Weekly Market Review: July 3, 2009

Posted on 6 Jul, 2009 in Stocks | 0 comments

I completely forgot about my weekly market review because of the July 4th long weekend! Here’s a quick snapshot of the market from last week before the market opens.

Just when everyone is expected the week to pass by without much affair, S&P500 tanked 8 points at the open on Thursday (Friday was closed for July 4th weekend) and we closed below 900 for the week. The week before Independence Day is historically positive, on top of that most traders are on vacation, so this breakdown move is definitely unexpected. This reminds me of the saying by Atilla from xTrends, the market does the most obvious thing in the most unexpected way.

Anyway, we’re heading to 880 in the pre-market on this Monday morning. Everyone is watching to see if this May’s low can hold. We’ll probably get a lot of choppy price action to shake both the bulls and bears out before any real move can mature.

S&P500 ETF

S&P500 ETF

S&P500 ETF

S&P500 ETF

GICS Sectors Review

The chart below is taken from CaraCommunity’s RSIApp.

Ticker Last RSI7d RSI7w RSI7m Zone (estimate)
XLE *
 46.16 25.27 41.47 37.49
XLB *
 25.15 33.83 47.67 41.87
XLI *
 21.36 32.55 46.92 38.91
XLY *
 22.29 35.39 48.93 44.23
XLP *
 22.89 46 58.05 45.35
XLV *
 25.75 44.06 57.54 44.7
XLF *
 11.47 36.01 51.78 38.43
XLK *
 17.83 40.58 59.52 48.41
IYZ *
 17.32 33.28 50.44 42.4
XLU *
 27.44 46.01 61.55 40.47
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Weekly Market Review: June 26, 2009

Posted on 28 Jun, 2009 in Stocks | 0 comments

The market dropped almost 20 points on Monday followed with Tuesday touching 888 on the S&P500. Then starting Wednesday, the market steadily climbed its way back to exactly where it started at the Friday close at 918. Doesn’t this get monotonic? I seem to be writing the same thing every week for the past month because the market is getting nowhere. Obvious to everyone, our big trading range is the low of May at 880 and the high of June at 950. Everyone is watching it closely.

However, the bears are at an advantage now. The downward channel seems to have started already with the price level and 10 day MA below the 200 day MA and 40 day MA, respectively. A more aggressive resistance is at 930 from last week.

From Figure 2, we see that in a long term perspective, the market is still adhering to its downward resistance from September 2008. Furthermore, there’s a negative divergence in the RSI at the current price level as compared to May 2009 when we were topping around 920 also.

In any case, this sideway but volatile action is difficult for me to trade. So rather than keep trying to play the swings in equities, I’ve started an options strangle position in Gold (GLD) this week. The risk is just lower there.

S&P500 ETF

S&P500 ETF

S&P500 ETF

S&P500 ETF

GICS Sectors Review

The chart below is taken from CaraCommunity’s RSIApp. The RSIs are slightly higher this week compared to last week. Otherwise, the overall picture remains the same between various sectors.

Ticker Last RSI7d RSI7w RSI7m Zone (estimate)
XLE *
 47.89 36.2 47.55 40.84
XLB *
 25.82 44.83 53.94 44.1
XLI *
 21.97 44.82 52.78 38.39
XLY *
 22.96 49.13 57.72 47.65
XLP *
 23.03 53.65 62.05 46.99
XLV *
 26.37 68.51 69.38 48.04
XLF *
 11.92 52.4 60.98 38.47
XLK *
 18.16 58.49 74.38 52.1
IYZ *
 17.90 58.46 61.23 47.35
XLU *
 27.74 60.95 63.84 42.59
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Weekly Market Review: June 19, 2009

Posted on 22 Jun, 2009 in Stocks | 0 comments

The market gapped down on Monday and never recovered this week. We tested the support from late June. In other words, the market gain from June has evaporated. What it means next week is that we’re at least trading in a lower trading range now. This could be the start of the long-awaited retracement. Let’s just see if we can break below this important resistance at 91 on the SPY. The pre-market on the e-mini this Monday morning is already at 906. Let’s see if volume can follow at the open and failures to get back up.

From Figure 2, we can see that we’ve broken below a decending support this week. But we managed to climb back up above it on Friday.

S&P500 ETF

S&P500 ETF

S&P500 ETF

S&P500 ETF

GICS Sectors Review

The chart below is taken from CaraCommunity’s RSIApp. Because of the dip in the market this week, 6 of 10 sectors are below the 50 threshold in their 7 days RSI. Whereas last week, we only had 2 of 10 below 50. This again tells us what we already knew from the SPY charts above, that is, we had a sell off this week. However, from the 7 weeks RSI, none of the sectors are below 50 yet. So this shows that we still have room for a further down move if the market decides so.

Ticker Last RSI7d RSI7w RSI7m Zone (estimate)
XLE *
 49.21 30.65 52.57 41.68
XLB *
 26.07 35.3 56.16 44.92
XLI *
 22.20 32.82 55.04 39.97
XLY *
 23.13 43.63 59.68 48.01
XLP *
 22.89 46.73 58.97 44.89
XLV *
 26.08 67.11 65.77 45.17
XLF *
 12.04 50.41 62.71 39.32
XLK *
 18.12 57.01 73.05 52.15
IYZ *
 17.70 37.76 55.69 44.8
XLU *
 27.47 57.49 61.05 40.37
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Weekly Market Review: June 12, 2009

Posted on 12 Jun, 2009 in Stocks | 0 comments

The market continues to be at a stalemate this week. The trading range of 925-950 identified last week remains intact. However, the 40 day MA finally touched the 200 day MA today (Figure 1). We should see the 50 day MA following suit next week. With the price being so tightly squeezed now, there really isn’t much room left to this prolonged sideway action.

Coincidentally, the lack of market action coincide with my reduction in time spent with the market. I’ve been busy at work.

On another note, Atilla at xTrends posted a few education pieces regarding intermarket relations, xTrends, and fundamental analysis (to be posted).

S&P 500 ETF

S&P 500 ETF

S&P 500 ETF

S&P 500 ETF

GICS Sectors Review

The chart below is taken from CaraCommunity’s RSIApp. Technology (XLK) remains high from last week. Consumer Staples (XLP) has backed down but Energy (XLE) and Materials (XLB) are in the overbought zone.

Ticker Last RSI7d RSI7w RSI7m Zone (estimate)
XLE *
 54.03 70.54 72.34 49.38
XLB *
 28.31 65.34 70.52 50.41
XLI *
 23.55 60.3 66.54 43.89
XLY *
 23.89 52.17 65.38 49.36
XLP *
 23.34 49.7 65.76 47.68
XLV *
 25.54 49.32 59.02 41.63
XLF *
 12.41 57.63 65.93 39.54
XLK *
 18.43 72.91 72.47 52.56
IYZ *
 18.40 68.43 67.9 47.26
XLU *
 27.83 69.79 66.25 42.55
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Weekly Market Review: June 5, 2009

Posted on 5 Jun, 2009 in Stocks | 0 comments

We started June with a sizable gap up on Monday. For the rest of the week, not much have happened as we nearly closed the gap on Wednesday and made a double top this morning (Figure 1). Nevertheless, we have maintained an elevated level above 940 on the S&P500 throughout the week. Interestingly, we closed the week right at 940 today.

From Figure 2, it’s clear that we’re back on the upward channel established in April. Apart from last week’s consolidation, the price has been following the channel well. It is obvious to everyone now that we’re in a bull phase. So, can we finally break this rally and move down? I gave up trying to guess anymore. That’s why my only new position this week is an options strangle for XLF. Just trying to profit from both sides of the game.

The top and bottom of this week’s range provide a good indicator for next week’s resistance and support, respectively. Thus, the notable levels are 925 and 950 for the S&P500.

S&P500 ETF

S&P500 ETF

S&P500 ETF

S&P500 ETF

GICS Sectors Review

The chart below is taken from CaraCommunity’s RSIApp. Compared to last week, we’re finally starting to see some sectors (XLP, XLK) creeping into an overbought territory.

Ticker Last RSI7d RSI7w RSI7m Zone (estimate)
XLE *
 52.54 61.37 69.05 46.71
XLB *
 27.94 61.64 69.28 49.21
XLI *
 23.53 64.71 66.44 44.24
XLY *
 24.16 64.39 68.37 49.38
XLP *
 23.74 69.23 75.62 49.49
XLV *
 25.74 53.61 62.94 43.96
XLF *
 12.43 61.17 66.38 41.72
XLK *
 18.16 69.64 70.3 49.73
IYZ *
 18.01 56.67 63.95 44.76
XLU *
 27.09 57.47 59.64 37.09
read more