I’m back! Just got back from my honeymoon in Jamaica and had a wonderful time. It was very relaxing although it rain a little more than we would have liked, but overall it was a great trip and we had a perfect wedding. But back to the market…
After being gone for nearly a week and-a-half here is what stands out to me…
The Aussie dollar, which the S&P 500 has tracked pretty well historically has been breaking down and hit a new low on this recent dip. This does not pose well for U.S. markets if history were to repeat itself with the S&P following the Aussie lower.
I touched on oil back on April 24th and how it should see continued weakness and I was looking for it to fill the gap back down to $3.00. We still don’t have an oversold level on the CCI but we are just barely breaching oversold on the RSI.
Gold continues to view the 300-day moving average has its main source of support. The 300-day has acted as a better form of long-term support/resistance than the 200-day, although it still seems a lot of commentary comes out about gold and its 200-day, oh well. We would need a closing break of 1631 to really see a downtrend in gold continue.
A chart that I watch that I think is a little less common is the relative strength between the Nasdaq 100 and the DJ Utility average. I few this pair as a way to monitor risk on/off. As people put more assets into the Nasdaq compared to the DJ Utility, we typically see a continued rise in asset prices in the major indices. As utilities begin to outperform the Nasdaq it has historically given the S&P 500 some trouble. What I’m watching for is a break below 5.70 which we just saw happen. I’ve marked with red lines past occurrences of this break and then zoomed in on the recent action.
That’s all I’ve got for right now. Tons to catch up so I’ll be back later.
Disclaimer: Everything in this post is meant for educational and entertainment purposes only. Do not construe anything written in this post or blog as a recommendation, advice, or an offer to buy or sell any securities. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer.
Andrew Thrasher is a Portfolio Manager for an asset management firm in Central Indiana. He specializes and writes about technical analysis as well as macro economic developments.
