This is almost my usual graph, but not quite. It has a couple of interesting things to say.
Things of interest:
1) Gold and Silver index is diverging from GLD and SLV metals funds. What and why?
2) Stocks are looking toppy, again.
3) Brazil, a ray of hope as they impeach the President?
First off, stocks. RUT the Russel 2000, stays below SPY and is increasing the gap. That happens in down markets as the broader market has more weak stocks that can’t stand selling pressure than the 500 largest. QQQQ floats on top as the growth engine, but even it has a failure to make new highs. SPY is almost a match for the prior high last June July area, but weakening. In the context of QQQQ failing new highs and RUT falling, well, not good.
DIA, the Diamonds Dow Industrials is rather middle of the pack, which is about normal.
Look at volume. On the up cycle, it just dries up. Now it’s very slim, about like last April / May. We are in a ‘sideways roller’ with minor down bias. Trade rules are to short the tops (when at / over the SMA stack) and cover on the bottoms spikes. (Or equivalently, buy puts at the top, sell them at the bottom spikes).
I have a different SMA stack here. It is a longer duration and only 2 lines. This is to dampen the swings of the rolls and make the trend more visible. Note that it is still inverted so still a bear market trend. This is the 100 day vs 200 day set.
MACD is in one of those weakening sideways weaves. These usually resolve to the downside.
DMI is “blue on top” with ADX at about 15, that is, trendless. So “up”, but going nowhere.
All in all, I think this is likely a good time to start looking for a longer term downward run. Then again, LOTS of folks with buckets of money are vested in not rocking the boat until the election is over, so YMMV. Me? My usual behavior in such contexts: Shift to a faster time period with trends and trade it. So a 10 day hourly chart…
Gold & Silver & Brazil
What I noticed here is that SLV and GLD have risen a bit off their lows, but the Gold & Silver Index (gold line 2nd from the bottom) used by Bigcharts is on a rocket ride. I need to find out what’s in that and why. My guess is “gold and silver mining stocks”. An interesting thing, is it a short cover, or does someone with deep pockets thing inflation or recovery is coming? Dig Here, so to speak ;-)
Finally, EWZ, that bottom green line, shows a sharp upturn at the end. Perhaps Brazil is looking at good times what with having impeached their corrupt President? Or the shorts are just covering… Another Dig Here!
At any rate, there are a few areas needing attention, at last, in a generally toppy and “avoid” market.
Guess I need to start more regular market checks again. ;-)