Global Trading Blog
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Dear Subscribers:The market continues to act bullish and breadth has improved worldwide as many different markets or assets are breaking out / setting up bullishly.As I mentioned in the last update, the market is a bit overbought short term so we might consolidate or pullback a bit here but overall, longer term momentum seems to be building into equities as the "risk on" trade is on.We should continue to see the Nasdaq Composite or the Russell 2000 outperfom the S&P 500 or Dow Jones industrials to mantain the bullish tone. The macro calendar for this week has some important releases. ... -
Dear Subscribers:The market had a bullish reaction to yesterday's announcement by the ECB in which it affirmed that it will renew bond purchases of PIIG countries in order to control and lower their interest rates.The only condition for this to occur is that the alleged PIIGS countries must ask for a bailout and follow the austerity standards set by the EU.Now its up to the bigger PIIGS, Italy & Spain to formally ask for a bailout and thus allow the ECB to print Euros to shore up their debt. The S&P 500 broke out to new 4 year highs as ... -
Dear Subscribers:First let me apologize for not updating the site as frequently as I do this week.I was affected by a bad flu and wasn't feeling well, thus needed to take some time off.However, I have been monitoring the market closely.The chop fest market once again showed its dramatic nature on Friday as it did a sharp U-turn and erased four consecutive days of selling with big gains after a better than expected Non-Farm Payrolls report.Since then we have had two positive up days that has brought us back to the yearly highs and the S&P 500 over 1400.If the ... -
Dear Subscribers:The market sells off today on a dissapointing Non Farm Payroll report, making it the second down day in a row.For the moment, I see the current pullback as the market working off overbought conditions and catching up to its 20-50 day moving averages.The Volume-Breadth trend is positive which signals that uptrend is healthy and the "strong hands" are buyers. We still have no distribution days in the major US indices which is still positive.The current pullback if we remain in an uptrend will be a good opportunity to add some new positions at better prices. As for the Non ... -
Dear Subscribers:Today the markets were up in decent volume and breadth improved.This technically means that the trend is getting stronger and "should" be more stable going forward. The S&P 500 crossed over its 50 day moving average but did not get another accumulation day. The breadth and participation of the "strong hands" is improving but note that the market has reachend and overbought condition. If you look at another momentum indicators such as the McClellan Oscillator you will see that short term we are extremely overbought. The market is putting very high hopes on a new Quantitative Easing or some ... -
Dear Subscribers:Markets broke out today with force.Many new breakouts occured in leading stocks while others kept advancing from breakouts that occured during the last couple of weeks.Volume in general increased in the major indices.Last week's overbought conditions (65% of the market monitor was overbought. See it here) found relief with little price erosion and most indices setup bullishly for this week. Knowing that, today's strong advance shouldn't have been a surprise.Lets look at a few charts:The S&P 500 reached new highs and seems set to reach the May 2008 highs at 1437 which should provide resistance short term. The Nasdaq ... -
Dear Subscribers:We begin the week with "bearish" news out of China and Europe this week.China reduced its growth forecast to 7.5%, which will put pressure on emerging economies and commodities and is sitting on a $2.2 trillion local debt. This week, Greece has to have a 70% approval of private debt holders to accept a debt swap. If they don't get this % of approval from private debt holders, credit default swaps will be triggered. Also the Euro Zone PMI, decreased to 49.3 which confirms economic contraction.Furthermore, Morgan Stanley downgraded US Q1 GDP to only 1%.All in all a lot of "bearish ... -
Dear Subscribers:The finished with a clear reversal and distribution day yesterday after making new highs.There have been 4 distribution days in the NYSE, 3 in the S&P 500 and 2 in NASDAQ.Remember that a distribution day is were selling volume is higher than day prior. This indicates that big players were selling.Usually 5 distribution days during a 4-6 week period will trigger a meaningful market correction.Yesterday's sell volume in the S&P 500 was higher than its 50 & 150 day moving average and highest since 12/16/2011. Still we haven't seen real market weakness and the grinding up trend is still ... -
Dear Subscribers: The market uptrend has remained in place and indices have kept creeping higher despite overbought conditions and technical divergences.Here I will highlight some of the negative aspects that other analysts and myself have noticed in the major market averages which suggest that a meaningful pullback is near. The Russell 2000 is one of the major indices is not confirming the new highs reached yesterday in the Dow Jones Industrials or the S&P 500. We can also see how its RSI is pulling back. If you are a student of the "Dow Theory" it will be evident that the ... -
Dear Subscribers:Markets reversed yesterday on higher in most major indexes. This is a distribution day in were big institutions were most likely sellers.One day reversals are not accurate predictors of market direction but yesterday's action was bearish and could be the start of something bigger. This was more evident or dramatic in the NASDAQ 100 in which Apple weights 20% of the index. The sharp reversal of Apple in high volume translated into an ugly reversal in the NASDAQ 100 Index. Today we are getting a bounce back to 1350 resistance reversing the losses from the futures market due to ... -
Dear Subscribers:The tug of war between Bulls & Bears continues at the 1350 resistance in the S&P 500.There have been some attempts to breach this level during the pre market futures and during normal trading but bulls have lacked the power to break on through.However, we have seen some very good performance in leading stocks and mega leading stocks such as Apple. To get a real pullback we will need to see this stocks start to break down. Also a divergence is building between the EUR/USD and the market. Normally they move in sync but since last Friday the EURO ... -
Dear Subscribers:For the moment, the winning streak in the market is being halted at resistance.The market has not been able to breach the 1350 resistance area from its overbought conditions.Today news from Europe are the excuse to sell. Bailout money to Greece was delayed until next week after euro-zone finance ministers demanded the country's parliament first approve another round of deep cutbacks. Copper falls over 2% and retests its 200 day moving average. Losses in copper show risk aversion. For the moment, everything is going as expected. I have warned about this pullback during this week and we have positioned ... -
Dear Subcribers:Buyers continue to appear in the small dips the market is giving.Weakness on Monday quickly faded and yesterday the market advanced slightly.We are hitting the 1350 resistance area which has proved to be a tough area for the market.2011 highs were achieved at these levels and it will be tougher for the market to continue to grind higher from here. A pretty steep trendline has been playing out since mid December. I would watch for a close on stronger volume below this trendline as a signal that the market will pullback with more sharply. Also the Dollar Index's momentum ... -
Dear Subscribers:Market has difficulty to continue its advance and reverses the small gains it had achieved near the open.As we have mentioned during the last couple of weeks, the market is overbought and focusing in profit taking rather than buying should be the norm.Despite the FED's bullish FOMC statament, with low rates at least until the end of 2014,the market is struggling to move higher and it seems other market participants are profit taking into the good news. A variety on sentiment gauges are suggesting that an important pull back is due.The % of assets of leveraged traders in money ... -
Dear Subscribers:Yesterday we saw various indices that were lagging or hitting resistance, breakout higher.The NYSE composite managed to close over its 200 day moving average, the S&P 500 made new highs and the PDP (the technical leaders ETF) also managed to close decisively over its 200 day moving average. Perharps more important, the Nasdaq-100 (or QQQ) is trying to break out over a 11 high-resistance in which it failed to move higher during 2011 in 7 attempts. It is positive that innovative-tech driven companies lead the rally and if we get a decisive break out over 11 year highs I ... -
Dear Subscribers:Markets are currently pretty extended to the upside as you can see in this week's Market Monitor: Given the current conditions, it is probable we will take a short on some index ETF to hedge our long exposure.This week we have a pretty heavy macro calendar in which the most important release will be the Non-Farm employment report on Friday. Best regards, Victor Riesco -
Dear Subscribers: After the strong gains of yesterday, the market takes a breather small losses. Yesterday's big gains were on high volume and breadth which is a positive but this made the markets to reach a pretty extreme short term overbought condition. The S&P 500 managed to close over its 150 day moving average, which normally shows the long term trend in the market. The % of stocks over their 20 and 50 day moving average shows that the market is very extended to the upside. The % of stocks over their 50 day moving average hadn't been as high as ... -
Dear Subscribers: The market is stalling near the highs of the month that coincide with those of August and September. After the potent rebound that started early this month, it is normal that these previous highs offer technical resistance and traders decide to take profits or short expecting the downtrend to resume. Breaking these levels we will probably reach 1260 which are the lows and support of March and June corrections. Also the 150 day Moving Average lies there and will probably act as a magnet in further upside. I expect the market to reach these levels sooner or later. Technically the market ...
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I’M VICTOR RIESCO
I’m a financial analyst and professional investor from Santiago, Chile. I’m the owner of Global Trader, a brokerage and trading .
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