Monday, September 26, 2016

NDX is trading in the range again

After making new highs for the year last week, NDX is back in the range ($4836- $4750) that it has been trading since the start of Aug end of July this year. At the moment it looks as if the 50DMA ($4800) is proving to be the resistance/floor for the index. But for it to stay in the range, the bottom of this range is around $4750 so we will have to wait and see if that holds in case we break below the 50DMA.

Friday, September 9, 2016

NDX breaking of the range today

Finally after a month of trading in a range bound, NDX broke out this morning. Now the clear downward trend has initiated. A move below the 50 DMA for the 1st time since the 1st week of July. As we are witnessing today and from what can be seen below is the 200 DMA,, when does it gets to that point is anybody's guess, I am not predicting anything here. Additionally something to keep in mind is the 50 DMA is still upwards slopping. For a larger move to happen, we will have to see it slope downward crossing below the 200 DMA and we can see even a larger move to the down side. Typically the longer the market stays in a consolidation phase the sharper the breakout that follows.

Thursday, September 8, 2016

NDX moving in a tight range

Since the beginning of August, NDX is range bound 483*-475*.

Friday, August 26, 2016

Inter-market Relationships

Relationships between:

- stocks and bonds 
- bonds and commodities 
- commodities and the dollar.

in an inflationary environment include:

  • A positive correlation between stocks and bonds (with bonds usually leading).
  • A negative correlation between bonds and commodities.
  • A negative correlation between the US dollar and commodities.

In a deflationary environment: 
  • A negative correlation between bonds and stocks.
  • A negative correlation between commodities and bonds.
  • A positive correlation between stocks and commodities.
  • A negative correlation between the US Dollar and commodities.

Thursday, August 18, 2016

NDX in tight consolidation

With Aug. 15 looking like a breakout the next day was a complete reversal and the index has still remained under a resistance level 4812 area. This is summer trading with volume being low consolidation is likely to continue. It will be interesting to see if the market continue to see new highs for the reset of the year or we see a big dip (a 10% correction) as everyone is anticipating this year. The economy is doing well as shown with the earning estimates beating expectations. Another reason for the markets move higher this summer was the upward trajectory in oil and gas prices.

Thursday, August 4, 2016

Relationship Between the FED and Repo

NFP Day Tomorrow (Friday Aug 5th)

The market has been trading in a close range waiting for the two important economic news to come out.

Aug 05

Unemployment Rate (Jul):

Aug 05