Saturday, June 29, 2013

Nemo's Findings, week of 6/30/2013

(Course on chart pattern recognition is available now: http://www.realitytrader.com/111trades.html  

"Nevermind....we were only kidding!"  ~The Fed...

 Well, the Fedmongers were out in full force backing away from that whole taper thing.  Ain't happening anytime soon.  The economy is not doing all that well.  Last week I thought the big thing was China actually, and they injected liquidity into their markets.  So the two big sources of nervousness were mollified this week.  However...

if the Fed taper-talk was the reason for the sell-off, that's all that is currently holding up this market, so unless this earnings season is good with good guidance, and econometrics get stronger, they are backed into a corner. Anyway, let's see some charts:


Remember that volume at price level highlighted in red from last week?  Notice where we bottomed?

 


Notice the white arrow very near to where we bottomed (close enough for government work...), that's the 38.2% retrace to the November low.

 

Ya' put the two together, what have you got?   See below:

 

 

Wait for it?............................................................................

 

 

 

ready?........................................................................................

 

 

 

CONFLUENCE!!!!!!!!!!!!!!!!!!!

 

 

 O.K. so I'm a bit melodramatic.  Question is what happens now?  Mmmmhhh..hard to say.  IWM is above it's 50 day, the finnies are sitting on it, and SPY is still a bit under the weather.  I think it would be reasonable to attempt an assault on it this week.  As I said before though, and not like I'm unique in the sentiment, earnings and guidance will lever the direction of this market.  This week's positive action can primarily be attributed to the FED, and oversold technical bounces.  Have you noticed though, that recent earning have been sold, where a couple of months ago, if a stock sold off on earnings in the morning, it was basically bought back up that day?  We may just be in the process of forming a rangebound trading area for the Summer leaning toward more downward action.

 

Let's take a quick look at bonds:  

 Here is a repeat of the weekly (was gonna' put weakly...probably apropos) As we can see, TLT made a valiant effort to recover the 50% retrace of the double bottom.  We'll see if it can hold it.  Both Gundlach and the PIMCO guy came out this week and said the carnage is likely over.  Having said that,  mortgage rates jumped .6% this past week on average.  That's huge...so, that may be a harbinger that the really good times for bond yields are over. 

And a quickie at the $:  

 

We've retraced above the 61.8% of that swing low, which way we head?  Good question...we're in the middle of world central bank currency wars.  It was, until recently $ up, market down.  Now they are moving more in positive correlation.  Looks like it could be headed for a bit of a downward retrace here.  On a larger time scale, it looks like they're trying to keep it in a range between $21ish and $23ish.

 

The week that was:

 




The week (month, quarter, semester) that is :




 

 O.K...all those new levels, that's enough for the weekend...