There’s been a number of significant level breaks/hits over the past week and it seems timely for a longer-term chart review. Here come the weekly charts.
A lot of the charts coming up relate in some way to the US dollar so let’s take a look at that one first.
The USD chart has broken out strongly from a 2 year range. There’s no arguing with this breakout, the USD is going higher. Since a lot of commodity charts react to moves in the greenback, let’s take a look at some of the more popular ones.
Let us all bask for a moment in the ever present glow of Procter & Gamble, which must be one of the most incredible stocks of all time. In this frothy market of ours, this maker of laundry soaps and dishwashing liquid sports a P/E of about 25, which back in the day was the sort of level reserved for high-tech companies. Anyway, the great crashes of the past few decades are hardly blips in the ascent of this monster.
Because perspective is everything, let’s once again get some big picture perspective…
S&P 500 is outside the lower fork line (again the Fork being a novelty, but the line being real) but above critical support. Bears would call this an overthrow to the upside and massive bull trap. We can call it an intact bull market above support and a very bearish market should that support be lost.
In my recent momo update I was quite adamant about the increasing odds of a major market correction. Since then we’ve seen a further increase in spasmodic intra-day gyrations across the board, fueled by a mix of low participation bot trading, heightened emotions and a constant stream of contradicting market rumors (e.g. Deutsche Bank). The trading lair has been in defcon 3 mode for a while now which clearly affects our daily trading activities. (more…)