Monday, January 12, 2015

Monday Morning Chartology

The Morning Call


The Market
    Monday Morning Chartology

            This is a very short term chart of the S&P.  You can see it (1) remains well within its short term uptrend, (2) has experienced two higher lows and one lower high, setting up a potential pennant formation; if that continues to develop with more higher lows and lower highs, the point of the pennant will be reached and the Market move from that point tends to have predictive value on future price direction, (3) fell below its 50 day moving average, then bounced above it and is now sitting right on it.  The intent here is to illustrate investors’ very short term uncertainty.  The thing that you can’t see is the upper boundary of the S&P’s long term uptrend (2083) and how the spread between that boundary and the lower boundary of its short term uptrend is narrowing---meaning that one of these trends will eventually be violated.   

            The long Treasury has a beautiful chart.  It is trading in uptrends across all timeframes.  Indeed, it is above the upper boundary of its intermediate term uptrend and right on the upper boundary of its short term uptrend.  TLT is also well above its 50 day moving average.

            GLD continues to struggle to make some sort of bottom/turn around.  It has labored to maintain a very short term uptrend while managing to trade and stay above its 50 day moving average.  It remains within a short term trading range and an intermediate term downtrend.

            The VIX has been in a trading range for almost two years.  Like the S&P chart, two boundaries (the upper boundaries of the short term trading range and the intermediate term downtrend) are above to cross.  Indeed, they are much closer to that intersection than the S&P.  Once that occurs, one of those boundaries will be violated sooner or later.

            More on valuation (medium):

            And (short):

       Investing for Survival

            Keeping your portfolio on track in 2015 (medium):

      News on Stocks in Our Portfolios

   This Week’s Data


            ***overnight, Fitch cuts Russia’s credit rating to one step above junk; the ECB announced that it is ‘planning to design’ a sovereign debt purchase program based on paid in capital ‘contributions’ made by big EU central banks (well, this is bound to happen); Japan announced a record FY 2015 fiscal year deficit; and Chinese developer Kaisa Captil Holdings failed to make a scheduled interest payment.




            Mikhail Gorbachev warns of war over Ukraine (short):

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