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The Weekly percentage comparison chart below shows that there
has been a divergence in market movement, so far, this year
between the SPX and EEM. This year, the SPX
made a higher closing swing high than that made in 2011, whereas the EEM did
not. Both have turned down from major resistance recently.
Further to my last weekly market update, this week's update can be summed
up in three words…more profit-taking.
The following
Weekly charts and graphs (for the past week) of the 6
Major Indices and 9 Major Sectors show that these
markets have not advanced for a second week as they struggle at major
resistance.
We all know the naked
truth that it's up to you, the politicians, to strengthen the weak/high-risk
fiscal and economic environment…the Fed really can't do your job ad
infinitum/ad nauseam as it can't fix the economy by monetary policy alone, as
re-iterated by Ben Bernanke today in his speech at Jackson Hole:
"As I have discussed today, it is also true that
nontraditional policies are relatively more difficult to apply, at least given
the present state of our knowledge. Estimates of the effects of nontraditional
policies on economic activity and inflation are uncertain, and the use of
nontraditional policies involves costs beyond those generally associated with
more-standard policies. Consequently, the bar for the use of nontraditional
policies is higher than for traditional policies. In addition, in the present
context, nontraditional policies share the limitations of monetary policy more
generally: Monetary policy cannot achieve by itself what a broader and more
balanced set of economic policies might achieve; in particular, it cannot
neutralize the fiscal and financial risks that the country faces. It certainly
cannot fine-tune economic outcomes."
It's time for
politicians to wake up, get out of bed, get dressed, and own up to your
responsibilities by acting for the good of those whom you purportedly serve.
A break and hold below channel support on the SPX:VIX ratio pair would indicate
further weakness to come in the S&P 500 Index, as shown on the Daily chart
below (as observed in intraday action on Thursday).
The first two Daily charts below show the profit-taking that is
occurring in the Nasdaq 100 Index. It's currently sitting at the lower end of
its smaller, steeper upward-sloping channel as I write this during intraday
action on Tuesday.
