Rotation Report: The Chase Is On

There's not much new this week.  Strong breadth action is beginning to be followed by price action as the major indices have formed continuation patterns.  However, markets are starting next week at or near resistance zones.

Looking at the NYSE dashboard, volume and breadth trends continue to be strong and suggest buying weakness.

The 13 level has been key in the VIX.  It's still worth keeping an eye on that level. 

Vol Term structure approaches the lower end of this new complacent range.  

The smoothed arms index is still far from a sell zone.  Another good sign for equities in the short term.

The bond market is getting pretty interesting.  Are investment grade bonds becoming shorts?  The 50 day moving average in the 30 year treasury has turned higher.

Investment grade corporate bonds continue trade within a rising wedge.

Interestingly, junk bonds look like the best corner of the bond market.  The equity bull market is advanced and this bond market dynamic appears to be a function of large fund managers across the globe 'seeking better returns'.  It's career risk to the nth degree.  For more, check out the latest edition of Top Trading Links.

The U.S. Dollar is testing tough resistance here at the 100 level.

Mid-week I wrote this piece on tech for See It Market.  I may have underestimated the group.  Throughout the week, bulls saw everything they wanted to see in the space and then some.

For example, the Internet index broke clear of some major resistance.  

Energy has broken it's half year downtrend with some room to run to the 40 week MA.  The 82 level is key as well.

 Specialty Retail broke out late in the week as it continues to lead the Consumer Spending charge.

Consumer Staples and utilities are really lagging here. Given the risk-on nature of the market they're groups to avoid.  The intermediate trend change in the 30 year treasury is also worth noting.

 Materials continue to find support at the 40 week moving average.

Europe really lagged as folks rotate to the emerging markets.  Euro Financials put in a toppy weekly candle.

It was a monsterous week for the Asian markets with China leading the way.  Of course we don't live in a vacuum, and there are the mandatory bubble murmurs.  I'm using pullbacks to look for setups and i'm pretty confident they'll be there.  Looking across the emerging markets, it appears Asia is LEADING these other markets and they may be soon to follow.  

Is Africa (and the middle east) set to follow suit?  The long term structures are beautiful in GAF and EZA

Of course let's not forget this possible bottom in Thailand.  Again, these charts just speak to how young the emerging markets rally may be.

The world index broke a continuation triangle higher.  All systems go?

It's kind of a mess in this emerging markets range but 44.5-46 is the area that stands out.

Early last week I shared a post on the Latin American 'Amazon.com' Mercado Libre over at See It Market.  Given the price action in EEM and the stock itself (MELI), I bought it in size.  It's just consolidating so well after a four year rally from 7 to 140.

Thanks for reading!