Global Trading Blog
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Dear Subscribers:I know that I have been repetitive about the weak Macro issue and the high probability of the US entering recession but yesterday we saw a clear example of why I have been so insistent on this subject.The new technical uptrend got hammered after a string of Macro misses from the US economy. Adding insult to injury, Moody's downgraded a series of spanish banks that added power to the sell off. The Philly FED Manufactoring Index was the most disturbing, entering firmly into negative territory which indicates economic contraction. The only positive surprise was the CB Leading Index which ... -
Dear Subscribers:It is risk on today as QE rumors increase after FED Evans called for more easing last night.Together with this, there was a "step forward" in Europe to create a "Bank Union" that would make the sector more "responsible".The Bank Union would include tighter coordination between the regulators and a bail out tool in which banks would be recapitalized while shareholders are wiped out and bond holders would get cut in their claims and converted into share holders.Technically the market is making a big move with 100% of the components of the market monitor, showing that is a risk ... -
Dear Subscribers:Yesterday the market was smacked was selling on higher volume and technically the downtrend seems to have resumed.The weak buying spurts since the May 18th oversold signal showed us that there wasn't strong buying behind the move and that the market was vulnerable.Yesterday we got a sell off that had mild sellers but the ratio between buyers and sellers was extremely bearish. Take a look at the market monitor to glance at the internals: Technically we have breached the 150 day moving average and it looks like the October 2011 highs & 200 day moving average are a probable target ... -
Dear Subscribers:Market has remained in a weak downtrend for the last 11 days.Sellers have control of the market but they haven't shown real power as of yet.The indices have mostly held the support created by March's lows and at first glance, there hasn't been much damage as of yet. However, beneath the surface a lot of stocks have corrected by large amounts.A bunch of leading stocks have been hit hard, falling more than 40% in some cases after earning reports.Support has held but the market isn't strong.A bit more selling and support will fall and downside will accelerate.I believe there ... -
Dear Subscribers:Market ends the week with a sharp sell off that terminates the uptrend signal from April 25th and causes the S&P 500 and Nasdaq Composite to breakdown below their 50 day moving average. This week we got the scenario that we didn't want to see as I highlighted on Monday's market comentary. The culprit of the break down has been the non stop macro misses coming out from developed economies. Since the uptrend started last April 25th, economic news have been very bad yet the market held up ok and continued higher until mid week.However the selling pressure caused ... -
Dear Subscribers:It seems that today we will have another follow through day with high volume in the market.A better than expected ISM Report lifts the S&P 500 to previous highs/resistance. Yesterday we saw action that we didn't wanted to see, as I highlighted in the previous update.The market fell a bit but in higher volume, creating a distribution day. This means that institutional investors were behind the selling and this is never good at the start of a new uptrend.Today we want to see the opposite action to give firmer footing to the rally: Big gains with higher volume.From the macro ... -
Dear Subscribers:Yesterday the market popped to new yearly highs thanks to a better than expected ISM Manufacturing PMI.The move to new highs wasn't extremely powerful as the previous ones @ 1419 in the S&P 500 were barely breached. Volume was below average which hints a lack of conviction and participation of institutional buyers. The Russell 2000 via the IWM is trying to break out once again but with average volume and with a limited price move. The IWM needs to hold this level or probably we will fail and have a deeper correction from this breakout attempt. Macro data today ... -
Dear Subscribers:First I would recommend to read this excellent analysis of yesterday's market action.A lot of gaps were filled but the market then rallied from these levels and that is bullish. The S&P 500 managed to close over 1400 and the Russell 2000 is barely holding this week's breakout. Read article here. Another positive, asides from the indices bouncing from their gap fill, was that volatility had big gains until the afternoon were it reversed to end negative on the day. A big reversal in volatility hints that fear is under control.With all the positives already explained lets focus on the ... -
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: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 ... -
Here we are again. Back into major resistance levels from which the overall market has failed to break out and move higher since the October bottom.We got a strong participation up day last Tuesday, which technically can be interpreted as a buy signal, but we need to see stronger confirmation with a solid breakout over resistance in the major indexes to see if this is finally for real.The S&P 500 is hitting its 200 day moving average today, a level it has headbanged and failed constantly. For a new, longer duration uptrend to start in the markets we need to ... -
Dear Subscribers:Yesterday's rally extended into the ending the day with huge gains in most major indexes and breaking the 6 day consecutive streak of the market closing lower than the open.The action of yesterday was quite historic. The Up/Down volume ratio on the NYSE Composite Index reached a historical high of 43.74. This is normally interpreted as strong accumulation and in normal times, precedes higher prices for the stock market going forward. We have had 4 similar buying episodes since the August low in the markets. This is interpreted as bullish going forward.Yesterday's action also creates a technical buy signal. Markets ... -
Dear Subscribers:Despite today's eventful day in which the Euro drama was in its maximum expression and the ECB decided to do a surprise rate cut for the Euro, markets finished the day with good gains and rallied into the close with higher volume than yesterday.This is a positive and is normally considered an accumulation day where institutional money enters the market. The market despite all this Euro mess looks bullish and it is enjoying its best seasonal cycle during the fourth quarter. Bear market or not, I believe the market should sustain an uptrend until year end. The NASDAQ ... -
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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