Technology stocks were under strong pressure with XLK down over 3%, and the broad semiconductors XSD finishing down almost 4% for the week. This is showing selling in some of the most economically sensitive groups of the market.
CHART OF QQQ
CHART OF XLK
CHART OF XSD (semiconductors)
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The broad New York Stock Exchange composite came extremely close to closing below the recent support at 10,425. I don’t think the correction is over and we could still see significant downside for $NYA.
CHART OF $NYA
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On the weekly chart of $SPX, we can draw a trend line touching the tops in June and October 2015, and the recent top from last week. These 3 peaks form a nice-looking downward sloping trend line. It remains to be seen if this trend line will now act as resistance. For now it did.
CHART OF $SPX with Fibonacci retracements
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​Market breadth has indeed improved. The only major concern remains the lack of volume on this move higher. My long-term stock market model (MBI) has flipped into the bear mode as early as September of last year but has now begun to improve. Nevertheless, I am still treating stocks as a bearish security until a bullish signal is given, and am only looking to short.

Junk bonds (high-yield corporate) are acting surprisingly resilient. Junk bonds have very high correlation to stocks, so I am watching JNK very closely for the signs of further improvement, to see if the bullish case for stocks improves.
CHART OF JNK
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US Long Treasuries seem to have found support at the previous breakout level and bounced higher. TLT is up for the week. This makes sense, as investors are rotating out of stocks and into bonds.
Long-term chart of TLT still shows a giant Cup and Handle pattern. A breakout above the pattern high at $134 would be extremely bullish for bonds and bearish for stocks.
         The more diversified bond fund AGG is consolidating near the all-time highs and looks poised to re-challenge them again. Should stocks come under more selling, AGG is likely to benefit.
CHART OF TLT
LONG-TERM TLT CHART
CHART OF AGG.
LONG-TERM CHART OF AGG
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​We got more fireworks in the currencies arena this week. This is because Bank of Japan failed to deliver more quantitative easing then the market was anticipating. The Yen gained strongly as USDJPY Forex pair lost almost 5%.
The US Dollar index came under serious pressure against major currencies and ended the week over 2% lower. USD is now at a critical support marked on the chart below. A break of that level could spell an even more significant downside correction for USD.
USDJPY FOREX PAIR
CHART OF $USD
LONG-TERM CHART OF $USD   

Precious metals are taking advantage of the cheaper US dollar. Gold reversed from the 50-day moving average and made another 52-week high.
 Few weeks ago I mentioned that my long-term gold model (GBI) has flipped into a bull mode and I am now looking to buy gold and to trade it on the upside. However gold needs to correct quite a bit more for me to become interested opening a long.
GOLD CHART
         Same comments apply to the gold miners ETF. GDX is enjoying the benefits of a weaker dollar as it moved over 100% off the all-time lows set in January. It is certainly overbought by pretty much any definition of this word, but at the same time it is showing strength. I consider GDX to now be a bullish security and also am looking to buy on a pullback.
CHART OF GDX
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Oil was able to power through the resistance level at around $43. Perhaps prices have stabilized for now, or perhaps this is just another strong short-covering rally. There is potent resistance further up around $53.
Picture in oil is somewhat ambiguous, so I would wait for a resolution either to the upside or the downside before attempting to trade it.
LONG-TERM CHART OF $WTIC
CHART OF $WTIC
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NATGAS is advancing in a very choppy manner. This week NATGAS touched the 200-day moving average at 2.304 and pulled back. But the pullback seems to have stopped on Friday. Unless we collapse from here, I can make a case for NATGAS to advance to the all-important 2.50 area of the chart. That area is showing major resistance especially on the weekly long-term chart. If NATGAS manages to close above 2.50, I think a new bull market in NATGAS would have started by then.
CHART OF NATGAS
LONG-TERM CHART OF NATGAS
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That’s it for this week’s market recap,
Best Regards and have another great trading week!
 
Alexander Berger (www.MasterChartsTrading.com)

Last week I mentioned that there are many bearish divergences appearing on the various stock index charts. For example the ITBM (Intermediate Term Breadth Momentum) oscillators have trended lower for the past few weeks, while the indices did the opposite. This is indicative of fewer and fewer stocks carrying the index higher.
Similar divergences are appearing on the charts of NASDAQ 100 and the New York Stock Exchange Composite ($NYA).
CHART OF $SPX
CHART OF QQQ
CHART OF QQQ with breadth        
CHART OF $NYA
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If the rally stops right now, where could $SPX pull back to? Looking at the weekly chart of $SPX I can see several retracement areas. The high-volume support and the 50% retracement is around 1975 on $SPX. So if the pullback materializes, some sort of a bounce around that area should be expected. A close-only chart shows support slightly higher at around 2000.
CHART OF $SPX with Fibonacci retracements
CLOSE ONLY CHART OF $SPX with Fibonacci retracements
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​Market breadth has indeed improved. The only major concern remains the lack of volume on this move higher. My long-term stock market model (MBI) has flipped into the bear mode as early as September of last year and is yet to even begin improving. By extension I still have a bearish outlook. This could change at any time and I am keeping an open mind about a possible bullish outcome.

Finally, we are entering the seasonally weak period for stocks. May through September period is associated with smaller stock market returns. In fact returns during the summer month often translated into losses according to the seasonality chart of $SPX.             

The long-dated Treasuries fund (TLT) extended its pullback and gapped below the 50-day moving average on Thursday. It appears TLT wants to again retest the early February breakout levels of around $127. If it holds there, it could provide for a low risk entry on the long side.
         AGG is looking even more bullish as it consolidates near all-time highs. AGG is generally much less volatile then TLT
CHART OF AGG.
LONG-TERM CHART OF AGG
CHART OF TLT
LONG-TERM TLT CHART
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​US Dollar is struggling at the 94 area. This week, however, we saw $USD come down to test that area again and the test was a success for now. This makes it the second attempt in as many weeks for the dollar bears to fail.
CHART OF $USD
LONG-TERM CHART OF $USD   

Especially interesting was Friday’s action as the USD gained strongly against the basket of currencies, but against Yen in particular. Chart of USDJPY possibly has a bear trap being  traced out on it. A bear trap happens when price of security drops below support only to immediately rebound and rally back above it.
CHART OF USDJPY

Strength in the dollar is bad for the precious metals which are priced in that same currency. Gold ended the week below the 50-day moving average for the second time in as many weeks...  
…No major changes in the long-term gold posture, so I am quoting:
“Few weeks ago I mentioned that my long-term gold model (GBI) has flipped into a bull market and I am now looking to buy gold and to trade it on the upside. However gold needs to correct quite a bit more for me to become interested opening a long. A retest of gold’s recent breakout could be upon us soon. $1191 is the level to watch.”
GOLD CHART
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As with gold, GDX is overextended to the upside, so a pullback may provide for an opportunity to partake in this new bull market. GDX has a confirmed Outside reversal on its chart. An outside reversal happens when yesterday candlestick is completely inside the range of today’s candlestick. In the case of GDX, Tuesday’s action is completely inside Wednesday’s action. Friday we had a close below the entire pattern, thus confirming this bearish reversal.
CHART OF GDX
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On the weekly chart of oil, we see that it is trading around $45. This is an important level for oil because it has failed there twice in the past and also because oil touched that level on several occasions. There are also several bullish divergences present, which make me think that oil could consolidate sideways, or maybe even push somewhat higher before another leg down unfolds.
LONG-TERM CHART OF $WTIC
CHART OF $WTIC
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NATGAS punched through resistance at 2.17 to end this week almost touching the 200-day moving average around 2.30. There is also resistance slightly higher at 2.315 from the previous peak. This would be a great place for NATGAS to fail. If the failure doesn’t happen, then there is an even stronger resistance at 2.50. That area is of particular importance to NATGAS, because if it manages to close above it and consolidate there, most likely a new bull market in NATGAS would be upon us.
CHART OF NATGAS
LONG-TERM CHART OF NATGAS
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That’s it for this week’s market recap,
Best Regards and have another great trading week!
 
Alexander Berger (www.MasterChartsTrading.com)