Saturday, May 14, 2011

Market Read for Week 052311-052711

SPY- I believe its time to be more cautious going long here with the volume pattern in the market possibly flashing quiet distribution. Some people may argue but what about QE or the US fiscal situation or... the continuation of the amazing liquidity fueled bull run. The Fed ending QE could also give the buck some levitation too which is what we could be witnessing now but may be tempered if US fundamental econ news (i.e. unemployment, consumer spending, earnings, etc...) turn bearish. In light of what we know it appears as if risk appetite is receding in small caps and the commodity space. The action in the past week or 2 feels like a tug of war between bulls and bears manifesting in the choppiness of the consolidation. Right now we're sitting in a wedge and it will be interesting to see which way we break, the decisiveness of the push and if it holds. On Friday SPY closed below the 20 SMA and the 5/8EMA.

30 minute

QQQ- Tech too has been flashing cautionary volume signal. We've seen sideways consolidation right below the 59 breakout level. Every time it pokes it's head above sellers have smacked it back down. Still holding the 20 SMA and TL support.

IWM- Looks like a lower high is forming and a possible down channel right to the 100 SMA. The 50 SMA or 83 is holding as current support. MACD fell out of the rising wedge, RSI is rolling over below 50 and volume here too is concerning.

USDX/DXY0/DX_F/Dollar- looks like next target is 77 exactly where the 100 SMA and the 50% Fib line up. There's also long-term TL resistance just above that.



HG_F/Copper- Hit long-term support and bounced perfectly. In a down channel within and overall up channel. Copper is important piece of the global growth story as it has served as a bellwether for the massive Chinese growth we've seen for quite a while. Still definitely looks to be slowing as the government has had to cool and contain the inflation for the past 2-3 years. If the pullbacks in the commodity markets continue this could allow China to move forward with it's growth and transition to a consumption economy. Watch to see if we possibly break out of this down channel and head back up to the highs or further breakdown.

CL_F/Crude- Margin hike in commodity space and now crude causing some short-term weak hand shaking out. Holding above 95/96 or the 100 SMA but now the 5/8 EMA are acting as resistance. Watch dollar for possible crude tell. If we continue to see further dollar strength think 92/90 coming up shortly. BUT as I've stated before with current global supplies seemingly on the wane, increasing conflicts surrounding petroleum rich nations and the global growth story continuing think this pullback is healthy but does not reverse the foreseeable bullish trend.

Crude VIX

XGLD/GLD/Gold- Still in bullish uptrend. *Not a gold or silver expert

XGLD Index



XSLV/SLV/Silver- 5 & 8 EMA are acting as resistance in SLV while the 23.6% Fib is acting as resistance on the Silver index. *Not a gold or silver expert

XSLV Index


VIX- Still isn't indicating bearish with 18 acting as short-term resistance.

McClellan Oscillator- no real edge here

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