Author Archives: Strawberry Blonde

US Major Indices Enter Correction Territory on Unprecedented Monthly Volatility Spike

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After another volatile day of trading on Thursday, all of the nine US Major Indices closed down hard and four are officially now in 10% correction territory (with the others closely behind), as shown on the following graph, which shows their losses since prices peaked in January.

Here’s a look at their 6-month daily chart. All of them are below their 50-day moving average.

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Stocks vs. Commodities: Will Traders Dump All?

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Looking back at a longer-term monthly view of the S&P 500 Index (SPX) compared with GOLD (GC) (blue bars) and WTIC Crude Oil (CL) (pink bars), we saw a broad correlation among these regarding rallies and pullbacks…until 2011 when the bounce in GC and CL stalled and, ultimately, sank in mid-2014, especially CL when it plunged to (just below) post-financial crisis levels in January of 2016.

As I write this post at 11:50am ET on Friday, we see that, while the SPX is just below all-time highs, GC faces major resistance at 1350, and CL is swirling around 65.00 (major resistance/support). (more…)

US Government Shutdown Looms on February 9th as World Market “SELL” Signal is Triggered

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Another U.S. government shutdown looms this week on February 9th.

Will it…won’t it? That’s the $64,000 question as more volatility is in store for markets.

Given the fact that there are great political divides over a variety of policies, increased volatility in the markets, and, now, the information that’s being revealed that may determine whether or not civil and/or constitutional rights were violated in the months leading up to and after the 2016 presidential election (and any political and/or legal fallout that may occur), will only add to the increased odds of chaos ahead, making future events less predictable. (more…)

FAANGs +5: Two New Risky 3x Leveraged ETNs

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On January 23 of this year two new 3x leveraged ETNs were launched, comprised of FBAMZNAAPLNFLXGOOGLBABABIDUNVDATSLA & TWTR, and their descriptions are as follows…

  • FNGU is an exchange traded note that tracks 3x the daily price movements of an index of US-listed technology and consumer discretionary companies. The index is highly concentrated and equally weighted.
  • FNGD is an exchange traded note that tracks 3x inverse the daily price movements of an index of high concentrated and equally weighted US-listed technology and consumer discretionary companies. The note uses derivatives to achieve its -3 exposure.

They are both highly risky investments and are very thinly traded.

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S&P 500 Index: Major Support at 2500

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Just a quick heads-up to mention that major support for the SPX sits between 2525 and 2485, as shown on the following daily and monthly charts.

There is a convergence of the 200-day moving average with two trendlines at 2525 on the daily chart, and, more importantly, a convergence of two external Fibonacci retracement levels with the +1 standard deviation level of a long-term uptrending regression channel at 2485 on the monthly chart.

If we see a major sell-off in equities, we may see price, ultimately, fall to somewhere around 2500  (a 10% drop from Friday’s close) before it stabilizes. Keep an eye on the FAANGs +5, as I more fully outlined here, as well as the 10YRT, as I described here and here. Further weakness in the FAANGs + 5, together with continued rising rates in the 10YRT, could very well propel such a drop in the SPX to that level, or lower. (more…)

Weekly Money Flow: Week 5 January 2018

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The following 1-year chart grids and 1-week gains/losses graphs show, at a glance, where a variety of major world markets are trading and how much they gained/lost this past week. They are presented without individual commentary. The charts will, however, simply show, at a glance, minor and major support/resistance levels in the form of 20 & 50-day moving averages and price swings/consolidation levels, as well as which markets are leaders or laggards in their performance during the 1-year period.

For my detailed analyses that I’ve completed over the past couple of weeks, especially this last week, on some of these markets, you can review them on my Blog at your leisure. (more…)