Its Boxing day so i’m not providing a full release here for a few days yet. I will release a 2014 retrospect and look ahead to 2015 pre the calender end of year but let me enjoy this holiday for a few more days guys. Having said the above, I appreciate that it is a time when part time traders have a little more time on their hands and its good moment for some reflection and planning for the year ahead. On that basis here some comments and a trio of reports below that may assist during this holiday period. On the near term markets are very thin and can consequently be pushed around to catch stops. Doubt all price moves on this basis I suggest, on the near term.
Firstly, technically there is no immediate correction here and now in the offing. As I suggest early in the rebound market breadth and contrarian indicators did not suggest a continuation the bear sell off. This was unexpected and hugely frustrating for many bears that had been waiting for this q4 correction since the end of q1. The correction was swift and deep but when she turned she turned very impressively, convincingly and she burnt alive all those who didn’t take profits on their shorts. The tech did suggest a continuation of trend so those that got stubborn need a moment of honesty is my comment here.
A few breadth tech charts:
First sp500. My comment would be that in a bull market as significant as the one we are in this is good enough. And at Christmas this is great!
Nas100 wise. Given Apple has suffered a significant correction this is relative strength. Nothing has broken here either on apple or the index. The probability move is for apple to at least attempt another new higher high which in itself would be enough to propel the index to make a new higher high. This is the prob trade and right now is not a bad apple entry.
Sp600
Not totally convincing but as i said seasonality wise this is enough.
Of course the wider nyse is struggling. Its that good old spread between main street and wall street. Until we see the wider housing market revive, (No signs yet), and mortgage credit be widely available again the nyse is likely to struggle.
And with that here a trio of reports to keep you busy. All asset markets inc fx appear on continuation of trend, for now. Its been the year of the US$!
First up here GS. I can’t recall seeing so many high conviction trades from GS! All continuations note. Is q1 setting up to be a bumper for fx and the Shanghai? Possibly and worth noting the positive correlation Shanghai AUD and Copper has broken down.
And here ML with a 2015 view.
And here a quick tech set of chart comparisons..
So with that all the best for now guys. Hope you are all having a great break. Now on to 2015. As promising as Q1 looks h2 is likely to see some real volatility return to these asset markets. In my view.
Photo below, yours truly enjoying some mountain air. Happy holidays to all where ever you are this Boxing day
All the best
Rich
