Money Flow for September Week One

By -

Further to my last weekly market update, this week's update will look at
graphs and charts for:

  • + 6 Major U.S. Indices
  • + 9 Major U.S. Sectors
  • + Germany, France, and the PIIGS Countries
  • + Emerging Markets Sector (EEM) and the BRIC Countries
  • + Canadian, Japanese, and the World Indices
  • + Commodities
  • + 7 Major Currencies
  • + 30-Year Bonds
  • + SPX:VIX and RUT:RVX Ratio Pairs

Very simply, you
can see from the following series of graphs depicting percentage
gained/lost for the past week
, and the corresponding 1-Year
Daily chartgrids
, that they all ended the week higher, with the
exception of Japan's Nikkei Index, the Agriculture ETF (DBA), the U.S. $, and
30-Year Bonds.

The global rally in the "Risk-on" trade
was fueled by the ECB's proposed conditional/sterilized (i.e. no new money
printing) bond buying program and China's fixed asset spending/stimulus program,
which were announced this past week.

Price is either:
at/near a prior 1-year high, making new highs for the year, at horizontal
overhead price resistance levels, at uptrending channel levels/resistance, at
downtrend channel resistance, or at moving average resistance.

Any that are in uptrend should look to their 20
sma for near-term support
, followed by the 50 sma, on any pullback from

Any further rally would, no doubt, be
fueled by positive news on a variety of events
during the upcoming
week, including Germany's Constitutional Court ruling on the legality of the ESM
on September 12 (which will have a bearing on the ECB's ability to implement its
bond buying program), the Dutch election on September 12, and the Fed
meeting/Chairman Bernanke's press conference on September 13. There are also
Eurogroup meetings and European Council Finance Ministers meetings next weekend,
which may affect price action at the beginning of that OPEX week.

The Weekly
below shows the profit-taking that's been occurring since the
beginning of June on the 30-Year Bonds as it begins to form a
"diamond" (potentially topping) pattern. For the moment, it's holding at
trendline and near-term support as it closed just above its middle Bollinger
Band. It's one to watch to see which direction is held by the eventual break of
the diamond apex.

over the past three days, as the SPX:VIX and
the RUT:RVX ratio pairs bounced back above the
bottom channel after a brief dip below, as shown on the two Year-to-Date
Daily charts

Ideally, any further
equity rally should see these two hold above the bottom of the channel,
particularly on any pullback in the SPX and the
RUT to their 20 sma on the Daily timeframe, as mentioned near
the beginning of this post…otherwise, this four-month rally in Global
equities may be finished for the time being as price, potentially, corrects to
the 50 sma, or lower

Enjoy your weekend
and good luck next week!