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Viewing entries tagged with 'Equities'
Last week in equities
All
The sharp declines in global equity markets last week traced out ‘bearish engulfing weeks’ in a number of indices, strongly suggesting that further falls will be seen over coming weeks.
From my observations over the years, the ‘engulfing’ signals, be it bullish or bearish, are one of the more reliable indicators around.
In the case of last week, the markets were already in a multi-week downtrend when they tried to rally early in the week (breaking the run of lower highs – which should be a bull signal) only to collapse and finish on their lows (and making a new low for the trend). That is bearish price action and shows that the sellers are highly motivated.
This price action throws up many trading possibilities including shorting the index’s themselves via CFD’s or Futures contracts or selling the risk currencies like NZD and AUD (AUD the most vulnerable right now?).
The S&P500 – The ‘big board’ as they say.
S&P 500 – Click here to view chart
The Dow, the Nasdaq and the German Dax all made the same pattern.
Regards G.
Chart of interest - S&P v CRB
All
Quite an enlightening chart here of the breakdown of the previously highly correlated relationship between U.S. shares (S&P) and commodities (CRB). Since the onset of the GFC the two asset classes have been highly correlated as the FED’s non-traditional monetary policy moves (read – Quantitative Easing programs) supported both. The last 6 months however have seen a distinct breakdown of the relationship.
My fear is that commodities are telling us that all is not well with the world and that equities are going to fall (play catch up).
Anyone out there got a different spin? I’d be interested to hear.
Cheers G.
Chart of interest - China stocks and AUD
All
Chinese shares have been heavily beaten down over the last 2 years. However yesterday’s action looks to me to be a potentially significant break higher.
Chinese Shares – click here to view chart
Taking a look at AUD/USD I have the AUD/USD testing, and rebounding, off CRUCIAL support at 1.0280 last night.
AUDUSD – click here to view chart
I wonder if the China stock move may come into play going forward (U.S. shares of course are doing very well too with the Dow at 4.5 year highs) overriding the recent focus on the big RBA rate cut which is somewhat old news (and the accompanying statement was, well….. rather neutral).
Regards G.
