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Sunday, March 28, 2010

S&P 500 and US Dollar: Week End Review

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Overview


The S&P 500, SPX, is up +0.58% for the week, up +5.62% for the month, up +4.62% for the year, and up +72.44% since the March 9, 2009 market bottom. The US Dollar, USDX, is up +1.05% for the week, up +1.13% for the month, up +4.68% for the year, and down -8.49% since the March 9, 2009 top.

SPX closed Friday at 1166.59, after setting another 2010 YTD closing high of 1174.17 on Tuesday, March 23. Likewise, the US Dollar pulled back on Friday to a close of 81.60, from a 2010 YTD closing high on Thursday of 82.16.

The Big Question: What happens now? Up, Down, Sideways? An upside breakout has occurred above 1150 for the SPX, previously resistance but which is now important recent support. This 1150 support could be tested again, with the strengthing of the US Dollar. As long as SPX stays at or above 1150, this is a very bullish indicator. Any new 2010 YTD highs need the US Dollar to stop ascending, at least trade sideways, and preferably pullback some. The USD has rallied against the key currencies EUR, JPY, and GBP.  When the Greece sovereign debt crisis is settled to the satisfaction of the markets, then I believe the top is in at least intermediate-term for USD and the SPX continues upwards.

All 5 major indexes (Russell 2000, NASDAQ Composite, NASDAQ 1000, S&P 500, and Dow Jones Industrial Average 30) have traded the same this week. All set 2010 YTD closing highs and then pulled back.  The S&P 500 is now in an intermediate-term bull market, as is the US Dollar Index. Both the S&P 500 and US Dollar Index are technically in long-term bull markets simultaneously. For comparative purposes, the current intermediate-term and long-term signals and the date generated are:
S&P 500 Bull 3-16-10, Bull July 2009
US Dollar Bull 12-21-09, Bull January 2010
Russell 2000 Bull 3-11-10, Bull July 2009
NASDAQ Composite Bull 3-15-10, Bull May 2009
NASDAQ 100 Bull 3-15-10, Bull April 2009
Dow Jones Industrial Average Bull 3-16-10, Bull July 2009


S&P 500: Intermediate-Term Bull Market Continues


S&P 500 Daily Chart Below is the SPX daily chart for 2010.

Noteworthy Closing Prices on daily chart below:
Current Close 1166.59 (Highest yellow horizontal line)
2010 YTD High 3-23-10 1174.17
Previous 2010 High 1150.23 1-19-10 (Second highest yellow horizontal line)
YE 12-31-09 1115.10 (Third highest yellow horizontal line)
10 Month EMA 1071.07 (Lowest yellow horizontal line)




Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, signalled a bull market for the SPX on Tuesday, March 16. That is, the 25d sma is greater than the 50d sma. An intermediate-term bear market had been in effect since February 10, only the third such bear market signal occurring since the March 9, 2009 bottom.

Resistance The current close, the highest yellow horizontal line, is below the recent 2010 YTD closing high, which is now recent resistance. All other recent resistance has been overcome, notably the 1150 area, and have become multiple levels of support below. SPX is also trading in the September 2008 area, but nothing appears of consequence for resistance or support.

Support There are multiple levels of support below, being that the SPX is near the YTD highs and also highs since the March 9, 2009 market bottom.  Notable support is the previous YTD high of 1150.23 on 1-19-10 and the related struggle to breakout upside from the 1150 area from about March 10-16.

Moving Averages SPX is now well above the 25d, 50d, 100d, and 200d simple moving averages. The 25d sma bottomed on February 26 and is now ascending. The 50d, 100d, and 200d sma's are all ascending,.The 25d sma has regained the 100d and then the 50d sma's.

Uptrend Line The uptrend line, a measure of the rate of price ascent, is from the March 9, 2009 closing low of 676.53 up through the February 8, 2010 closing low of 1056.74. The February 8 closing low has been the bottom of the 2010 pullback. The SPX has remained above this trendline since bouncing up above on February 9.

Downtrend Line The downtrend line, a measure of the rate of price descent, is from the October 9, 2007 all-time closing high of 1565.15 down through the March 23, 2010 YTD closing high of 1174.17. SPX has remained below for 3 days now.

Relative Strength Index (RSI)
RSI 14 day = 74.18 is overbought; has dropped from mid to high 90s of mid March
RSI 28 day = 76.39 is overbought; has dropped from 83.30 YTD high of March 23
I originally thought, even with the higher RSIs, that a pullback and/or consolidation was not imminent, because the US Dollar would not strengthen significantly. However, until the Greece sovereign debt issue is resolved once and for all, I now think we could see some additional SPX consolidation and some pullback as the US Dollar maintains strength.

MACD (12,26,9) The MACD is bullish and has been since February 16.  However, the MACD has been decreasing.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The SPX is well above this signal at the current close, which is the highest yellow horizontal line.

Conclusion The SPX has rallied from lows of February, set a new 2010 YTD closing high on Tuesday, and now has pulled back some due to a strengthening of the US Dollar. SPX is at some weak recent support, stronger support is in the 1150 area below. The RSIs indicate SPX is overbought, so a major upside breakout is questionable and can only be fueled by a weakening US Dollar. Therefore, until the Greek soverign debt crisis is resolved, or at least the chatter volume decreases, I don't foresee a significant upside for the SPX. I would expect more consolidation, sideways trading, and a trading range established for the interim. The 1150 area is critical support and the bottom for the SPX at this point. 1150 could be tested again. The intermediate-term trend is bullish and the long-term trend is still bullish.


US Dollar: Intermediate-Term Bull Market Continues


US Daily Chart Below is the USD daily chart from late November, 2009 through the current close. 

Noteworthy Closing Prices on daily chart below:
Current Close 81.60 (Highest yellow horizontal line)
2010 YTD High 3-25-10 82.16
Previous 2010 YTD High 2-23-10 80.93 (Second highest yellow horizontal line)
YE 12-31-09 77.95 (Lowest yellow horizontal line)
10 Month EMA 79.46 (Third highest yellow horizontal line)




Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, indicates an ongoing bull market for the US Dollar. That is, the 25d sma is greater than the 50d sma and has been since December 21, 2009. This is the first such bull market signal since from early February 2009 through early April 2009. This is also the first bull market since the March 9, 2009 closing high and subsequent decline into a bear market.

Resistance The current close, the highest yellow horizontal line, is below the recent 2010 YTD closing high, which is now recent resistance. All other recent resistance has been overcome. USD is also trading in the May 2009 price area, but nothing appears of consequence for resistance or support.

Support There are multiple levels of support below, being that the USD is near the YTD highs. Notable support is the previous YTD high of 80.93 on 2-23-10.  A tremendous amount of recent support is the range trading from February 4 though March 23.

Moving Averages The USD tested the 25d sma but has spiked above. With this large green candle of March 24, the USD is easily above the 25d, 50d, 100d, and 200d sma's. The 25d, 50d, and 100d sma's are ascending and the 200d sma has leveled off. The 50d sma now has crossed above the 200d sma, the Golden Cross, on February 18. The 100d sma met the 200d sma on Friday, March 26 and both are equal at 78.09.

Uptrend Line The uptrend line, a rate of price ascent, is from the November 25. 2009 closing low of 74.24 up through the March 16, 2010 closing low of 79.70. The November 25 low has been the bottom, since the March 9, 2009 peak. The March 16 low has been the bottom of the 2010 pullback.  The USD tested this uptrend line and bounced above on March 18. The USD has stayed above subsequently.

Downtrend Line The downtrend line, a rate of price descent, is from the March 9, 2009 high of 89.17 down through the March 25, 2010 YTD closing high of 82.16.  USD pulled back from the YTD high the next day, Friday.

Downtrend Line Very Long-Term A very long-term, well known downtrend line, not shown on this chart, from the January 2002 close of 120.22 down through the March 9, 2009 close of 89.17.  USD is still well below - the trendline is at approximately 84.50.

Relative Strength Index (RSI)
RSI 14 day = 61.17 is reasonable, neutral; up from the mid 30s of mid March
RSI 28 day = 62.22 is reasonable, neutral; up from the high 40s of mid March
The recent upward bounce has increased the RSIs to reasonable levels, from the previous oversold levels.

MACD (12,26,9) The MACD is now bullish, since Wednesday, March 24.

Long-Term Trend The third highest yellow horizontal line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The USD is above this signal at the current close, which is the highest yellow horizontal line.

Conclusion The US Dollar has had a remarkable, rather unexpected, rally from the lows of late November and early December 2009. The rally stalled around February 19-23, sideways trading ensued, then a pullback. The USD then showed some strength last week before exploding upwards on Wednesday with a big green candle. The RSIs are neutral, after bouncing off lows indicating an oversold condition. The USD has regained and exceeded the benchmark 80.00 price, which had been the center of price trading for over a week. I had questioned how much upside momentum was left unless Greece totally melts down as a result of squabbles in the EU. I expected more sideways trading to occur, a trading range established, and no definitive up or down move. Until the Greece sovereign debt crisis is solved once and for all, apparently the USD has more upside momentum. The intermediate-term trend is still bullish. The long-term trend is still bullish. See additional comments below in the Summary.


Summary


Both the SPX and US Dollar appear bullish and both have continued upwards! There is some uncertainty in the markets, but no fear. The USD rallied Wednesday and Thursday big time against the EUR and JPY, causing the big spike. This put a cap on the SPX rally.  USD is in both intermediate-term and long-term bull markets versus the EUR, JPY, and GBP, which comprise 83.1% of the US Dollar Index.

EUR/USD The EUR/USD signals are both intermediate-term and long-term bear markets, but a bottoming process and sideways trading began February 18, until the EUR brokedown through on Wednesday. The EUR has also broke down through the 25d sma on March 19 and is now below the 25d, 50d, 100d, and 200d sma's.  The EUR had been in a trading range between February 4 and March 23 before this breakdown.  RSI 14d is oversold at 37.26 and RSI 28d is leaning oversold at 46.58.  MACD has been bearish since March 21. The EUR has broke down through support, is a new bottom in?

USD/JPY The USD/JPY signalled an intermediate-term bull market on Friday, March 26 and is also now signalling a long-term bull market signa.  The USD is now approaching the 2010 YTD closing high of 93.1610 on January 7.  USD is above the 25d, 50d, and 100d sma's and the 25d sma crossed above the 50d sma on Friday, March 26.  The RSI 14d is overbought at 77.60, but the RSI 28d is reasonable, neutral at 62.33.  MACD has been bullish since March 7.

GBP/USD The GBP/USD signals are both intermediate-term and long-term bear markets. The GBP bounced up from the March 1, 2010 YTD closing low only to set another YTD closing low of 1.48832 on Thursday, March 25.  GBP is below the 25d, 50d, 100d, and 200d sma's, with the sma's fanning out in classic bearish mode.  The RSI 14d is near oversold at 47.08 and the RSI 28d is oversold at 38.52.  MACD became bearish on Thursday, March 25.

UUP ETF (US Dollar Index Bullish Fund) The UUP signals are both an intermediate-term and long-term bulls markets, reflecting the overall trend of the USD reviewed above.

UDN ETF (US Dollar Index Bearish Fund) The UDN signals are both an intermediate-term and long-term bear markets, reflecting the overall trend of the USD reviewed above.

US Dollar Index is comprised of 6 currencies, which are weighted. The current intermediate-term and long-term signals, the USD trend versus that currency, are noted, after the weighting percentage, below:

EURO 57.6% Bullish, Bullish; USD has rallied
JPY 13.6% Bullish, Bullish; USD has rallied
GBP 11.9% Bullish, Bullish; USD has rallied
CAD 9.1% Bearish, Bearish; USD has rallied
SEK 4.2% Bearish, Bearish; USD has rallied
CHF 3.6% Bearish, Bullish, USD has rallied and consolidating

The Euro, JPY, and GBP are weighted a total of 83.1% of the US Dollar Index. Therefore, the USD trends versus Euro, JPY, and GBP are what had been driving the USD bull market. However, all 3 currencies, have recently rallied resulting in the USD generally pulling back and trading sideways.


Matrix Markets & Friends


Where to Find Matrix Markets & Friends on the Internet:
http://MountainSeer.blogspot.com/

I microblog on Twitter:

@MatrixMarkets
Related to this blog, plus additional news about S&P 500, US Dollar, some Technology, and any trades we make.

@OspreyFlyer
Technology stocks and news


Previous & Additional Comments


The Russell 2000 regained and exceed it's 2010 high first, followed by the NASDAQ Composite, and then the NASDAQ 100. Next the SPX set 2010 YTD highs in excess of the Janaury 2010 highs. The Dow Jones Industrial Average was lagging behind the SPX and other aforementioned indexes, a familiar pattern during this rally from the March 9, 2009 low as the NASDAQ 100, NASDAQ Composite, and/or Russell 2000 have led the rally with the S&P 500 following and then the Dow Jones Industrial Average lagging in the back. Now the DJIA has reached a new 2010 YTD high on Wednesday, March 17, and has been able to hold the price. I so noted this in a previous post.

As I have stated in previous posts, there is some uncertainty, but not fear, in the markets. As of now, the official unemployment rate peaked in October 2009, but the official underemployment rate, U-6, has increased recently. This Great Recession, as with all recessions, results in a certain amount of restructuriing of the economy, which is in progress. At present, I am not bearish on USA equities but cautious after this good bull run since February 9 on the SPX

I do not foresee a double dip recession or another significant economic downturn. The withdrawal of significant federal economic stimulus will result in a flattening of the rebound and perhaps a small pullback. I do see a long, slow recovery as the economy restructures to the new economic paradigm. The January and February USA economic data has not been that bad, actually encouraging, even considering snow storms! lol I expected worse numbers, especially after reasonably good November and December 2009 holiday data.


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Thursday, March 25, 2010

S&P 500 and US Dollar: Mid Week Review

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The S&P 500, SPX, is up +0.67% for the week, up +5.72% for the month, up +4.72% for the year, and up +72.60% since the March 9, 2009 market bottom. The US Dollar, USDX, is up +1.42% for the week, up +1.50% for the month, up +5.07% for the year, and down -8.15% since the March 9, 2009 top.

The S&P 500, SPX, closed Wednesday at 1167.72, after setting another 2010 YTD closing high of 1174.17 set on Tuesday, March 23. The current close is just above support from the Wednesday, March 17 close of 1166.21. The Tuesday high is now considered recent resistance and a 2 day trading range has been established.

The Big Question: What happens now? Up, Down, Sideways? An upside breakout has occurred above 1150, previously resistance but which is now important recent support. This 1150 support could be tested again, with the strengthing of the US Dollar. As long as SPX stays at or above 1150, this is a very bullish indicator. Any new 2010 YTD highs need the US Dollar to stop ascending, at least trade sideways, and preferably pullback some.  All 5 major indexes (Russell 2000, NASDAQ Composite, NASDAQ 1000, S&P 500, and Dow Jones Industrial Average 30) have traded the same this week.  All set 2010 YTD closing highs and then pulled back.

The S&P 500 is now in an intermediate-term bull market, as is the US Dollar Index. Both the S&P 500 and US Dollar Index are technically in long-term bull markets simultaneously. For comparative purposes, the current intermediate-term and long-term signals and the date generated are:
S&P 500 Bull 3-16-10, Bull July 2009
US Dollar Bull 12-21-09, Bull January 2010
Russell 2000 Bull 3-11-10, Bull July 2009
NASDAQ Composite Bull 3-15-10, Bull May 2009
NASDAQ 100 Bull 3-15-10, Bull April 2009
Dow Jones Industrial Average Bull 3-16-10, Bull July 2009


S&P 500: Intermediate-Term Bull Market Continues


Noteworthy Closing Prices on daily chart below:
Current Close 1167.72 (Highest yellow horizontal line)
2010 YTD High 3-23-10 1174.17
Previous 2010 High 1150.23 1-19-10 (Second highest yellow horizontal line)
YE 12-31-09 1115.10 (Third highest yellow horizontal line)
10 Month EMA 1071.28 (Lowest yellow horizontal line)




Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, signalled a bull market for the SPX on Tuesday, March 16. That is, the 25d sma is greater than the 50d sma. An intermediate-term bear market had been in effect since February 10, only the third such bear market signal occurring since the March 9, 2009 bottom.

Resistance and Support The current close, the highest yellow horizontal line, is now below the recent 2010 YTD closing high, which is now recent resistance. All other recent resistance has been overcome, notably the 1150 area, and have become multiple levels of support below. SPX is also trading in the September 2008 price area.

Moving Averages SPX is now well above the 25d, 50d, 100d, and 200d simple moving averages.  The 25d sma bottomed on February 26 and is now ascending. The 50d, 100d, and 200d sma's are all ascending, which is a postive sign. The 25d sma has regained the 100d and then the 50d sma's.

Uptrend Line The uptrend line, a measure of the rate of price ascent, is from the March 9, 2009 closing low of 676.53 up through the February 8, 2010 closing low of 1056.74. The February 8 closing low has been the bottom of the 2010 pullback. The SPX has remained above this trendline since bouncing up above on February 9.

Downtrend Line The downtrend line, a measure of the rate of price descent, is from the October 9, 2007 all-time closing high of 1565.15 down through the March 23, 2010 YTD closing high of 1174.17. I have reset the downtrend line to this new high and SPX remains below.

Relative Strength Index (RSI)
RSI 14 day = 81.44 is very overbought; but has dropped from mid to high 90s of last week
RSI 28 day = 78.73 is overbought; near 2010 YTD high of previous day 83.30
I originally thought, even with the higher RSIs, that a pullback and/or consolidation was not imminent, beecuase the US Dollar would not strengthen significantly. However, until the Greece sovereign debt issue is resolved once and for all, I now think we could see some additional SPX consolidation and some pullback.

MACD (12,26,9) The MACD is bullish and has been since February 16.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The SPX is well above this signal at the current close, which is the highest yellow horizontal line.

Conclusion The SPX has rallied from lows of February, set a new 2010 YTD closing high on Tuesday, and now has pulled back some due to a strengthening of the US Dollar. SPX is at some weak recent support, stronger support is in the 1150 area below. The RSI indicates SPX is overbought, so a major upside breakout is questionable and can only be fueled by a weakening US Dollar. Therefore, until the Greek soverign debt crisis is resolved, or at least the chatter volume decreases, I don't foresee a significant upside for the SPX. I would expect more consolidation, sideways trading, and a trading range established for the interim. The 1150 area is critical support and the bottom for the SPX at this point. 1150 could be tested again. The intermediate-term trend is bullish and the long-term trend is still bullish.


US Dollar: Intermediate-Term Bull Market Continues


Noteworthy Closing Prices on daily chart below:
Current Close 81.90 (Highest yellow horizontal line)
2010 YTD High 81.90 3-24-10 (Highest yellow horizontal line)
Previous 2010 YTD High 2-23-10 80.93 (Second highest yellow horizontal line)
YE 12-31-09 77.95 (Lowest yellow horizontal line)
10 Month EMA 79.51 (Third highest yellow horizontal line)




Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, indicates an ongoing bull market for the US Dollar. That is, the 25d sma is greater than the 50d sma and has been since December 21, 2009. This is the first such bull market signal since from early February 2009 through early April 2009. This is also the first bull market since the March 9, 2009 closing high and subsequent decline into a bear market.

Resistance and Support The current close, the highest yellow horizontal line, has raised the price above all recent resistance - all the way back to May 2009 and even to January 2009 prices.  There is considerable support below consisting of consolidation trading since February 4.

Moving Averages The USD tested the 25d sma but has spiked above.  With this large green candle, the USD is easily above the 25d, 50d, 100d, and 200d sma's.  The 25d, 50d, and 100d sma's are ascending and the 200d sma has leveled off.  The 50d sma now has crossed above the 200d sma, the Golden Cross, on February 18. The 100d sma is close to crossing above the 200d sma.

Uptrend Line The uptrend line, a rate of price ascent, is from the November 25. 2009 closing low of 74.24 up through the January 14, 2010 closing low of 76.76. The November 25 low has been the bottom, since the March 9, 2009 peak. The USD tested this uptrend line and bounced above on Friday, March 19.  Whether the USD can continue above this trendline, a rate of price ascent, will determine how strong this bull market is.

Downtrend Line The downtrend line, a rate of price descent, is from the March 9, 2009 high of 89.57 down through the February 23, 2010 closing high of 80.93, which was the 2010 YTD closing high for a time.  The USD had struggled with this downtrend line since February 23, but was able to breakout above on Friday, March 19.

Downtrend Line Very Long-Term A very long-term, well known downtrend line, not shown on this chart, from the January 2002 close of 120.22 down through the March 9, 2009 close of 89.17, is still above the USD current price, at approximately 83.20.  However, the USD is approaching this downtrend line and, quite frankly, I never thought the USD would rise this close to it.

Relative Strength Index (RSI)
RSI 14 day = 65.98 is reasonable, neutral; up from the mid 30s of mid March
RSI 28 day = 61.37 is reasonable, neutral; up from the high 40s of mid March
The recent upward bounce has increased the RSIs to reasonable levels, from the previous oversold levels.

MACD (12,26,9) The MACD is now bullish, effective Wednesday, March 24.

Long-Term Trend The third highest yellow horizontal line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The USD is above this signal at the current close, which is the highest yellow horizontal line.

Conclusion The US Dollar has had a remarkable, rather unexpected, rally from the lows of late November and early December 2009. The rally stalled around February 19-23, sideways trading ensued, then a pullback. The USD then showed some strength last week before expolding upwards on Wednesday with a big green candle. The RSIs are neutral, after bouncing off lows indicating an oversold condition. The USD has regained and exceeded the benchmark 80.00 price, which had been the center of price trading for over a week. I had question how much upside momentum was left unless Greece totally melts down as a result of squabbles in the EU. I expected more sideways trading to occur, a trading range established, and no definitive up or down move. I again do not see more upside momentum, but I was incorrect on this over the weekend.  The intermediate-term trend is still bullish. The long-term trend is still bullish. See additional comments below in the Summary.


Summary


Both the SPX and US Dollar appear bullish and both have continued upwards!  There is some uncertainty in the markets, but no fear. The USD rallied Wednesday big time against the EUR and JPY, causing the big spike.  This put a cap on the SPX rally.

EUR/USD The EUR/USD signals are both intermediate-term and long-term bear markets, but a bottoming process and sideways trading began February 18, until the EUR brokedown through on Wednesday.  The EUR has also brokedown through the 25d sma. The EUR is in a trading range between the February 10 closing high and the February 24 closing low. RSI 14d is oversold at 35 and MACD has been bearish since March 21.  The EUR has brokedown further than I thought it would, sheesh.

USD/JPY The USD/JPY signals are both intermediate-term and long-term bear markets. However, the intermediate-term signal is essentially neutral and the long-term signal is being tested.  The USD has bounced above the March 3, 2010 closing low of 88.4590 and is well above the November 29, 2009 closing low of 86.3530. The 25d, 50d, and 100d sma's have converged just above 90. The RSI 14d is slightly overbought at 76 and MACD has been bullish since March 7.

GBP/USD The GBP/USD signals are both intermediate-term and long-term bear markets. The GBP bounced up from the March 1, 2009 closing low of 1.49256 low but is now testing this bottom again.  The RSI 14d is rather oversold at 49 and MACD has been bullish since March 11.

UUP ETF (US Dollar Index Bullish Fund) The UUP signals are both an intermediate-term and long-term bulls markets, reflecting the overall trend of the USD reviewed above.

UDN ETF (US Dollar Index Bearish Fund) The UDN signals are both an intermediate-term and long-term bear markets, reflecting the overall trend of the USD reviewed above.

US Dollar Index is comprised of 6 currencies, which are weighted. The current intermediate-term and long-term signals, the USD trend versus that currency, are noted, after the weighting percentage, below:

EURO 57.6% Bullish, Bullish; USD has rallied
JPY 13.6% Bearish, Bearish; USD has rallied
GBP 11.9% Bullish, Bullish; USD has rallied
CAD 9.1% Bearish, Bearish; USD has rallied
SEK 4.2% Bearish, Bearish; USD has bounced up from March 12 low
CHF 3.6% Bullish, Bullish, USD has rallied

The Euro, JPY, and GBP are weighted a total of 83.1% of the US Dollar Index. Therefore, the USD trends versus Euro, JPY, and GBP are what had been driving the USD bull market. However, all 3 currencies, have recently rallied resulting in the USD generally pulling back and trading sideways.


Matrix Markets & Friends


Where to Find Matrix Markets & Friends on the Internet:
http://mountainvision.blogspot.com/

I microblog on Twitter:

@MatrixMarkets
Related to this blog, plus additional news about S&P 500, US Dollar, some Technology, and any trades we make.

@OspreyFlyer
Technology stocks and news


Previous & Additional Comments


The Russell 2000 regained and exceed it's 2010 high first, followed by the NASDAQ Composite, and then the NASDAQ 100. Next the SPX set 2010 YTD highs in excess of the Janaury 2010 highs. The Dow Jones Industrial Average was lagging behind the SPX and other aforementioned indexes, a familiar pattern during this rally from the March 9, 2009 low as the NASDAQ 100, NASDAQ Composite, and/or Russell 2000 have led the rally with the S&P 500 following and then the Dow Jones Industrial Average lagging in the back. Now the DJIA has reached a new 2010 YTD high on Wednesday, March 17, and has been able to hold the price. I so noted this in a previous post.

As I have stated in previous posts, there is some uncertainty, but not fear, in the markets. As of now, the official unemployment rate peaked in October 2009, but the official underemployment rate, U-6, has increased recently. This Great Recession, as with all recessions, results in a certain amount of restructuriing of the economy, which is in progress. At present, I am not bearish on USA equities but cautious after this good bull run since February 9 on the SPX

I do not foresee a double dip recession or another significant economic downturn. The withdrawal of significant federal economic stimulus will result in a flattening of the rebound and perhaps a small pullback. I do see a long, slow recovery as the economy restructures to the new economic paradigm. The January and February USA economic data has not been that bad, actually encouraging, even considering snow storms! lol I expected worse numbers, especially after reasonably good November and December 2009 holiday data.


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Monday, March 22, 2010

S&P 500 Sectors Update


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This is an update on the S&P 500 Sectors via the 9 Select SPDRS ETFs. The S&P 500 itself, the SPX, closed today at 1165.81, just short of the 2010 YTD closing high of 1166.21 set on this past Wednesday, March 17.  The US Dollar Index, USD, closed today at 80.61, down from last week's top closing of 80.75 on Friday, March 19.  I reviewed the SPX and USD in detail over the weekend.

8 of the 9 Select SPDR ETFs are now in an intermediate-term bull market.  Only XLU Utilities is in an intermediate-term bear market.  All 9 sectors are in a long-term bull market.  I am defining an intermediate-term bull market as the 25 day simple moving average greater than the 50 day simple moving average, and vice versa for a bear market.  I am defining a long-term bull market as the current price greater than the 10 month exponential moving  average, and vice versa for a bear market.

Below is a brief update on each of the 9 Select SPDR ETFs that represent the S&P 500 sectors:


Intermediate-Term Bull Market


XLB Materials
Above 25d, 50d, 100d, 200d sma's
RSI 25d = 72.58 is slightly oversold
MACD (12,26,9) is bullish since February 12
Below 2010 YTD highs

XLE Energy
Below 25d, 50d, 100d sma's; Above 200sma
RSI 25d = 56.88 is reasonable, neutral
MACD (12,26,9) is bearish since March 22
Below 2010 YTD highs and October & November 2009 highs

XLF Financial
Above 25d, 50d, 100d, 200d sma's
RSI 25d = 80.13 is very oversold
MACD (12,26,9) is bullish since February 17
Just below 2010 YTD highs

XLI Industrial
Above 25d, 50d, 100d, 200d sma's
RSI 25d = 83.64 is very oversold
MACD (12,26,9) is bullish since February 16
Just below 2010 YTD highs

XLK Technology
Above 25d, 50d, 100d, 200d sma's
RSI 25d = 76.49 is oversold
MACD (12,26,9) is bullish since February 16
Below 2010 YTD highs

XLP Consumer Staples
Above 25d, 50d, 100d, 200d sma's
RSI 25d = 76.34 is oversold
MACD (12,26,9) is bullish since February 12
Just below 2010 YTD highs

XLV Health Care
Above 25d, 50d, 100d, 200d sma's
RSI 25d = 70.03 is slightly oversold
MACD (12,26,9) is bullish since February 18
Below 2010 YTD highs

XLY Consumer Discretionary
Above 25d, 50d, 100d, 200d sma's
RSI 25d = 87.05 is very oversold
MACD (12,26,9) is bullish since February 16
At 2010 YTD highs


Intermediate-Term Bear Market


XLU Utilities
Above 25d and 200d sma's; Below 50d and 100d sma's
RSI 25d = 60.97 is reasonable, neutral
MACD (12,26,9) is bullish since February 18
Well below 2010 YTD and December 2009 highs; Below September thru November 2009 highs


Sector Charts


Below are the 9 sector daily charts, from the July 2009 pullback bottom up through today's close, Monday, March 22 below.  See brief commentary above for each sector.

The 2 yellow horizontal lines on each chart are current closing price and the the 10 month exponential moving average. The 10m ema is the long-term bull/bear market signal. All 9 sectors are in a long-term bull market, that is, the current closing price is above the 10m ema. The uptrend line is from the sector bottom, usually concurrent with the market March 9, 2009 bottom or thereabouts, up through the lowest closing price during the 2010 pullback/correction.  All 9 sectors are above their respective uptrend line.




















Matrix Markets & Friends


Where to Find Matrix Markets & Friends on the Internet:
http://mountainvision.blogspot.com/

I microblog on Twitter:

@MatrixMarkets
Related to this blog, plus additional news about S&P 500, US Dollar, some Technology, and any trades we make.

@OspreyFlyer
Technology stocks and news


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Sunday, March 21, 2010

Technology Sector Review: XLK, SMH, CRM

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This is a review of some daily charts of the technology sector. I reviewed on Saturday the S&P 500 and US Dollar to see what the status was of the USA equities and currency. In that review, I concluded the S&P 500 is in an intermediate-term bull market and in a long-term bull market. I also concluded the US Dollar was in an intermediate-term bull market and a long-term bull market.

This technology review will include ETFs XLK and SMH plus one stock, CRM, since I already have reviewed the popular stocks Apple (AAPL) and Google (GOOG) on Thursday. There are many more technology ETFs and stocks, of course, than I will review here. Long-term I am bullish personally on technology and the ETFs and stocks listed below. Obviously the future is technology and various forecasts show a solid demand in 2010 for software and hardward. I do my best to keep up with all the latest news and research. I microblog some technology information on Twitter at @OspreyFlyer. A summary is at the end of this post.

XLK: Technology ETF



Noteworthy Closing Prices
Current 22.79 3-19-10 (Third highest yellow line)
2010 YTD High 23.27 1-4-10 (Highest yellow horizontal line)
YE 12-31-09 22.93 (Second highest yellow horizontal line)
10 Month EMA 21.00 (Lowest yellow horizontal line)

Overview XLK is up +0.18% for the week, up +5.07% for the month, down -0.61% for the year, and up +72.39% since the March 9, 2009 market bottom. The XLK is a general technology ETF designed to represent the technology sector of the S&P 500, which is approximately 22% of the S&P 500. This ETF also includes the S&P telecommunications sector, which is merged into this technology sector. See the XLK Technology portfolio holdings here. Apple comprises 8.90% and Google 5.98% of the XLK, a total of 14.88% of the holdings.  This is a very liquid ETF.

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, signalled a bull market for the XLK on Thursday, March 18.  That is, the 25d sma is greater than the 50d sma. A bear market signal had been in effect since February 5, 2010 the first such signal since the February 11, 2009 through April 2, 2009 signal.  What a bull run!

Resistance and Support The current closing price, the third highest yellow horizontal line, is in the sideways channel trading of January 2010, which is recent resistance. Above this resistance are the 12-31-09 YE close and the 2010 highs. XLK is also trading in parts of the August and September 2008 trading range.

Moving Averages The 25d sma stopped descending on February 26 and bounced up.  The 50d sma continues to gradually descend while the 100d and 200d sma's continue to ascend. The 25d sma has regained the 50d and 100d sma's. XLK regained the 100d sma on March 1 and the 50d sma on March 4.

Uptrend Line The uptrend line, a rate of price ascent, is from the March 9. 2009 closing low of 13.22 up through the February 4, 2010 closing low of 20.86. The February 4 closing low has been the bottom for this 2010 pullback to date. The XLK has remained easily above this trendline since bouncing up above on February 5.

Downtrend Line The downtrend line, a rate of price descent, is from the October 31, 2007 all-time closing high of 28.40 down through the January 4, 2010 closing high of 23.27, the peak YTD closing high so far. XLK has been testing this downtrend line since March 12.

Relative Strength Index (RSI)
RSI 10 day = 74.49 is overbought; has dropped from high 90s due to recent consolidation
RSI 25 day = 75.43 is overbought, has dropped from low 80s due to recent consolidation
The expected pullback and/or consolidation did occur, to reduce RSIs.  More short-term consolidation is likely before any major surge upwards.

MACD (12,26,9) The MACD is bullish and has been since February 16.

Long-Term Trend The lowest yellow horizontal line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The XLK is above this signal at the current close, the third lowest yellow horizontal line.

Conclusion The XLK has now had a decent rally off the low of February 4. However, the current price is still below the 12-31-09 YE close and January 4, 2010 YTD closing high. XLK did regain the 12-31-09 close on March 17 and 18, but then fell back below on March 19.  The RSI 10 day and 25 day are signalling overbought conditions, so continuing short-term consolidation is likely. I believe XLK will ultimately break through upside to new 2010 highs, just not sure how long this will take. The intermediate-term trend is now bullish.  The long-term trend remains bullish.

SMH: Semiconductors ETF



Noteworthy Closing Prices
Current 27.49 (Third highest yellow horizontal line)
2010 YTD High 28.52 1-8-10 (Highest yellow horizontal line)
YE 12-31-09 27.92 (Second highest yellow horizontal line)
10 Month EMA 25.32 (Lowest yellow horizontal line)

Overview SMH is up +1.78% for the week, up +4.21% for the month, down -1.54% for the year, and up +72.78% since the March 9, 2009 market bottom. The SMH is a technology ETF designed to represent companies that develop, manufacture, and market integrated circuitry and other products known as semiconductors. Of course, semiconductors are integral to the technology sector and to the global economy. Semiconductors demand can be seen as a global economic indicator. See the SMH Semiconductors portfolio holdings here. This ETF is heavily weighted to INTC, TXN, and AMAT, which comprise approximately 55+% of the total portfolio. This is a very liquid ETF.

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, signalled a bull market for the SMH on Wednesday, March 17. That is, the 25d sma is greater than the 50d sma. A bear market signal had been in effect since February 5, 2010, the second such signal since the consolidation trading from late 2008 into Q1 2009.

Resistance and Support The current closing price, the third highest yellow horizontal line, is below the December 2009 highs, the YE 12-31-09 close, and in the sideways trading range of mid January 2010. SMH did regain the YE 12-31-09 close for one day, March 17.  This is recent resistance. Above this resistance is yet more resistance and ultimately the 28.00+ price area, the 2010 highs, the highest yellow horizontal line.

Moving Averages The 25d sma bottomed on February 26 and began ascending.  The 50d sma is slightly descending. The 100d and 200d sma's are ascending. The 25d sma has regained the 50d and 100d sma's. SMH has regained the 100d and 50d sma's.

Uptrend Line The uptrend line, a rate of price ascent, is from the February 23, 2009 closing low of 15.66 up through the February 4, 2010 closing low of 24.51. The February 4 closing low has been the bottom for this 2010 pullback to date. The SMH has easily remained above this trendline since bouncing up above on February 5.

Downtrend Line The yellow downtrend line, a rate of price descent, is from the July 19, 2007 high of 40.42 down through the January 8, 2010 high of 28.52, the peak YTD closing high so far. SMH has began testing this trend line in the last few days.

Relative Strength Index (RSI)
RSI 10 day = 57.42 is reasonable; has dropped from mid 90s earlier in 2010 due to month long trading range
RSI 25 day = 62.43 is reasonable; peaked at high 60s recently
The month long consolidation from mid February through mid March has kept RSIs reasonable.  SMH is ready to surge upwards.

MACD (12,26,9) The MACD is bullish and has been since February 11.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The SMH is above this signal at the current close, the third highest yellow horizontal line.

Conclusion The SMH has now had a decent rally off the lows of February 4. However, the current price is still below the December 2009 closing highs, 12-31-09 YE close, and the January 2010 closing highs. The RSI 10 day and 25 day are not signalling overbought conditions, so a significant pullback does not appear imminent. Additional sideways, consolidation trading may occur, however, an upwards surge is now likely.  The intermediate-term trend is now bullish.  The long-term trend remains bullish.


CRM (Salesforce.com Inc.)



Noteworthy Closing Prices
Current 76.02 3-19-10 (Second highest yellow horizontal line)
2010 YTD High 76.91 3-18-10 (Highest yellow horizontal line)
YE 12-31-09 73.77 (Third highest yellow horizontal line)
10 Month EMA 61.28 (Lowest yellow horizontal line)

Overview CRM is up +0.41% for the week, up +11.88% for the month, up +3.05% for the year, and up +146.10% since the March 9, 2009 market bottom. A strong bull run! As with Apple (AAPL), CRM has been setting all-time closing highs recently, the peak at 76.91 on March 17. CRM is a cloud computing pioneer company.2009.

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, signalled a bull market for CRM on March 12. That is, the 25d sma is greater than the 50d sma. A bear market signal had been in effect since February 9, 2010, the first such signal since June and July 2009.

Resistance and Support The current closing price, the second highest yellow horizontal line,  is above all resistance except the previous day's all-time closing high!  Key support is the January 4, 2010 YTD closing high of 74.82, along with the March 12 and 15 closing prices.  Additional strong support is below at the YE 12-31-09 close of 73.77.

Moving Averages The 25d sma bottomed on February 17, leveled off, and began ascending on February 26.  The 25d, 50d, 100d, and 200d sma's are all ascending.

Uptrend Line The uptrend line, a rate of price ascent, is from the November 19, 2008 closing low of 21.96 up through the February 5, 2010 closing low of 62.08. The February 5 closing low has been the bottom for this 2010 pullback to date. CRM bounced up above the YTD low on February 9 and has easily remained above uptrend line.

Downtrend Line There is no downtrend line, a rate of price descent, because CRM is at all-time closing highs.

Relative Strength Index (RSI)
RSI 10 day = 82.58 is very overbought; has dropped from high 90s
RSI 25 day = 74.04 is overbought; has dropped from 80-81
CRM has had a record settiing bull run to all-time highs.  Expect a pullback and/or consolidation short-term, before another surge upwards in 2010.

MACD (12,26,9) The MACD is bullish and has been since February 11.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. CRM is well above this signal at the current close, the second highest yellow horizontal line.

Conclusion CRM has rallied Big Time above the February 5 YTD closing low, which has been lowest closing during the 2010 pullback. The current price is at just below the all-time high. The RSIs indicate CRM is way overbought. Expect a short-term pullback and/or consolidation, before any further surge upwards in 2010.  The intermediate-term trend became bullish on Friday, March 12. The long-term trend remains bullish.


Summary


I am personally long-term bullish on the two ETFs, XLK and SMH, and one stock, CRM, reviewed above.  However, both XLK and SMH have underperformed the overall USA equities market lately.  That is, both have been unable to set new 2010 YTD highs even as the Russell 2000, NASDAQ Composite, NASDAQ 100, S&P 500, and Dow Jones Industrial Average 30 have recently.  I noted this in a post last week.  On the bright side, CRM has not only reached new YTD 2010 highs, but also all-time highs.

Technology 4Q 2009 earnings reports have been good and the 2010 outlook and guidance is very positive.

I have been unable to discover any other technology ETFs that have decent volume, preferably averaging 1 million shares traded daily.  I'd now settle for 500 thousand average daily volume, if you know of any?


Matrix Markets & Friends


Where to Find Matrix Markets & Friends on the Internet:
http://mountainvision.blogspot.com/

I microblog on Twitter:

@MatrixMarkets
Related to this blog, plus additional news about S&P 500, US Dollar, some Technology, and any trades we make.

@OspreyFlyer
Technology stocks and news


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Saturday, March 20, 2010

S&P 500 and US Dollar: Week End Review

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The S&P 500, SPX, is up +0.86% for the week, up +5.02% for the month, up +4.02% for the year, and up +71.45% since the March 9, 2009 market bottom. The US Dollar, USDX, is up +1.17% for the week, up +0.07% for the month, up +3.59% for the year, and down -9.44% since the March 9, 2009 top.

The S&P 500, SPX, closed Friday at 1159.90, below the 2010 YTD closing high of 1166.21 set on Wednesday, March 17. The Friday close found support from the Wednesday low of 1159.94.  The Wednesday and Thursday closings are now considered recent resistance and a 3 day trading range has been established.

The Big Question: What happens now? Up, Down, Sideways? An upside breakout has occurred above 1150, previously resistance but which is now important recent support.  This 1150 support may be tested again.  As long as SPX stays at or above 1150, this is a very bullish indicator.    Any new 2010 YTD highs need the US Dollar to stop ascending, at least trade sideways, and preferably pullback some.

The Russell 2000 regained and exceed it's 2010 high first, followed by the NASDAQ Composite, and then the NASDAQ 100. Next the SPX set 2010 YTD highs in excess of the Janaury 2010 highs.  The Dow Jones Industrial Average was lagging behind the SPX and other aforementioned indexes, a familiar pattern during this rally from the March 9, 2009 low as the NASDAQ 100, NASDAQ Composite, and/or Russell 2000 have led the rally with the S&P 500 following and then the Dow Jones Industrial Average lagging in the back. Now the DJIA has reached a new 2010 YTD high on Wednesday, March 17, and has been able to hold the price.  I so noted this in a previous post.

The US Dollar, which had been trading sideways, rallied late in the week, mostly because of increased chatter about the Greece sovereign debt crisis.  That chatter mostly consisted of the Greek government complaining about having to pay high interest rates for being a substandard borrower and Germany complaining about helping Greece, lol.  The Indian central bank also raised interest rates.  

As I have stated in previous posts, there is some uncertainty, but not fear, in the markets. As of now, the official unemployment rate peaked in October 2009, but the official underemployment rate, U-6, has increased recently. This Great Recession, as with all recessions, results in a certain amount of restructuriing of the economy, which is in progress. At present, I am not bearish on USA equities but cautious after this good bull run since February 9 on the SPX 

I do not foresee a double dip recession or another significant economic downturn. The withdrawal of significant federal economic stimulus will result in a flattening of the rebound and perhaps a small pullback. I do see a long, slow recovery as the economy restructures to the new economic paradigm.  The January and February USA economic data has not been that bad, actually encouraging, even considering snow storms!  lol  I expected worse numbers, especially after reasonably good November and December 2009 holiday data.

The S&P 500 is now in an intermediate-term bull market, as is the US Dollar Index.  Both the S&P 500 and US Dollar Index are technically in long-term bull markets simultaneously. For comparative purposes, the current intermediate-term and long-term signals and the date generated are:
S&P 500 Bull 3-16-10, Bull July 2009
US Dollar Bull 12-21-09, Bull January 2010
Russell 2000 Bull 3-11-10, Bull July 2009
NASDAQ Composite Bull 3-15-10, Bull May 2009
NASDAQ 100 Bull 3-15-10, Bull April 2009
Dow Jones Industrial Average Bull 3-16-10, Bull July 2009


S&P 500: Intermediate-Term Bear Market Continues



Noteworthy Closing Prices
Friday Current Close 1159.90 3-19-10 (Highest yellow horizontal line)
2010 YTD High 1166.21 3-17-10
Previous 2010 High 1150.23 1-19-10 (Second highest yellow horizontal line)
YE 12-31-09 1115.10  (Third highest yellow horizontal line)
10 Month EMA 1069.86 (Lowest yellow horizontal line)

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, sginalled a bull for the SPX on Tuesday, March 16. That is, the 25d sma is greater than the 50d sma. An intermediate-term bear market had been in effect since February 10, only the third such bear market signal occurring since the March 9, 2009 bottom.

Resistance and Support The current close, the highest yellow horizontal line, is now below the recent 2010 YTD closing highs, which are now recent resistance.  All other recent resistance has been overcome, notably the 1150 area, and have become multiple levels of support below.  SPX is also trading in the September 2008 price area.

Moving Averages SPX has regained the 25d, 50d, 100d, and 200d simple moving averages and is now well above all. The 25d sma bottomed on February 26 and is now ascending.  The 50d, 100d, and 200d sma's are all ascending, which is a postive sign. The 25d sma has regained the 100d and then the 50d sma's.

Uptrend Line The uptrend line, a measure of the rate of price ascent, is from the March 9, 2009 closing low of 676.53 up through the February 8, 2010 closing low of 1056.74. The February 8 closing low has been the bottom of the 2010 pullback to-date. The SPX has remained above this trendline since bouncing up above on February 9, a bullish signal.

Downtrend Line The downtrend line, a measure of the rate of price descent, is from the October 9, 2007 all-time closing high of 1565.15 down through the March 17, 2010 YTD closing high of 1166.21.  I have reset the downtrend line to this new high and SPX remains below.

Relative Strength Index (RSI)
RSI 10 day = 80.53 is very overbought; has dropped from high 90s due to small pullback and consolidation
RSI 25 day = 80.25 is very overbought; has dropped from mid 80s due to small pullback and consolidation
I originally thought, even with the higher RSIs, that a pullback and/or consolidation was not  imminent, beecuase the US Dollar would not strengthen significantly.  However, until the Greece sovereign debt issue is resolved once and for all,  I now think we could see some additional SPX consolidation and some more pullback.

MACD (12,26,9) The MACD is bullish and has been since February 16.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The SPX is well above this signal at the current close, which is the highest yellow horizontal line.

Conclusion The SPX has rallied from lows of February, set a new 2010 YTD closing high on Wednesday, and now has pulled back some due to a strengthening of the US Dollar. SPX is at some weak recent support, stronger support is in the 1150 area below.  The RSI indicates SPX is overbought, so a major upside breakout is questionable and can only be fueled by a weakening US Dollar. Therefore, until the Greek soverign debt crisis is resolved, or at least the chatter volume decreases, I don't foresee a significant upside for the SPX.  I would expect more consolidation, sideways trading, and a trading range established for the interim.  The 1150 area is critical support and the bottom for the SPX at this point.  1150 may well best tested soon.  The intermediate-term trend is bullish and the long-term trend is still bullish.


US Dollar: Intermediate-Term Bull Market Continues



Noteworthy Closing Prices
Friday Current Close 80.75 3-19-10 (Second highest yellow horizontal line)
2010 YTD High 80.93 2-23-10 (Highest yellow horizontal line)
YE 12-31-09 77.95 (Lowest yellow horizontal line)
10 Month EMA 79.30 (Third highest yellow horizontal line)

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, indicates an ongoing bull market for the US Dollar. That is, the 25d sma is greater than the 50d sma and has been since December 21, 2009. This is the first such bull market signal since from early February 2009 through early April 2009. This is also the first bull market since the March 9, 2009 closing high and subsequent decline into a bear market.

Resistance and Support The current close, the second highest yellow horizontal line, has raised the price to the sideways trading range of February 19 through March 2, which is acting as recent resistance.  The current price is also at the top of the sideways trading range that occurred in May, June, and July 2009. The USD regained the benchmark 80.00 price on Thursday

Moving Averages The USD has been testing the 25d sma since March and the current close is above.  The 25d sma has basically leveled off.  The 50d and 100d sma's are still ascending, while the 25d and 200d sma's are flat. The 50d sma now has crossed above the 200d sma, the Golden Cross, on February 18. The 100d sma has not yet crossed the 200d sma.

Uptrend Line The uptrend line, a rate of price ascent, is from the November 25. 2009 closing low of 74.24 up through the January 14, 2010 closing low of 76.76. The November 25 low has been the bottom, since the March 9, 2009 peak. The USD has been testing this uptrend line and the current close is above.  Whether the USD can continue above this trendline, a rate of price ascent, will determine how strong this bull market is.

Downtrend Line The downtrend line, a rate of price descent, is from the March 9, 2009 high of 89.57 down through the February 23, 2010 closing high of 80.93. The 2010 closing high is the YTD high so far. The USD has been struggling with this downtrend line since February 23 and had not been able to stay above until the current close.

Downtrend Line Very Long-Term A very long-term, well known downtrend line, not shown on this chart, from the January 2002 close of 120.22 down through the March 9, 2009 close of 89.17, is still significantly above the USD current price, at approximately 83.30.

Relative Strength Index (RSI)
RSI 10 = 54.98 is very reasonable; up from low of mid 20s on March 12
RSI 25 day is 55.38.11 very reasonable; up from low of mid 40s on March 16
The recent upward bounce has increased the RSIs to reasonable levels, from the previous oversold levels.

MACD (12,26,9) The MACD is bearish and has been since February 26, 2010.

Long-Term Trend The third highest yellow horizontal line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The USD is above this signal at the current close, which is the second lowest yellow horizontal line.

Conclusion The US Dollar has had a remarkable, rather unexpected, rally from the lows of late November and early December 2009. The rally stalled around February 19-23, sideways trading ensued, then a pullback. The USD then showed some strength on Thursday and Friday.  The RSIs are mid range, after bouncing off lows indicating an oversold condition.  The USD has regained the benchmark 80.00 price, which has been the center of price trading for a week. I question how much upside momentum is left unless Greece totally melts down as a result of squabbles in the EU.  I expect more sideways trading to occur, a trading range established, and no definitive up or down move. The intermediate-term trend is still bullish. The long-term trend is still bullish. See additional comments below in the Summary.


Summary


Both the SPX and US Dollar appear bullish, but both rallies have stalled.  There is some uncertainty in the markets, but not fear. Any further downward pressure primarily on the Euro, then the GBK, and perhaps the Yen, will determine whether the US Dollar can rise and continue a rally. This scenarion would create some downward presuure, a cap, on the SPX.

EUR/USD The EUR/USD signals are both intermediate-term and long-term bear markets, but a bottoming process and sideways trading began February 18. The EUR has closed and stayed above the 25d sma but is now testing once again.  The EUR is in a trading range between the February 10 closing high and the February 24 closing low.  RSI 25d is a very reasonable mid point 51.40 and MACD has been bullish since February 16.

USD/JPY The USD/JPY signals are both intermediate-term and long-term bear markets. However, the intermediate-term signal is essentially neutral.  The USD has bounced above the March 3, 2010 closing low of 88.4590 and is well above the November 29, 2009 closing low of 86.3530. The 25d, 50d, and 100d sma's have converged just above 90. The RSI 25d is slightly oversold at 43.12 and MACD has been bullish since March 7.

GBP/USD The GBP/USD signals are both intermediate-term and long-term bear markets. The GBP has bounced up from the March 1, 2009 closing low of 1.49256 low and regained the losses from the sideways tradiing.  The RSI 25d is rather oversold at 39.61 and MACD has been March 11.

UUP ETF (US Dollar Index Bullish Fund) The UUP signals are both an intermediate-term and long-term bulls markets, reflecting the overall trend of the USD reviewed above.

UDN ETF (US Dollar Index Bearish Fund) The UDN signals are both an intermediate-term and long-term bear markets, reflecting the overall trend of the USD reviewed above.

US Dollar Index is comprised of 6 currencies, which are weighted. The current intermediate-term and long-term signals, the USD trend versus that currency, are noted, after the weighting percentage, below:

EURO 57.6% Bullish, Bullish; USD has rallied late in week within trading range
JPY 13.6% Bearish, Bearish; USD has rallied late in week within a trading range
GBP 11.9% Bullish, Bullish; USD has rallied late in week within a trading range
CAD 9.1% Bearish, Bearish; USD has broken down; but bounced up from March 17 low
SEK 4.2% Bearish, Bearish; USD has bounced up from March 12 low
CHF 3.6% Bullish, Bullish, USD has bounced up from March 16 low
The Euro, JPY, and GBP are weighted a total of 83.1% of the US Dollar Index. Therefore, the USD trends versus Euro, JPY, and GBP are what had been driving the USD bull market. However, all 3 currencies, have recently rallied resulting in the USD generally pulling back and trading sideways.


Matrix Markets & Friends


Where to Find Matrix Markets & Friends on the Internet:
http://mountainvision.blogspot.com/

I microblog on Twitter:

@MatrixMarkets
Related to this blog, plus additional news about S&P 500, US Dollar, some Technology, and any trades we make.

@OspreyFlyer
Technology stocks and news


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Thursday, March 18, 2010

Apple & Google: Stock Chart Review

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A Tale of Two Tech Stocks
Apple has recently been making all-time highs while Google rallied off 2010 lows and then pulled back.


Apple



Noteworthy Closing Prices
Current 224.65
2010 YTD High 226.60 (3-12-10)
YE 12-31-09 210.73
10 Month EMA 188.27

Overview AAPL is up +9.79% for the month, up +6.61% for the year, and up +170.30% since the March 9, 2009 market bottom. AAPL peaked on Friday, March 12 at a 2010 YTD closing high plus an all-time closing high, generated by the iPad hype. An intermediate-term buy/long/bull signal was generated on Friday, March 12. Previously, an intermediate-term buy/long/bull signal occurred in mid February 2009 and the race was on - until a sell/short signal just before Christmas 2009. It was a amazing bull run! Another breakout, and buy/long signal, occurred a couple of weeks later, which lasted until February 17. Now yet another bull signal has occurred.

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a buy/long/bull signal on Friday, March 12, 2009. Therefore, AAPL is now in an intermediate-term bull market. That is, the 25d sma is higher than the 50d sma.

Resistance and Support The current closing price, the second highest yellow horizontal line is now below the March 12 YTD high, which is recent resistance.  AAPL is in a sideways trading range, consolidation, and on support from last week.

Moving Averages The 25d sma bottomed on February 26, began ascending strongly, and now has regained both the 100d and 50d sma's.. The 25d, 50d, 100d, and 200d sma's are ascending. Overall, the bullish signals are encouraging.

Uptrend Line The uptrend line, a rate of price ascent, is from the January 20, 2009 closing low of 78.20 up through the February 4, 2010 closing low of 192.05. The February 4 closing low has been the bottom for the 2010 pullback to date. AAPL battled this uptrend line for days before breaking out above February 25. Whether AAPL can continue above this trendline, this rate of price ascent, will ultimately determine price strength.

Downtrend Line There is no downtrend line, a rate of price descent, because AAPL is at an all-time high.

Relative Strength Index (RSI)
RSI 10 day = 84.67 is very overbought; has dropped from 99+ due to recent consolidation.
RSI 25 day = 79.87 is very overbought; has dropped from lower 80s due to recent consolidation
Expected pullback and consolidation is occurring, maybe even more soon, before eventually another surge upwards in 2010.

MACD (12,26,9) The MACD is bullish and has been since March 1.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. AAPL is well above this signal at the current close, the second highest yellow horizontal line.

Conclusion AAPL has rallied Big Time above the February 4, 2010 YTD closing low of 192.05, which has been lowest closing during the 2010 pullback. The current price is just below the 2010 YTD and all-time closing high. The RSI 25 day and 10 day indicate AAPL is very overbought, but the recent pullback and consolidation is decreasing the RSI some. Additiona consolidation and perhaps more pullback is possible, before another surge upwards in 2010. I stated previously that I thought the shorts, the bears, will jump on AAPL at some point due to the inevitability of a pullback. The intermediate-term trend became bullish on Friday, March 12. The long-term trend remains bullish.


Google



Noteworthy Closing Prices
Current 566.40
2010 YTD High 626.75 (1-4-10)
YE 12-31-09 619.98
10 Month EMA 519.85

Overview GOOG is up +7.52% for the month, down -8.64% for the year, and up +94.71% since the March 9, 2009 market bottom. Googzilla has pulled back from a recent closing high of 581.14 on Thursday, March 11.  The censorship conflict with China, and high probability of leaving the huge Chinese market, has damaged the stock price.  An intermediate-term buy/long signal was generated on April 13, 2009 and the Bull Run was on - until a sell/short signal on February 1, 2010, which is still in effect.

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, still indicates an ongoing bear market since February 1 for GOOG. That is, the 25d sma is less than the 50d sma. This reveals the depth of the 2010 pullback. This pullback created price damage that has not been repaired through sustained higher prices.

Resistance and Support GOOG remains below the January 4, 2010 closing high, the highest yellow horizontal line and the 12-31-09 YE close, the second highest yellow horizontal line, both now recent resistance.  The current close, the thrid highest yellow horizontal line, is above the October 2009 highs, which is now recent support. GOOG is below the stair stepping November 2009 highs, which are resistance.  The recent high, before the small pullback, of 581.14 on March 11 is also resistance.  There is a lot of resistance above that must be overcome, before there can be any thought of regaining the 600.00+ price area and 2010 highs.

Moving Averages The 25d sma bottomed on March 1 and began ascending.  The 50d, continues descending. The 100d sma has leveled off and 200d sma continues ascending. Most bothersome has been the 25d sma breaking down through the 50d and 100d sma's plus the 50d sma breaking down through the 100d sma on March 4.. GOOG has now regained the 25d & 50d sma's, but has been battling the 100d sma for 8 of the last 10 trading days.

Uptrend Line The uptrend line, a rate of price ascent, is from the November 24, 2008 closing low of 257.44 up through the February 25, 2010 closing low of 526.43. The February 25 closing low has been the bottom for the 2010 pullback to date. GOOG stayed above this uptrend line since the next day, February 26.  Whether GOOG can continue above this uptrend line, this rate of price ascent, will determine whether a bull market signal is generated sooner.

Downtrend Line The yellow downtrend line, a rate of price descent, is from appoximately the November 6, 2007 all-time closing high of 741.79 down through the January 4, 2010 high of 626.75, the peak YTD closing high so far. GOOG has not reached this trend line.

Relative Strength Index (RSI)
RSI 10 day = 60.59 is reasonable; has dropped from lower 90s due to pullback & consolidation
RSI 25 day = 62.65 is reasonable; has dropped from lower 70s due to pullback & consolidation
RSI is not the problem with GOOG, probable loss of Chinese market is.

MACD (12,26,9) The MACD is bullish and has been since March 9.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. GOOG is above this signal at the current close, the third highest yellow horizontal line.

Conclusion GOOG has rallied from the lows of February 25, peaked on March 11, and has pulled back some.  The current price is still below the December 2009 closing highs, 12-31-09 YE close, and the January 2010 YTD closing highs. There remains substantial recent resistance above. The RSI 10 day and 25 day are reasonable.  GOOG's problem is the censorship dispute with China and pulling out of the world's largest national Internet market.  Holding the current price levels and higher prices will eventually sustain a signal that an intermediate-term bull market has returned through ongoing price strength. The intermediate-term trend remains bearish. The long-term trend remains bullish.


Matrix Markets & Friends


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