Saturday 3 May 2014

Weekend update - World monthly indexes

World equity markets continue to broadly climb higher, although many markets are starting to look tired, notably the two economic leaders - USA & Germany. Despite the continued support of the JCB, the Nikkei looks especially weak, and is now in a bearish down cycle.

Lets take our monthly look at ten of the big world markets


The Greek market is stuck in what is a key resistance zone of the 1200s. Rising support is around 1100 or so. A break to 1000 is likely this summer, and that is a good 20% lower.


The Bovespa is currently higher for the second consecutive month, but remains pretty vulnerable to slipping back under the big 45000 threshold, from there, another 5000pts lower to 40k looks very viable.


The CAC is still broadly climbing, but underlying MACD (green bar histogram) is ticking lower for the 6 or 7th month. Price momentum is weakening, and the CAC is vulnerable to a multi-month down cycle within the next 2-3 months. Primary downside would be 3500.


The European economic powerhouse - that is Germany, has seen its equity market stuck for the last six months. The big 10k level looks out of range this side of the summer. Primary downside for the bears remains 8k.


Price structure on the FTSE sure is a choppy cluttered mess (although with an upward trend), and it is notable that the UK market is yet to break the historic highs seen in 1999. Underlying MACD cycle is set to go negative in the immediate term.


Despite an economy that has largely collapsed - I'd refer anyone to the depressionary unemployment levels, the IBEX continues to battle upward. There is going to be clear resistance in the 11-12k zone. Best case downside this summer would be around 8k.


The mighty Dow is looking stretched, but price action is still broadly bullish. The 16700/800s look viable in the very near term. 17k looks just about viable, but a major rollover looks later than mid June. Primary downside is 14k. Anything <12k looks completely out of range this year.


The Italian market is just under key resistance of the 22000s. A very natural pull back down to 18000 looks very viable this summer. Underlying price momentum remains very strong though, and even if there was a rollover this month, it will take at least another 4 or 5 months to go negative cycle.


The Nikkei continues to struggle, and is now around 10% lower since the start of the year. Underlying MACD cycle has turned negative, we have a bearish cross,and outlook is bearish for the summer. First downside is 12k..secondary target is the huge 10k threshold.


The China market continues to trade within an exceptionally tight trading range...hovering around the 2k threshold. Best case upside late 2014 - but more likely in 2015, looks to be 2400, with a secondary level of 3500.


Taken as a collective, we have a world equity market that is still generally battling to the upside, but price action sure is getting a little bearish. What remains particularly remarkable is how the ugly EU PIIGS - especially Italy and Spain, are still broadly climbing.

Looking ahead

The week begins with PMI and ISM services data. There is intl. trade data on Tuesday.

Wed/Thursday, Yellen is due to speak, which I believe will get very heavy coverage across the financial TV networks. The week concludes with wholesale trade data.

Aside from whatever the CEO of Print central might say, it is set to be a pretty quiet week.

*there is sig' QE-pomo: Mon' and Friday, both around $2bn. Although yes, it is notable that the days of $5bn pomo are now past.

Permabear battling onward

I suppose it could be worse, I could be losing money on the short side. Instead, I'm in somewhat underwater positions on the long side. I have endeavoured so hard lately, and I'm pretty tired of waiting for a 'grand turn' in this market, even a mere pull back of 10-15%..never mind anything more.

The near term trend - at least on the weekly charts, is still suggestive of sp' I am reasonably content to be on the long side across this weekend. However, the higher we go..the more tempting it will be to switch to the short side. As things are, I think bears will get at least a few weeks of warning - via sideways 'toppy chop', before any major down wave begins.

back on Monday :)

Another week for the bull maniacs

Despite a brief sell down this past Monday afternoon, the bulls held the line at sp'1850, and broadly battled higher for the rest of the week. The primary upward trends are holding for all the main indexes, and Mr Market looks set to break new historic highs next week.



*regardless of whether you agree with the micro-count on the above chart, the primary trend is unquestionably to the upside, and with the third green candle, the default trade would be on the long side.

It was a bit of a quiet end to the week, but more than anything, what is clear...

1.Yes, the economy is showing some distinct signs of weakness, not least via Q1 GDP of just 0.1%

2. The bears are still lacking any decent downside power, as also reflected in the VIX.

3. The broader upward trends - seen on the daily, weekly, and monthly charts are ALL intact.

4. The reducing QE fuel will be an increasing problem for the market this summer.

For yours truly, it was a bit of a battle this week. I am still trying to 'carefully' play the long side. I hold heavy long across the weekend, since I have much higher upside targets for my 3 oil/gas driller stocks (DO, RIG, SDRL). Hopefully, I can make some good gains next week, and have some extra capital to short this market with, across the coming summer.

*many thanks to all those who commented this week, it is always good to hear from you!

Goodnight from London
*the weekend update - late Saturday, will be on the world monthly indexes

Video update from Schiff

Interesting commentary on this past weeks econ data.

Daily Index Cycle update

US indexes closed the week with minor price chop, sp -2pts @ 1881. The two leaders - Trans/R2K, settled -0.3% and +0.2% respectively. Near term outlook is for a renewed push to new index highs, into the sp'1925/50 zone across the next 3-6 weeks.


Nasdaq Comp'




*It is notable that we already have fractional breaks of the declining resistance on the Nasdaq and R2K. This certainly is highly suggestive that the broader market will be climbing for a few more weeks.

Transports, Dow, SP', all came pretty close to breaking new historic highs today. Despite today's mixed close, new highs do seem likely next week.

a little more later...