It is hard to believe but we have closed down for almost a month without breaking new highs. As Europe and the Middle East tension rise some markets still remains calm, namely the U.S. markets. Everything else this week had it worse. Metals seems to be holding their own and resisting the urge to go lower. Weekends used to be an agonizing two days, but now it seems its a good way to analyze the market at pause. So what have we found so far?
Believe it or not, the financials has hardly broken a sweat and its far from being oversold. On a weekly basis the BKX has had its first week below the upper Bollinger band which has stayed above for 4 to 5 weeks previous. With a long weekly red candle bar, I would call this pretty bearish. Many are expecting the markets to rally due to oversold reading and as we know oversold doesn't mean reversal. In fact, where markets made oversold territory, most financials have not. Is it just slow in catching up or is there strength to this sector? One look at the weekly bars of BKX or BPFINA shows that there is either a bearish weekly engulfing candle or a streak of monthly red bars. Just like the Bears looking for a reversal as markets made their way up from 2012. The same can be said going down, and we should soon see enough whether the trend has changed if the rallies are small to non-existent. Characters of strength favouring the downside.
A few markets to note:
- Greece market has formed a weekly reversal candle, but the trend still remains down.
- CCI still remains weak and in oversold territory
- Canadian Dollar has rallied hard but has hit a road block in its 20 and 200 wkly ma. It must break these barriers for a bullish trend to resume or confirmed.
- FTSE remains bearish and has not hit oversold even with a 4 week decline.
- Gasoline has been trending up which could only be bad for markets.
- Gold which everyone is watching like a hawk has been trending sideways and putting in reversal candle patterns. What goes sideways usually continues in trend, in this case down. A 1300 to 1250 is not out of the question.
- Heating oil is also in sync with Gasoline...
- Hang Seng has broken key levels on the weekly chart. 75, 200, and Lower BB all taken out and have closed below for the week.
- KOSPI has retained some support within its lower BB like just above the 200ma.
- Lumber had its worst week yet and closed below its BB. Next stop 200ma at $270.
- NATGAS not only closed down for 3 consecutive weeks, but it closed under its 200 and 20 wkly ma.
- Nikkei couldn't hold its 20wk ma and its 200 and lower BB sits in the 10500 to 10000 range.
- Philippine Stocks have gotten hammered and this is not for the lack of warning I have made here. currently resting on its Lower Wkly BB.
- Russell managed to peak its head out of overbought and it is a wonder to be had knowing what happening everywhere else.
- Silver is still oversold and should continue lower, my target for silver has been always in the 18 dollar range and will reassess when it has been reached, but in the case that it doesn't I am still un-doubtfully happy with its move.
- Soybeans is the next one on the block. The pattern and momentum of this commodity is waning and is running out of breath.
- SSEC China has had its worst 2weeks yet. Not only did it not manage to hold on to its 20wk ma, but its also sitting on its lower BB line that is trending down. Currently not even oversold.. Sucks to be China. On the bright side though, the stochastics has diverged with price. Should this be enough to turn its market around we should see a fast spike, but we will see when we get there.
- TSX Toronto market has since made a huge downtrend since we called notice to the reversal candle top a month ago. Currently its head and shoulder formation looks like its in great shape. It has closed below its 200 and 75 wkly ma this week.
- USD.. Anyone who says markets rise when USD falls will have been shocked for a month now. Both US. Markets and USD have been in agreement to trend lower.
- UTIL is probably the bright spot in all this gloom. It has managed to hold its 75wkly ma. This needs to hold or else a weaker outlook is at hand. 75wkly ma is currently at 474.31.
- WTIC seems to be in good position to break out to the upside as well. Bearish implications can be said for an upside move or downside move. A move higher might be a stress to the US. Economy while a wkly chart seems to be forming a triangular wedge, and if the pattern is correct a continuation lower will be likely.
- XAD Australian Dollar has been introuble for 9 weeks already failing to hold its 20 and 75wkly ma and has broken its 200wkly ma 5 weeks ago. auzzie auzzie auzzie.....
- XJY Japanese Yen has been on a tear. I saw a few weeks back an article regarding Mark Cuban borrowing the YEN to pay for Dollar Debt. Smart but one look at the chart then told you that a ending diagonal wedge is at hand and a reversal was to come.
- EEM Emerging markets is in a lot of hurt falling for the first time below its 75, 200wkly ma, and lower BB. So anyone bullish for the hyped up markets should look twice.
- Copper has turned bearish again and one must watch this commodity as a bellweather for markets around the world.
If there is one thing to take away from this is that while most markets around the world sitting on a thin branch just aching to break, the U.S. markets seems to be holding up. Maybe everyone in the world has been running to the U.S. for investment safety? Well, we know full well it is not immune and its just a matter of time. Playing catch up is a Bitch!!! Are we looking through rose coloured glasses or are they bloody glasses? Here is a hint and I always save the best for last.
The NYSE percent of stocks above its 200MA signal line is sitting on 67.71. Also below the 75ma and just above its 200ma. With its Stoch. at a new weekly entrance of oversold territory it is definitely between a thin line and hard place.
EOMessage....
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