Market Summary

As can be seen from the chart below we are above all the moving averages heading into the last week of the year, traditionally the time of the Santa Claus Rally or Christmas Rally for the last week of the year. Will we get a rally next week going in to year close? We will just have to wait and see. Click on chart to enlarge.

Of major interest is that as we approach the year end the small cap index has overtaken Gold in the best performer spot for the year up 23.26% beating golds 22.64%. For the week gasoline per the UGA was up the most up 5.24% followed by the oil ETF USO up 3.23%. All funds were up for the week with only EFA slightly in the red. Click on table to enlarge.

Market Summary

Elliott wave counting is a hobby of mine and I often look for waves to count when I look at a chart. The chart below of the daily S&P 500 shows a very long wave from the beginning of September to the beginning of November. In Elliott wave counting the 3rd wave is the longest wave of the five waves that make up a complete Elliott wave count. Click on chart to enlarge.

A better view of the complete wave count can be seen on the weekly S&P 500 chart below showing a low of 1010.91 to the end of wave 1 at 1129.24, wave 2 at 1039.70, wave 3 at 1227.08, wave 4 at 1173.00, and now we are in wave 5. Since markets move together there should be many other examples of 5th waves in markets. This is a time to tighten up your stops if you are long the market however the market looks very bullish. Click on chart to enlarge.

Gold and the small cap index continue to lead for the year. For the week the Dow, gas, and oil were up the most although it was a very flat week with nothing changing by over 1%. Click on table to enlarge.

Market Summary

The S&P 500 price chart formed a flag pattern as it came off the early November highs and moved sideways between the 20 and 50 day moving averages. With the recent breakout above the 20 day moving average(blue line)a new bullish thrust higher is taking place. Seasonally this is the best time of the year to be in the market as it has historically closed December higher for the month. Will that happen this year we will just have to wait and see. Click on chart to enlarge.

Gold and the small cap index continue to lead for the year. For the week the gasoline ETF UGA was up 8.62% followed by the oil ETF USO up 6.51%. Click on table to enlarge.

Market Summary

The market is going sideways in a flag formation between the 20 and 50 day moving averages. The holiday season is traditionally bullish as markets stage year end rallies. Sentiment remains bullish. Click on chart to enlarge.

Gold and the small cap index continue to lead for the year. For the week natural gas was up the most followed by the US dollar. Click on table to enlarge.

Market Summary

As can be seen from the chart below the market gapped lower Tuesday and spent the rest of the week climbing back up to where it started the week on Monday leaving the market relatively flat for the week but with an upward bias since the Tuesday low and closing above the 20 day moving average. The market is still bullish however it needs to get above a downtrend line of the recent tops. Good news is likely to follow, such as some resolution of uncertainty in Irish economic problems, and be given the credit with driving the market higher. We will just have to wait and see. Click on chart to enlarge.

Gold and the small cap index continue to lead for the year and natural gas was the big leader for the week up 7.65%. Click on table to enlarge.

Market Summary

While the market has been in a strong uptrend and the Fed has started pumping money into the economy we are off the high of 1227.08 made on Nov. 5th and have made a series of lower highs and lower lows since that time. The market did find support on the 20 day moving average (blue line) Friday but closed below the 1200 mark and it appears the 1220 area is serving as resistance and a double top remembering the 1219.80 high made on April 26. What has really caused the market to pause has been the international news of a debt problem in Ireland and a rumor the Chinese will raise their interest rates to slow inflation and their overheated economy. The commodity markets took a tumble at that news as China is the main importer of raw materials and the Baltic Dry Index has shown signs of rolling over. As our market has made an extended rally off the August lows a correction here seems likely. The 38% Fibonacci retracement level is at 1155 and the 50% retracement level is 1133. Will we get there? We will just have to wait and see. Click on chart to enlarge.

While gold and the small cap index are still in the top positions for the year they are off their best levels. For the week only gasoline and the US Dollar were up with all the rest of the funds in the red. The Emerging market EEM and China FXI were off the most for the week. As a side note interest rates on the 10-Year US Treasury bond have started to rise and may be a harbinger of falling bond prices. These interest rates could be the canary in the coal mine so to speak. Click on table to enlarge.

Market Summary

It has been a very good week in the markets as this bullish rally continues. We broke out above the April 2010 highs with strength as the Fed announced its monetary policy of a 600 billion dollar stimulus and the Republicans gained control of the House. As can be seen on the daily chart of the S&P 500 below we are breaking out above former highs and are likely to go higher. Click on chart to enlarge.

When a daily chart high is taken out we must look to a larger time frame on a weekly chart for the next level of resistance. As can be seen on the weekly chart of the S&P 500 below the next level of resistance is the 1300 mark. What is interesting on the chart below is the formations of a huge cup and handle formation as well as an inverted head and shoulders formation. Both these would indicate we are going higher with the inverted head and shoulders formation pointing to a target in the 1430 range. As I mentioned two weeks ago the current rally occurred after the Fed speech Ben Bernanke gave August 27, 2010 and it is clear that monetary policy is moving the markets higher. With the flow of money being printed by the Fed it is likely we will go higher but it is also likely we will get inflation. Commodity prices have soared and are the place to be to take advantage of this situation. Rising lumber prices indicate rising housing price about a year down the road. China is the beneficiary of a strong US economy however they are raising their interest rates as we are lowering ours strengthening their currency as we weaken ours. Inflation of prices without wage inflation, which has been flat for 30 years, is likely to put strain on consumers. How all this plays out we will just have to wait and see.

As can be seen on the table below a majority of the funds are green in the YTD column. That is a good sign. Gold and the small cap index continue to top the list for the year. For the week, oil and China made the best gains. Click on table to enlarge.

Market Summary

Last Monday the market reach 1196 which is close enough to the 1200 mark to qualify for reaching my target. The question remains was that the high for the current rally? News will drive this market which has been going sideways with many daily dojis. The statement of the FOMC meeting scheduled for Nov. 2-3 and the results of the election as well as two unemployment reports are due next week. I would consider a correction to begin with a close below the 1170 mark. A correction, however, may be good for the market. The falling dollar and rising inflation will help push the market higher. Note the "Golden Cross" where the 50 day moving average crossed above the 200 day moving average at approximately 1122. Click on chart to enlarge.

Gold, the small cap index, and the Nasdaq are the top three in the table below for the year. What is interesting is that the natural gas ETF UNG did the best for the week up 9% but has done worst for the year down -45%. When markets turn what was going down starts going up and what was going up starts going down. Click on table to enlarge.

Market Summary

Market direction continues to go up while the Volatility Index ($VIX) continues down and the next target for the market is the 1200 mark on the S&P 500. Anticipation of the second round of Quantitative Easing (QE2) seems to be driving the market higher and began after Ben Bernanke gave a speech August 27, 2010 that can be found HERE. The next meeting of the FOMC scheduled for Nov. 2-3 should be pivotal in this market as the Fed gives further guidance on its monetary policy. What is interesting is that the US Dollar, which began a decline around the same time as the speech referenced above was also the same time that the stock market began its most recent rally. Clearly monetary policy is affecting the market and responsible, at least in part, for the rally. Click on the chart to enlarge.

While gold remains up the most for the YTD period it has come off its highs and the Russell small cap index, up the second most for the year, was relatively flat for the week as were most of the other markets. Of note then for the week are the decliners of greater than 1% which includes FXI, EEM, GLD, and UNG. China raised its key interest rate last week and raised capital requirements at banks. China's GDP grew 9.6% from a year earlier in the third quarter, slowing from the 10.3% rise in the second quarter. Click on table to enlarge.

Market Summary

As can be seen on the chart of the S&P500 below we have broken out above the 1170 resistance level which should now act as support. The next level to the upside is the 1200 mark. However, should the market turn lower we have support at the prior area of support/resistance at 1150. The financial sector (XLF)has taken a hit with the freeze on foreclosures and the Bank Index($BKX) has sold off hard the last three days. Technology, on the other hand, has done well up a similar amount to what the financial sector is down. This could be a turning point or simply an area of consolidation. We will just have to wait and see. Click on chart to enlarge.

Gold continues to outperform up nearly 22% for the year. For the week the China market per the FXI was up the most up over 4%. Click on table to enlarge.

Market Summary

Last week was a very good week in the markets and a continuation of the uptrend that began in September. And while September and October are historically the weakest months of the year in the markets the announcement that the Fed will begin another round of Quantitative Easing (QE2) to stimulate the economy has meant that good news is good news and bad news is good news. The worse than expected jobs data released Friday then became good news to continue the rally. The next FOMC meeting is set for Nov. 2-3 and the market is already pricing in an announcement of further stimulus which if it does not get could be cause for a downturn.

The chart below of the S&P 500 shows that we are approaching the next level of resistance at 1170 which we should reach. After that I would say the areas of resistance are the round number 1200 and then the April high in the area of 1220. It is interesting to note that the $VIX again broke below two standard deviations of its 20-period moving average today which has in the past been a sell signal for the market approximately a week later. Will it happen this time we will just have to wait and see. Click on image to enlarge.

The table below shows that gold has outperformed this year up nearly 20% followed by the emerging market ETF EEM up 8.24%. For the week gold was up 2.13% followed by the EEM up 1.76% and the small cap index up 1.20%. Click on table to enlarge.

Market Summary

As can be seen from the chart below we were not able to maintain a closing price above the 1150 level which is where we saw resistance back in January of this year. Resistance levels often take several attempts to break through if we are to go higher. A failure at this level would be noted by a closing price below 1131 and the Volatility Index $VIX above 24. Click on chart to enlarge.

For the year gold is up 17.40% followed by the EEM up 6.37% and the small cap index up 6.12%. For the week gasoline and oil were up the most up 7.83% and 6.68% respectively, followed by the EEM up 2.97%. Click on table to enlarge.

Market Summary

As can be seen in the chart below of the S&P500 prices have broken out above prior resistance level at 1130 and are now up against the next area of resistance at 1150. Should the market break above this level the next area of resistance is the 1170 area. While historically September and October are the worst months of the year in the market September has so far proven to be exceptional. It appears very unlikely we will have a double dip in the economy if the stock market is our guide. How long the current rally will continue we will just have to wait and see. Click on chart to enlarge.

For the YTD period gold continues to outperform the rest of the markets. Over the last several weeks more and more of the funds followed have moved into positive territory for the year. For the week EFA was up the most up 3.26% followed by the small cap index up 3.00%. The US dollar and natural gas were the only losers for the week down -2.67% and -3.04% respectively. Click on table to enlarge.

The chart below is of the daily S&P 500 using a modification of My ETF Trading System found here. What this chart shows is that we are at the top of a range in an uptrend. The two blue bars on the right side of the chart indicate that last Thursday and Friday the momentum had declined from that of the green bars that preceded it in this uptrend. The last blue bar is a doji like bar indicating indecision. The MACD indicator, which is set to a very sensitive setting, will indicate a downtrend once the zero line is crossed to the downside. We are at a critical point in the markets where we will either break out above the 1130 area and move higher or breakdown and move lower from here. Which way we go we will just have to wait and see. Click on chart to enlarge.

The performance chart below shows that we have several ETFs that have moved from negative to positive territory on the Year-to-date basis over the last week and these include the Russell 2000 small cap index, the emerging market EEM, the Nasdaq index, and the Dow Jones index. This is a positive change but will it last? Again, we will just have to wait and see. Click on table to enlarge.

Market Summary

From the chart below it can be seen that the market has been going sideways for several months in a range from 1020 to 1130 on the S&P500 and has the shape of an inverse head-and-shoulders formation with the neckline at the 1130 area. If the market breaks above that area it would be very bullish. We are between the most recent high and low of August and so will have to watch and see which of these two areas is crossed first. Click on chart to enlarge.

Gold remains in the number one spot for the YTD period at 10.87% and natural gas is the dog of the group at -39.00%. Click on table to enlarge.

Market Summary

This last week was a good week in the market with the major indices showing gains and the S&P500 gaping higher on Friday. With 3rd quarter earnings season behind us for the most part market participants are looking to the release of economic numbers for a sense of direction in the economy. The 1st Friday of every month is the release of Non-Farm Payroll (NFP) from the Department of Labor which is one of the biggest movers of the market. This last release, while not spectacular, was better than expected and the market gaped up in response. The Federal Reserve also watches these numbers closely to determine when or if to do Quantitative easing, in other words, to print money and to buy bonds which gives the US Treasury cash. With the better numbers they are less inclined to do so.

One of the interesting indicators I follow is the Volatility Index ($VIX), the so called 'Fear Index' as it is called. When the $VIX goes down there is less fear in the market and the market goes up, and when the $VIX goes up there is more fear in the market and the market goes down. In other words it is inversely correlated to the market and that is how it works. When the $VIX gets to below two standard deviations from it moving average and comes back up that means it has made a low and is a buy signal on the $VIX which is a sell signal on the market. But it does not correlate immediately but has a little bit of a lag time. The first time it occurred this year was on January 12 and then about 8 days later the market dropped about 10%. The second time it occurred this year was on April 13 and then the market hit a high on April 26 and dropped about 20% to the July lows. See the first chart below and the highlighted ovals and compare those dates to the S&P500 chart below that. We again had the $VIX drop below its lower standard deviation on Friday. Will this be followed by another drop in the market? It is interesting to note that the market often reverses course over long weekends. We had a reversal at the beginning of July after the long July 4 weekend. How we fair after this long labor day weekend remains to be seen. The markets are coming up to their 200 day moving averages and if they can get above that level it would be a good sign and indicate strength in the markets. If however they get up to that level and reverse it would be a good shorting opportunity. How the markets go we will just have to wait and see. Click on charts to enlarge.




The ETFs followed had a good week with natural gas, the laggard for the year, doing the best up nearly 5%. For the YTD period gold continues to outperform. Click on table to enlarge.

Market Summary

The monthly chart of the S&P 500 below shows the rally off the March 2009 lows to the April 1010 highs and the pull back we have had since that time. And while we have 2 more days left in this month as it stands now we show having made a higher high and a higher low this month than last month. And while anything is possible it seems to me we have a good chance of finishing the month this way. September and October are seasonally the worst months of the year in the market. How it plays out this year we will just have to wait and see. Click on chart to enlarge.

Gold is the leader in performance on the YTD basis followed by the US dollar ETF UUP with the natural gas ETF UNG doing the worst. For the week the gas and oil ETFs were up the most and the natural gas ETF UNG was down a lot at -10.22%. Click on table to enlarge.

Market Summary

As can be seen from the weekly chart of the S&P500 below the 20 moving average(blue line) is at the point of crossing the 50 moving average(red line). This last happened at the beginning of 2008 and we know what kind of year that was. Currently we are in between the low and the high of July and which price level we reach first, the prior low or the prior high, will tell us a lot about the trend of the market. Click on chart to enlarge.

For the YTD period gold and the dollar are the only ETFs in positive green territory. For the week FXI and GLD did the best and USO did the worst. Click on table to enlarge.

Market Summary

The market has once again fallen below its long term moving average as seen on the monthly chart of the SPY below. The good news is that with the month of August we have made a higher high and a higher low as it now stands. The momentum of the last several days has been to the downside and it is possible that this is the beginning of a wave 3 count to the downside which would take us to below the 100 level. There are however several areas of support and I am not in the camp of those who believe in a double dip at this point. Next week will tell us more as to the future trend of the market and we will just have to wait and see. Click on chart to enlarge.

We have lost two members of the "Green Team" in the YTD column from last week and the more riskier asset classes, the small cap and nasdaq which usually lead the market, were down more than the Dow or S&P500 which is not a good sign. The US dollar also has changed its downward trend and begun to move up which puts downward pressure on the equity markets. Click on table to enlarge.

Mid-Week Review

Following the Fed announcement yesterday at the FOMC meeting that the economic recovery is not as robust as had been hoped and that the Fed would monetize the debt by buying treasury notes to keep interest rates low the futures market began to sell off over night resulting in a gap open lower this morning. This announcement comes on the heels of Friday's worst than expected jobs report. What can be seen from the chart below is island top formed by the gap open higher on August 2 noted by the blue oval and today's gap lower as noted by the pink oval. Island tops are a topping sign before the market moves lower. Currently the futures market are pointing to a lower open tomorrow. Also note the five wave count. How far down the market will go we will just have to wait and see. Click on chart to enlarge.

Market Summary

The monthly chart of the SPY below shows that the market is above its long term moving average and the next target is the June high of 113.20. And while the bears keep believing that the market should go down the momentum is to the upside. Friday's jobs report, which was worst than expected, was not able to keep the market down and when the market rises on bad new it is a good sign. Click on chart to enlarge.

For the YTD period we now have four funds in the green as the market moves higher. For the week the US dollar was down -1.64% and as the dollar goes down the stock market goes up. How the markets react to a rising dollar we will just have to wait and see. Click on table to enlarge.

Market Summary

The month of July prove to be the best month for the market in a long time and put an end to the downtrend that began with the high in June. And while the weekly chart of the SPY shows a series of higher highs and higher lows since the beginning of July the last week of July was more like a doji with the SPY opening the week at 110.60 and closing the week at 110.27. A doji is a sign of indecision and the market is between the 50 and 200 day moving averages and it will either breakout or breakdown. The daily chart shows a breakout of a falling wedge pattern which is bullish however which way it goes we will just have to wait and see. Click on chart to enlarge.

While price performance shows little change for the week which is typical of a doji pattern for the month the oil index was up over 12% and both the EEM and EFA were up 10%. Click on table to enlarge.

Market Summary

It appears the sell off may be over as the major indexes break their downtrend line and the Dow, S&P500, and Nasdaq closed back over their 50-day moving averages. The S&P500 is above 1100 which is a milestone. The next target for the market is the June high.

The daily chart shows a breakout to the upside of a falling wedge pattern which is a very bullish sign. Short and intermediate term sentiment is bullish while Long term sentiment is neutral. The chart below of the SPY 240 min is my short term chart showing a bounce as I expected as I said in my prior post at the 50% Fibonacci level filling two prior gap areas. Earnings season has just begun with some good news in earnings however the economy still matters and unemployment is too high. How the future unfolds we will just have to wait and see. Click on chart to enlarge.

The small cap index $RUT has joined GLD and UUP on the green side for the YTD period which is another good sign. For the week, FXI was up 7.02%, $RUT up 6.6%, and EEM up 6.47% and it was green for all listed markets. Click on table to enlarge.

Market Summary

It would appear that we have begun a new leg to the downside with the big sell off on Friday. The last several days rally of 7% off the recent lows seems to have run out of momentum and reversed course. I have placed Fibonacci retracement levels on the image below from which levels we will either bounce off of or pass through as we go lower. Which way we go time will tell. Click on image to enlarge.

Only GLD and UUP are positive for the YTD period. For the week only UNG was up while the FXI was down -4.77% and the small cap index $RUT and the emerging market EEM were both down more than -3%. Click on table to enlarge.