Friday, March 13, 2015 Weekly Market Recap SPY, XLF, TLT, GLD, GDX,USO

 Friday, March 13, 2015 Weekly Market Recap. Watch this video on YouTube here.

       The beauty of following a rules-based trading system is that it removes most of your own bias out of trading. We followed our own rules and exited the long position in SPY on March 10th. For now, we are letting cash sit on the sidelines while watching which way the market will head next. I am not yet convinced that this correction that started in in late February has run its course.

Market breadth has deteriorated further. The breadth momentum is still pointing lower and hasn’t begun to rise. While NYSE New Highs-New Lows indicator has dropped into negative territory and stayed there for most of this week – not a bullish sign at all. In the past similar readings first led to more downside before the uptrend resumed.

One sector that was a mixed bag for the past few months is the Financials sector. XLF put in a lower high on March 6th, dropped below the 50-day exponential moving average (EMA), but then popped right back up this Thursday. Friday’s action in XLF was not impressive, as it erased about half of the Thursday’s gains. Unless XLF follows through soon by breaking above the resistance in the $24.20 area, we may see it retest February lows. Our trading system did generate a buy signal for XLF on Thursday, but as I mentioned, so far there was no follow through.

       Bonds gained for the week and we re-opened a position in TLT on March 11 per our trading system trigger signal. TLT may have sprung a bear trap with a quick move back above broken support. For now the buy signal is valid.

Gold is getting ready to re-test the November lows as it lost a little less than 1% this week. If the gold bulls are to make a stand, it should be soon; otherwise we will see new 52-week lows. A rebound to the $1200 area may provide a nice setup for a short trade.

       GDX similarly was down almost 3% for the week. I see a few of the hammer type candlesticks with long tails on GDX chart, which indicates at least some buying pressure. Unless GDX fails here and move to new 52-week lows, I am guessing it should rebound $19-20 area. At that point I would be looking again to enter on the short side.

       Our system generated a short signal on USO as far back as February 10th. This week we finally saw a decisive break below support in oil and new lows are now looking more and more likely. We still have an open position in SCO.

That is it for this week’s recap!

Best Regards and have another great trading week!

 

Alexander Berger (www.MasterChartsTrading.com)

Disclaimer, we have:

Open positions: SCO

New position: TLT

Closed position: SPY