Sunday, March 2, 2008

MARKET REVIEW: BEARISH/SIDEWAYS (02.03.2008)

    SUMMARY

    CRB Index versus Bonds -> Bullish
    CRB Index-> Bullish
    Bonds -> Bullish
    Oil-> Bullish
    Oil & COT-> Bullish
    Gold-> Bullish
    Gold & COT-> Bullish
    US Dollar-> Bearish
    US Dollar & COT-> Bearish
    DJ Ind.-> Bearish or Sideways
    S&P 500 -> Bearish or Sideways
    Nasdaq -> Bearish or Sideways

    Bonds and commodities are negatively correlated. But this relation is broken this week.

    This broken relation affects the expectations on the stock market side. In that case markets can either follow the big trend (which is bearish) or consolidate.

    It is allowed to be SHORT on the STOCK MARKET this week.

    DETAIL

    Long term comparision of S&P500, CRB Index, US dollar, and 30Y Bond Price

    clip_image001

    CRB Index versus Bonds

    Commodities are bullish in relation to the bonds. But as the CRB index alone shows that the bullishness of commodities are weaking and bonds are gettin stronger. This can slow down the CRB/Bond comparision in the image below. Increasing ratio shows that economy is strengtening. Increasing ratio advises that you should be in inflation type stocks e.g. gold, oil, aluminum, industrial material stocks. On the other hand, financial type stocks will suffer e.g. insurance, brokerage.

    clip_image002

    CRB Index

    Strong CRB index favor the currenc y of commodity exporters like canadian dollar and austrialian dollar.

    clip_image003

    Bonds

    clip_image004

    clip_image005

    Oil

    clip_image006

    Oil and Commitment of Traders Report

    clip_image007

    Gold

    clip_image008

    Gold and commitment of traders report

    Trend is bullish because gold is used to hedge inflation. Inflationary trends are high.

    clip_image009

    US Dollar

    US dollar is bearish which is good(bullish) for commodities. US investors tend to invest in foreign stock when US dollar is decreasing.

    clip_image010

    US Dollar Commitment of Traders Report

    clip_image011

    Dow Jones Industrial Average

    Last bar shows that bulls tried to increase the price but bears pushed the price lower than the open. Volume is higher on the last bar, indicating

    clip_image012

    S&P 500

    Similar to the Dow Jones Index, bulls are tried to increase the price during the week but bulls pushed the price lower.

    clip_image013

    NASDAQ

    clip_image014

No comments: