Posts Tagged ‘Hugging The Trendline’
Are you afraid of SPDR’s?
The SPY ETF is a fund composed of funds. What I mean is that this fund gives you a composite of all the different market sector funds, called SPDR’s, and lets you trade on it. Of course, as with all funds, its’ owners align the prices from time to time when they need to be adjusted to fit the fair value of the composite. It is on its way up, as the Fibonacci Fan shows that it is straight on its main line, and it has passed successfully its’ last resistance yesterday. What makes this an attractive opportunity is the BUY signal shown by the OBV-EMA 3,1,C where the OBV crosses the EMA 3 upwardly. See the Chart below.
This is the way the Chart looks:
published by MetaStock (www.equis.com)
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Futures signal the way for the U.S Markets
I know very well that the situation looks grim for the U.S. economy. The defaults on Mortgages are way up, an extremely high jobless rate that doesn’t seem to want to go down at all, the worries of financial experts that the health-care bill recently passed by Congress will WEIGH on the deficit instead of decreasing it, and a general feeling that we may be headed into a double-dip as far as the financial markets and the whole U.S. is concerned.
I think we are being presumptuous in saying that the economy is headed down again. I give as my proof, as usual the Technical Analysis that can be made on the market, and what we can derive as a conclusion from it.
Take the futures on the 3 indices of Wall Street. They show some weakness, especially the Dow futures which has broken the upcycle trend line. But the others though a little bit closer to the line are still on the way up, and the Dow itself is on a parallel to its trend routs upwards.
I think the situation is in control. From a technical point, the S & P 500 just did a beautiful-looking retest on the 1166 line and the futures as I write these lines give it a thumbs up. I think that the general and specific trend for America is upwards. Just check out the Futures Charts below:
This is the way the Chart of the Dow Jones Futures looks:
This is the way the NASDAQ 100 Futures Contracts index looks:
This is the way the S&P 500 Futures look:
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The World Dollar Index
The way the technical smell of the US Dollar is, one may not want to take a bite of it–not appetizing at all. Even though there has been a strong recovery in the dollar worldwide, as seen by the Dollar Index, which measures the US Dollar against all foreign currency, there are signs of a change back to the downwards days of the last 2 years. The price has yet to conclusively prove itself above the 80-81 level and see-saws on or below it. It has reached but is not successfully passing the Fibonacci 38.2% mark and it is leaning hard on its trend line.
In addition, the MOM indicator and Volume indicator show a negative divergence the last 3 weeks, a sure sign of trouble. When the MOM and Volumes drop while the price continues to rise, that is a strong sign that the continuation of the rising prices may be a false hope.
I do not say that the Dollar is in danger, I just warn of some kind of correction is most probably coming its way.
This is the way the Chart looks:
