Tuesday, January 14, 2014 Zeb’s Vue

General Information and Analysis

 

US

Comment for 1/14/2014	Measure	Indicator	Ranking
Weekly RSI	WeeklyRSI	66.2	Neutral/fall
Long Term MVA (200 day MVA)	200 MVA	8.33%	Bull
5 Day Slope of 55 day MVA	Slope55MA	0.42%	Neutral
Intermediate Trend (Using ADX)	ADX(14)	18.86	Neutral/Chop
Short Term Trend (Daily RSI 3)	RSI(3)	79.69	OverB
Relative Volatility ATR vs. 1Stdev	ATR(90)	0.60%	Calm
VIX - MACD 10/30 (slope down)	MACD	0.010	Neutral/Bear

 

Comment:

Long Term price movement is still bullish, even with yesterday's triple digit losses.  Short term, the market is becoming more volatile as it does when fear enters the market.  The storm may be upon us.   The market was up overnight.

When long term the market is still in a bull, and we have a large range day as we had, then today could be another down day if price moves below yesterday's low (1809.50 on ES Mini, 16240.6 on DOW)

Overnight trading in Europe and in Stock market futures is inconclusive.  This could very well be a choppy day

 

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 March Contract - Tuesday- Useful on Friday 1/10/2014

Yesterday			Day Before Yesterday
High	1838.50		High	1842.50
Low	1809.50		Low	1826.25
Close	1815.00		Close	1837.75
R2	1850.50		R2	1851.75
R1	1833.00		R1	1844.75
Pivot	1821.25		Pivot	1835.50
S1	1803.75		S1	1828.50
S2	1792.00		S2	1819.25

 

Stocks –

Zeb’s View:

Retail sales (as provided by Redbook) are mixed.  Econoday is reporting that taking out autos, retail sales are moderately healthy.  This should have been a catalysts for the market moving up, and it did slightly.  However, the psychology of investors and traders is wary (fear building for a correction).  Goldman Sachs store sales were down -1.0%. 

The only conclusion I can determine is to say retail sales are somewhat in a diverging  mode from jobs report.  Diverging information is the normal mode for investors, and it makes for choppy markets on a daily basis.

Day-traders have an important resistant number coming up.  1810 on SPX is of particular interest, and 1800 will be a major support area.  1810 on SPX has acted as support since November of 2013. 

The potential that traders and investors are moving to a near-term asset rotation is high, as the first part of January 2014 shows gold and silver to outperform and stocks to underperform.  However, be warned, that there is no certainty this is taking place.  Gold and silver have reached a low in their cycle, and could react to the upside as they often do at this time of year.  Fundamentally, there is little changed that forced Gold down to these levels - meaning Gold could have a significant rally. 

US Dollar Index is up as of 6:24 this morning.  Crude Oil lost a lot yesterday, but it is holding steady to higher this morning. 

Overall, the data coming out so far today is inconclusive with respect to market direction.  With price on S&P emini below YDPivot, look for YD Pivot to provide resistance with support at YD support 1.  Choppy is in the cards as of this writing.

USA Government

The big news overnight is that the US lawmakers have agreed on a funding bill for next year.  This is ahead of schedule, and has been accomplished without all the last minute drama of last year.  We still have the Jan. 15th deadline for the debt ceiling, but everyone (including me) thinks that will get extended until the funding bill is passed.

So far this morning, the dollar is up on the news.  Maybe someone can inform me why that is.  OK, I agree prices are pretty much random on a daily basis.  The dollar Index dropped for three days in a row, and as almost every day-trader knows, 3 days in the same direction is likely to have a correction to the upside (even if small).  Let's wait. 

China continues to let the Renminbi move higher.  Renminbi is now the anti-dollar currency (something I and many others have said China was moving toward).  As a USA citizen, I hope that Timmy Geithner and Secretary Lew are right about having China's currency appreciate and take the roll of anti-dollar.  I have me dooots (so to speak). 

I don't want to see the US lose purchasing power in the International markets.  If you are a USA citizen, you should be torn between supporting your country via investment and supporting your personal wealth.  If the US lawmakers and the US President wants to deficit spend (to the tune of $1.1 trillion dollars next year) into oblivion and then monetize the debt (as the Federal Reserve is doing) they are ruining the dollars purchasing power and therefore from an investment perspective only, an anti-dollar investment is a good thing to have. 

I ask you, if you look at history of countries spending themselves into oblivion, what happens?  And is there any exception (even once) of that happening - oblivion?  Austerity here we come sometime. 

In the meantime, the opportunies to make money for IRA, 401K and other non-taxable means have never been better.  The question will be, when will the US government take over those accounts?   Oooh, the bloodsuckers in government have to be looking at the trillions of dollars in those accounts.  Would they not want to do to that money the same as they did to Social Security?  Just asking...