First, I've got to apologize for the incompleteness of this week's letter. I caught the flu this weekend and i'm all scatter brained.
This week, news is coming at us from every angle with the market expecting a mega QE from the ECB and earnings from every group. There's plenty of evidence to slant a market bias both bullish and bearish, so let's dig in.
It was an interesting finish to the week as we saw a false breakdown with a bullish divergence in the Nasdaq 100.
However, that doesn't jive at all with the recent relative strength developments.
Financials relative strength broke below it's corrective half year rally.
The consumer ratio broke trend support from 2011, but is still within a horizontal pivot area. A further breakdown would be pretty worrisome.
Various commodity groups look very interesting here.
The Nat Gas Index reversed once again after testing trend support from 2010.
Brent Oil staged a doji week. Finally, a sign the bleeding is slowing. I'm looking to play a snap back rally in oil this week.
Gold's monster bottom breakout was a top story of the week. We've got a clear upside target area to roughly 1350.
Looking further out on Gold relative to the S&P 500, we see a year long downtrend test in the making.
Overseas, emerging Asia is still doing it's own thing...
The Philippines broke out of a two year base.
Hong Kong continues to consolidate within a half year wedge.
Emerging Markets relative strength is testing a key boundary after breaking another boundary last week.
Germany closed at new highs as it powered out of a year long base.
Thanks for reading!
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