Quantitative easing (money printing), extremely low or even negative interest rates around the world are helping stock indices recover from the somewhat oversold levels. SPY gained a little over 1.6% for the week to end the week at $193.72. This oversold bounce was expected and it sure came as a relief for many investors. The question on everyone’s minds is of course whether or not this is a sustainable rally, or simply a short-covering one.
CHART OF SPY
CHART OF $SPX
CHART OF QQQ (video bonus)
1.The 50 and the 200-day simple moving averages
2.New Highs less New Lows Percentage
3.Bullish percent index
4.Percent of stocks above the 200-day exponential moving average
What I am seeing is that market breadth for $NYA is still very much bearish. Currently all 4 of the above indicators are in the bear mode. If/when at least some turn bullish, we will re-assess and see if a new bull market is upon us.
CHART OF $NYA
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CHART OF TLT
CHART OF AGG
LONG-TERM CHART OF AGG
CHART OF $USD
The long-term weekly chart of gold below shows lower lows and lower highs being made – a trademark of a bear market. The latest rebound is currently in the Fibonacci retracement area off the lows set in November of last year. This would be a good place to look for a failure for gold prices.
LONG-TERM CHART OF GOLD
CHART OF GDX
CHART OF $WTIC
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NATGAS fall hard to $2.04, then started rising in what I think is a rising wedge formation. A rising wedge in a bearish security, like NATGAS, is a bearish continuation pattern. A close below the trend line, would almost certainly call for at least a retest of multi-year lows. NATGAS is currently at the high-volume resistance area, so a failure here is likely.
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)