I'll begin this post by saying that this was a weird
week…

• + There was very little movement, overall, but there was a "Whole Lotta Shakin' Goin' On".
• + We saw this example of how the Fed's "easy-money-to-create-jobs"
  policy was turned upside down by the Bank of America.
• + While consumers claim that they are becoming increasingly
  uncomfortable, AAPL made new all-time highs, and its market cap has overtaken
  that of GE's.
• + China's Shanghai Index is about to fall off a cliff, yet its
  Financial ETF is telling another story.
• + Dow Transports is threatening to become unglued, yet the Dow
  30 is hovering over trendline support at new highs from the 2009 lows.
• + Emerging Markets and the U.S. Financials appear to be gaining
  traction.

(more…)

The weakness in the Dow Transports Index from early this year is evident on the
Daily chart below. Price has recently broken below and retested the break of its
large triangle (based on just the closes). The Utilities Index has recently broken and retested its uptrend
line from last December (based on just the closes). The Dow 30 Index is sitting just above triangle
resistance/support.

Of particular interest in the immediate term will be
the Transports Index to see if it, potentially, corrects and leads the others
down.

China's Shanghai Index made a new 3-year low close today, as
shown on the Daily chart below. The RSI, MACD & STOCHS indicators are
diverging upwards, but are still hooked down.

(more…)

Data released today shows that Consumer Confidence/Comfort continues to drop, in spite of the Fed's actions over the past four years, and is fast approaching the extreme low levels of 2009. It would appear that the average consumer is less aware of Fed policy/intervention than that of political (non)action to date.

It's very unfortunate that both political parties have failed to employ their due diligence in carrying out their responsibilities during their current term…they have left it all up to the Fed, who admitted they can't solve all the economic problems on their own. If politicians were employed by a company, they'd be fired for sleeping on the job. Consumers can't live on junk food alone…

Further to my post of September 4th, I would note that the SPX,
XLF, and EEM have recently broken above trendline resistance, as shown
on the Weekly chart below.

The Daily
chartgrid and the 2-day graph below of the 9
Major Sectors show that profit-taking has occurred since last Friday,
particularly in the riskier Offensive Sectors, while some of the Defensives have
made some gains…Technology and Industrials are in a neutral holding
pattern.

A break and hold below
trendline support on the SPX, XLF, and EEM may see
further flight from the Offensive Sectors and into the Defensive
Sectors…otherwise, I'd expect to see money flow back
into the higher risk Sectors as they continue their trek
upwards…ones to watch.