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Saturday, February 12, 2011

Weekend Outlook!!!

Roy has released a short version with his updates, this is a Forex lover's version this week-end. After a few general comments on the over-all market Roy presents the British pound, Canadian Dollar, and finishes with the Australian Dollar, US Dollar pair. To view the clip, Click here!!!
TNX, which tracks the yield on the 10 year Treasury Bond was unable to close above the Trendline on a weekly scale this week, this opens the door for the Triangle to hold intact, meaning TNX might have reached its top on this recent rally. The indicators are also pointing to this possibility as they are in extreme over-bought conditions. This could be bearish for stocks if investors start selling equities and move back into the bond market.

The US Dollar on the daily scale is starting to breath some signs of life as it was able to make a minor higher high and close above the 20 day MA Friday. The indicators are now on a full buy, but the MACD has yet to break above the "Zero" line.

On the weekly scale the Dollar still needs to close above the 20 week MA which was resistance Friday, in order to up the odds that it is in a new up-trend. The indicators here are not so bullish, the MACD is slightly bullish, but the Histo-gram is negative, the RSI is trending down, and the STO is on a sell, with a slight possibility that it is trying to roll over to a buy. Breaking below the lower trendline of support would most likely lead to a sustained sell-off, pushing the buck to all-time lows. If the Dollar is going to rally, it needs to do so NOW!!!

The Summation Index has been diverging for this entire rally, much the same as it did back in the bull market from the 2002 lows. The only difference this time is that the Index has been making lower lows, instead of higher lows. The Index still has room to run higher before hitting the trendline of resistance.

The Percent of Stocks above their 50 MA on the SPX broke back above the overlaid 20 day MA, signaling a buy on this chart. If the longer-term trendline of resistance holds this rally should be short lived. Negative divergence has been building since Mid-October. Any time the price action is above the green horizontal line at 70%, the market is considered over-bought and will eventually turn to the downside and relieve those conditions. Same holds true for the over-sold conditions using the red line down at 30%.

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