Charts of the Week
Charts of the Week, published ahead of each week's open, features technical strategist Mike Paulenoff's video chart analysis of key markets and their ETFs or bellwether stocks to watch.
What the Shanghai Tells Us About Markets Globally
The Chinese market, as represented by the Shanghai Composite has a very vulnerable aspect to it and needs to do some serious work on the upside to take off and extend its bull move. Looking at the Shanghai, one sees the low in October 2008 to the high in August 2009, followed by a sideways consolidation. We can look at this as a digestion period of its huge upmove, which becomes a bullish/pennant type pattern. However, after a 6-month sideways stint, one would expect a breakout, but instead it continues to coil.
The Case for Gold
The first chart I will explore today is the relationship between gold and oil and the dollar. The daily chart of spot gold versus spot euro/dollar shows a normal relationship, at least at first glance, with gold and the euro, as priced in dollars, moving in the same direction. Gold has undergone a serious correction from its December high at 1227 to its February low at 1044, while the euro has been going down the entire time.
Best of the Bad
In our Charts of the Week this week, we look at S&P 500 (SPY) in comparison to international indexes for Germany (EWG), Spain (EWP), Japan (EWJ), China (XFI), and Russia (RSX) and then the dollar (UUP) and gold (GLD). The S&P 500 Depository Receipts (SPY) closed at 108.04 Friday, and a lot of people think it will go back up to the 109 area. The SPY has resistance at the 20-day moving average at 109.35.
SPX, GLD, GDX, DBA, TAN
This week's Charts of the Week cover the overall equity market via the S&P 500 and then look at the dollar (via its ETF, the UUP) and commodities such as gold, silver and agriculture that are impacted by the dollar (via their ETFs such as the GLD, GDX, SLV, DBA and DBC). The S&P 500, after peaking at 1150 in mid-January, fell to 1071.58 on January 29, but rallied back towards 1103-1104 resistance and couldn’t get through last week.
Five Charts to Watch
This week’s Charts of the Week video analyzes four key market segments – Brazil via its the iShares MSCI Brazil Index ETF (EWZ), the semiconductor sector via the Semiconductor HLDRs (SMH), the dollar via the PowerShares Dollar Bullish ETF (UUP), and financials via Bank of America (BAC) and Wells Fargo (WFC). Click on each symbol’s link to access the video or visit www.mptrader.
