http://www.indexq.org/

***UPDATE June 11th @ 10:31 am EDT: The sell-off in Greece continues...

Although the following Daily chart of the Greek (Athens) General Share Index doesn't yet show today's (Tuesday's) candle, you can see that the current price has fallen below the 200 sma...major support sits at 800.

***UPDATE Tuesday, June 11th:

• See today's Bloomberg article entitled "Greece First Developed Market Cut to Emerging as UAE Raised." The article goes on to say that Greece has become the first developed nation to be cut to emerging-market status by MSCI Inc. after the local stock index plunged 83% since 2007.
• See today's NY Times article -- Greek government is closing down its state-run TV and radio broadcaster to cut costs.

"Reality"...Fact or Fiction? ;-)

Money Flow for June Week 1

Further to my last Weekly Market Update and its Addendum, this week's update will look at:

• 6 Major Indices
• 9 Major Sectors
• SPX:VIX Ratio
• SPLV vs. SPX vs. CRX
• Various World Markets
• Stocks Above 20/50/200-Day Moving Averages

Chocolate "Fix" Takes on a Whole New Meaning...

This (Canadian) news headline appeared today (you can read the article at this link):

Volume in the July Cocoa futures contract spiked in today's continued rally from the past few days up to a 50% Fibonacci retracement level, as shown on the Daily chart below.

At the moment, price is still subject to a bearish influence of a moving average "Death Cross" formation, as well as a confluence of this Fib level with a downtrend line and the upper Bollinger Band. A break and hold above this confluence resistance, followed by a rally with conviction may, ultimately, reverse this formation to a bullish "Golden Cross."

Emerging Markets ETF Breaks Below Channel

We may see some nice follow-thru on this EEM channel break and a correction down to major support at 36.50, as shown on this Weekly chart.

A drop below 0.98 on the AUD/CAD forex pair could send it down to the lower channel at 0.959ish or lower to 0.93, as shown on this Weekly chart.

I'll be watching the recent weakness on China's Shanghai Index for a potential drop and hold below both the 50 and 200 MAs, as shown on the Daily chart below.

So, further weakness in EEM, AUD/CAD, and China could pull US equities down further, especially if we see a continued drop in Japan's Nikkei Index, as I wrote about earlier today in this post.

Nikkei on its way to 12600?...or 11500?

It looks like Japan's Nikkei e-mini Futures Index (NKD) may well be on its way down to its next confluence support level of 12600, as I discussed in my post of May 24th, and as shown on the Weekly chart below. There is the potential for a bearish 3 Black Crows candle pattern to form, depending on where this week's candle closes. A close near its low this week, technically, portends further weakness.

A failure to hold that level, could send it down to 11500ish, or lower.

***UPDATE Thursday, June 6th @ 12:30 pm EDT: Here's an update of the Weekly chart of the NKD as of today's continued drop...low of the day, so far, is now 12310...low of the day, so far, on USD/JPY is now 95.89.

Trade Balance Widens for Canada and U.S.

Data released today (Tuesday) shows that trade balance widened for both Canada and the U.S., as shown on the graphs below.

The following is one explanation of the widening pertaining to the U.S.:
Source: http://www.nasdaq.com/markets/us-economic-calendar.aspx

The USD/JPY rallied to 100.36 immediately upon the data release (100.41 is near-term resistance set in overnight trading). As of 10:15 am EDT, price has yet to break above resistance.

Japan's Nikkei 225 Futures Index (NKD) is  attempting to rally this week after a 3080 point drop that began two weeks ago and is trading just below what is now near-term resistance, as shown on the Weekly chart.

Two instruments to watch in the week(s) ahead...

Furthermore, the following data, also released pre-market today, shows an increase in retail sales...it seems the consumer is still spending.