Friday, August 29, 2008
Monday, August 18, 2008
U.S. Dollar vs Light Sweet Crude
This is a chart comparing the price of Oil to the U.S. Dollar index. This charts shows the mirror image of both price patterns. Looking a little closer at the relationship, the U.S. Dollar Index as recovered and made it above it's opening range from the beginning of the year. The price of Light Sweet Crude is significantly above it's opening range. If the dollar started to fade and attempt to test the lower boundary of it's opening range, the price of oil should start to chug higher.(click to enlarge chart)
Any significant increases in the price of Oil could cause the a price retreat in equities. The chart below is of the S&P 500 Index. This index is below it's opening range, but is sitting closely to the 1290.63 infection point. If this level does not hold. Look for prices to test 1260 area and then the 1229 level. It is important to notice the declining volume on this weak re-tracement rally over the past few weeks.
S&P 5oo Index(click to enlarge charts)
S&P 500 Index 3 day chart with linear regression lines and standard deviations
Any significant increases in the price of Oil could cause the a price retreat in equities. The chart below is of the S&P 500 Index. This index is below it's opening range, but is sitting closely to the 1290.63 infection point. If this level does not hold. Look for prices to test 1260 area and then the 1229 level. It is important to notice the declining volume on this weak re-tracement rally over the past few weeks.
S&P 5oo Index(click to enlarge charts)
S&P 500 Index 3 day chart with linear regression lines and standard deviations
Sunday, August 17, 2008
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Tuesday, August 12, 2008
Report On The Top 100 Safest Banks
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Monday, July 28, 2008
Gearing Up For The Slow Month Of August
August is typically a slow month on Wallstreet and the end of July can be a time where professional money managers square up some positions that give them concern before they head off to vacation. This squaring up of positions doesn't mean irrational or violent swings in the markets, but it could mean that companies in what are considered questionable sectors could see some additional selling. The chances of professional investors and money managers taking on more risk heading into August is slim, more likely this is a time to eliminate risk.
One area that comes to mind is Oil. Since the futures market is much more leveraged when it comes to trading, expecting the trend to change and a strong rally to ensue is less likely. There have been talk by the experts on television that technology stocks should benefit the most from oil's decline as money rotates to sectors with stable earnings. Below is a chart of Light Sweet Crude followed by a chart of the Nasdaq 100 Index.
Light Sweet Crude(click to enlarge)
NDX - Nasdaq 100 Index
While oil has had a strong pull back after a great run, it is still in a strong uptrend. Until oil rallies again and fails to make a new high, money will most likely not rotate into other sectors with any strong momentum. One variable to watch effecting the price of oil is the value of the U.S. Dollar. The chart below is of the U.S. Dollar Index. If the dollar starts to weaken again, it could be the spark for another up move in oil.
U.S. Dollar Index
The chart below shows that momentum could be slowing for the down moves experienced this year. It doesn't mean that the market is turning, it does mean that money is looking for advantageous places to go.
NYSE Composite Index(click to enlarge)
One alternative view is that momentum is slowing, it is just that the financial stocks can only go so low, some are counting the days until they hit zero.
One area that comes to mind is Oil. Since the futures market is much more leveraged when it comes to trading, expecting the trend to change and a strong rally to ensue is less likely. There have been talk by the experts on television that technology stocks should benefit the most from oil's decline as money rotates to sectors with stable earnings. Below is a chart of Light Sweet Crude followed by a chart of the Nasdaq 100 Index.
Light Sweet Crude(click to enlarge)
NDX - Nasdaq 100 Index
While oil has had a strong pull back after a great run, it is still in a strong uptrend. Until oil rallies again and fails to make a new high, money will most likely not rotate into other sectors with any strong momentum. One variable to watch effecting the price of oil is the value of the U.S. Dollar. The chart below is of the U.S. Dollar Index. If the dollar starts to weaken again, it could be the spark for another up move in oil.
U.S. Dollar Index
The chart below shows that momentum could be slowing for the down moves experienced this year. It doesn't mean that the market is turning, it does mean that money is looking for advantageous places to go.
NYSE Composite Index(click to enlarge)
One alternative view is that momentum is slowing, it is just that the financial stocks can only go so low, some are counting the days until they hit zero.
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