CRB-Index

CRB INDEX: Update

Commodities closed beneath resistance and has broken the prior dominant uptrend. Mometum suggests we may see a retracement towards the 50eMA or 200eMA, but overall I expect to see losses over the coming weeks. 
 
Generally speaking declining commodities means a stronger Dollar.

BANKS

FTSE350: Sector Analysis

Banks has finally broken to the downside of the channel that has been forming since August ’09. The weekly and monthly candle is looking very bearish but I will wait for a retest of 4341 before entering short on this sector.

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SP500-Daily

SP500: Update

Summary
It has been a choppy week to say the least with the bulls and the bears almost playing a game of peek-a-boo with one another. The daily 200eMA is looking tired and fed up and not too far away from becoming completely flat. Although we haven’t seen a close beneath the 200eMA I think it’s only a matter of time – there have been plenty of attempts…

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Gold-Monthly

GOLD: Cycles

Still very much an experiment, I am trying to extrapolate the underlying cycles within Gold. The main problem I have at this stage is a severe lack of data, as to properly identify the 9 year Juglar cycle I’m looking for I’d ideally need at least 100 years worth of data. However, I do feel I can pinpoint 2 major swing lows that are 9.1 years apart.

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SP500-Cycles

SP500: Market Cycles

The smallest cycle is 35 weeks and we are approximately 1/4 of the way through – so initially expect to see gains on the US markets until we reach it’s mid point (around mid July) where we could begin to see the decline lasting until around mid November 2011 where it should bottom out.
Using the markets bottom in March 2009 as my starting point, we can see that the crash was the results of several major cycles ending simultaneously. Around mid November 2011 we will see the 3 smaller cycles converge, which will in fact be the mid point to the larger cycle. This suggests that the market will not crash as deep as it did in 2009, but it could still be quite significant drop.

FTSE100-March-11th

FTSE100: Update

So far the FTSE has failed to breach the 6100 area, and very close to touching the previous swing low at 5811. I have chosen a more sensitive form RSI to show the divergence that occurred during the run-up to 6100. Although this may back up my original post on 27th Feb, it is too soon to call for a price reversal.

As price action is within a consolidation, I can pay closer attention to the RSI which is approaching oversold – for this reason I expect a bullish pull-back within the current consolidation, before further declines. It should be noted that the weekly RSI setting is currently at 55 (neutral) so cannot see price going below 5514 unless the weekly RSI approaches the overbought area of 80+. If anything, the current choppy conditions of the FTSE is just a modest correction and expect the bull-run to regain strength and break the 6109 area for another leg higher.

SUMMARY:
Short Term: Bullish within the channel
Medium Term: Bearish retracement below 5811
Longer Term: Bullish and for price to break 6109

FTSE100-Market-Breadth

FTSE100: Market Breadth

Quite excessive divergences have been forming between the small-cap and large-cap stocks within the UK and US markets. Although this does not provide an accurate turning points in price or time, it does help provide a ‘heads-up’ to the possibility of a reversal, and aid me with alternative Elliott-Wave counts if specific price points are broken. In short, “The troops are struggling to keep up with the generals”.

 

If FTSE100 breaks 6100 convincingly and turns this into support, then this would indicate further gains and we can temporarily ignore the inter-market divergences. If however it fails to break the level of 6100 then falls below 5817, then my bias would lean towards a change in market direction and to call a possible top. Either way I have reduced my end of day (EOD) stock positions within my portfolio to the bare minimum and will await the market to decide.

DJIA-Market-Breadth

DJI: Market Breadth

Divergences between DJI and the broader market hint at the possibility of a price reversal. In a healthy market we would expect the small-cap stocks converge with the large-cap, which is not evident in the chart below.

Global-Portfolio-Analysis

MAJOR INDICES: Relative Strength Analysis

By comparing the Major Indices and their percentage gains over the last 6 months, I can very quickly see which Indices are the better performers and rank them in order.  In turn this allows me to favour the stronger Indices when selecting industries or markets I wish to trade in. 

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Sector-Comparison

FTSE350: Sector Analysis

SECTOR COMPARISON:
By directly comparing the sectors with each other, I can quickly rank the sectors in order of performance and either look for price action set-ups on stocks within those sectors, or to trade the sectors themselves. The Sectors in the chart below have been outperforming the FTSE100 over the last 3 months, and are all above their 50 and 200 eMA’s. The Sectors below aren’t necessarily from the previous chart, but have been selected as they either hint at potential trades to place, or they are of general interest as they may be at a reversal point.

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