Money Flow for December Week One (by SB)

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Further to my last weekly market update, this week's update will look
at:

  • + 6 Major Indices
  • + 9 Major Sectors
  • + Germany, France, and the PIIGS Indices
  • + Emerging Markets ETF (EEM), the BRIC Indices, and the BRIC ETF (BKF)
  • + Canada, Japan, Britain, Australia, and World Market Indices
  • + Commodity and Agriculture ETFs (DBC and DBA), Gold, Oil, Copper, and Silver
  • + 7 Major Currencies
  • + Major Trendline Breaks on 7 Major Indices
  • + 30-Year Bonds



You won't see any
commentary for the first 7 groups
, as I simply wanted to show,
at a glance, two things:

  1. where current price is relative to support/resistance levels, and
  2. which groups money was flowing into and out of this past week

in
order to assess whether there was a common theme(s) going on
here. In this regard, I've provided 1-Year Daily thumbnail
charts
and 1-Week percentage gained/lost graphs for
each group.

You can see from the Daily charts where current price is
relative to resistance/support levels. Most of them are at either
downtrend, horizontal, or moving average resistance…although Gold, Oil,
Copper, and Silver are hovering above support levels, but threatening to
continue downward. That is, in a nutshell, the common theme, at the
moment.

Also, you can see from the percentage
gained/lost graphs that, generally, there was more buying than selling
this past week, except in Technology, Commodities, the Euro, and the Swiss
Franc. This is also the common theme, at the
moment.

 
To summarize, the
exceptions (Technology, Commodities, the Euro, and the Swiss Franc) are the ones
to watch going forward to see if this weakness persists, and to what degree.
Furthermore, inasmuch as most Indices/Sectors/Currencies are
trading up against some form of resistance, we should be looking for any
major news announcement(s) (such as the upcoming FOMC
meeting rate announcement and press conference on December 12th
) that
may either spur continued buying, or dampen and, potentially, reverse this
trend. The dreaded "Fiscal Cliff" issue has been the 'topic du
jour,' as the U.S. markets continue to make wild intraday swings when one of the
political leaders holds a press conference to report that, basically, nothing
has been resolved.

6 Major Indices

9 Major Sectors

Germany, France, and the PIIGS Indices

Emerging Markets ETF (EEM), BRIC Indices, and BRIC ETF (BKF)

Canada, Japan, Britain, Australia, and World Market Indices

Commodity and Agriculture ETFs (DBC and DBA), Gold, Oil, Copper, and
Silver

7 Major Currencies

Major Trendline Breaks on 7 Major Indices

Below are Weekly
charts
for the Dow 30, S&P 500, Nasdaq 100, Russell 2000, S&P
100, Dow Utilities, and Dow Transports Indices. Drawn on each is a major uptrend
line from the October 2011 lows.

As I've mentioned in the past,
each index has broken below this major trendline. The only one
that has broken back and closed above is the S&P 500 (for the third week in
a row). So far, the Russell 2000 and S&P 100 have yet to break and close
above, while the Dow 30 played catch-up this week, as shown on the first graph
above. The Nasdaq 100 was notably weak, with the pullback in AAPL weighing on
this index, as well as on the S&P 500 and 100
Indices.

So, AAPL's movement next week
will, no doubt, have a significant impact on the Nasdaq 100, S&P 100, and
S&P 500 Indices, and will be a stock to watch, along with the Dow
30
(to see if it continues to outperform the other indices in the
week(s) ahead). I last wrote about AAPL here, and my comments are worth noting, as they're still
applicable…e.g., see the section on the imminent "Death Cross" forming
on both the AAPL and the NDX Daily charts
.

30-Year Bonds

 
Once again, price on the
Weekly chart below of 30-Year Bonds closed on Friday just above
near-term support, after retesting a level just below. Failure to hold this
support level may induce serious bond-selling, which could begin on a larger
scale if price then failed to hold at the next support level (around the lower
Bollinger Band/50 sma). Any substantial weakening of Bonds may produce a
large-scale rally in equities…one to watch over the next
days/weeks.

 

 
In conclusion,
rather than repeat myself, I would just refer you to my comments made
this past week in my posts of December 7th, December 2nd, and November 30th, as they are still appropriate for the week(s)
going forward (e.g., look for the wild intraday swings to
continue
).

Furthermore, we may see further
buying on the beaten-down high-beta stocks, as has continued
this past week, in the Social Media stocks and RIMM, (as shown
on the 1-Week percentage gained/lost graph below), as fund
managers attempt to top up their yearly portfolio gains before the end of the
year. I'll be looking for any parabolic rise and climax on high volumes on
stocks such as these as a precursor to a potential major market trend reversal.
If this type of stock continues to explode higher in the near-term versus value
stocks, I'll also be warned of potential Q4 earnings weakness (markets favouring
beta-movers versus actual value).

Enjoy your weekend
and good luck next week! 

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