Spain's Ibex 35 Index Mired in Long-Term Congestion Zone

In the midst of political and social uncertainty surrounding the recent referendum in Catalonia to separate from the rest of Spain and Prime Minister Rajoy's aim to stop it, Spain's Ibex 35 Index has been faltering, as shown on both the longer-term Monthly chart and the short-term Daily chart below.

Longer term, price ran into major resistance in the form of a downtrend line and a 50% Fib retracement level. It's currently hovering above the 40% Fib level. So far, neither the Momentum nor the ROC indicators are showing that higher prices are in store for this index on this timeframe.

Shorter term, a bearish moving average Death Cross has formed and price closed just below both of them on Friday. So far, the RSI, MACD and PMO indicators are not hinting of higher prices to come any time soon.

These technical indicators, resistance and support levels, together with the Death Cross formation, may be monitored to assist in determining the potential sustainability of any further decline or new rally that may ensue over both the short term and the longer term. A drop and hold below the long-term triangle apex at 9150 could produce a swift plunge to 7750, or lower.

New "SELL" Signal Triggered on Weekly SPX:VIX Ratio

I last wrote about the SPX:VIX ratio in my post of October 17. At the time, volatility was creeping higher, as the SPX was making new highs.

As of 2:00 pm today (Wednesday), volatility has continued to rise, as the ratio dropped to just above the critical 200 "New Bull Market" level, as shown on the following SPX:VIX Monthly ratio chart.

The following 60-Day 60-minute ratio chart shows that, although one gap up has been filled, there are two unfilled gaps remaining, dating back to September 11.

A new "SELL" signal has just triggered on the Weekly ratio, as shown below.

The SPX nearly reached a potential target of 2600 on Monday, as shown on the following Daily chart, where it will encounter major resistance in the form of a +2 deviation level of a very long-term regression channel, as I outlined in my above-mentioned post.

Keep an eye on these charts, especially the 60-Day 60-minute, to see if the prior gaps are filled, and whether the ratio drops and holds below 200. If so, expect volatility to increase as weakness sets in on the SPX. If not, the SPX may try, again, to reach 2600, before such a scenario may develop.

In any event, the SPX may whipsaw until after the next Fed meeting concludes on November 1, before it, either continues to advance to new highs, or we see a pullback, and gap fills on the intraday ratio.

BITCOIN: The Extreme Anomaly

* See UPDATE below...

After plunging to 3000 six weeks ago, Bitcoin snapped back and reached 6000+ today (a 100% increase during that time), as shown on the following Monthly chart, and, as noted in my last post (originally written on September 4th and updated periodically, with comments and charts, to, and including, today).

What strikes me as extraordinary is to see the percentage gained Year-to-date of Bitcoin (527.07%) compared to the U.S. Major Indices, as shown on the following graph.

I find this noteworthy and very unusual, to say the least, inasmuch as it's not "backed up by" or "pegged to" anything.

And, here's a look at the all-time percentage gains for Bitcoin, since it was first listed on the NYSE on May 19, 2015...2417.70%...

Is this an unsustainable parabolic bubble in the making? We'll see...

If Satoshi Nakamoto, the man believed to have created and implemented Bitcoin, still holds 1,000,000 Bitcoin, he'd be $6 Billion richer today:
https://en.wikipedia.org/wiki/Satoshi_Nakamoto

* UPDATE November 2...

Another 1300 points tacked on in the past 9 days as it ploughed through the 7000 level...the manic euphoria continues...

Will the SPX Reach 2600?

I last wrote about the SPX:VIX ratio on September 30.

Price action on the Monthly ratio chart below shows an inability, so far, for volatility to be held at bay, while the SPX continues to make new highs, almost daily.

It has failed to hold, with conviction, above the 250 level and advance above its next resistance level, which is a 161.8% external Fibonacci level at 280.

Price action, typically, doesn't like to leave unfilled gaps on the 60-Day 60-minute ratio chart. It gapped up on September 11 and remains unfilled. I'd expect that it will be filled in the near term, inasmuch as momentum has been fading on this timeframe and it has dropped below zero, once again. Watch for momentum to remain below zero on any gap fill.

Should price drop and hold below 200, we could see a significant drop occur in the SPX. Keep an eye on momentum on this timeframe for any confirmation of such a move.

One possible scenario that may occur (before any such gap fill) is for the SPX to make a last gasp to reach 2600 (a +2 deviation level of a very long-term regression channel), as shown on the Monthly chart below.

Keep an eye on momentum on the above chart to see if it pops back, and holds, above zero to confirm that such a rally may be imminent.

Amazon Musings...

Will Amazon (AMZN) follow in the (recently fateful) footsteps of Equifax (EFX)? Note the similarities in their price action over the past five years (until EFX began its plunge on September 8)...

FAANG Rotation: Risk On or Risk Off for Q4?

I last wrote about the five FAANG Tech stocks at the end of June.

Since then, we've seen rotation in and out of these stocks, as depicted on the following four percentage gained/lost graphs of varying lengths of time...namely, Year-to-date, 2017 Q3, the month of September, and the past week, respectively.

They are all still stuck in their large sideways trading ranges -- and Amazon and Apple are trading below their 50-day moving average -- as shown on the following 1-Year daily charts. All of them have formed some kind of topping formation, especially Amazon, which has formed a bearish Head & Shoulders pattern.

Watch for a break and hold, firstly, below their 50-day moving averages, and, then, a break and hold below their support levels, on escalating volumes, as a signal that traders are running from risk in Q4. Otherwise, renewed strength in these stocks, with increasing volume support, will indicate the market's continued overreach for growth versus value, at least until the end of the year when we may see the Fed hike interest rates for the third time this year.

Additional information can be found in my last post here (that details what may lie ahead for equities, in general, in Q4), which may or may not influence risk-appetite trading action (and vice versa) in the FAANGs.