Sunday, May 22, 2011

Market Read for Week 052311-052711

SPY- Volume patterns starting to feel like quiet lightening of the load or "de-risking" from funds. This thesis makes sense as macro news of late has begun turning negative or not confirming that the market can transition from Fed backed easy money to a fundamentally footed fueled market. BUT there are a lot of conflicting cross currents from the dollar's relative weakness (and now short-term strength) to sell in May... Right now SPY is in a down/falling channel, below the 20 SMA but above the 50 SMA and in between the 50 & 61% fib retracement levels.


QQQ- Don't see any real edge here in tech as it is in between the 20 & 50 SMA. 59 is key resistance and volume pattern of late is flashing a cautionary sign but still making higher higher lows and highs.

IWM- Small cap "risk" appetite leader may be foreshadowing further weakness short-term in equities.

DXY0/DX_F/Dollar- Looks primed for more with the inverse H&S. Think the dollar sees 77 (measured move from the right shoulder, 50% fib, & resistance level) on a break above 76.



DX_F hourly

HG_F/Copper- Copper is still in a down channel to long-term TL support. It attempted to break out on Friday but failed. Watch for a move this week as a possible tell that the global growth story may be turning back on as China and the rest of the emerging world markets fight inflation. If this TL fails and copper breaks down watch for continued weakness in equities.

XOIL/CL_F/Crude- 100 SMA is acting as resistance. Strong buying below 97.5 (buying tails around 95). Summer seasonality and Middle Eastern production sensitivity seem to act as underlying bids in crude keeping it around the 100 sweet spot.


Crude VIX

XSLV/Silver- Looks similar to crude with the 10 SMA acting as resistance and a lower TL acting as solid support. Silver seems to be basing around the 100 SMA. If it can get above the 10 SMA and 23.6% fib think  39 is next level to watch which is also the location of the 38.2% fib.

XGLD/Gold- Not sure why gold is showing relative strength compared to silver and other precious metals but there may be seasonal demand forces at work here.

VIX- a bearish non-confirmation with no signs of real protective fear buying.

McClellan Oscillator- descending triangle expecting a break early this week.

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