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| SPX:VIX Ratio Monthly |
Friday, February 24, 2017
SPX:VIX Ratio Entering A New Bull Market Territory
Further to my post of February 18th, a hold above 200 would indicate that the SPX:VIX ratio is entering a new bull market territory, as shown on the following Monthly ratio chart. Bullish momentum remains strong (in favour of equities) and is confirmed, as of Friday's close, by a higher swing high on this timeframe.
Emerging Markets ETF: At A Critical Level
The Emerging Markets ETF (EEM) has punched above one level of major resistance (38.00), but it's facing even stronger major resistance (price and trendline convergence) around the 39.00 - 40.00 level, as shown on the following Daily chart.
The RSI indicator has made a new swing high on a higher swing high in price, but has yet to do so on the MACD and PMO indicators. Volumes have also been steadily dropping, on average, since July 2016. So we're seeing some mixed messages on this timeframe.
A hold above the 38.00 level is crucial now, as a drop and hold below could see price drop, once again, to the 50 or 200 day moving averages, or lower.
Price on the Weekly chart below is resting right on a long-term 40% Fibonacci retracement level (from 2008) and the 200 week moving average (both around the 38.40 level).
So, it's doubly important that EEM hold the 38.00 level, lest we see some major weakness creep in.
The RSI indicator has made a new swing high on a higher swing high in price, but has yet to do so on the MACD and PMO indicators. Volumes have also been steadily dropping, on average, since July 2016. So we're seeing some mixed messages on this timeframe.
A hold above the 38.00 level is crucial now, as a drop and hold below could see price drop, once again, to the 50 or 200 day moving averages, or lower.
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| EEM Daily |
Price on the Weekly chart below is resting right on a long-term 40% Fibonacci retracement level (from 2008) and the 200 week moving average (both around the 38.40 level).
So, it's doubly important that EEM hold the 38.00 level, lest we see some major weakness creep in.
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| EEM Weekly |
Tuesday, February 21, 2017
Who's Having a Good Time?
Who do you think is having a good time and will prosper (short and long-term) as a consequence of their focused energy and actions...Trump "resisters"/protesters/rioters, or participants in the stock market rally since the November 8th Presidential election?
Brian Tracy writes in his book, "Get Smart!," that the speed of change is the most important factor that affects your life today. His three main factors that are accelerating this rate of change are summed up in his equation:
SOC = IE x TE x C
(speed of change is equal to information explosion times technology expansion times competition).
So, on what issues will you focus your attention, in order to recognize, accept, and adapt to today's ever-growing rate of change? Your survival and level of prosperity depend on it.
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| SPX Daily |
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| Percentages Gained/Lost since November 8, 2016 in U.S. Major Indices |
SOC = IE x TE x C
(speed of change is equal to information explosion times technology expansion times competition).
So, on what issues will you focus your attention, in order to recognize, accept, and adapt to today's ever-growing rate of change? Your survival and level of prosperity depend on it.
Saturday, February 18, 2017
SPX On Track To Meet Its 2400 Target By Year-End
Further to my Market Forecast For 2017, the S&P 500 Index is on track to meet, or even overshoot, its potential target of 2400 by the end of 2017.
As noted on the Monthly chart of the SPX below, price has less than 50 points to go. Bullish sentiment remains strong, and, as of Friday's close, is confirmed by a higher swing high on the Momentum indicator, as shown on the Monthly SPX:VIX ratio chart below.
As noted on the Monthly chart of the SPX below, price has less than 50 points to go. Bullish sentiment remains strong, and, as of Friday's close, is confirmed by a higher swing high on the Momentum indicator, as shown on the Monthly SPX:VIX ratio chart below.
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| Monthly SPX chart |
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| Monthly SPX:VIX Ratio chart |
Wednesday, February 15, 2017
"Election-Flate" of U.S. Major Indices
From the following 1-Year Daily chart of the U.S. Major Indices and the graph depicting percentages gained/lost since November 8, 2016 (election day), you can see the huge gains that they've made since the election, except the Utilities Index. In spite of the relative flatness of Utilities since then, all of them remain above their 50-day moving average.
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| 1-Year Daily chart |
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| Percentages Gained/Lost graph from Nov. 8/16 - Feb. 15/17 |
The following 5-Year Daily chart of the SPX:VIX ratio shows that, while the SPX made an all-time new high today (February 15th), this chart failed to confirm the latest price spike. The RSI has fallen below the 50 level, and the MACD and PMO indicators have formed bearish crossovers...potentially signalling, either an imminent pause in equity buying, or some profit-taking in the near term.
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| 5-Year Daily chart |
Bottom line: The above-mentioned indices look like they're about to go parabolic in a continued price spike. If they do, I'd keep an eye on the SPX:VIX ratio to see whether we get a higher price confirmation, together with a new "BUY" signal on the technical indicators (e.g., a higher RSI swing high, and bullish crossovers on the MACD and PMO). If we do, it's important that these three indicators remain in such "BUY" mode on any near-term pause or pullback on the SPX as a gauge of subsequent market strength. Otherwise, we may see some larger profit-taking occur over the medium term.
Monday, February 13, 2017
ALERT: Today's World Market Index "Outlier"
A glance at today's (February 13th) market action among major world markets shows that the greatest gain, in terms of percentage, occurred in the Ukraine Index, as shown on the following data and charts.
The question is, does this precede some kind of positive political news? If so, there is considerable overhead price congestion/resistance to overcome around the 950-1000 level, and such news could, potentially, help price punch through that zone.
The question is, does this precede some kind of positive political news? If so, there is considerable overhead price congestion/resistance to overcome around the 950-1000 level, and such news could, potentially, help price punch through that zone.
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| Source: Indexq.org |
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| UAX Daily chart |
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| UAX Monthly chart |
Saturday, February 11, 2017
World Market Weak Spots
Further to my post of February 9th, the following charts and graphs will illustrate which world markets have lagged over a longer one-year period and a shorter year-to-date period. They are presented without individual comment, as they visually illustrate that point.
However, I would conclude that, while there are a couple of particularly weak European countries (namely, Portugal and Greece), most world markets, overall, are in a one-year uptrend, under accumulation, and above their 20 and 50-day moving averages.
Failure of any of these to, at least, hold above their 50-day moving average could see the beginnings of a reversal of this bullish sentiment. Europe may hold the key in terms of precipitating a negative domino effect on other world markets. Watch for, either a stabilization of Portugal and Greece, or continued weakness in the near term. As well, Italy, Spain, France, India and China are worth watching for signs of any eroding confidence.
U.S. Major Indices
Major European Indices
Emerging Markets + BRIC ETFs, and Brazil, Russia, India & China Indices
Canada, Japan, UK, Australia & World Market Indices
However, I would conclude that, while there are a couple of particularly weak European countries (namely, Portugal and Greece), most world markets, overall, are in a one-year uptrend, under accumulation, and above their 20 and 50-day moving averages.
Failure of any of these to, at least, hold above their 50-day moving average could see the beginnings of a reversal of this bullish sentiment. Europe may hold the key in terms of precipitating a negative domino effect on other world markets. Watch for, either a stabilization of Portugal and Greece, or continued weakness in the near term. As well, Italy, Spain, France, India and China are worth watching for signs of any eroding confidence.
U.S. Major Indices
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| 1-Year Daily charts |
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| 1-Year Percentage Gained/Lost Graph |
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| Year-to-Date Percentage Gained/Lost Graph |
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| 1-Year Daily charts |
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| 1-Year Percentage Gained/Lost Graph |
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| Year-to-Date Percentage Gained/Lost Graph |
Emerging Markets + BRIC ETFs, and Brazil, Russia, India & China Indices
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| 1-Year Daily charts |
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| 1-Year Percentage Gained/Lost Graph |
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| Year-to-Date Percentage Gained/Lost Graph |
Canada, Japan, UK, Australia & World Market Indices
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| 1-Year Daily charts |
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| 1-Year Percentage Gained/Lost Graph |
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| Year-to-Date Percentage Gained/Lost Graph |
Thursday, February 09, 2017
World Market Index & SPX Hamstrung by U.S. Politics?
Further to my post of November 24, 2016, the World Market Index did, subsequently rally and is now stuck in a trading range between 1700 and 1750, as shown on the Daily chart below.
In that post, I mentioned the importance of a break and hold above 1750 as a potential signal of clear support for world equities, in the longer term, including that of the SPX.
You can see that a new "SELL" signal has just been triggered by the bearish crossovers of the MACD and PMO indicators.
The SPX is languishing just below the 2300 level, as shown on the Daily chart below, and the MACD and PMO indicators have yet to form a bullish crossover and trigger a new "BUY" signal.
Even if we see one of these indices break out, it's doubtful that sustained "buying with conviction" will prevail, unless we see the other one participate in such a rally, as well. That may not happen until both parties of the U.S. Congress begin to cooperate in a civil and bipartisan approach to move ahead with the new administration's agenda regarding the economy and security of its nation, instead of the political obstruction currently in play.
In that post, I mentioned the importance of a break and hold above 1750 as a potential signal of clear support for world equities, in the longer term, including that of the SPX.
You can see that a new "SELL" signal has just been triggered by the bearish crossovers of the MACD and PMO indicators.
The SPX is languishing just below the 2300 level, as shown on the Daily chart below, and the MACD and PMO indicators have yet to form a bullish crossover and trigger a new "BUY" signal.
Even if we see one of these indices break out, it's doubtful that sustained "buying with conviction" will prevail, unless we see the other one participate in such a rally, as well. That may not happen until both parties of the U.S. Congress begin to cooperate in a civil and bipartisan approach to move ahead with the new administration's agenda regarding the economy and security of its nation, instead of the political obstruction currently in play.
