During the past several trading days, equity markets rallied back from deeply oversold conditions, filling the downside gaps the markets had opened after the severe earthquake in Japan. I believe we are witnessing the first part of a huge distribution phase, that will mark a cyclical top in 2011. This could lead to spectacular moves in Indices, to the up- as well as to the downside. It will take some time until markets start to roll-over and resume the secular bear-market. We could even see a new high in the S&P500 this year, but if this is the case, I expect negative divergences setting up, confirming that a big top is under way for equities in 2011. The technical condition remains strongest in the big cap sector, which could be an indication that investors start to shift from small- to big caps and build their portfolio in more defensive names.
For those of you who have not seen the documentary movie "INSIDE JOB", I would recommend you to watch that. As you are probably are aware, we have not setup any meaningful regulation for Investment Banks and Derivative Trading. On top of that, the Swiss National Bank is celebrating that it cut losses on EURCHF trades, by selling "toxic assets" with a profit. This sounds like as if you wake up in intensive care and your doctor is telling you: We implanted this cancer successfully into your body.
"INSIDE JOB" : http://topdocumentaryfilms.com/inside-job/ all the culprits are still in charge.
FTSE: Starts to under perform, there is a danger of a substantial top here
Biotech Index: Showing relative strength, a break above 1310 would give a buy signal
Volatility: After the triple witching option expiry, we are back in the "neutral zone".
The Bullish Percent Index (BPI) is a breadth indicator based on the number of stocks on Point & Figure buy signals within an Index: We have a bull correction S&P500 and some bear alerts NASDAQ COMP. NYSE COMP., but not a new bear confirmed yet.
SPY: I expect a retest of the lows in the coming days.
The Nasdaq QQQQ tracker has to test and hold the 53.85 level
USD: Testing the important support, but still no signs of live...
The DAX has a good chance to build a bottom within its uptrend
SMI: Good Support around 6000. Investors could buy the support in defensive names.
Eurobanks: Still very resilient, but I would avoid this sector
Dow Jones Industrial: Big Caps start to outperform
Eurostoxx50: Could build a bottom around 2750, still within it's uptrend.
Eurobanks: Still very resilient, but I would avoid this sector
Dow Jones Industrial: Big Caps start to outperform
Eurostoxx50: Could build a bottom around 2750, still within it's uptrend.
Syngenta: Broke uptrend: Also here, some bottom building above 291 needed.
Kali & Salz: Merrill Lynch initiated a sell-off after buying the SDF stake from BASF, stop-loss 48
Kali & Salz: Merrill Lynch initiated a sell-off after buying the SDF stake from BASF, stop-loss 48
XLE Energy Sector ETF: The uptrend is broken and there is a possibility for a short term top
Gold: At resistance, but momentum does not favour a break-out.
