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Data released Thursday night shows a marked downtrend in place in China from 2010 on GDP, Fixed Asset Investment, Industrial Production, and from 2008 on Retail Sales, as shown on the graphs below. In fact, the numbers for Fixed Asset Investment and Retail Sales are lower than the lows in 2009.
My only conclusion from these is that China has been in, and is still in, a period of contraction…there are no signs that China will lead the world out of a slowdown in growth.
Below are four Weekly charts of Gold, Oil, Copper, and Silver.
The price action for the past few weeks on each one is presenting as a bear flag, either at, just above, or just below a major support level. Any attempts, so far, to sell off below these support levels have been met with defensive buying/short covering…ones to watch for a potential break and hold below their recent lows as a signal of more weakness in these markets, which will likely have a negative impact on the equity markets…this ties in with the theme mentioned in my last post on the Major Indices and the Major Sectors.
Further to my post of June 29th, I'm watching the YM, ES, NQ & TF 4-Hour charts as price drops, once again, toward the two intersecting 50% Fibonacci fan lines with the horizontal support levels of 12460 for YM, 1327.50 for ES, 2578 for NQ, and 778 for TF. Price has already reached and dipped just below this level on the NQ.
If price cannot hold above this level on these e-mini futures indices, they are in danger of dropping down to or below the June lows.
Further to my last weekly market update, this week's post will take on a different format. This may be a more useful and simple format for me to use on a weekly basis instead of the previous lengthy ones that I've been reporting on since the beginning of this year, in order that I may compare overall market and sector strength/weakness, and to assess appetite for risk during the past week relative to the long, medium, and short terms.
Below are a series of chartgrids of the 4 Major Indices and 9 Major Sectors showing Monthly, Weekly, and Daily timeframes. Each chart contains a set of Bollinger Bands, a 50 sma (red), and a 200 sma (pink). Generally, the mid-Bollinger Band (20 sma) will represent the "MEAN" to which price will revert as markets become overbought or oversold at their upper and lower Bollinger Bands. Price above the mid-Bollinger Band will be considered "BULLISH." Price below the mid-Bollinger Band will be considered "BEARISH." A green candle will depict "RISK ON" and a red one will depict "RISK OFF."
Further to my last weekly market update, here is a summary of where money flow ended for Week 4 of June 2012.
The Weekly charts below of YM, ES, NQ & TF show that they all closed higher than the prior week (the ES, NQ & TF formed a bullish engulfing candle, while the YM came within a few ticks of forming one as it opened slightly higher than the prior candle's close)…all four on slightly lower volumes than the prior week. They've popped up and closed above the downtrending channel at their middle Bollinger Band and above the current month's Volume Profile POC (yellow horizontal line). The YM closed at its 1-Year Volume Profile POC (red horizontal dotted line along the right edge of the charts), the ES closed slightly above, the NQ closed well above, and the TF closed just below.
