Index Data

closing values for Monday, November 30, 2009:

Trend & Value 50 Index:

1025.95 (up .20%)

Equity ETF Index:

1000.42 (up .74%)

China Small Cap ADR 25 Index:

1018.43 (up 1.36%)

Large Cap Dividend Top 50 Index:

1023.22 (up .09%)

T&V Gold Stock Index:

587.37 (down .14%)

General Liquidity Index:

1026.34 (up .62%)

BRIC Basic Materials Index (new):

1000.04 (up .04%)

------

SPY:GWL Ratio

the US market is looking good relative to the rest of the world, but currency traders can't take a hint, I guess. patience.

SPY (S&P 500 ETF) -- foreshortened chart

over 13 years of price history, reduced to 28 data points.



I also made a foreshortened snapshot with March 6, 2009 as point 1:

Death Cross Watch -- PHM, DRI, AYE

there weren't any new crossovers today, but I forgot to post the three from Wednesday, so those are below.

there are 32 active death crosses among S&P 500 stocks now. the number is slowly on the rise, with plenty more on the horizon.

so the reader wonders, am I really going to post every stock where the 50 day moving average crosses below the 200?

sure, why not? people don't look at charts enough. I mean really look at them. personally, I don't pay enough attention to individual stocks so tracking an indicator like this forces me to glance at more of them.

Index Data

closing values for Friday, November 27, 2009:

Trend & Value 50 Index:

1023.91 (down 1.68%)

Equity ETF Index:

993.10 (down 2.33%)

China Small Cap ADR 25 Index:

1004.72 (down 1.11%)

Large Cap Dividend Top 50 Index:

1022.32 (down 1.66%)

T&V Gold Stock Index:

588.20 (down 1.38%)

General Liquidity Index:

1020.07 (down 1.51%)

------

Global Dow hourly chart

nice reversal this week.



here is the WSJ page that should give you an updating chart of the GDOW. good thing to have bookmarked for quick glance of the market at odd hours.

The Pyramids of Dubai

I was away from the computer for a damned holiday, and this Dubai stuff is all over the news when I turn it back on.

Garrett's discussion of Pyramids in the book The Bubble That Broke The World really hits home. would have been better if you read that book a few years back, but if you didn't it's still worth your time I suppose. here's the link to the google books preview:

A Bubble That Broke the World
By Garet Garrett

Foreshortened Gasoline

the employment outlook

Spot Gold and Silver Hourly Charts

substantial divergence here between the two metals. silver needs to find some buyers soon.

Index Data

closing values for Wednesday, November 25, 2009:

Trend & Value 50 Index:

1041.38 (up .38%)

Equity ETF Index:

1016.83 (up .86%)

China Small Cap ADR 25 Index:

1015.99 (up 2.01%)

Large Cap Dividend Top 50 Index:

1039.57 (up .93%)

T&V Gold Stock Index:

596.42 (up .59%)

General Liquidity Index:

1035.75 (up 1.15%)

------

Death Cross Watch -- IRM, BSX

30 Death Crosses on the S&P 500 now.

Index Data

closing values for Tuesday, November 24, 2009:

Trend & Value 50 Index:

1037.48 (up .17%)

Equity ETF Index:

1008.14 (down .35%)

China Small Cap ADR 25 Index:

995.94 (down 1.00%)

Large Cap Dividend Top 50 Index:

1030.01 (up .14%)

T&V Gold Stock Index:

592.94 (down .55%)

General Liquidity Index:

1023.94 (down .34%)

------

Death Cross Watch -- VLO, PWR

28 active death crosses among S&P 500 components now.

Index Data

closing values for Monday, November 23, 2009:

Trend & Value 50 Index:

1035.72 (up 1.36%)

Equity ETF Index:

1011.68 (up 1.41%)

China Small Cap ADR 25 Index:

1006.00 (up .96%)

Large Cap Dividend Top 50 Index:

1028.59 (up 1.43%)

T&V Gold Stock Index:

596.21 (up .49%)

General Liquidity Index:

1027.45 (up .73%)

------

Index Data

closing values for Friday, November 20, 2009:

Trend & Value 50 Index:

1021.86 (down .33%)

Equity ETF Index:

997.63 (down .37%)

China Small Cap ADR 25 Index:

996.39 (up .52%)

Large Cap Dividend Top 50 Index:

1014.11 (down .14%)

T&V Gold Stock Index:

593.31 (down .91%)

General Liquidity Index:

1020.05 (down .23%)

------

TNA

judging by the look of this chart, the TNA fund was named appropriately (though you'll have to supply your own vulgarity. been waiting to post on this fund for a while, but now I just can't bring myself say it).



update: got some bad data on stockcharts it looks like. I don't see how the fund could be down that much. checked yahoo and someone on the message board says:

They paid caital gains distributions.....Which will be paid on 11/30....so you'll see them in your account on 12/1.

You had to own them at yesterday's close to get them.

The distribution was 4.656 per share short term cap gain AND .01 per share long term capital gain....

Nice Cuffs

a missing cuff link in the liquidity puzzle?

btw, here's a short excerpt from the Trend & Value Letter sent to subscribers early this morning:

The T-Bill Discount Rate went negative yesterday. I don't Know what exactly is going on, but something screwy is happening in the financial system. A couple days ago I saw some headline about some European Banks that might be in trouble again. A week before that the hyped trade was betting on a Japanese Government Bond default. WTF? Seems to me that big money is just putting feelers out on every potential 'black swan' they can think of to see if something gives. I guess that's to be expected in an environment where 'risk-free' yields nothing, and 'risk' has already been overly reflated. Hot money starts to look around for black swans. But a watched pot never boils, and Santa Claus never comes until the children fall asleep.

plenty of charts and analysis in the report too. sign up for one of the subscription options at the top of the blog and get today's report as a bonus.

Panic Ratio and Panic Ratio 2.0

for all the talk of the crisis having past, the Panic Ratio continues to hint at something decidedly different.



but at this point the ratio loses some of its usefulness with the T-Bill yields at zero, so moving forward we will also pay attention to a milder version, the VIX divided by the 2 year Treasury yield. we'll call it Panic 2.0.



looking good.

Index Data

closing values for Thursday, November 19, 2009:

Trend & Value 50 Index:

1025.26 (down 1.17%)

Equity ETF Index:

1001.33 (down 1.68%)

China Small Cap ADR 25 Index:

991.26 (down 1.37%)

Large Cap Dividend Top 50 Index:

1015.54 (down 1.14%)

T&V Gold Stock Index:

598.76 (up .33%)

General Liquidity Index:

1022.37 (down .76%)

------

Currencies versus Gold

for all the hype, major currencies (aside from USD of course) still haven't hit new lows relative to Gold. most are very close, but that's just the thing. several of these patterns look like potential bottoming patterns. not permanent bottoms, but bounces off these archy formations can be substantial.

nothing conclusive right now, but I'll be monitoring these ratios closely from here.

another EUR/JPY daily chart

couple days ago we looked at a daily chart of EUR/JPY showing a triangle type pattern. the rate has since broken below the support line but that didn't really precipitate any significant downside, at least not yet.

perhaps that it because the rate is still holding above the trendline coming up from the low early this year, which also happens to be a major 2/3 speedline. a violation of this support would be more consequential than that shorter term line highlighted in the previous post. if that trendline breaks, then look for support in the vicinity of the .755 speedline below it (purple line) though the pair could certainly trade well below that before finding any real support.



as with all the charts I post, I suggesting clicking the image to view it full size.

search of the day -- 666 s&p low conspiracy

earlier today I got a visit to the blog from the following google query:

666 s&p low conspiracy

now I have been getting hits to my 666 post on a regular basis since March (even a handful before that) but this is the first time that a search has contained the word 'conspiracy'. and actually I am not sure where I have used the word on this blog ever.

I am not sure what would constitute a conspiracy about the S&P hitting 666, which was a valid technical target for anyone who had cared to review the index's price history.

but the really curious part of the search was that the domain name was the home page of an investment bank consultancy. then right after that the 666 post got several other hits from investment bank / hedge fund type domains.

why are what look to be reputable investment professionals suddenly interested in 666 in the context of a conspiracy?

I'm curious what the motivation was in looking into 666 + conspiracy. if the person who did the search reads this, I'd be interesting in hearing from him/her. off the record if you wish.

GDX update

looks like the 'megaphone' pattern on GDX highlighted last week is still in play.




furthermore, we are seeing a pattern of declining tops on the GDX:GLD ratio the past few months.



on the other hand, bulls can point to the outperformance of GDXJ (Junior Gold ETF) relative to GDX and GLD since the fund was launched.

Australia iShares (EWA) -- potential double top?

Index Data

closing values for Wednesday, November 18, 2009:

Trend & Value 50 Index:

1037.44 (down .08)

Equity ETF Index:

1018.44 (down .25%)

China Small Cap ADR 25 Index:

1005.03 (up 1.08%)

Large Cap Dividend Top 50 Index:

1027.27 (down .14%)

T&V Gold Stock Index:

596.80 (down .86%)

General Liquidity Index:

1030.21 (down .11%)

------

Dow:Gold Ratio update

in late February I made what at the time was a very contrarian forecast. I said that I expected the Dow to outperform the price of Gold over the 'tradeable future'. that was probably one of my better calls this year.

but then after the Dow:Gold ratio made its initial, vigorous advance I decided to press my luck and forecast an even higher level for the ratio. with Dow:Gold trading around 9/1 (this was in late May or June, if I recall) I forecast a further advance all the way up to 12/1.

well the ratio did end up advancing more, but it only got to about 10, before starting to drift lower the past several weeks.

now we are back around 9 and everyone is wondering why we didn't hit 12 like I promised. two possible answers here; either my forecast was in error, or the game ain't over yet.

after looking at the charts again it seems to me that the decline from 10.1 to 8.97 can be viewed as a normal retracement within a (potentially) much larger advance. take a look at this chart:



notice the support found right around the confluence of the .382 price retracement and the .57 speedline. and in terms of time the retracement was about 2/5 the length of the initial advance from 7 to 10. none of these numbers are out of line with proportions typical of counter-trends.

so in round numbers the ratio advanced 3 points (from 7 to 10) then dropped a point (from 10 to 9). I don't see any reason why it can't advance another 3 points higher (from 9 to 12) from here.

now some of you might be scratching yer heads, thinking, wah? I thought that Trend & Value dude was bearish on stocks now! how can this self admitted goldbug (so he says) make these outlandish comments that the Dow can hit 12 ounces of Gold? nonsense!

well, I will say it's a sketchy call, but I have my reasons. the purpose of this post was just to see if my reasoning had been invalidated by recent price action. the answer is No, Not Yet. and I don't just change major outlooks wily-nilly, so the 12/1 forecast stands, at least for now. if something changes, I'll let you Know.

possible volume cycles on Dow Averages

just looking at the equivolume charts of the three Dow Averages. notice that on all three the volume traded between the latest high and prior high has been very close to the same amount of volume traded the previous high and the previous-previous high.

the question is whether these little cycles mean anything. in my experience, it's kind of hit and miss. sometimes they do, sometimes just coincidence that took the measurement on a certain day...

when I drew the annotations the lines were equidistant. as often happens they got skewed when I saved the annotations. tried to fix it, but gave up.

Index Data

closing values for Tuesday, November 17, 2009:

Trend & Value 50 Index:

1038.30 (unchanged)

Equity ETF Index:

1021.01 (down .17%)

China Small Cap ADR 25 Index:

994.31 (up 1.42%)

Large Cap Dividend Top 50 Index:

1028.69 (down .04%)

T&V Gold Stock Index:

601.96 (up .03%)

General Liquidity Index:

1031.37 (down .08%)

------

China small caps up some on net, but other than that it was one of the flatter days we've seen in a while.

Global Dow Index approaches 50% retrace of bear market

just discovered this index this morning actually. saw the quote on the WSJ site (which I don't visit very often). this is probably the best equities index I've come across. 150 stocks, equally weighted (rebalanced annually), multiple countries, industries etc, data updated pretty much around the clock. here is the link to the DJ info page.

the Global Dow Index would be perfect for the futures market, around the clock trading with the underlying cash markets open at the same time. something tells me they are working on this...

at the very least they could whip up an ETF that tracks the index.

anyhow, I think I am going to start analyzing GDOW regularly from here.

EUR/JPY daily chart

the Nippy has been quietly firming up again against most counterparts. the triangle thingie here on EUR/JPY should be good for a point or three on a breakout. (up or down, though the downside looks more convincing to me right now.)

Index Data

closing values for Monday, November 16, 2009:

Trend & Value 50 Index:

1038.27 (up 1.57%)

Equity ETF Index:

1022.71 (up 1.97%)

China Small Cap ADR 25 Index:

980.40 (up .28%)

Large Cap Dividend Top 50 Index:

1029.15 (up 1.27%)

T&V Gold Stock Index:

601.76 (up .52%)

General Liquidity Index:

1032.23 (up 1.59%)


------

not one decliner on the General Liquidity Index today. viva la reflación.

Chaikin Money Flow on Equity ETFs

just like on the S&P, most equity ETFs are showing big divergences between the price action and the direction of the CMF indicator. 36 out of 40 ETFs on our Equity ETF Index have a CMF(21) reading below 0. by comparison, only two ETFs had negative CMF(21) readings 49 trading days ago. I include some examples below.

(click here for an explanation of the CMF indicator)









say it again, Frenchy.

S&P 500 Equal Weight Index

the lagging of the SPXEW:SPX ratio tells us that even as the broad market hits or tests (depending on which index you prefer) new highs, fewer stocks are participating in the party. this is normally a prerequisite for any substantial bear reaction.

as an additional small bit of evidence that the market has tired, I notice that the number of S&P stocks below the 50 day moving average is, well, below the 50 day moving average. I haven't back-tested this farther back than this year, but I doubt this is a very healthy situation.



additionally we are seeing larger blue-chippy issues that have lagged the market all year getting bid up indiscriminately all of a sudden. (MCD and ABT come to mind.) stuff like that is making me suspicious.

that said, I do think US large caps (and the larger, the better) offer the least amount of downside over the tradeable future. US small caps are already lagging significantly, and the S&P World ex-US index is lower relative to the S&P 500 than it was a couple months ago.

AES Corp (AES)

as an electricity producer, the direction of AES should provide clues to the viability of the supposed recovery. on the weekly chart we see volume start to turn up as the price softens. on the daily chart you got a pretty well defined neckline around 12.75. a break below that neckline targets the 50% retracement of the rally since March.

this could drop to 10ish in just a few days of trading, given a sufficiently panicky macro environment.

could rally again too I suppose, though I'm having trouble envisioning any astoundingly bullish scenarios.

a reader asks...

a long time T&V reader writes to me:

Hi Kyle,

A fellow named ron rosen has been posting to kitco some technical analysis of the current gold bull, saying that the next move is a massive C wave down to c. $6-700. His posts are in the URLs below. Kitco is jon nadler's oddly anti-gold site.

You have expressed compatible views in the past. Is this threat for real?[....]

Yes.

Death Cross Watch -- FPL Group Inc. (FPL)

looks cheap from certain angles, but then there is nearly $18 in debt. that's over $43 of debt per share, folks.

anyway, the 50 dma is below the 200 dma on 27 S&P 500 components right now.