Tuesday, December 24, 2013 Zeb’s VUE

General Information and Analysis

 

US

Comment for 12/24/2013	Measure	Indicator	Ranking
Weekly RSI	WeeklyRSI	72.2	OverB
Long Term MVA (200 day MVA)	200 MVA	9.58%	Bull
5 Day Slope of 55 day MVA	Slope55MA	0.75%	Bull
Intermediate Trend (Using ADX)	ADX(14)	17.2	Neutral
Short Term Trend (Daily RSI 3)	RSI(3)	85.76	OverB
Relative Volatility (ATR% vs StdDev over last 90 days	ATR(90)	1.00%	Normal
VIX - MACD 10/30 (slope down)	MACD	-0.040	Neutral
The market is bullish with a move toward overbought (on price only).

The table above is a rating for intermediate and long term trend in the S&P500.  I used the S&P 500 as the indicator for the USA stock market.  For day traders: You may find it useful to trade in the direction of the trend.  However, looking at any daily chart over lots of years, the trading direction for the day is pretty random. 

S&P PIVOT ES Mini - Monday - Useful on Tuesday 12/24/2014

High  - 1824.50

Low   - 1816.75
Close – 1822.75
R2     - 1829.25
R1     - 1826.25
Pivot  - 1821.50
S1     - 1818.50
S2     - 1813.75
Read about Pivot points on Investopedia. 

Stocks –

Stocks traded up overnight in Asia and Europe.  Trading is thin both in Asia and Europe.   Yesterday saw a historic new high in S&P500.  

One of the main bullish factors is IMF managing director (Lagrade’s) comment that the IMF sees stronger USA economic outlook in 2014.

The budget deal in Washington DC has business leaders looking with more confidence in the business environment next year. 

There appears to be an exodus of investors out of the bond market and into stocks.  ETFs (Electronic Traded Funds) that trade every kind of bond imaginable have been falling in value, as interest rates rise.  Many bond traders I talk to are talking about a long-term change with bonds going down (rapidly) in value.   If so, this means bond prices will plunge and hundreds of billions of dollar will flow out of bonds into stocks (and other assets). 

New Home Sales:  This is due to be released at 10:00 AM EST (7AM PST).  It is expected to be very slightly below October 2013.  The Nov FHFA house price index is expected to increase slightly.

Durable Goods Orders:  Durable Goods orders reflect new orders placed with domestic manufactures.  Manufacturing is gaining strength.  Transportation component increased to 8.4% after a drop of 2.5% in October.  Defense is the major expenditure increase along with motor vehicles.  Businesses appear to be more willing to invest in capital goods. 

There was this: ObamaCare deadline postponed by a day.  Reportedly, the web site could not handle the last minute traffic.  The government’s deadlines are inconsistent as they move dates.  The changes in the parameters of ObamaCare is causing huge uncertainty for insures, consumers and businesses that must comply with ObamaCare.   Go figure – and people want government programs? 

China

China’s credit squeeze has eased following People’s Bank of China (PBOC) move to provide emergency liquidity injections.  They injected 29B yaun into the system.  The squeeze was brought on by PBOC attempt to rein in soaring debt.

For 2014, investors world-wide are expecting China to set its GDP growth goal to 7.5%.  This remains the same as 2013.  The government has stated they expect a recovery in exports to help drive the expansion as the USA and Germany rebound.  China’s leaders are trying to implement deep structural reforms, and are attempting to keep growth steady during “change”.