Post by ukarlewitz on Jul 22, 2010 19:25:52 GMT -5
We seem to be at a pretty significant point here. Spx and Nq have both closed above their April bear channel and their 50dma. Likewise for individual stocks (esp steel and semis), foreign markets (eg, SSEC), key currencies (euro and A$) and key commodities like copper. Nysi has clearly broken away from the zero line. This is all very good.
The two watch outs are US bonds and the Yen. Both are in strong uptrends and at d/t or t/t, and represent the risk-off trade. If they continue to be strong I'd bet the equity rally falters. On the other hand, if the flow of funds reverses, there is no doubt equities will significantly pop and probably begin a sustained rally.
Weekly sentiment data is clearly in the bull camp. We're still at the bearish extremes from the 2009 low, and investors are in leveraged bear funds, not bull funds. Sentiment is slow to change. We'll get updated data this w/e. thetechnicaltakedotcom.blogspot.com/2010/07/investor-sentiment-we-need-buyers.html
I'd add that most TA pundits have been bears - like Alphatrends, Cobra, Oscar and Murphy. This is only perhaps just now starting to change. Net, sentiment has a long way to go in the other direction before we have to worry about too much optimism in the market.
110.1 on Spy is the first R. 111.5 gets it back the 200dma. Daily rsi improved to 70 and it looks like the macd will swing positive in a day or two, adding more fuel. Below are some lines to watch - the purple channel seems to be working so far. On the left side is a partial watch list - you can see that nearly all important stocks/indices/sectors are trading above their 50dma (blue) and 20dma (pink) and half are above the 200dma (red).
Caldaro - While this bi-polar market activity has unfolded, some of the technicals we follow have continued to improve. In overseas markets we now have four foreign indices, of the thirteen we follow, in confirmed uptrends: BSE, FTSE, HSI and IBEX. Also three of the nine SPX sectors are now in confirmed uptrends: XLB, XLF and XLU. Today's action took the SPX up to the upper range of the two pivots, (1058 and 1090), the market has been trapped in for over a week. Again the short term OEW charts swung into positive territory. This time, however, the wave pattern off the SPX 1011 low is looking more and more impulsive. We can now count with a potential small 1-2 off tuesday's SPX 1057 low. This would imply we are getting close to a breakout, through the 1090 and 1107 pivots. Until this occurs remember the OEW 1058 pivot is support and the OEW 1041 pivot 'key' support. The rally high, from the SPX 1011 low, is currently SPX 1099.
Bespoke - While the US has had a nice bounce off of its correction lows, the rest of the world has been doing better lately. The US ranks fifth from last in terms of distance from 50-day moving average. As the S&P 500 has been struggling to close above its 50-day, most other countries are now well above this widely followed indicator. Spain, Sweden, Brazil, Russia, India, and Singapore are trading the farthest above their 50-days, while Japan is the farthest below at more than -5%. (Check the charts here: www.bespokeinvest.com/)
Cobra - A little little little little bit bearish toward tomorrow at least I don’t expect the market to up big like today because the TICK closed above 1,000 again. Also since NYADV closed too high, there’re 61% chances a red day tomorrow.
Murphy - The three major stock indexes shown below closed back over their 50-day moving averages. The S&P 500 (Chart 2) and the Nasdaq Composite (Chart 3) did so for the first time since early May. Another positive sign is the ability of all three indexes to close above the down trendline drawn over their April/June highs. The next hurdle to overcome is their July highs and 200-day moving averages. The short-term stock picture does appear to have improved with the growing possibility of a rebound to the mid-June peak. The rally in stocks was supported by a rally in most commodities, most notably copper prices which hit a three-month high. Copper, however, has shown a pattern of "higher lows" since June while stocks declined into early July. Today, copper hit a new three month high. Although copper is still below its 200-day average, today's short-term breakout increases the odds that stocks may continue to gain some ground as well. Chart 5 shows how closely the two markets have been correlated since mid-2008. Notice also that copper (orange line) turned up before stocks at the end of 2008. Today's positive action in both markets isn't enough to signal a mew uptrend in either one. But it may be enough to continue a summer rally through the balance of July.
Barrons TA guy:
THIS EARNINGS SEASON IS quite similar to the previous one from a technical analyst's point of view. Earnings themselves seem to be getting better and many companies reported nice upside surprises. But as was the case in April, the market is shrugging off good news and punishing bad news.
This is the sort of unquantifiable data that reveals the presence of the bear.
When the market reacts poorly to earnings we can surmise that expectations were too high. Investors buy in advance of earnings reports but sell when those earnings do not exceed their own often misguided expectations. Buy the rumor, sell the news.
This is the information that does not show up in traditional sentiment gauges such as the Chicago Board Options Exchange volatility index (the VIX) and various opinion-based polls and surveys such as Market Vane.
If we were to only look at these indicators, we would see a mixed bag rather than group-think on one side or the other. Only extremes of bullish or bearish behavior and thought give us any useful information to help us assess the market's mood.
Following the market's reactions to individual earnings stories can yield great clues to what is happening beneath the surface. We cannot see this by just following major stock-market indexes, such as the Standard & Poor's 500.
With some notable exceptions, reactions to earnings reports have been poor.
online.barrons.com/article/SB50001424052970204826704575381433515654668.html?mod=BOL_hpp_dc
The two watch outs are US bonds and the Yen. Both are in strong uptrends and at d/t or t/t, and represent the risk-off trade. If they continue to be strong I'd bet the equity rally falters. On the other hand, if the flow of funds reverses, there is no doubt equities will significantly pop and probably begin a sustained rally.
Weekly sentiment data is clearly in the bull camp. We're still at the bearish extremes from the 2009 low, and investors are in leveraged bear funds, not bull funds. Sentiment is slow to change. We'll get updated data this w/e. thetechnicaltakedotcom.blogspot.com/2010/07/investor-sentiment-we-need-buyers.html
I'd add that most TA pundits have been bears - like Alphatrends, Cobra, Oscar and Murphy. This is only perhaps just now starting to change. Net, sentiment has a long way to go in the other direction before we have to worry about too much optimism in the market.
110.1 on Spy is the first R. 111.5 gets it back the 200dma. Daily rsi improved to 70 and it looks like the macd will swing positive in a day or two, adding more fuel. Below are some lines to watch - the purple channel seems to be working so far. On the left side is a partial watch list - you can see that nearly all important stocks/indices/sectors are trading above their 50dma (blue) and 20dma (pink) and half are above the 200dma (red).
Caldaro - While this bi-polar market activity has unfolded, some of the technicals we follow have continued to improve. In overseas markets we now have four foreign indices, of the thirteen we follow, in confirmed uptrends: BSE, FTSE, HSI and IBEX. Also three of the nine SPX sectors are now in confirmed uptrends: XLB, XLF and XLU. Today's action took the SPX up to the upper range of the two pivots, (1058 and 1090), the market has been trapped in for over a week. Again the short term OEW charts swung into positive territory. This time, however, the wave pattern off the SPX 1011 low is looking more and more impulsive. We can now count with a potential small 1-2 off tuesday's SPX 1057 low. This would imply we are getting close to a breakout, through the 1090 and 1107 pivots. Until this occurs remember the OEW 1058 pivot is support and the OEW 1041 pivot 'key' support. The rally high, from the SPX 1011 low, is currently SPX 1099.
Bespoke - While the US has had a nice bounce off of its correction lows, the rest of the world has been doing better lately. The US ranks fifth from last in terms of distance from 50-day moving average. As the S&P 500 has been struggling to close above its 50-day, most other countries are now well above this widely followed indicator. Spain, Sweden, Brazil, Russia, India, and Singapore are trading the farthest above their 50-days, while Japan is the farthest below at more than -5%. (Check the charts here: www.bespokeinvest.com/)
Cobra - A little little little little bit bearish toward tomorrow at least I don’t expect the market to up big like today because the TICK closed above 1,000 again. Also since NYADV closed too high, there’re 61% chances a red day tomorrow.
Murphy - The three major stock indexes shown below closed back over their 50-day moving averages. The S&P 500 (Chart 2) and the Nasdaq Composite (Chart 3) did so for the first time since early May. Another positive sign is the ability of all three indexes to close above the down trendline drawn over their April/June highs. The next hurdle to overcome is their July highs and 200-day moving averages. The short-term stock picture does appear to have improved with the growing possibility of a rebound to the mid-June peak. The rally in stocks was supported by a rally in most commodities, most notably copper prices which hit a three-month high. Copper, however, has shown a pattern of "higher lows" since June while stocks declined into early July. Today, copper hit a new three month high. Although copper is still below its 200-day average, today's short-term breakout increases the odds that stocks may continue to gain some ground as well. Chart 5 shows how closely the two markets have been correlated since mid-2008. Notice also that copper (orange line) turned up before stocks at the end of 2008. Today's positive action in both markets isn't enough to signal a mew uptrend in either one. But it may be enough to continue a summer rally through the balance of July.
Barrons TA guy:
THIS EARNINGS SEASON IS quite similar to the previous one from a technical analyst's point of view. Earnings themselves seem to be getting better and many companies reported nice upside surprises. But as was the case in April, the market is shrugging off good news and punishing bad news.
This is the sort of unquantifiable data that reveals the presence of the bear.
When the market reacts poorly to earnings we can surmise that expectations were too high. Investors buy in advance of earnings reports but sell when those earnings do not exceed their own often misguided expectations. Buy the rumor, sell the news.
This is the information that does not show up in traditional sentiment gauges such as the Chicago Board Options Exchange volatility index (the VIX) and various opinion-based polls and surveys such as Market Vane.
If we were to only look at these indicators, we would see a mixed bag rather than group-think on one side or the other. Only extremes of bullish or bearish behavior and thought give us any useful information to help us assess the market's mood.
Following the market's reactions to individual earnings stories can yield great clues to what is happening beneath the surface. We cannot see this by just following major stock-market indexes, such as the Standard & Poor's 500.
With some notable exceptions, reactions to earnings reports have been poor.
online.barrons.com/article/SB50001424052970204826704575381433515654668.html?mod=BOL_hpp_dc
