Friday, December 26, 2014 Weekly Market Recap. Watch video on youtube
From our entry point on December 18th, the S&P 500 is up a little over 2%. The indices continue to make new all-time highs and new all-time closing highs. The stock market is clearly bullish.
From our entry point on December 18th, the S&P 500 is up a little over 2%. The indices continue to make new all-time highs and new all-time closing highs. The stock market is clearly bullish.
Market breadth is also bullish. Market breadth indicators such as: Bullish percent index, % of stocks above 50 and 200 exponential moving average, and New Highs-New Lows index are positive. I also see no divergence in the Advance-Decline line for the $SPX.
Looking back to the 2007 peak in the $NYA (NY stock composite index) we can see an obvious bearish divergence in the Advance-Decline line which shortly lead to a bear market. Looking at the same chart today, if anything, we can see a bullish divergence on the same chart.
Treasuries and bonds in general came under selling pressure as early as December 17th. We closed our position in TLT on this Wednesday with nice gain. Note that bonds are bullish long-term, so we will be looking for a reentry opportunity in the days and weeks to come.
Gold and gold miners remain somewhat indecisive with a bearish bias. Our trading system gave us a short signal on November 28th. A decisive close below $17, preferably on Friday, would almost guarantee new lows in the gold miners ETF. Alternatively, a close above $20 would negate our short signal.
Oil ($USO) was consolidating for the past 2 weeks with what appears to be a rising bear flag of sorts. Oil is in a bear market, so a break below around $54 for $WTIC, would call for new lows. Should oil break this support, oil related assets and countries that depend on oil for revenues would likely continue down as well. So far I see no counter-trend buy signal per our trading system on $USO.
That’s it for this week’s recap,
Best Regards and have another great trading week!
Alexander Berger (www.MasterChartsTrading.com)
Disclaimer: we have open positions in: SPY and DUST
Closed position: TLT
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