DowJones - Are we poised for a move higher

It was a strong day for US equities on Friday and we could be on course for a breakout.  Financial stocks led the way after bullish job market data gave rise to expectations that the economic recovery is back on track and that interest rates may rise sooner than previously thought.  I must add that we do need a follow through at the beginning of next week to confirm this move however.

DowJones - Retesting all time highs

Disappointing US jobs data is keeping equities well bid as expectations that the tapering of the FED stimulus package is not going to happen quite as soon as people had previously expected.  Combine this with an impressive earnings season for US stocks and you can understand the strength seen recently.

Were having a 3rd attempt to break the 15,700 level which is proving to be a strong resistance level with double/triple top chart formation developing.  A failure on the upside will result on the focus back on the support area around 14,850/14,700 and the 2008 high of 14,167.  A break on the upside could propel the index up to around the 16,825 on the 138.2% Fibonacci projection.

DowJones - Nice recovery but where next?

 

Equities saw a good recovery yesterday after the prospect emerged that the western intervention in Syria could be resolved without dropping any bombs.  We are seeing further follow through again today.

We are trading back above the 15000 mark on the Dow Jones Ind. Av.  and more importantly above the high made on the 26th August at 15054 which should give the bulls some encouragement.  On the upside, we could see some resistance however around the 100 & 50day MAs given the strength they displayed as a supports at 15161 and 15256 respectively.

DowJones - are we heading south too?

Weak close for the DowJ last night, closing below the resistance level of 14825, we need more downward pressure today however to confirm the follow through.  A further move south and all eyes will be on the previous significant low at 14570 level and the Elliotticians on 38.2% Nov12-Aug13 retracement at 14440.  The ultimate test would be for it to try the bottom of the trend channel support at approx. 14200  Watch for a close back above 15050 because we may start to change our tune.

'Fiscal cliff' is a dirty word once again

The fiscal cliff is rearing its ugly head once again as the Obama administration has warned that the current debt cap could be reached by mid-October, rather than the mid-November originally forecast.  The markets could be in for a bumpy road ahead, or the next couple of months at least, as we'll most likely watch the Democrats vs Republicans play chicken with the US economy once again!

If we looked back how the markets reacted in the run-up to the past votes both in 2011 & 2013 we might have an idea of how people might react in the run-up to the event, as well as looking at what happened straight afterwards.

FTSE100 - Are we in for a bigger correction still?

We saw divergence on the momentum indicator and a cross on the MACD leading to sell off, we have since seen a brief recovery back to the 6520 level, but appears to have been rejected so our focus is back on the low made on 22/08/13 at 6351.  Charts confirm this price action as the indicators still look negative so we may look to test the bottom of the long term up channel around the 6150 / 6200 before seeing any significant buying interest.

Brent - An improving oil v equities correlation?

Looks like we've got good oil / equities correlation because we can draw some good similarities in chart patterns between Brent / FTSE100 and S&P500 daily charts.  Just like the other charts, we're testing the neckline of a Double Top formation on the daily chart and have bearish MACD and a downtrend in the RSI.  Also note, that we have been having some good afternoon recoveries shown by a lot of long lower shadow candles, so be weary of any morning sell offs and remember to wait for a confirmation on the close, to avoid being chopped.

S&P500 - Still warning flags out for the short term time horizon

Firstly we have to remember and keep in the back of our minds is that the S&P500 is still in a bull channel and Long term uptrend; but like the FTSE100, and like I mentioned last week, the indicators are implying that we may still be in for some lower numbers to come.  We're currently seeing long-shadowed / small-bodied candlesticks and a rangebound price behaviour, but given the time of year we should try to avoid reading into this too much.

FTSE100 - becoming a victim of the Summer lull

The FTSE100 was lacklustre last week, my view hasn't changed drastically as the MACD still in bearish mode and momentum downtrend holding.  The bulls should be a bit more encouraged however, by the recovery seen on Thursday and confirmation of the bearish rejection on the Friday.  For the time being we are very much stuck in the 6650 - 6550 range waiting for a breakout on either side, till then will be sitting on our hands.

Apple (APPL) on the move again

Apple is trying its best to recover to its former glory, as its been trading in a sideways range for the past 6 months, sitting nicely between $390 and $460, which just so happens to be the Fibb retracements of 50% and 38.2% of the 5year rally to its peak.  This behaviour gives us a lot of confidence in the numbers for this share.  Thus on the nearer term we are testing the $460 level, and close above $465 should kick the share price up to $510 mark.

S&P500 looks good, but minor cause for concern persists.....

The S&P500 still looks strong and the longer term investor doesn't have any real reason to worry too much.  The only thing to watch is, just like the FTSE100, there is divergence occurring in Momentum Indic. vs price action and the fact that we are towards the top of the trend channel.  Despite these factors the SMAs are still all inline and positive looking, and all bullish trendlines are intact.  So we should be too surprised if there is a pullback or consolidation soonish around the 1650/1620 area.  If there is a breach below, we would need to have a reassess of the situation.

Is the FTSE100 running out of momentum?

Interesting charts when you look at the FTSE100 this morning. We've got divergence occurring on the Momentum indictor and but still holding (just) on the uptrend line.  I cant help but feel that were going to have a pullback on after the consolidation.  Looks to me that we might head back down and test the 6550 level again on a break of the trend line or possibly down to the 6450 Fibb retracement.