It's easy to get all bear'd up on the markets after this week's action. Lord knows we all want to front run the coming post QE drop. But the POMO is still here and the fact of the matter is we're at meaningful buying levels in the immediate term.
After Thursday's 80% down day, the major indices found buyers at key supports and moving averages. It seems plenty of stops were taken out Thursday. Also, take note the momentum picture in SPY and QQQ is still neutral/bullish.
The most notable junk bond ETFs also found support at the summer lows.
Monday Morning update: If these levels are to break today, the volatility picture suggests we have significant room for downside. There just isn't a lot of fear out there right now.
The Asia Pacific Fund, a diverse fund of the largest Asian stocks, found support at the 100D MA and ended up hammering for the week. Also note the daily cloud support. If inclined, there is a very clear level to trade against.
The DAX continues to carve out a topping pattern. If it were to top out and break down, trend support from the 2009 lows is nearly 20% away
The US Dollar continues it's strongest move in years, One thing to note is the RSI. The last two times it rallied this strongly RSI made an M top in the overbought zone.
The defense group is loitering near the highs. One of the strongest groups in the market no doubt.
The shippers broke the 40 week MA with no hesitation.
Financials broke their short term relative strength uptrend. I'm interested to see if it holds sideways or moves lower.
XLE probed deep into trend support from 2011, and found some buyers at the 40 week MA. Note the long term momentum picture is still positive.
After a false breakout last Friday, the regional banks fell fast to support. This is a great place to take a shot if you like some names in the group.
The short term downtrends in gold miners price and relative strength are unsustainable, but very strong. It's probably worth watching the price pivot level.
Trade 'em well!
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