Archive for the ‘Market Analysis’ Category

Traders Corner   23 comments

The S&P 500 levels to watch today:

UPSIDE: 2005 (August’s high and the all-time high), and 2025 (top of the Bollinger Bands).
LAST CLOSE: 2003, inside the 2001-2003 (3 data points) range.
DOWNSIDE: 1993-1998 (6 data points), 1982-1990 (July’s high and 5 data points), 1968 (June’s high), 1966 (50 day moving average), 1963 (20 day moving average), 1927-1939 (July’s low and 9 data points and the 100 day moving average), 1924 (May’s high), 1904 (August’s low), and 1901 (bottom of the Bollinger Bands).

S&P 500 Daily Momentum: Bullish (weakening)
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bearish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures: Slightly Positive
Overall: The markets were running last week on low volume. Will the volume come back this week? Until then, the momentum indicators seem headed to neutral, in spite of the price action.

Posted September 2, 2014 by edmcgon in Daytrading, Investing, Market Analysis, Technical Analysis

Traders Corner   35 comments

The S&P 500 levels to watch today:

UPSIDE: 2001-2002 (2 data points), 2005 (August 26th’s high and the all-time high), and 2016 (top of the Bollinger Bands).
LAST CLOSE: 2000.
DOWNSIDE: 1993-1998 (4 data points), 1991 (July’s high), 1982-1988 (4 data points), 1977 (August 20th’s low), 1971-1972 (2 data points), 1968 (June’s high), 1964 (August 15th’s high and the 50 day moving average), 1958 (August 18th’s low), 1956 (20 day moving average), 1955 (August 14th’s high), 1947-1948 (2 data points), 1944 (August 11th’s high), 1941 (August 15th’s low), 1927-1939 (July’s low and 9 data points and the 100 day moving average), 1924 (May’s high), 1921 (August 4th’s low), 1916 (August 1st’s low), 1909-1913 (3 data points), 1904 (August 7th’s low), and 1896 (bottom of the Bollinger Bands).

S&P 500 Daily Momentum: Bullish (weakening)
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bearish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures: Negative
Overall: With the S&P 500’s bullish momentum weakening, and the futures pointing down, it looks like a day for the bears today.

Ed’s Daily Notes for August 28th   3 comments

Bloomberg: Gold-Price Indicator Fading as ETPs Tumble by $71 Billion

Gold-backed funds that heralded record prices in 2011 and last year’s biggest sell-off in three decades are becoming less useful as market predictors.

After a decade of changing mostly in tandem, gold prices and holdings in exchange-traded products backed by bullion have the most-negative correlation since 2004. Investment in ETPs are headed for a fifth straight week of moving in the opposite direction of New York futures, data compiled by Bloomberg show. That would be the longest stretch since 2012, before investors began dumping gold.

Global ETPs that accumulated more bullion than France’s central bank in 2012 saw their influence wane as equities surged and the Federal Reserve took steps to ease economic stimulus, signaling higher interest rates that erode the appeal of gold as an alternative asset. As investors exited the funds, erasing about $71 billion of value, unrest from Ukraine to Gaza this year revived demand for the precious metal as a haven, boosting prices that Goldman Sachs Group Inc. says aren’t sustainable.

“There is a disconnect” because “a lot of money has left,” said Mark Luschini, the chief investment strategist at Janney Montgomery Scott LLC. in Pittsburgh that oversees $65 billion. “For gold, this year has been all about the Federal Reserve and political tension, and at the moment, the rate-increase worries are overshadowing the safe-haven buying.”

The bloom is off the golden rose. That doesn’t make gold ETP’s a “sell”. It just means the actions of retail investors in equity markets is far less relevant to the price of gold now.

Business Insider (via Yahoo Finance): This Illustration Posted By Eric Schmidt Shows How Google Thinks About Innovation

Google is one of the largest, most influential technology companies in the world. But it didn’t start out that way, and it’s not easy to maintain that status. Google Executive Chairman and former CEO Eric Schmidt has shared some insight as to how Google views innovation and the competition.

Schmidt and Google’s former SVP of Products Jonathan Rosenberg are publishing a book next month called “How Google Works.” The book dives into what Schmidt and Rosenberg learned as they helped build Google into what it is today.

Schmidt has been teasing the book by posting excerpts of illustrations and various tips from the book to his Google+ and Twitter page. His latest post emphasizes that tackling the market with different angles rather than simply trying to be better than your rival is crucial for success.

“It’s important to understand what’s going on around you, but the best way to stay ahead is a laser focus on building great products that people need,” Schmidt posted to Google+ along with the illustration.

This_Illustration_Posted_By_Eric

Posted August 28, 2014 by edmcgon in News, Precious Metals, Stocks

Traders Corner   17 comments

The S&P 500 levels to watch today:

UPSIDE: 2001 (August 25th’s high), 2005 (August 26th’s high and the all-time high), and 2011 (top of the Bollinger Bands).
LAST CLOSE: 2000.
DOWNSIDE: 1998 (August 26th’s low), 1993-1994 (2 data points), 1991 (July’s high), 1988 (August 20th’s high), 1986 (August 21st’s low), 1984 (August 22nd’s low), 1982 (August 19th’s high), 1977 (August 20th’s low), 1971-1972 (2 data points), 1968 (June’s high), 1964 (August 15th’s high), 1963 (50 day moving average), 1958 (August 18th’s low), 1955 (August 14th’s high), 1954 (20 day moving average), 1947-1948 (2 data points), 1944 (August 11th’s high), 1941 (August 15th’s low), 1927-1939 (July’s low and 9 data points), 1926 (100 day moving average), 1924 (May’s high), 1921 (August 4th’s low), 1916 (August 1st’s low), 1909-1913 (3 data points), 1904 (August 7th’s low), and 1897 (bottom of the Bollinger Bands).

S&P 500 Daily Momentum: Bullish
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bearish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures: Slightly positive
Overall: The S&P 500’s bullish momentum is starting to flatten. This could indicate a bullish pause, or a reversal. On the other hand, the Bollinger Bands are still expanding, which would seem to indicate this bull has more room to run. The overbought/oversold indicators still have some bullish room left.

Traders Corner   40 comments

The S&P 500 levels to watch today:

UPSIDE: 2001 (August 25th’s high and the all-time high), and 2006 (top of the Bollinger Bands).
LAST CLOSE: 1997.
DOWNSIDE: 1993-1994 (2 data points), 1991 (July’s high), 1988 (August 20th’s high), 1986 (August 21st’s low), 1984 (August 22nd’s low), 1982 (August 19th’s high), 1977 (August 20th’s low), 1971-1972 (2 data points), 1968 (June’s high), 1964 (August 15th’s high), 1962 (50 day moving average), 1958 (August 18th’s low), 1955 (August 14th’s high), 1953 (20 day moving average), 1947-1948 (2 data points), 1944 (August 11th’s high), 1941 (August 15th’s low), 1927-1939 (July’s low and 9 data points), 1925 (100 day moving average), 1924 (May’s high), 1921 (August 4th’s low), 1916 (August 1st’s low), 1909-1913 (3 data points), 1904 (August 7th’s low), and 1899 (bottom of the Bollinger Bands).

S&P 500 Daily Momentum: Bullish
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bearish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures: Slightly positive
Overall: Yesterday, the S&P 500’s P&F chart showed an ascending triple top breakout, which is considered bullish long-term. However, the P&F’s price target remains at 2040, which is only a little over a 2% increase from yesterday’s close. My takeaway from this signal is limited upside, keeping in mind P&F targets aren’t always accurate. On the other hand, momentum certainly belongs to the bulls in the short term. Taking long positions in day/week/month trades is probably safe here, but only if sentiment doesn’t shift. There is still enough money sloshing around in the markets to keep equities running here. One more bullish signal: The Bollinger Bands are starting to expand, just as the market is moving upwards.

Ed’s Daily Notes for August 26th   1 comment

Financial Times: François Hollande purges government after leftwing revolt

Plas brought this up yesterday:

François Hollande has purged his embattled Socialist government of leftwingers opposed to EU austerity after a revolt led by Arnaud Montebourg, the flamboyant economy minister.

Mr Montebourg quit the cabinet on Monday, delivering a blistering attack on what he called “absurd” austerity policies – supported by Mr Hollande – which had brought about “the most destructive crisis in Europe since 1929”.

The outspoken minister said in a televised statement that the eurozone’s fiscal stance was “the cause of the unnecessary prolongation of the economic crisis and the suffering of the European population”.

The cabinet crisis was triggered by figures this month showing there had been no growth in the French economy in the first half of the year, with unemployment continuing to rise.

The economic gloom alarmed the left, already worried by the deep unpopularity of the government. An Ifop poll at the weekend showed Mr Hollande’s approval rating at just 17 per cent, with prime minister Manuel Valls plunging nine points to 36 per cent.

This presents a unique market situation. On one hand, France moving farther away from Germany politically would destabilize the European Union. On the other hand:

Bloomberg: Draghi Pushes ECB Closer to QE as Deflation Risks Rise

Mario Draghi just pushed the European Central Bank closer to quantitative easing.

With euro-area data this week likely to show the weakest inflation since 2009, the ECB president used a high-powered central-banking conference in Jackson Hole, Wyoming, to warn that investor bets on prices have “exhibited significant declines.”

Stocks rose, the euro fell and bond yields dropped to record lows today as the comments fanned speculation the ECB is finally heading for a form of monetary stimulus it has long avoided. Draghi previously said that a worsening of the medium-term inflation outlook would provide a reason for broad-based asset purchases.

The Aug. 22 speech “was a major event and marked a turning point in ECB rhetoric,” said Philippe Gudin, chief European economist at Barclays Plc in Paris. “We think the recent economic developments have increased the chance of outright QE as the next step.”

From a market perspective, central bank action always trumps politics (contrary to popular opinion). One can argue the ECB should have done this several years ago, although I don’t: As we have seen in the U.S., QE only creates economic window dressing by artificially pumping up markets and allowing banks to sell overpriced assets to the Fed (instead of lending money to truly help the economy). If Europe wants to pursue this, expect European markets to do well.

But what about the U.S.? With the Fed ending QE this Fall, around the same time we will possibly getting ECB action, the effect on the world economy should go like this: Dollar rises in value, euro falls, U.S. exports to Europe fall, European exports to the U.S. increase. However, because most European products tend to be high-end, unless the euro falls through the floor (which would require an exceedingly large QE from the ECB, which is not expected), European exports to the U.S. have limited upside. Overall, I would expect the U.S. exporters to be hurt by this news.

As an aside, I would also expect China to be hurt by this news, being effected in the same way as the U.S. If it hurts the Chinese economy severely enough, we might even see the Chinese de-pegging the yuan from the dollar. But this is speculation on activity at least a year away (more likely several years away). Honestly, it is hard to say what the Chinese may do.

Traders Corner   17 comments

The S&P 500 levels to watch today:

UPSIDE: 1991 (July’s high), 1993-1994 (2 data points and the all-time high), and 2003 (top of the Bollinger Bands).
LAST CLOSE: 1988 (August 20th’s high).
DOWNSIDE: 1986 (August 21st’s low), 1984 (August 22nd’s low), 1982 (August 19th’s high), 1977 (August 20th’s low), 1971-1972 (2 data points), 1968 (June’s high), 1964 (August 15th’s high), 1960 (50 day moving average), 1958 (August 18th’s low), 1955 (August 14th’s high), 1952 (20 day moving average), 1947-1948 (2 data points), 1944 (August 11th’s high), 1941 (August 15th’s low), 1927-1939 (July’s low and 9 data points), 1924 (May’s high and the 100 day moving average), 1921 (August 4th’s low), 1916 (August 1st’s low), 1909-1913 (3 data points), 1904 (August 7th’s low), and 1901 (bottom of the Bollinger Bands).

S&P 500 Daily Momentum: Bullish
S&P 500 Daily Overbought/oversold: Neutral (leaning overbought)
S&P 500 Weekly Momentum: Bearish (weakening)
S&P 500 Weekly Overbought/oversold: Neutral (leaning overbought)
S&P 500 Futures: Positive
Overall: Because of the low volume Friday, most of the technicals didn’t move much. But the S&P 500 futures are giving the bulls the opening today.