Market Recap For The Week Ending Friday May 29th, 2015 - SPY TLT GLD GDX USO RSX EWZ

S&P 500 was down for the week as it digested the all-time highs of last week. There was some wild action at the beginning of the week as stocks plunged Tuesday only recoup most of the losses on Wednesday. 

There is now an obvious divergence in the $SPX and the on-balance volume indicator – $SPX is making higher highs while the on-balance volume is pushing lower instead. It’s difficult to say where this will lead. For the time being stocks are pushing higher, $SPX is still on a breadth thrust up and the market is generally bullish.    
Chart of S&P 500

Bonds (TLT) came back from the dead and gained almost 2 percent for the week. TLT is right at the 200-day moving average, challenging it from below. As I mentioned in my last week’s market recap there is now lots and lots of overhead resistance for bonds. A close above the 200-day would help TLT overcome one the first resistance levels. 

Gold lost a little over 1% for the week as it continued with a plunge from the last week. For the past 2 weeks gold is down as much as 4%. With dollar hitting new highs, gold may be poised for further weakness and a retest of at least May 1st low ($1168) is very much in the cards. 

Gold miners (GDX) followed gold lower with a loss of over 8% for the past 2 weeks. On Tuesday GDX closed below early May low at $19.25, but since rebounded. There is now resistance for GDX at the 50-day moving average currently at $19.70. Again, should gold continue its slide, GDX is surely to follow and a retest of March and possibly December lows may occur. 
Chart of GDX

       Oil started the week miserably, but had a strong finish. We have an open position in SCO (inverse crude oil) ETF still open with a stop-loss if oil closes above $62.  Charts of oil and other commodities

With oil possibly resuming its slide, I thought I would cover a couple of countries’ ETFs that are heavily dependent upon oil exports: Russia and Brazil.

         RSX – the Russia ETF is in a long-term downtrend that started at least a year ago. I am therefore ignoring all bullish setups and only looking for bearish once. RSX put in a low last December and then had a powerful rebound. Along the way there were 3 setups that appealed to me. Last setup happened on May 19th with a gap down/rebound/gap down pattern. Today RSX closed below both the 50-day and the 200-day moving averages. My best guess at this point is that we will get a weak rebound followed by more selling in RSX.
RSX chart

       EWZ – the Brazil ETF is also in a long-term downtrend that started at least last October. Again, for bearish securities I ignore all bullish setups. Last good short setup for EWZ happened in late April as a short signal was generated per our trading system. Since then, EWZ is down over 10%. EWZ is weak, oversold and staying oversold – a sign of possibly more downside to come.  
Chart for EWZand EWZ market timing chart

That’s it for this week’s market recap,

Best Regards and have another great trading week!

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Alexander Berger (www.MasterChartsTrading.com)

Disclaimer, we have:

Open positions: IBB, XSD, IWM, IYR, TLT, DUST

New position: SCO

Closed position: LULU (stop-loss hit)