An analysis of daily price change since 1973 tells us that there are some certain seasonal biases in the market. Major U.S. indices show a greater probability of advancing in some months as compared to others. There are many reasons for seasonal or monthly bias in equity market. We will review some of them in future posts. The…
The equity indices of most major nations in the world are trending up. Emerging Markets are doing better than developed market. Emerging Market Are Doing Better The Select Sector SPDR ETF, SPY, bottomed in February 2016 (Third Panel Chart 1). EFA, iShares MSCI EAFE ETF, bottomed few days later (First Panel Chart 1) and EEM,…
One Day Reversal Candlestick With Bearish Divergence Major U.S. indices closed down on Tuesday August 8 2017 after S&P 500, Dow Jones Industrial Average, NYSE Composite and Wilshire 5000 Total Market Index made all time intra-day highs. They also closed in the lower half of the day’s range. This does constitute as one-day reversal candlestick…
The intermarket analysis says that it is still better to be invested in equities and bonds than in commodities and U.S. dollar. Equites and Bonds are Rising The 30-year U.S. Treasury Bonds, $USB, declined from July 2016 to March 2017 (First Panel Chart 1). It made double bottom near 147.00-146.00 level in December 2016 and…
S&P 500 Sectors Relative Strengths Two Sectors Outperforming Broader Index Two of the S&P 500 sectors, $XLK (Second Panel Chart 1) and $XLF (Fifth Panel Chart 2), are out-performing the index. $XLK is doing better than the index since April 2016 and $XLF is doing better since June 2017. $XLF outperformed S&P 500 from July 2016…
Major U.S. indices are trending higher. Dow Jones Industrial Average and NASDAQ Composite are leading the overall market. Small caps mostly lagging. Relative Strength From the beginning of 2017, Dow Jones Industrial Average was performing similar to S&P 500. Since the middle of July 2017, DJIA is out-performing S&P 500 (Top Panel Chart 1). Since November 2016,…
Monthly Chart Analysis Current Status: Last Update on Tuesday August 01, 2017 Current Trend: Confirmed Uptrend Last Pattern: Double Bottom (or horizontal Channel) (broken out in July 2016) Previous Pattern: Rectangle (broken in Apr-13) Current Streak: 4 Up months Last Six Months 5 Up months Last High 2484.04 (Jul-17) High Month Low Month Last Swing 2193.81 Aug-16 2083.79…
Economy The Real GDP continues its uptrend since bottoming in Feb-2009 (Chart 1). The Total Employment and Real Retail and Food Services Sales have also maintained their uptrend during this period. The Unemployment Rate has maintained down trend. Industrial production rose from Jun-2009 to Dec-2014. It then declined till Mar-2016. Since then it has resumed…
Dollar Index The U.S. Dollar Index, DX #F, has been declining since January 2017 when it reached the highest level since 2003 (Chart 1). During 1990s, the index has risen from a low of 78.43, in 1992, to a high of121.90 in 2001. The up trend reversal occurred after a near triple bottom pattern – two other…
A research paper by Ben Jacobsen and Cherry Y. Zhang of Massey University of New Zealand demonstrates that monthly seasonality effect is sample specific. They found that the strategy of ‘Sell in May and Go Away‘ beats the market more that 80% of times over -year horizons. Another aspect of this strategy is that during this time, bonds usually outperform…
U.S. GDP is growing at a modest pace and the economic expansion is expected to continue, albeit, slowly. The recession signals are benign and the economy is not over heating. This combination supports an environment for cautious and gradual Fed Funds rate hikes.
Consumer Staples was the best sector over the past 30 days followed by Technology. Defensive sectors are underperforming since November. Industrials, Technology and Financials are showing relative strengths.
Gold’s demand is highest in three years but supply is highest in seven. It bottomed in November 2016 and is on a short upswing since then. Gold ETF, GLD, is doing slightly better than SPDR S&P 500, SPY, recently. The gold miners ETF, GDX, is doing better than GLD and the gold junior miners ETF, GDXJ, is doing better than GDX.
Germany German XETRA DAX broke above a symmetrical triangle on weekly timeframe in early August 2016, by rising above 10500.00 (Chart 1). From August to November 2016 it stayed within a horizontal trading range with an upper limit of 10830.00 and a lower limit of 10170.00. In early December it broke above that trading range. The 100%…
The U.S. economy has been growing for the past few years, albeit, at a slow rate. Many have attributed the sluggish growth to secular stagnation due to weak household demand, impact of structural changes on employment, weak private investment, political gridlock and global slowdown. Some of these factors will last for many years and some may see up-and-down movement.…
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