THURSDAY SEES BIG MOVES IN CURRENCIES, COMMODITIES, EQUITIES AND BONDS -- $SPX TESTS BOTTOM OF RANGE -- $TYX YIELDS CONTINUE TO FALL -- $NATGAS TAKES A RUN AT $5 -- $GOLD BREAKS A 16 MONTH TRENDLINE -- $USD GAPS LOWER
THURSDAY SEES BIG MOVES IN EQUITIES, COMMODITIES, CURRENCIES AND BONDS.... Almost everything was moving around 1% today. You can see on Chart 1, this is my TOP 15 THINGS TO WATCH Chart list. I get a quick snapshot of the intraday action in each group. For the big picture, the Market Summary link on the home page under the chart on the left is the detailed component for seeing what is moving. The bottom line for today is that there was a lot of repositioning. Vix options expired on Wednesday so today the market really started to move.
Chart 1
$SPX TESTS BOTTOM OF RANGE... In Chart 2, we can see the $SPX has moved sideways for 5 weeks on a 60-minute chart. 1850 has been tested multiple times and the market does not seem to have enough inertia to push through yet. We can see the Dow is making 4-week lows today. The Nasdaq Composite is trying to hold on to the 4200 level. The $COMPQ gapped up to 4200 on January 15. A break below the blue line would be short term significant as a failed breakout. The $RUT looks similar to the $COMPQ.
(click to view a live version of this chart)
Chart 2
$TYX YIELDS CONTINUE TO FALL. ... The Bond market continues to get more bids. The 30-year bond yield is falling in Chart 3, which means the price of the bond is rising. The yields have fallen through the 50, 100 and 150 levels. The 200 DMA is at the 3.58 % level so I would be watching for a test of that level over the next few weeks. After being a very profitable short position last year, it seems to be exactly the opposite since January 1. This trade could accelerate as investors are forced to cover their short positions. Just to clarify, when the price is rising and investors are expecting the price to fall, they are forced to cover their short position at higher prices. As the move accelerates, then short positions get less comfortable.
(click to view a live version of this chart)
Chart 3
$NATGAS TAKES A RUN AT $5. ... You can see in Chart 4 we have UNG, the Natural Gas ETF really surging to the top right of the chart. Below is the $NATGAS which will update after the close. The MACD is firmly in positive territory and making another surge higher. A test of $5 is not far away on the $NATGAS chart.
(click to view a live version of this chart)
Chart 4
Chart 5 shows the long term picture on $NATGAS. The weekly price action shows a typical peak around the end of January, so investors should be aware of the 'Winter - Spring' cycle. Usually the price of $NATGAS starts an up thrust in late March, early April as shown by the green arrows. The 2013 February move was only 10 or 15% down as part of a larger move off the April 2012 lows. With the 2012 uptrend still intact, we may continue to see a quicker resolution to the upside.
(click to view a live version of this chart)
Chart 5
$GOLD BREAKS A 16 MONTH TRENDLINE ... In Chart 6, you can see $GOLD on the bottom and the GLD tracking ETF on top. While the tracking index is slightly lower due to fees, the $GOLD chart will actually show a breakout after today's close. At time of writing $GOLD was at 1262. With $GOLD breaking through a 16 month trend line, this could cause short positions to cover and cause the move to accelerate to the upside.
(click to view a live version of this chart)
Chart 6
$USD GAPS LOWER ... In Chart 7 you can see the UUP showing the move below the up sloping trend line and below the 50 DMA. On the $USD chart, which will update after the close, this would be very significant. With a rising $USD, the gold bulls will have trouble. If the $USD weakens from here, the Gold bulls should have a pretty serious run higher. This gap away from blue line resistance is pretty important.
