The major take-away from this group is the weakness in the Russell2000. The R2K (Small Caps) has formed a double top and broken below the 50-Day MA. That’s a bearish development. Already we can see how bearish the Nasdaq has become. It is now well below the 50-Day MA. Other Indices are stronger – still hovering a little below the 20-Day MA.
Here’s a more detailed chart for the major benchmark, SP500:
Today’s candle is a bearish engulfing candle. The previous day was a narrow range, inside day. Usually a bearish engulfing candle like this would suggest further downside. At least a test of the 14 March pivot seems on the cards. Until then, the Index remains in a sideways trend. We’re coming up to the end of the Quarter, so some shenanigans could go on in the next few days.
Here are the Bullish Percent charts for the major indices. These are charts of the %age of stocks in each index on a “buy” signal on Point and Figure Charts. They provide an insight into the breadth of the market. Weak breadth usually precedes a fall.
The Dow Industrials and SP100 (OEX) are the only charts above their 20-Day MAs. All other charts are below their 20-D MAs. This is a market being held up by the big blue chips. OEX is only marginally above its 20-Day MA. SPX is well below its 20-Day and only marginally above its 50-Day MA – so there’s a clear divergence from the regular chart of the SPX. Nasdaq is the weakest. It has formed a broad double top on the week chart, but is oversold and so there’s some hope of a bounce at this stage. The long term, however, is looking very bearish, which is not a good sign for the whole U.S. market
Below is a Candle Glance Group of Commodities. In order: CRB Commodities Index, Agriculture, Energy, Industrial Metals, Livestock, Precious Metals.
The main take-away here is the bearish action in Industrial Metals. All of the previous session’s good gains have been given up. I said yesterday: “Industrial Metals had a good session last night, but it only brings it up to the 20-Day MA and still a long way below the 50-Day MA. This is looking like a counter trend rally.” The action in last night’s session was very negative and not a good sign for our Miners today. Gold continues to act poorly. I thought we might get a bounce around here as the POG had stalled at the 50-Day MA. But it was not to be. POG sliced through the 50-Day MA in the most recent session. POG is currently under the influence of strong bearish sentiment and any bounce is likely to be sold off. I really can’t see much hope for Gold until sometime in the Northern Summer (our Winter). Seasonal factors might provide an impetus then, but they didn’t have much effect last year.
BHP on the NYSE: -0.78%. EWA +0.47%. Ozzie Dollar +0.68%. Given the strength of the Ozzie Dollar, the performances by BHP and EWA are poor. The mild sell-down in the afternoon session and poor breadth figures in Australia yesterday are now looking more ominous.
(20min delay)