It's a wild market out there. The volatility is fantastic, it's a real trader's paradise. There are plenty of unknowns, a ton of earnings these next two weeks and sentiment got ahead of it's self in a meaningful way last week. Good luck prognosticators. Let's dig in.
Crude oil held key multi year support. It's hard to be negative oil here and now.
XLE did a fantastic job holding the long term trend. The question is, can it stay above?
Airlines had a wild week, but were unable to regain the break down level Friday. This group is why we're in markets right? The long term trend is up and falling energy prices are bullish, but Ebola uncertainty is only growing.
Breadth and sentiment indicators have become a mess recently and have offered little value. However, the one sentiment indicator I trust most flashed a buy signal Wednesday. This suggests a significant bottom is in. It's possible we've reached max fearbola.
The VIX may just have had the most epic false breakout of the year. I'm also following the 10D MA and ~18 to pull more information.
The Russell 2000 re-tested the breakdown to end the week. The odds still point to lower. We have an open measured move 12%
The S&P 500 ETF also re-tested the August low on Friday. Clearly, the action early next week is important.
The S&P dividend ETF relative to the S&P 500 is testing long term resistance. We see the quick recent run to safety. Will it continue?
The show me to tell me ratio AKA Russell 2000 / Dow Industrials is still down-trending and just re-tested a breakdown on Friday.
The Nasdaq to long term treasuries ratio is broadening out. It just doesn't know what to do here. It seems this near term bounce has more legs to it.
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Treasuries sure appear to have capitulated this week. The trend is still strongly higher, but this is going to be interesting to watch.
One of the more surprising rebounds of the week was the home builders. There's still a lot of work to do, but it's worth eyeing if last week's low holds.
XHB RS broke a half year downtrend after bouncing at the popular .618 retracement. Keep in mind this is much a home maintenance ETF as it is a home construction indicator.
Real Estate relative strength is breaking out in a big way. More signs of a search for defense and yield.
Real Estate relative to tech hasn't broken out yet, but the larger structure suggests it will. It's probably safe to say the P/E in tech is about to shrink.
Apple reports earnings Monday night. Anything is possible, but with the recent triangle breakdown, the risk appears to the downside.
The dollar/yen re-tested and bounced off the prior highs. Illustrated via YCS:
Trade 'em well!
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