Archive for November, 2009

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Danger In The Markets? Part IV

Thursday, November 5th, 2009

The charts seen in this post are from Maurice Walker, http://thechartpatterntrader.com.  First, a daily 1-year chart of the S&P500.  The large broadening pattern  (in blue) is notable, as is the smaller one, as seen by the dotted line.

EconomicGreenfield Walker SPX Daily 11-4-09

chart provided by http://thechartpatterntrader.com

Chart Courtesy of StockCharts.com

 

Here is a weekly chart of the S&P500.  Notable here is the downtrend line (in black) from the October 2007 highs that seems to be serving as resistance.  Also, the MACD and Full Stochastics seem to be reflecting weakness.

EconomicGreenfield Walker SPX Weekly 11-4-09

chart provided by http://thechartpatterntrader.com

Chart Courtesy of StockCharts.com

 

Next is a weekly chart of the QQQQ.  Again, as with the S&P500 chart above, the downtrend line (in black) from the October 2007 highs that seems to be serving as resistance.  Also, the MACD and Full Stochastics seem to be reflecting weakness.  As well, the RSI is declining:

 EconomicGreenfield Walker QQQQ Weekly 11-4-09

chart provided by http://thechartpatterntrader.com

Chart Courtesy of StockCharts.com

 

Now onto Part V…

 

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SPX at 1046.50 as this post is written

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Danger In The Markets? Part III

Wednesday, November 4th, 2009

Moving on to the stock market.  First, a 1-year daily chart of the S&P500.  Although at first glance, the advance from the March lows doesn’t appear too suspect, two aspects are notable.  One can see that currently the price has dipped below the 50 day moving average (line seen in blue -the red line is the 200 day moving average) for only the second time since the rally began in March; and second, the MACD indicator along the bottom seems at best lethargic; at worst, it is a significant divergence from the advancing price:

EconomicGreenfield SPX 11-3-09

Chart Courtesy of StockCharts.com

 

Next, here is a daily chart from ~ mid ’07 of the NYSE Summation Index.  I have put in the S&P500 as an overlay in green, with the NYSE Summation Index’s MACD at the bottom of the chart.  What I continue to find interesting here is the negative MACD divergence as indicated on the chart, as seen by the blue trendlines:

EconomicGreenfield NYSI Daily 11-3-09

Chart Courtesy of StockCharts.com

 

Next is a 10-year daily chart of the VIX.  The level of 20 (as seen by the blue horizontal line) on the VIX seems to be a good demarcation of stress.  I originally made this observation on September 16, and note how the 20 level seems to have subsequently acted as support. 

The VIX has been above this 20 level continuously since early September of 2008:

 EconomicGreenfield VIX Daily 10yr 11-3-09

Chart Courtesy of StockCharts.com

 

Now on to Part IV…

 

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SPX at 1045.41 as this post is written

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Danger In The Markets? Part II

Tuesday, November 3rd, 2009

Before displaying some charts of the stock market, I would like to post a couple of the Japanese Yen.  My comment of September 14 is relevant today:

“Additionally, is it not odd, on an “all things considered” basis, that the Japanese Yen is rising at what appears to be an increasing rate?  This rise commenced in mid-2007, as seen below:”

Here is the 5-year daily chart of the Japanese Yen:

EconomicGreenfield Yen Daily 11-3-09

Chart Courtesy of StockCharts.com

 

Here is the 1-year daily chart.  As one can see, there may be a Cup and Handle chart pattern forming from early 2009:

EconomicGreenfield Yen Daily 1 yr 11-3-09

 Chart Courtesy of Stockcharts.com

 

Now onto Part III…

 

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SPX at 1040.14 as this post is written

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Danger In The Markets? Part I

Monday, November 2nd, 2009

This series of blog posts represents a periodic Technical Analysis of the markets.  My last series of posts (5 parts) of this nature was titled “Peril In The Markets?” and started September 13.  At the conclusion of that series of posts, I wrote this blog post summarizing my thoughts:

http://www.economicgreenfield.com/2009/09/17/extreme-peril-in-the-stock-market/

Although a stock market crash did not occur in September or October, as I thought likely given the overall situation, my overall assessment of the markets (and the economic situation) is that the level of risk has increased.  There continues to be an extreme degree of peril embedded in the financial markets – as well as the economy in general.  In my opinion, from these price levels this peril can only be resolved via a crash of possibly extreme magnitude.   

Before displaying some charts, I would like to make a couple of disclaimers.   First,  an extensive overview of all of my Technical Analysis observations would be very lengthy, and it would also infringe upon some facets I consider to be proprietary.  As such, I will limit my observations, but I think most people will still get a clear overview of my thoughts.  Second, I am aware that many people don’t believe in Technical Analysis.  Even though I use Technical Analysis extensively, I will readily admit it is not infallible.  As readers of this blog are aware, the majority of my focus is on fundamental aspects of the markets and the economic situation.

Now, on to Part II and some charts…

 

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SPX at 1036.19 as this post is written

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“Cash For Clunkers” : Incremental Sales Analysis

Sunday, November 1st, 2009

My last post about “Cash For Clunkers” was on October 8 and can be found here:

http://www.economicgreenfield.com/2009/10/08/cash-for-clunkers-revisited/

On Thursday, there was an interesting story on CNNMoney.com concerning a sales analysis of the Cash For Clunkers program.  It can be found at this link:

http://money.cnn.com/2009/10/28/autos/clunkers_analysis/?postversion=2009102910

Here are some excerpts that are particularly notable:

“A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com.”

and later in the article:

“The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.”

and later in the article:

“In order to determine whether these sales would have happened anyway, Edmunds.com analysts looked at sales of luxury cars and other vehicles not included under the Clunkers program.

Using traditional relationships between sales volumes of those vehicles and the types of vehicles sold under Cash for Clunkers, Edmunds.com projected what sales would normally have been during the Cash for Clunkers period and in the weeks after.

Edmunds.com‘s estimate of the ultimate sales increase generally matches what industry experts had thought, said George Pipas, a sales analyst with Ford Motor Co (F, Fortune 500).”

SPX at 1036.19 as this post is written

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