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Jason Haver: S&P 500, BKX, USB -- A Terminal Pattern in Equities?
The equities market hasn't made much headway lately and may be in the midst of a terminal pattern.
Jason Haver    

Monday saw the S&P 500 (INDEXSP:.INX) gap lower at the open (in an extended fifth wave), which was quickly retraced, leading SPX to close in the green. Neither bulls nor bears have gotten much accomplished lately, and thus both sides continue to keep options open for the intermediate term. I'm still inclined to give the intermediate edge to the bears, and presently, the 1910 level looks to be the dividing line.
 
SPX appears to be in the midst of a terminal pattern. Ideally, I'd still like to see another thrust up to a new all-time high, but it's not required.
 

Click to enlarge

Over the past few weeks, we've discussed the fact that the high-beta indices, such as the Nasdaq Composite (INDEXNASDAQ:.IXIC) and Russell 2000 (INDEXRUSSELL:RUT), are in intermediate downtrends. Another index that I watch religiously (but haven't shown lately in the updates) is the KBW Bank Index (INDEXSP:BKX). BKX is also in an intermediate downtrend and has recently broken beneath a three-point validated uptrend line.
 
BKX is interesting because it hasn't even come close to taking out its all-time high, and my longtime expectation here is that it's simply forming a huge ABC correction. At the beginning of 2013, I was very bullish on this index, looking for a trip to 72 -- but that target has long since been captured, and there are potentially enough waves in place for the entire rally since 2009 to be complete.
 

Click to enlarge

Finally, the long bond (USB) has held its breakout (as anticipated) and seems to be making a run at February's 138 target -- but, of course, blue-chip equities are still holding their own.
 

Click to enlarge

In conclusion, right now the near-term charts resemble my 4-year-old's refrigerator art, so there isn't much in the way of surefire near-term targets at the moment. Looking at the bigger picture, though, the intermediate charts still suggest equities may be in a vulnerable position. Until blue chips signal the all clear for bulls, I will continue to treat this as a terminal rally. Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Jason Haver: S&P 500, BKX, USB -- A Terminal Pattern in Equities?
The equities market hasn't made much headway lately and may be in the midst of a terminal pattern.
Jason Haver    

Monday saw the S&P 500 (INDEXSP:.INX) gap lower at the open (in an extended fifth wave), which was quickly retraced, leading SPX to close in the green. Neither bulls nor bears have gotten much accomplished lately, and thus both sides continue to keep options open for the intermediate term. I'm still inclined to give the intermediate edge to the bears, and presently, the 1910 level looks to be the dividing line.
 
SPX appears to be in the midst of a terminal pattern. Ideally, I'd still like to see another thrust up to a new all-time high, but it's not required.
 

Click to enlarge

Over the past few weeks, we've discussed the fact that the high-beta indices, such as the Nasdaq Composite (INDEXNASDAQ:.IXIC) and Russell 2000 (INDEXRUSSELL:RUT), are in intermediate downtrends. Another index that I watch religiously (but haven't shown lately in the updates) is the KBW Bank Index (INDEXSP:BKX). BKX is also in an intermediate downtrend and has recently broken beneath a three-point validated uptrend line.
 
BKX is interesting because it hasn't even come close to taking out its all-time high, and my longtime expectation here is that it's simply forming a huge ABC correction. At the beginning of 2013, I was very bullish on this index, looking for a trip to 72 -- but that target has long since been captured, and there are potentially enough waves in place for the entire rally since 2009 to be complete.
 

Click to enlarge

Finally, the long bond (USB) has held its breakout (as anticipated) and seems to be making a run at February's 138 target -- but, of course, blue-chip equities are still holding their own.
 

Click to enlarge

In conclusion, right now the near-term charts resemble my 4-year-old's refrigerator art, so there isn't much in the way of surefire near-term targets at the moment. Looking at the bigger picture, though, the intermediate charts still suggest equities may be in a vulnerable position. Until blue chips signal the all clear for bulls, I will continue to treat this as a terminal rally. Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Jason Haver: S&P 500, BKX, USB -- A Terminal Pattern in Equities?
The equities market hasn't made much headway lately and may be in the midst of a terminal pattern.
Jason Haver    

Monday saw the S&P 500 (INDEXSP:.INX) gap lower at the open (in an extended fifth wave), which was quickly retraced, leading SPX to close in the green. Neither bulls nor bears have gotten much accomplished lately, and thus both sides continue to keep options open for the intermediate term. I'm still inclined to give the intermediate edge to the bears, and presently, the 1910 level looks to be the dividing line.
 
SPX appears to be in the midst of a terminal pattern. Ideally, I'd still like to see another thrust up to a new all-time high, but it's not required.
 

Click to enlarge

Over the past few weeks, we've discussed the fact that the high-beta indices, such as the Nasdaq Composite (INDEXNASDAQ:.IXIC) and Russell 2000 (INDEXRUSSELL:RUT), are in intermediate downtrends. Another index that I watch religiously (but haven't shown lately in the updates) is the KBW Bank Index (INDEXSP:BKX). BKX is also in an intermediate downtrend and has recently broken beneath a three-point validated uptrend line.
 
BKX is interesting because it hasn't even come close to taking out its all-time high, and my longtime expectation here is that it's simply forming a huge ABC correction. At the beginning of 2013, I was very bullish on this index, looking for a trip to 72 -- but that target has long since been captured, and there are potentially enough waves in place for the entire rally since 2009 to be complete.
 

Click to enlarge

Finally, the long bond (USB) has held its breakout (as anticipated) and seems to be making a run at February's 138 target -- but, of course, blue-chip equities are still holding their own.
 

Click to enlarge

In conclusion, right now the near-term charts resemble my 4-year-old's refrigerator art, so there isn't much in the way of surefire near-term targets at the moment. Looking at the bigger picture, though, the intermediate charts still suggest equities may be in a vulnerable position. Until blue chips signal the all clear for bulls, I will continue to treat this as a terminal rally. Trade safe.

Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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