The S&P500 E-mini futures had some very interesting action this week and it is time to review that action and what it is suggesting for the coming week.
The weekly chart over the past year shows a stalled rally that is forming a head & shoulders pattern, currently the right shoulder is in the process of completion. The 1260 level is the H&S support to watch as breaking of this level suggests a target of 1190-1200. Sell signals were given late in the left shoulder, at the peak of the head, and there should be a Sell signal by next week. The indicators are weakening and suggest a bearish undertone. A weekly Buy Setup is starting and this may put a nine week setup till October 2011.
The daily chart over the last 6 months show an ugly shoulder formation with a lower high that had broken the uptrend support line on Wednesday 27 July 2011. A Buy Setup is in the third period today and the first level to watch is whether the TDST at 1271.5 will be broken decisively over next week. Currently, the charts are telling of a Down Friday, given the deadlock in US Government about the debt ceiling, amid downgrading threats from rating agencies. The indicators are bearish… with RSI going well into bearish territory, as are the Stochastics and Force Index.
The 30 minute charts show of a recent downtrend that tested the uptrendline as a resistance intraday and the RSI at this level bounced off the bearish resistance. The MACD is also showing that there is consistent downward momentum. The Force Index should should later today a stronger down force, especially when the MACD lines are in bearish territory and turning over. It is also observed that the Gann Swing points are still making lower lows, making the downtrend intact for the very short term.
Looking at the SPX chart with the TTR indicator, when it is <0.85 and starts rising, the market tanks. This has happened in the last 2 years and is looking to happen again. Watch this space!
MadScientist – 29 July 2011
Friday, July 29, 2011
Thursday, July 28, 2011
MadScientist's hypothesis for 3Q 2011
Today is 28 July 2011 and the US government is still in deadlocks about the debt ceiling of 14.3 trillion due next week Tuesday 1 August 2011. They are supposed to be having a meeting today (Thursday) and come to some conclusion.
Here is my hypothesis of what is likely to unfold based on news and developments in the USA as well as all over the world.
The US debt ceiling WILL be raised… but late. It is not likely to be in time for August 2, 2011, however, may kick in later in August. The date is likely to be missed, and markets will react badly albeit briefly and this is followed by the US government official getting together over a weekend and thrash things and sorts it out. Again, only temporarily.
Sometime in September, it will start with one of the rating agencies downgrading the US debt status. About that time, perhaps into October, European contagion will spread and thrash the markets. This should coincide with the Kress Cycle peaking out in October 2011.
Given such a scenario, IF it plays out as hypothesized, the USD (equity and bond markets along with the USD) should be falling until the government acts together, and then followed by European contagion which should propel the USD further.
Technically, there is a bullish divergence in the USD and there needs to be a trigger to start the equilibration.
One thing is clear, the Japanese Yen will be the haven, as will Gold. Gold is likely to go parabolic and correct that parabolia.
Checking the VIX, VXO and VXX (Implied volatility indexes and ETF), there is a bullish divergence that looks to have started the first bullish phase.
As of yesterday, the S&P500 has reversed and the fear indexes gave Buy signals. The Head & Shoulders pattern top appears to be completing with this down move. Many sectors including financials, oil, utilities, etc. have also given Sell signals. Yesterday is a turning point, at least for this short term. It remains to be seen if it will go further, and confirm this down leg move.
More later as I develop the technical picture and hypothesis with details.
The MadScientist
Here is my hypothesis of what is likely to unfold based on news and developments in the USA as well as all over the world.
The US debt ceiling WILL be raised… but late. It is not likely to be in time for August 2, 2011, however, may kick in later in August. The date is likely to be missed, and markets will react badly albeit briefly and this is followed by the US government official getting together over a weekend and thrash things and sorts it out. Again, only temporarily.
Sometime in September, it will start with one of the rating agencies downgrading the US debt status. About that time, perhaps into October, European contagion will spread and thrash the markets. This should coincide with the Kress Cycle peaking out in October 2011.
Given such a scenario, IF it plays out as hypothesized, the USD (equity and bond markets along with the USD) should be falling until the government acts together, and then followed by European contagion which should propel the USD further.
Technically, there is a bullish divergence in the USD and there needs to be a trigger to start the equilibration.
One thing is clear, the Japanese Yen will be the haven, as will Gold. Gold is likely to go parabolic and correct that parabolia.
Checking the VIX, VXO and VXX (Implied volatility indexes and ETF), there is a bullish divergence that looks to have started the first bullish phase.
As of yesterday, the S&P500 has reversed and the fear indexes gave Buy signals. The Head & Shoulders pattern top appears to be completing with this down move. Many sectors including financials, oil, utilities, etc. have also given Sell signals. Yesterday is a turning point, at least for this short term. It remains to be seen if it will go further, and confirm this down leg move.
More later as I develop the technical picture and hypothesis with details.
The MadScientist
Monday, July 11, 2011
Finding Support Before the Next Rally - Market Analysis for July 11th 2011 by Singaporeseeds
Daily chart for Dow
Daily chart for S&P
Daily chart for NASDAQ
The latest rally in the markets had reached an end on Friday. This was indicated by Demark’s sequential system. We should see the markets find some support over the next few days before continuing its move up.
Support should come around its 50 day moving average at 1,310 for S&P, 12,300 for Dow and 2,315 for NASDAQ.
Daily chart for the dollar
The dollar is still in a wedge now. The side where it will break out from will determine its movement over the next few weeks.
Daily chart for Gold
Daily chart for Silver
Seasonally, Gold bottoms in late July and will rally into September so we are approaching the most bullish season for gold. However the triple top resistance with a bearish divergence in MACD and RSI will still weigh heavily on gold. We’ll see how gold behaves over the next few weeks before we decide. However I will be looking for bottoming signs for both gold and silver over the next few weeks.
Daily chart for Crude Oil
Mid to end July is seasonally a bullish period for crude oil. This coupled with the bullish divergence in MACD and RSI indicates that we should see a short rally in crude oil over the next few days.
I’m expecting crude to rally to 45.6 by August 2011.
Daily chart for Natural Gas
Natural gas is still in a slump. However we can see increasingly more bullish bets entering the market over the last few weeks. As I’ve mentioned many market analyses ago, this is a long term bullish play.
Daily chart for Cattle (COW)
The ETF for cattle futures is COW. This follows the futures price for cattle livestock. The recent shortage of cattle supply coupled with rise in feed costs (rise in grain costs due to the numerous crop-devastating floods around the world) will be a huge factor in keeping cattle prices up.
Seasonally mid June to October is a bullish time for cattle futures. Target at the April highs at 33.09 by mid August 2011.
Daily chart for S&P
Daily chart for NASDAQ
The latest rally in the markets had reached an end on Friday. This was indicated by Demark’s sequential system. We should see the markets find some support over the next few days before continuing its move up.
Support should come around its 50 day moving average at 1,310 for S&P, 12,300 for Dow and 2,315 for NASDAQ.
Daily chart for the dollar
The dollar is still in a wedge now. The side where it will break out from will determine its movement over the next few weeks.
Daily chart for Gold
Daily chart for Silver
Seasonally, Gold bottoms in late July and will rally into September so we are approaching the most bullish season for gold. However the triple top resistance with a bearish divergence in MACD and RSI will still weigh heavily on gold. We’ll see how gold behaves over the next few weeks before we decide. However I will be looking for bottoming signs for both gold and silver over the next few weeks.
Daily chart for Crude Oil
Mid to end July is seasonally a bullish period for crude oil. This coupled with the bullish divergence in MACD and RSI indicates that we should see a short rally in crude oil over the next few days.
I’m expecting crude to rally to 45.6 by August 2011.
Daily chart for Natural Gas
Natural gas is still in a slump. However we can see increasingly more bullish bets entering the market over the last few weeks. As I’ve mentioned many market analyses ago, this is a long term bullish play.
Daily chart for Cattle (COW)
The ETF for cattle futures is COW. This follows the futures price for cattle livestock. The recent shortage of cattle supply coupled with rise in feed costs (rise in grain costs due to the numerous crop-devastating floods around the world) will be a huge factor in keeping cattle prices up.
Seasonally mid June to October is a bullish time for cattle futures. Target at the April highs at 33.09 by mid August 2011.
Sunday, July 3, 2011
Pause before a Bigger Rally! - Market Analysis for 5th July 2011 by Singaporeseeds
Daily chart for Dow
Daily chart for S&P
Daily chart for NASDAQ
My last market analysis was right on the spot as the past week was one of the best of the best weekly moves for the last 2 years. All 5 days of the week ended as long bullish candles on all 3 indexes and broke through their respective 50 day moving averages.
As Monday is a US public holiday, I’m looking at a consolidation starting this Tuesday. This is especially so after an uninterrupted 5 day bullish move ended with all 3 indexes closing at a significant retracement level way. However we should not see S&P close below support at 1,320. This would be 12,400 for Dow and 2,765 for NASDAQ.
Daily chart for the dollar
The dollar (UUP) is at the base of the wedge that had formed since beginning of May 2011. We shall see whether it would break below this wedge. At the moment, I believe it should.
Daily chart for Gold
Gold (GLD) gapped down and closed as a doji on Friday. Although Gold had formed a triple top at 151.50 with a bearish divergence on both RSI and MACD, I’m still having doubts whether there would be an extended downtrend for Gold. I still believe gold should reach 156.15 on GLD by end August 2011.
Daily chart for Silver
Silver (SLV) is slowly trending down towards its 200 day moving average at around 31. It is already forming a bullish divergence on RSI and MACD. We should see some bullish action soon.
Daily chart for Crude Oil
Crude Oil (USO) formed a bullish candlestick pattern just at an important support level at 35.50 on USO. This is formed on the backdrop of a bullish divergence on RSI and MACD. I believe we should see crude oil (USO) break it’s 200 day moving average and trendline soon.
Daily chart for Natural Gas
Natural Gas (UNG) is still enjoying the sideways bounce. However on RSI trendline pattern, it should be the last sideways dip. Let’s see if this is able to bring Natural Gas (UNG) above its 50 and 200 day moving average and form a bullish crossover for these 2 moving averages.
Daily chart for S&P
Daily chart for NASDAQ
My last market analysis was right on the spot as the past week was one of the best of the best weekly moves for the last 2 years. All 5 days of the week ended as long bullish candles on all 3 indexes and broke through their respective 50 day moving averages.
As Monday is a US public holiday, I’m looking at a consolidation starting this Tuesday. This is especially so after an uninterrupted 5 day bullish move ended with all 3 indexes closing at a significant retracement level way. However we should not see S&P close below support at 1,320. This would be 12,400 for Dow and 2,765 for NASDAQ.
Daily chart for the dollar
The dollar (UUP) is at the base of the wedge that had formed since beginning of May 2011. We shall see whether it would break below this wedge. At the moment, I believe it should.
Daily chart for Gold
Gold (GLD) gapped down and closed as a doji on Friday. Although Gold had formed a triple top at 151.50 with a bearish divergence on both RSI and MACD, I’m still having doubts whether there would be an extended downtrend for Gold. I still believe gold should reach 156.15 on GLD by end August 2011.
Daily chart for Silver
Silver (SLV) is slowly trending down towards its 200 day moving average at around 31. It is already forming a bullish divergence on RSI and MACD. We should see some bullish action soon.
Daily chart for Crude Oil
Crude Oil (USO) formed a bullish candlestick pattern just at an important support level at 35.50 on USO. This is formed on the backdrop of a bullish divergence on RSI and MACD. I believe we should see crude oil (USO) break it’s 200 day moving average and trendline soon.
Daily chart for Natural Gas
Natural Gas (UNG) is still enjoying the sideways bounce. However on RSI trendline pattern, it should be the last sideways dip. Let’s see if this is able to bring Natural Gas (UNG) above its 50 and 200 day moving average and form a bullish crossover for these 2 moving averages.
Subscribe to:
Posts (Atom)