Monday Morning Chartology
The S&P appears to be rolling over, having voided a very short term uptrend and unsuccessfully challenged the upper boundary of its short term trading range. I marked in red three tries to break above the upper boundary of its intermediate term trading range; then I marked in orange four lower highs following the aforementioned attempts to challenge its intermediate term trading range. Having said all that, these are just potential warning signs that may or may not have any follow through. As always it is the follow through that counts.
Stock performance during April option expiration week (short):
Update on best stock market indicator ever (short):
The dollar closed below the lower boundary of its short term trading range on Friday. You can see that it has unsuccessfully challenged this boundary a couple of times over the last two years; so this could be just another false alarm. That said, I have put this chart next to the S&P because of their similarities, i.e. both have been trading sideways for over a year. If the dollar breaks lower, that is likely not a good sign for stocks.
The long Treasury had a good week, finishing within very short term and short term uptrends and above its 100 day moving average and a key Fibonacci support level. This performance is a sign of a growing risk-off trade.
Gold continues to struggle through a consolidation process. While it had a good week, it still has work to do overcoming a very short term downtrend.
Last week, the VIX managed to void a very short term downtrend. You can see that the lower boundary of its short term downtrend offered support. It is still well below its 100 day moving average. Nonetheless, it probably a good time to institute any portfolio insurance trades. Our Aggressive Growth Portfolio will Buy a 25% position in VXX (18.4) at the Market open. Please remember this is a very short term hedging position.
***the globe’s bureaucrats were busy little beavers over the weekend: an IMF paper said negative rates have boosted demand (what demand?), Chinese consumer inflation was slightly lower than expected (and not coincidentally, the Bank of China meets this week), Iran said that its missile program was not up for negotiations (surprise, surprise), central bankers are meeting to finalize plans to bail out Italian banks (you want parmesan on that?), Austria forcibly ‘bails in’ senior creditors of a failed bank (you want parmesan on that?), statements by Japanese officials suggest that it might not live by the cease-competitive-currency-devaluations accord formulated at the recent G29 meeting (hot sake?) and apparently someone took note of the emergency Fed meeting today, because Yellen meets with Obama immediately after (get your galoshes on because its going to get deep).
Goldman on the upcoming OPEC meeting (medium):
Bill Gross and Larry Fink on negative interest rates (sorry, Christine):
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