Firstly, I apologize for the length of my post, but I have a lot to say…thanks for bearing with me!
Further to my last weekly market update, here is a summary of where money flow ended for Week 4 of March 2012.
The Weekly charts below of YM, ES, NQ & TF show that YM & ES made a lower close and NQ & TF made a higher close than the prior week. The uptrending channel is still holding as support and direction for the Weekly timeframe. Secondary support levels lie at the middle Bollinger Band (12440 for YM, 1298 for ES, 2438 for NQ, and 772.80 for TF). Both the YM & TF pierced below their lower channel, once again, but managed to close inside…ones to watch for potential developing weakness.
I'll reiterate what I said in my last weekly market update (and as noted in my post of March 15th), that if the Major Indices are going to continue a convincing rally from here, it will be important for the Russell 2000 to break (convincingly) and hold above its February highs to provide added fuel. A failed breakout could lead to the onset of weakness, not only in this index, but also in the others.
The three Daily charts below depict support and resistance levels on the percentage of Stocks Above 20-Day, 50-Day, and 200-Day Averages.
Stocks Above 20-Day Average closed slightly lower than last week, but managed to close just above the 60% resistance level…one to watch to see if it holds as support next week, or if it's breached again.
Stocks Above 50-Day Average closed lower than last week and are in between the 70% resistance level and 50% support level…one to watch for potential further weakness.
Stocks Above 200-Day Average closed a tiny bit lower than last week, but are still holding above the 70% support level…one to watch to see if it holds as support, or if it's breached, once again.
The closing levels on all of these three charts are lower than the prior week. I'd conclude that, in the short and medium term, stocks remain mildly bullish, and in the longer term, stocks remain bullish…but, all are on negative watch for further possible weakness.
The VIX fell by a smaller loss of 1.46% this past week than the prior week, as shown on the graph below. Further to the comments in my last weekly market update, the Daily ratio chart below of the SPX:VIX shows that the SPX did, indeed, pause and consolidate on negative divergences on the RSI, MACD, and Stochastics. On Friday, there was a crossover on the Stochastics, which suggests that a breakout to the upside may be in the offing on the SPX next week…one to watch.
As shown on the graph below of the Industry Groups, most closed lower, with Oil Services the major loser, and Retail the biggest gainer, followed by a minor gain in Internet.
As shown on the graph below of the Major Sectors, most closed lower, with Energy and Industrials the biggest losers, and minor gains made in Consumer Staples, Utilities, and Consumer Discretionary.
As shown on the graph below, losses were made by the Commodities, Agricultural, U.S. Financials, Euopean Financials, and Chinese Financials ETFs…the European Financials ETF was the biggest loser.
With volatility rising again on Foreign ETF weakness, as noted in my post of March 22nd, the Financials ETFs are the ones to watch for possible further weakness, particularly with the weak data released Thursday night showing a decline in China's CB Leading Index, as shown on the graph below.
China's Shanghai Stock Exchange Index is declining and closed just below the 50 sma, as shown on the Daily chart below. As yet, there is no sign of a reversal of the downtrending RSI, MACD, and Stochastics indicators, suggesting further downside to, perhaps, near-term support in the region of 2300.
As shown on the graph below, losses were made in Silver, Copper, Oil, and Gold.
The following four Weekly charts of Oil, Gold, Silver, and Copper show support and resistance levels…ones to watch.
As shown on the graph below of the Major Indices, the Dow Utilities made a minor gain, while all others lost, with the Dow Transports the biggest loser…one to watch for a potential breakout above/below major resistance/support levels, as shown on the Weekly chart below. The Emerging Markets ETF (EEM) was a big loser on the week, and I would refer you to the comments noted in my posts on the BRIC countries on March 15th and March 12th.
As shown on the currency graph below, the Aussie $ and Canadian $ were the biggest losers, with the British Pound and U.S. $ incurring minor loses, and the Euro made a minor gain. The Aussie $ and Canadian $ are ones to watch for potential increasing weakness on any further declines in Gold and Oil.
The Weekly chart below of the U.S. $ shows that price closed just above the 200 sma (pink)…major resistance and support are at 82.00 and 79.00, respectively…one to watch to see how it performs over the week(s) to come.
Enjoy your weekend!