The SPY is set to retest, or come close to, the high. That said, I am still on the side of a cautious bear in the short-term, and have been raising cash in my portfolios. The most recent sale was the reduction in precious metal exposures, as I think the 10% or so rise since July 24 is overdone.
Both the Market Vectors Gold Miners and Market Vectors Junior Gold Miners ETFs (ticker GDX and GDXJ, respectively) are overbought on the stochastics. This, in itself, would not be overly concerning if not for the weak upside follow through on both ETFs, concerning price/volume characteristics pushing into resistance, and my timing model, which points to reduced upside potential. Concerning my timing model, I would be more constructive on the gold miner shares on some conjunction of either lower gold prices or higher monetary supply.
As for other indexes I am watching......
The UUP (the PowerShares US Dollar Bullish Fund) may want to make another run upward (an indication of a return of the risk off trade?). The fund tested and closed the early July gap, and the recent decline has occurred on lower volume relative to the comparative upward move. To me, this suggests another move up is in the offing.
As for the dollar's ugly step-sister, the Euro looks stuck in a downtrend. The the 200 day moving average on the FXE (the Currency Shares Euro Trust) has served as resistance for the fund. Provided that the FXE is overbought on the stochastics, its poor volume characteristics, and negative MACD, I think the 200 day moving average will continue to act so.
Interestingly, the intermediate to long-end of the treasury curve looks to be selling off somewhat.
The IShares Barclays 7-10 year Treasury Bond fund (ticker IEF) is off the July highs, as traders have increased their trading fortitude. That said, the treasury market (as exampled by the fund) is at an interesting watch point. It is oversold on the stochastics, but the MACD just went negative. The decline since July has been on lower volume, but more importantly the volume benchmark in June is significantly higher. How this fund trades around these price levels may give an indication on the direction of the risk-on/risk-off trade and the markets in general.
Both the Market Vectors Gold Miners and Market Vectors Junior Gold Miners ETFs (ticker GDX and GDXJ, respectively) are overbought on the stochastics. This, in itself, would not be overly concerning if not for the weak upside follow through on both ETFs, concerning price/volume characteristics pushing into resistance, and my timing model, which points to reduced upside potential. Concerning my timing model, I would be more constructive on the gold miner shares on some conjunction of either lower gold prices or higher monetary supply.
As for other indexes I am watching......
The UUP (the PowerShares US Dollar Bullish Fund) may want to make another run upward (an indication of a return of the risk off trade?). The fund tested and closed the early July gap, and the recent decline has occurred on lower volume relative to the comparative upward move. To me, this suggests another move up is in the offing.
As for the dollar's ugly step-sister, the Euro looks stuck in a downtrend. The the 200 day moving average on the FXE (the Currency Shares Euro Trust) has served as resistance for the fund. Provided that the FXE is overbought on the stochastics, its poor volume characteristics, and negative MACD, I think the 200 day moving average will continue to act so.
Interestingly, the intermediate to long-end of the treasury curve looks to be selling off somewhat.
The IShares Barclays 7-10 year Treasury Bond fund (ticker IEF) is off the July highs, as traders have increased their trading fortitude. That said, the treasury market (as exampled by the fund) is at an interesting watch point. It is oversold on the stochastics, but the MACD just went negative. The decline since July has been on lower volume, but more importantly the volume benchmark in June is significantly higher. How this fund trades around these price levels may give an indication on the direction of the risk-on/risk-off trade and the markets in general.
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