Category Archives: Foreign

Whippy-Ki-Yay

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Only the Lord knows where the markets will be once I wake up for the normal trading day, but tonight, it’s a mad, mad, mad, mad world. Kuroda pretty much disappointed everyone, in spite of throwing trillions and trillions more yen at buying ETFs (which, let me tell you, is insane), but as ZH put it:

“So to summarize, Kuroda left rates unchanged, left QE unchanged, implicitly raised doubts about the effectiveness of the world’s monetary policy machinations.. and increased the stock market ETF buying to make sure that the illusion of normality is maintained.”

At first, the ES and NQ fell sharply, and then they went green – – which made me want to throw my laptop through a window – – and then they went red again. I’m just going to let all this wash out at this point and stop watching. I guess I should at least be glad the ES isn’t up thirty points right now. The Stockholm Syndrome has completely taken effect.

0728-es

U.S., European & Chinese Financial Weakness

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In my 2016 Market Forecast post of December 29, 2015, I mentioned three ratio charts worth monitoring for 2016.

They show the strength/weakness of the:

  • XLF (U.S. Financials ETF) compared to $SPX
  • EUFN (European Financials ETF) compared to $STOX50
  • GXC (Chinese Financials ETF) compared to $SSEC

The following three updated Daily ratio charts show that U.S. and European financials are weak (and weakening) compared with their respective Major Index, so far, this year, while China’s financials are also weak and mired in a long-term trading range, just above major support.

Even if U.S. equity markets do break out of their long-term high-basing trading range (as described in my last post), none of these three ratio charts fill me with much encouragement to project that such a rally could last very long if we see continued weakness, and, especially, a deterioration in these Financial ETFs compared with their Index.

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