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Markets: Four Charts You Need to See

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You can learn a lot just by watching!

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Late last week, we pointed to Italy as the next forward catalyst; true to form, that's the reason being assigned to yesterday's downside rhyme.

To be sure, the global financial machination is a multi-linear dynamic. The causa proxima, as my brother Jeff Saut likes to say, was a confluence of concerns ranging from "the Italian election to a collapsing euro to sequestration, dysfunctional government, etc." Truth be told, it doesn't really matter; just as the bulls were loath to credit the government hand for the rising tide that lifted all asset classes, the bears need not justify downside causation.

For my part, after trading like a banshee last week, I sat yesterday out -- and while it's frustrating (given my stated bias yesterday), I often remind myself that if my greatest cost is that of opportunity, I should consider myself lucky. It wasn't for lack of conviction, mind you; it was more a function of time management; we unleashed Hoofy and Boo anew yesterday, and (nodding to Jeff again) the human mind can only focus on one thing at any given time.

To recap some thoughts from yesterday that continue to "matter," at least as much as one-quarter of our aggregate metrics can (fundamentals, structural influences, and psychology are the other three), I'll share four charts.

The first chart below is the CRB (commodities index) vs. the S&P (INDEXSP:.INX) (as a proxy for the stock market); this is consistent with our oft-stated vibe that "commodity volatility typically leads to stock movement."



The second chart below is the S&P uptrend we've been monitoring, which introduces near-term support in the S&P 1475-1480 range, depending on when we get there (it's an upward slope; time and price are the determinants).



The third chart should be familiar to ye faithful; it's the tech stocks on the aggregate; NDX (INDEXNASDAQ:NDX) 2700 remains THE level of lore for traders galore (and, not coincidentally, where we closed yesterday).



The fourth chart is of the financials on the aggregate. BKX (INDEXDJX:BKX) 54 was flagged yesterday as a level that mattered for the banks, and by extension, the broader tape. As go the piggies, so goes the poke. Goldman Sachs (NYSE:GS), Deutsche Bank (NYSE:DB), JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) remain the best single stock proxies for the sector.



As always, technical analysis provides a better context than catalyst-risk definition is our friend-so respect, but don't defer, as we together find our way.

R.P.

Twitter: @todd_harrison

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No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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.

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