Showing posts with label DOW JONES. Show all posts
Showing posts with label DOW JONES. Show all posts
Sunday, August 15, 2010
Thursday, January 21, 2010
DOW JONES, S & P 500, DOW TRANSPORTS & other key financial indexes trend lines & fibonacci's
DOW JONES INDUSTRIAL (weekly chart) - Key trend line:
SPY (S & P 500) (weekly chart) - Key trend line:
NASDAQ COMPOSITE (monthly chart) - Key trend line:
DOW JONES TRANSPORTS (weekly chart) - Key trend line:
DOW JONES US FINANCIAL INDEX (weekly chart) - Key trend lines:
IWM iShares Russel 2000 ETF (weekly chart) - Key trend lines:
IYR - DOW JONES REAL STATE iShares ETF (weekly chart) - Key trend lines:
To learn more on trendlines:
Stock charts trendlines (school)
Wednesday, September 2, 2009
Monday, August 17, 2009
2002 megaphone and currently short term supports
Big sell-off with a huge gap down today (which we could expect to be filled by the bulls) and the VIX almost 15% up. This bring back to my memory this 2002 chart, with a similar chart pattern that is developing today (the famous "megaphone", almost so famous like the failed H & S)
Anyway, it is something interesting to remember:
This are the key levels supports and objectives in the short term (established in the previous posts) that I am following:
Dow Jones US financial Index: key support at 232 (23.6% fibonacci). Today's close: 241.02. But, the XLF is developing a pennant?:
Dow Jones Real State ETF (IYR): it broke the key support at 38.5. Today's close: 37.52. Next support: 35.
Dow Jones Industrial: key support at 8.960. Today's close: 9.135.
Dow Jones Transport: key support at 3.420 (38.2% Fibonacci). Today's close: 3.576.
Nasdaq Composite: Huge gap and very close to resolve (or not) the rising wedge:
UUP: it can not break the downward channel. But it looks like it will keep trying:
10 year US treasury Bond yield:
For the first time in the last 9 months, it broke the uptrend channel.
SPY: some people could see a Head & shoulder, which obejctive is 97:
Anyway, it is something interesting to remember:
This are the key levels supports and objectives in the short term (established in the previous posts) that I am following:
Dow Jones US financial Index: key support at 232 (23.6% fibonacci). Today's close: 241.02. But, the XLF is developing a pennant?:
Dow Jones Real State ETF (IYR): it broke the key support at 38.5. Today's close: 37.52. Next support: 35.
Dow Jones Industrial: key support at 8.960. Today's close: 9.135.
Dow Jones Transport: key support at 3.420 (38.2% Fibonacci). Today's close: 3.576.
Nasdaq Composite: Huge gap and very close to resolve (or not) the rising wedge:
UUP: it can not break the downward channel. But it looks like it will keep trying:
10 year US treasury Bond yield:
For the first time in the last 9 months, it broke the uptrend channel.
SPY: some people could see a Head & shoulder, which obejctive is 97:
Monday, August 10, 2009
Some charts: Dow Jones Ind., Dow Transports & Nasdaq
I try with some Pitchfork's charts and Fibo's. Here, some interesting findings (especially the coincidence in the objectives of the elliot wave counts and the pitchfork's resistances)
Dow Jones Industrial:
Dow Jones Transport:
Nasdaq Composite:
Dow Jones Industrial:
Dow Jones Transport:
Nasdaq Composite:
Sunday, August 2, 2009
10 year US Treasury bond yield analysis
I was wondering on the possibility of the yield of the 10/year T-bonds (from now, the TNX) to continue up, if we consider that a sharp correction in the financial markets is very likely.
Then, I started looking at the correlation between the TNX and the S & P 500. Here are the results:
As we can see in the chart, there is no evidence of correlation between the indexes. Then, it is possible to expect new lows for the market, with a flat or rising TNX (like the January - March 2009 period). The red line represents the regression line, which estimates the relation between the two variables, the TNX and the S & P 500. The R square is 0.001, almost null. Number of observations: 2481. From January 1962 to July 2009.
What about the Fed Fund Rate?
Macroeconomic theory tells us that long term interest rates tend to move in the same direction with short term interest rates. Then, we would expect the yield on a long term asset like the 10 year T-bond to move up when short term rate like the federal funds rate moves up.
I read a paper entitled "How the Federal Reserve Fund rate affect the 10-year T-Bond yield" and conclude that the federal reserve funds directly influences the 10 year T-bond yield.
In addition, from the fundamental side, I do not expect a new "flight to quality". The reasons:
1) The constant issue of new debt from the treasury. The government debt is loosing "quality".
2) The panic. We do not have a panic or high since October 2008, and it is not expected new volatility for the future as we can see in the dowtrending VIX.
3) The Federal Reserve does not have space to decrease the FED FUND rate given the current levels.
4) In the short term, I expect that the FED will continue with the minimum discount rate, because at the moment inflation is unlikely. But, in the near term, with the economy improving, the inflation threats will oblige the Fed to rise interest rates. This will push up the TNX, and, which is more dangerous, the conventional mortgage rate. See the chart:
Technical perspective:
TNX daily chart:
TNX monthly chart:
As I always say, this is my humble opinion. But this are the facts. It would be interesting to know your opinions.
Source of research:
http://www.federalreserve.gov/econresdata/releases/statisticsdata.htm
Then, I started looking at the correlation between the TNX and the S & P 500. Here are the results:
As we can see in the chart, there is no evidence of correlation between the indexes. Then, it is possible to expect new lows for the market, with a flat or rising TNX (like the January - March 2009 period). The red line represents the regression line, which estimates the relation between the two variables, the TNX and the S & P 500. The R square is 0.001, almost null. Number of observations: 2481. From January 1962 to July 2009.
What about the Fed Fund Rate?
Macroeconomic theory tells us that long term interest rates tend to move in the same direction with short term interest rates. Then, we would expect the yield on a long term asset like the 10 year T-bond to move up when short term rate like the federal funds rate moves up.
I read a paper entitled "How the Federal Reserve Fund rate affect the 10-year T-Bond yield" and conclude that the federal reserve funds directly influences the 10 year T-bond yield.
TNX vs. Fed Fund Rate:
In addition, from the fundamental side, I do not expect a new "flight to quality". The reasons:
1) The constant issue of new debt from the treasury. The government debt is loosing "quality".
2) The panic. We do not have a panic or high since October 2008, and it is not expected new volatility for the future as we can see in the dowtrending VIX.
3) The Federal Reserve does not have space to decrease the FED FUND rate given the current levels.
4) In the short term, I expect that the FED will continue with the minimum discount rate, because at the moment inflation is unlikely. But, in the near term, with the economy improving, the inflation threats will oblige the Fed to rise interest rates. This will push up the TNX, and, which is more dangerous, the conventional mortgage rate. See the chart:
Technical perspective:
TNX daily chart:
TNX monthly chart:
As I always say, this is my humble opinion. But this are the facts. It would be interesting to know your opinions. Source of research:
http://www.federalreserve.gov/econresdata/releases/statisticsdata.htm
Tuesday, July 28, 2009
In the begining of the correction?
Continuing with the post "DOW: Green Monday?", now I think a correction is very likely. Not necessarily tomorrow, because we need some confirmations, but the process is in development. We have some sell signals.
In the short term:
First, look at the UUP (BULL US Dollar index ETF). If we look at the moving averages that I use to track trend (when the 22 EMA cross the 100 SMA in the 15 minutes frequency chart, and is confirmed by the price, we have a signal), they are showing a change in trend. In addition, we can notice the bullish divergences. This does not mean that the indexes are going to fall from here, but they could begin to move sideways. This is not good for commodities and latin-american indexes.
Then, we have the BUY signal in the VIX. It is the same signal as the one in the UUP. Look that the charts, they are very similar.
This scenario is right, if we suppose that the markets are going to maintain the negative correlation with the dollar that they had until today.
Finally, if we look at the indexes, it is interesting to notice that we do not have a sell signal yet. Then, It is early to short the market (in my humble opinion). We need a confirmation in the SPY.
Gaining more perspective, here some daily charts:
SPY:
UUP:
QQQQ:
DOW JONES TRANSPORT:
Ticker sense: (bullish)
http://tickersense.typepad.com/.a/6a00d8341c924353ef0115723ba8d7970b-popup
In my opinion, we should look at the 950 level in the S & P 500. This is the key support.
In the short term:
First, look at the UUP (BULL US Dollar index ETF). If we look at the moving averages that I use to track trend (when the 22 EMA cross the 100 SMA in the 15 minutes frequency chart, and is confirmed by the price, we have a signal), they are showing a change in trend. In addition, we can notice the bullish divergences. This does not mean that the indexes are going to fall from here, but they could begin to move sideways. This is not good for commodities and latin-american indexes.
Then, we have the BUY signal in the VIX. It is the same signal as the one in the UUP. Look that the charts, they are very similar.
This scenario is right, if we suppose that the markets are going to maintain the negative correlation with the dollar that they had until today.
Finally, if we look at the indexes, it is interesting to notice that we do not have a sell signal yet. Then, It is early to short the market (in my humble opinion). We need a confirmation in the SPY.
Gaining more perspective, here some daily charts:
SPY:
UUP:
QQQQ:
DOW JONES TRANSPORT:
Ticker sense: (bullish)
http://tickersense.typepad.com/.a/6a00d8341c924353ef0115723ba8d7970b-popup
In my opinion, we should look at the 950 level in the S & P 500. This is the key support.
Thursday, July 16, 2009
Some amazing coincidences
Looking some charts I have found some interesting coincidences that I would like to share.
First, look at the DJI monthly chart. In July, the 200 EMA cross the monthly 200 SMA. In addition, in the daily chart, we have the same resistance!. The 200 daily EMA.
DOW JONES Monthly Chart:
DOW JONES monthly chart with RSI, CMF, MACD & Stocastics:
Now looking at the 2002 bear market, we can see the same pattern. In my humble opinion, the reason of the recent movements of the market is shorts squeezes. And in the bottom of 2003, it looks like other short squeeze, to go down after.
DOW JONES 2002 bottom:
DOW JONES 2009 ......bottom?
First, look at the DJI monthly chart. In July, the 200 EMA cross the monthly 200 SMA. In addition, in the daily chart, we have the same resistance!. The 200 daily EMA.
DOW JONES Monthly Chart:
DOW JONES monthly chart with RSI, CMF, MACD & Stocastics:
Now looking at the 2002 bear market, we can see the same pattern. In my humble opinion, the reason of the recent movements of the market is shorts squeezes. And in the bottom of 2003, it looks like other short squeeze, to go down after.
DOW JONES 2002 bottom:
DOW JONES 2009 ......bottom?
Friday, July 10, 2009
DOW: green monday?
Today, the DOW closed with some interesting divergences.
First, on the intraday chart, we can see the divergence on the MACD and the RSI. In addition, the dynamical resistance had been broken:
On the daily chart, we can see the divergence in the RSI (parametrized at 7).
Finally, on the weekly chart, all the indicators remains in bearish situation:
Transports ($TRAN in stockcharts.com) is the sector that is supporting the rest of the indexes. It is showing an amazing strength. This is the sector to look closely and follow.
Finally, the SPY is still over the 200 SMA. During the last 3 days, it showed weakness to the downside. I think the reason is that the overall traders and blogs are expecting big moves downward. Then, Mr. Market enjoys making them loose their patience and doing the opposite.
First, on the intraday chart, we can see the divergence on the MACD and the RSI. In addition, the dynamical resistance had been broken:
On the daily chart, we can see the divergence in the RSI (parametrized at 7).
Finally, on the weekly chart, all the indicators remains in bearish situation:
Transports ($TRAN in stockcharts.com) is the sector that is supporting the rest of the indexes. It is showing an amazing strength. This is the sector to look closely and follow.
Finally, the SPY is still over the 200 SMA. During the last 3 days, it showed weakness to the downside. I think the reason is that the overall traders and blogs are expecting big moves downward. Then, Mr. Market enjoys making them loose their patience and doing the opposite.
Wednesday, July 8, 2009
Today's close
This is one scenario we could consider for the indexes. We have a dozen, but this one is, in my opinion, the most likely, since it is in accordance with some elliot wave counts that I have seen in other blogs.
The range 880-885 is a key level. If, in the coming days, the S & P 500 closes over this level, we have to change the hypothesis. The head and shoulder would be invalid, and then, this range is a good number to put your stops in case you had gone short.
We can see the 200 DMA acting as a resistance (dotted yellow line), the 50 DMA broken support (dotted green line) and the Andrew's Pitchfork channels on both, DOW JONES and SPY.
It is worth note that in the SPY, the 200 DMA is supporting the downward pressure, while in the DOW JONES is playing as resistance.
DOW JONES:
SPY:
The range 880-885 is a key level. If, in the coming days, the S & P 500 closes over this level, we have to change the hypothesis. The head and shoulder would be invalid, and then, this range is a good number to put your stops in case you had gone short.
We can see the 200 DMA acting as a resistance (dotted yellow line), the 50 DMA broken support (dotted green line) and the Andrew's Pitchfork channels on both, DOW JONES and SPY.
It is worth note that in the SPY, the 200 DMA is supporting the downward pressure, while in the DOW JONES is playing as resistance.
DOW JONES:
SPY:
Thursday, July 2, 2009
Dow Jones / S & P 500
Well, the month had finished and it is a good moment to try to see what can we expect for the next month, without making futurology. In the S & P 500, we can consider 880 and 780 as the key levels. Here, the 23.6% and 61.8% fibonacci retracements are the supports in case the head and shoulder patterns is confirmed. Meanwhile, is a good strategy Wait & See, until the market defines the course. If we look at some indicators (see the charts below, specially the weekly chart of the S & P500), we could consider that the market had already define the trend (look the ADX).
In addition, if we relates this charts with the charts of the VIX, the conclusion is that the direction for the next month should be downward. An spike in the VIX is very likely from this levels. But.... be careful, because the majority of the blogs and financial sites that I am visiting see the Head and Shoulder pattern (pattern formed during may and June). When everybody see the same pattern, the market likes to do the opposite.
Look at the RSI. It was moving between 50 and 90 during all the rebound (from March until June 15). Now, it is moving below 50. This indicates a change in the trend. Also, pay attention to the Bollinger Bands. The central band had been broken.
S & P 500:
The 61.8% Fibonacci retracement is at 778. The key support is 880.
Dow Jones Industrial:
In addition, if we relates this charts with the charts of the VIX, the conclusion is that the direction for the next month should be downward. An spike in the VIX is very likely from this levels. But.... be careful, because the majority of the blogs and financial sites that I am visiting see the Head and Shoulder pattern (pattern formed during may and June). When everybody see the same pattern, the market likes to do the opposite.
Look at the RSI. It was moving between 50 and 90 during all the rebound (from March until June 15). Now, it is moving below 50. This indicates a change in the trend. Also, pay attention to the Bollinger Bands. The central band had been broken.
S & P 500:
The 61.8% Fibonacci retracement is at 778. The key support is 880.
Dow Jones Industrial:
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