Signs Of Distribution

The past week of trading has been marked by strong sector rotations that have kept equity markets in their steep uptrends. The VIX Index, measuring market volatiltiy, has once again fallen to it's lowest levels of the year, indicating complacency among investors. Comparing the acutal VIX level to sentiment cycles, I belive that we could soon hit the "wow I am smart levels". The AAII Bullish sentiment indicator is once again on the rise, indicating broad bullishness among investors. The same goes for the Euro which has seen the biggest rise in speculative long positions for a long time.

For now, we have some divergences worth looking at, that are building up in the US equtiy market: The Dow Transportation Index is not confirming the new highs set in the Dow Jones Industrial. The Russell 2000 (small cap sector) starts to lag big caps (S&P100). The Cumulative AD is just flattening a little bit in the NYSE, the S&P AD line managed to make a new high, confirming the last weeks rise in the market. The strong sector rotations, as well as the change in leadership could be an early indication that markets could get closer to an intermediate top. Probably too early to sell, and too late to buy...The USD remains weak, but sentiment is getting extremly bearish. As the chart above shows, speculative long positions in the EUR have risen to the highest levels of the year, where as those for the USD turned negative on the year. I remain positive on the USD at the current levels. A break of 78.5 in the DXY would be a first step in the right direction...

As you can see from the charts below, equity markets are clearly breaking to the uspide, with most of the Indices trading above important resistance levels. This is a good reason for a positive start for the new week.

Eurobanks still chalenging the downtrend, no short yet.

DAX: Trading above 7200, next resistance is 7500


Eurostoxx: Trading above 3000, next resistance is around 3100

Dow Jones breaking 12035, next resistance around 12335

QQQQ: Next resistance around 58.50

SYNN: Waiting for numbers, still in break out territory

SDF: What an amazing rebound, 58 is next resistance


Egypt has brought some focus on Energy Stocks, we are buyers here.

Uranium Participation

Cameco


ATLN: Wait for a break of 55 to add more.. speculative position

Bayer: Long at 54.5, does not want to break down, stopp loss 53.5

Emerging markest still a sell: