This week in technicals(TWIT): Stocks at a critical juncture; Asia takes center stage

One word explains last weeks action:  Nasty.  What makes it even more nasty is there were a ton of fresh warning flags on Friday.  Now a plethora of key trend-lines are being tested.  Let's dig in.

First a couple of notes from last week's review:

• Specialty retail is still setting up a bounce
• XHB has completely broke down and it can easily lead to a larger breakdown
• The SPY cycles chart absolutely nailed this key turning point.  That makes me wonder what the heck is in store this summer..

Summary:

• US stocks are at a critical juncture
• An oversold bounce is likely this week.  It's hard to bet on anything sustainable
• Bonds and Gold continue to show strength as more signs of a flight to safety is underway.
• We need to watch Asian ETF's in the near term for hints.  

Stocks are at key junctures

The S&P 500 high beta ETF approaching it's 7th touch of this support line since the Obama re-election lows.  A break suggests a near term shift towards defense.

IWM is a mirror image.  If it breaks there isn't support until the high 90's.

Financials are at key price and relative strength support.  Bounce trades could be in play early this week.

Energy has broke a 19 month 5+ touch support line.  Maybe it bounces back above horizontal support, but i'm sure as shit not betting on that with my money.  

Broadcasting is now touching this 8 month support line for the 4th time.  What an uptrend.

Chemicals are approaching this support line from the 2011 lows for the 6th time.

Yellow flags are waving like a NASCAR race at Bristol

The VIX, on a weekly closing basis, has broken the downtrend from late 2011.

The HYG/TLT ratio is approaching 1.5 yr rising T/L support after breaking a gradual 5 month support line.  With the first test in 8 months it seems logical this will bounce.

Other bond ratios are really suggesting caution.

The S&P 500 to 30 yr Treasury Bonds ratio is telling strategists to push allocations from stocks to bonds in the short term.

Nasty breakdowns are in progress in EDD/US Bonds.  A flight to safety in credit markets is underway.

The ten year yield gave up the long term trendline breakout and is looking more and more like a false move.

Gold barely snuck out of channel resistance to end last week.  Can it test the falling 200D??  The MACD is already diverging.  Sign of a corrective bounce??

Is a short term bounce due soon?

Smoothed TRIN broke an incredibly clear 10 month downtrend last week.  That rarely happens on charts like these.  Just looking at the prior peaks you could say aggressively buy 'em, but very short term bounce trades make more sense.  If this is going to have an out-sized move higher, it'll happen in the next few weeks.

Eyes on Asia

The Singapore iShares broke down from an 8 month wedge

Japan is at a support line started this fall.  This thing has really compressed since May.  I'll just thrown in none of the Japanese ADR's look good at all.

Here are some key happenings in the Chinese charts:  

The Hong Kong ETF is at it's 5th touch of support from the 2009 low.  This thing is nasty scary if it doesn't hold.

Financials have pierced support connecting the 2011 and summer 2013 lows.

Real Estate is at critical support connecting the 2009 and 2011 lows.

The small caps are in a similar pattern to EWJ.

From a longer term perspective this is a wait + see market.  Yeah we can look to some bounce trades off support, but then what??  After months of being on cruise control, we have to freakin' bring it this week.  Trade 'em well!