Market Recap: Major US market indices bearish outlook

I wanted to present four weekly charts of the main US market indices SPX, DJ, NASD and RUT. What is common to all are the parallel channel and that we are bouncing off the upper resistances on them. Which makes my near term market outlook bearish.


First up: SPX, market hit the channel trendline resistance and bounced off it mostly on some earnings (ref AAPL) shrugging off the not so great economic data, pattern seems clear although we never know which Fed official would prop us up.

Next: DJ Industrial: The channel is roughly over the same period over a longer term channel, DJ has been lagging somewhat lately on the lower time frames.

NASDAQ: This index broke resistance trendline and has been leading all other indices but it too might have to take a step back as AAPL is feeling some pressure lately, in spite of the blockbuster earnings last week. On AAPL my view is the risk reward isn't as appealing as an long term investment going forward, but I'm in no way a sector or AAPL specialist.We'll have to watch what the tech sector does from here on.

Russell 2000: This midcap index is forming a bearish head & shoulders pattern, not in a channel but is bearish nonetheless. Its bouncing off an important support ling and the right shoulder could form higher but if this breaks beware.

I think these charts convey my outlook for the months ahead, we may trade range bound or lower, I'm worried about what happens in Europe with the French elections and the never ending PIGS debt. Stay  nimble.

Market Recap: 4/4/2012 - Bears have more work to do

Some technical damage today with a decent size selloff and no bounce off the lows. After the FOMC minutes and Europe bond sale. I think what was interesting today was that the longer term trendline from Nov ( 3/28 post ) was retested and somewhat broken. Thats a bearish sign and if that breaks we will have some sharp moves lower but not so sure that happens yet. First its a short week with a holiday on Friday, usually day before is seasonally bullish. Also, if you look at the 30m chart below we have channel support that has held near close, so the uptrend is intact.  

As of writing this, Asia is trading lower so we'll have to see how Europe does overnight, we might just drag sideways in indecision too. Short term support from 2/29/2012 is at 1378 about 20pts below close today so thats to keep an eye out for.

Market Recap 3/31/2012: And that was Q1 2012

I wanted to post the long term weekly chart of SPX to get an idea of a longer term level that I think will be reached soon thanks to the Fed. The resistance line at 5/23/08 high at 1440.25 is my near target. We'll have to wait and see if its met, only roughly 2% away.

The market has shown some intraday bearishness but the trendline support from 3/28 post held up and SPX is trading in a sideways channel as in the 30min chart below, we may retest either of the channel lines although the stochastics are overbought and I'm a bit bearish into the open Monday.

 

There was some interesting action in the treasuries, 20yr treasuries sold off sharpy yesterday, given the negative correlation with SPX this is could be bullish and may have been behind the bounce off the low on Friday. This would be something to keep an eye on tomorrow.

Market Recap: 3/28/2012

 Well one day move on Bernanke's statement all nearly wiped out two days later. So here are some thinks I'm looking at. The daily chart below shows long somewhat of a longer trendline support.

The pink line from the Nov 25, 2011 low shows the Santa rally when we thought the market was about to take a turn for the worse. The Fed came to the rescue. Now two days ago when we thought the market had run its course a bit yet again Ben B talked easing. And while we're at it, the dip 3/6 was again supported by another Feb chief calling QE4,5,6 ... So that's really whats been driving the markets. We see a similar long term trendline support on the ES mini, and clear bounce off the support line.

Over the last few days we've definitely seen an inclination to move lower and only dragged higher. The chart above is the hourly candles. The short term trendline support makes for a rising wedge which I'll be watching tomorrow. If the trendline breaks we could move to retest the 3/23 support near 1389. But that seems a bit too drastic, especially given the overall bullish moves (not to mean fundamentals IMHO)






 

Market Recap: 12/22

Short post today. We did finally touch the upper trendline target my downside target would be the MA(200) for the trend to have better structure and if that fails I'd be looking at a possible reversal. So in wait and watch mode. Also tomorrow is the last trading day before Xmas so trade light

Market Recap: 12/21

Dislocated equity index moves today with SPX +0.19%, DJ +0.03% and COMPQ -0.99%. Its almost like pairs traders are shorting COMPQ and going long SPX. Algo's or not I remain looking for cycles in a trend. So if yesterday was a break out, today's move isnt as convincing to me as a strong trend up. Overall chart posted yesterday is the same, we haven't yet reached the upper trendline on the daily. Take a look at the 30m SPX chart. The regression line with 1.5 sigma deviations capture the downward channel I posted yesterday sort of statistically. Stochastics are getting overbought and on a 30 minute timeline tend to predict cyclic moves better. So not a lot more higher before we correct a little, although the dip and move up (higher low) is somewhat bullish.

Market Recap: S&P week before Xmas

So we stabilized a little after the SPX downgrade in August (See ROC), in terms of intraday volatility but are not out of the woods yet. We've been trading sideways ever since and might continue to do that as we stay within the bearish channel. We've had four retests of the upper trendline and are due for another as today we moved above the MA(50) and its santa rally time and the stochastics are slightly over sold. Will we break through the trendline? I have my doubts about it. 

Above daily chart, see the rising wedge in a downward channel, thats bearish, and the stochastics have more room to move lower. Next chart is the weekly

Tradings been rough as you can see, from the chart but the Fib target high to low (Pink lines) is much lower.  

The same actors persist, Europe and Mr Ben B and US politics. Any resolution for each not in sight. It seems that the Fed has decided to wait on the European roslution, read breakup, before it gets involved with QE3. No point in inflating when a crisis will undo the impact would be the logic. So short term we may move a little higher but longer term I'm still bearish.