Author Archives: Strawberry Blonde

World Market Index & SPX Hamstrung by U.S. Politics?

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Further to my post of November 24, 2016, the World Market Index did, subsequently rally and is now stuck in a trading range between 1700 and 1750, as shown on the Daily chart below.

In that post, I mentioned the importance of a break and hold above 1750 as a potential signal of clear support for world equities, in the longer term, including that of the SPX.

You can see that a new “SELL” signal has just been triggered by the bearish crossovers of the MACD and PMO indicators.

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U.S. Congress: Focus on Economy NOT Political Obstruction

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Economic data released today on the Chicago PMI (Purchasing Manager’s Index) shows how much the U.S. economy is urgently in need of fiscal stimulation.

With barely a whimper above the 50 expansion level, the health of its economy is set to drop into contraction territory soon (as it did in 2009 following the depressed signals forecast by similar low numbers produced in 2007/08), unless Congress begins to cooperate and focus on real issues that support its claims of being number one in the world arena when it comes to economic (and military) might, instead of playing economically dangerous political games in unnecessarily obstructing the advancement of the new Trump administration, cabinet confirmations, and economic and security agendas.

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2016 Market Wrap-Up: S&P 500 Index, SPX:VIX Ratio & USD

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This post will outline how the S&P 500 Index and the SPX:VIX Ratio performed throughout 2016 and how they ended the year. It will also take a look at where the US Dollar Futures Index finished up.

S&P 500 Index

The following four charts of the S&P 500 Index will depict how 2016 ended, on a yearly, quarterly, monthly, and weekly basis.

Each candle on Chart #1 represents a period of one year.

After breaking out to all-time highs and above major resistance, the 2016 candle closed near its high, after re-testing last year’s low and the close and open of the 2013 and 2014 candles, respectively. It would appear that, after shaking out short-sellers, the bulls are firmly in control of upward momentum. We’ll see if the Momentum indicator makes a new high on the 2017 candle…a distinct possibility, if price can remain above major support at 2100. If price drops to that level, we’ll see a rise in volatility, and, if price drops and holds below that level, volatility will rise drastically.

Chart #1 SPX Yearly

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EUR/USD Nearing Critical Support

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As the EUR/USD Forex pair continues its rather steep decent during the past couple of months, it is approaching a critical major support level around 1.04, as shown on the Weekly chart below.

Not only will a drop to that level form a potential triple bottom pattern, it will also hit a triple confluence of long-term price, trendline and regression channel “mean” major support.

A drop and hold below 1.04 could see a catastrophic price plunge to levels (0.8827) not seen since October 2000. We may, however, see price overshoot and drop below 1.04 briefly, before a potential bounce occurs.

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