My GENIUSEShave done it again. On Friday I highlighted how these so-called experts had only 50% of their money in the market having been slightly leveraged long at the recent high. This made me think that as soon as the market showed some life, they would all want to roar back in. Looks to be exactly what happened. Again it was mostly driven by tech. Is that echoes of the year 2000 I can hear? It was tech leading the way on that occasion as well.
Starting with the daily chart of the S&P together with indicators. At the top is my Geniuses. Aren’t they unbelieveable. After Friday’s action one can’t help wondering if they have enough money to last more than a day or two. But the S&P finally hit a new high. It happened to be op-ex as well which probably added to the fun. Crucial that this carries through now. January can be a difficult month.
When we turn to the Trannies – as we can see it has not been able to keep up with the excitement. As usual I put a lot of importance on this sector. Just suggest a little bit of caution here.
And just one more point in discussing New York, despite the rise in the NASDAQ on Friday, there were still more new 52 week lows completing the same picture for the whole week. Not exactly a sign of strength.
Commodities still haven’t changed much during the week except uranium which hit a new high for the year. Remember it has more than doubled. As I mentioned before, not saying it won’t go higher, I experienced the last bull market in uranium when I had a chart on my wall and it went all the way to my ceiling, but markets never go in a straight line.
Silver probably sits near the top of the pile with the frustration it has caused this year – as we can see from the chart, it is still sitting around where it was last year – and the year before. Have to watch this closely here. At the bottom of the chart is the gold/silver ratio (scale inverted) just look at that downtrend. Amazing. These sorts of trendlines are everywhere at the moment. Just like to see some of them broken.
The Chinese market has been attracting considerable comment recently (not necessarily in a bullish manner). As we can see from the first chart here, which is the Shanghai index, it has continued to trickle lower. Normally when one sees as much money being pulled from a particular market, it is usually time to think about doing the opposite but on this occasion, I am not so sure about taking such action. I prefer to watch this for a bit more of the story.
The lower chart is Hong Kong. Isn’t this a sad little picture. Used to be such a good trading market but like the chart above, money is being dragged out of here at a furious pace.
And the other side of Asia story - Tokyo. I got excited about this chart last year when it was looking to break out of the big base. At the time I thought it looked “sexy” hardly a popular technical term. Looks like it should be part of the technical lexicon as this market has since had a marvellous rise and as we can see, is currently trying to run off the top of my page. Need to watch this to see if it is able to continue on here. But don’t forget this index is still nowhere near its all-time high.
Coming back home, the next chart is the daily of our XMM (Metals and Mining). See what I mean about these little downtrends that have been formed. I think this one was made to be broken – just too perfect. But it does show that our miners pulled back to their major support and just reached oversold (bottom of the chart in red). But even if this index breaks this down-trend which hopefully will happen in our next trading session, will it then be able to overcome all the overhead resistance? Very interesting situation.
It seems to me that every time I pick up a newspaper lately views seem to be bordering on “Goldilocks”. Not too hot, not too cold – I have heard the “Goldilocks” term a number of times over the years but usually it doesn’t end well.
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