Monday Morning Chartology
The S&P followed a set pattern last week, ramping higher in the morning, then trading lower through the rest of the day. In the process, it made a lower high and a higher low, usually indicative of open battle between the bulls and bears. One of two things will occur this week: either it trades in a very tight range violating neither the recent high nor the recent low or it breaks one way or the other. If I had to bet, I would say the break is likely to come on the upside; but I don’t have to bet.
The long Treasury traded down on Friday. It closed above the upper boundary of its short term trading range. Under out time and distance discipline that was sufficient to negate the trading range and re-set it to a short term uptrend. In the chart I have redrawn the short term uptrend. However, Friday’s pin action was big enough on the downside that I am going to defer re-setting the short term trend until the close today.
GLD had a rough go of it last week, breaking its very short term uptrend. It is now in a short term and intermediate term downtrend and finished below its 50 day moving average.
The VIX continues to be of little value in assessing Market direction. It remains stuck in a yearlong short term trading range as well as an intermediate term downtrend and closed above its 50 day moving average.
From the Sentiment Trader:
Active investment managers have continued their extreme exposure to stocks. Even the most bearish manager is net long stocks, according to the National Association of Active Investment Managers. This week's data show the average exposure, spread between most bullish and most bearish managers and confidence among all managers is at extremes seen only two other times in the 8-year history of the survey. Those were early January 2007 and early January 2014. Both times proved to be somewhat troublesome for the most bullish managers in the weeks ahead.
Update on NYSE margin debt (short):
Update on ‘the best stock market indicator ever’ (short):
Shiller on bubbles (short):
Will profit margins mean revert? (short):
News on Stocks in Our Portfolios
This Week’s Data
Japan get double whammy (short):
Lowry on Obamacare (medium):
New report coming on global warming (medium):
Condi Rice on Obama’s foreign policy (medium):
Krauthammer on Obama’s foreign policy (medium):
Over the weekend (medium):
Stephan Roach on Chinese central planning (medium):
Bank loan write offs soar at Chinese banks (medium):
China also fighting corruption (medium):