Nasdaq 100 Challenges Resistance But Loses The Battle
Anthony M. Cherniawski | Sep 20, 2015 02:25AM ET
CBOE Volatility Index “threw back” inside the Broadening formation and its weekly Cycle Top support at 21.34 before rallying back above both supports.It may be ready for another lift off. Is another “Black Monday” in store?
The S&P 500 is repelled by weekly Short-term resistance.
S&P 500 challenged its weekly Short-term resistance at 2016.97 before being repelled on “Decision Day.” It has broken through all minor supports and appears capable of challenging its mid-Cycle support at 1939.38. This leaves S&P 500 vulnerable to a decline to its weekly Cycle Bottom at 1666.86 in the very near term. Today was Quadruple Witching day. Unfortunately, the NYSE was broken for the last half hour of trading, leaving a lot of trades unsettled.This suggests that Monday’s open may be volatile.
(ZeroHedge) Normally when the world needs an equity market boost, a broken market suffices to slam VIX and save the world. This time not so much.. and the carnage that this will cause into quad witch is frightening...
Nasdaq 100 challenged resistance, but lost the battle.
NDX challenged weekly Intermediate-term resistance at 4441.61 and lost the battle, giving up all the previous week’s gains.The subsequent sell-off brought it beneath its Long-term support at 4384.93, which is a critical loss of its uptrend since 2012. If trendline support fails, it is likely that mid-Cycle support may also fail, leaving the Broadening Wedge target or its Cycle Bottom at 3044.51 as the next targets.
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Read market moving news with a personalized feed of stocks you care about.Get The App(NYT) U.S. stocks are falling sharply on concern about the outlook for global growth after the Federal Reserve decided to hold off raising interest rates.
The Dow Jones industrial average ended down 292 points, or 1.8 percent, to 16,382 on Friday. The Standard & Poor’s 500-stock index slumped 32 points, or 1.7 percent, to 1,958, and the Nasdaq declined 66 points, or 1.4 percent, to 4,827.
The day’s losses wiped out all of the stock market’s gains for the week.
High Yield Bondsare repelled by Short-term resistance.
The High Yield probed higher after its inside week, but was repelled by Short-term resistance at 134.01.It closed the week at a loss. There is a good probability of MUT meeting its Broadening Wedge target in a short period of time. New lending in the high yield arena has come to a standstill for the past three weeks.
(Market Realist) Investor flows in high yield bond funds
Investor flows in high yield bond funds turned positive last week, after two successive weeks of outflows. According to Lipper, net inflows into high yield bond funds totaled $186 million in the week ended September 9, compared to outflows totaling $227 million in the previous week. But even with these inflows, high yield bond funds have witnessed outflows to the tune of $4.1 billion on a year-to-date (or YTD) basis.
The Euro closes at Long-term resistance.
The Euro closed just above Long-term support/resistance at 112.84.The surge in the Euro was primarily due to the demand for the local currency as European stocks were sold. It is probable that the Euro may have completed its bounce, especially should it lose Short-term support at 111.22. The trend toward parity with the USD may be resuming shortly.
(Bloomberg) The dollar is poised to strengthen to parity with the euro in the next 12 months as the Federal Reserve is still on course to raise interest rates, even after deciding not to act this week, according to Principal Global Investors.
The U.S currency will likely appreciate to 125 yen during the same period, said Jim McCaughan, chief executive officer of Principal, which manages about $350 billion. The Fed decided at its meeting Thursday against raising its benchmark amid financial market turmoil and rising risks of a global economic slowdown.
Euro Stoxx 50 is repelled by trend line resistance.
EuroStoxx 50 made another attempt at the resistance line of its Cup with Handle formation and closed back beneath mid-Cycle support at 3226.08. The Cycles Model suggests another possible week in a panic decline that may end beneath the October 2014 low..
(CNBC) European markets suffered a torrid Friday, after the U.S. Federal Reserve's overnight decision to hold interest rates at record lows fanned worries about the health of the global economy.
Uncertainty gripped investors, pushing the pan-European STOXX 600 to close down 1.8 percent, after recouping some earlier losses. It ended down around 0.3 percent on the week.
Across Europe's major indexes, the picture looked bleak. Germany's DAX tanked more than 3 percent, putting it just shy of bear market territory, or a fall of 20 percent from the year's highs in April.
The Yen closes again above Long-term support.
The Yen was quiet this week, closing again above Long-term support at 82.77.It may emerge to challenge its weekly Cycle Top at 107.17 through the balance of September.Another breakout above 86.10 may confirm the actionable signals, as a rally in the Yen is evidence of an unwinding of the Yen carry trade that may be under way due to falling equities.
(Bloomberg) The era of a weaker yen is coming to an end and Japan’s currency may strengthen toward 115 per dollar, according to Eisuke Sakakibara, a former vice finance minister.
The yen was little changed at 119.80 per dollar as of 1:43 p.m. in Tokyo Friday, after surging 0.5 percent the previous day when the Federal Reserve kept its policy rate unchanged. The currency has rebounded since reaching a 13-year low of 125.86 in June. When asked about the Fed’s decision to stand pat, Sakakibara said “the impact is not really that strong” on Japan.
The Nikkei 225 has an “inside” week.
The Nikkei resumed its decline, butwithin the confines of the high and low of the previous week. It usually denotes uncertainty or the anticipation of an event. In this case, it may have been waiting for the Fed decision. .An inside week is usually a continuation pattern.
(CNBC) Asian shares advanced on Friday after the Federal Reserve decided to hold off on its first rate hike in nearly a decade, but Japan's Nikkei 225 tumbled on the back of renewed strength in the yen.
The world's most influential central bank cited concerns over the global economy and financial market volatility among the factors that played a role in keeping interest rates near zero.
"The outlook abroad appears to have become less certain," Yellen said at a news conference after a two-day policy-setting meeting. "In light of the heightened uncertainty abroad ... the committee judged it appropriate to wait."
U.S. Dollar breaks Long-term support.
The US Dollars lid under its weekly Long-term support at 95.18 this week, losing an important support level.The Cycle Model suggests new lows may be possible through mid-October.
(Reuters) Sept 18 Speculators pared back bullish bets on the U.S. dollar this week to their lowest level since late July last year, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.
The value of the dollar's net long position fell to $20.97 billion in the week ended Sept. 15, from $22.07 billion the previous week. This was the fourth straight week that dollar
longs came in under $30 billion.
To be long a currency is to make a bet it will rise, while being short is a bet its value will decline.
Dollar sentiment has taken a hit the last two weeks given mixed U.S. economic data, suggesting that while the U.S. economy was improving, there were still pockets of weakness.
U.S. 30-Year rallies from a Master Cycle low on Thursday.
The Long Bond rallied above Long-term support at 154.59 in a dramatic turn around. Intensifying selling pressure prior to Thursday was relieved by the Fed non-decision. The Master cycle low was more than a week later than its normal due date.
(Reuters) - U.S. Treasury yields fell on Friday, extending the previous day's declines after the Federal Reserve kept interest rates unchanged Thursday and doubts grew as to whether it would tighten policy at all this year.The Fed held off on a move in a bow to worries about the global economy, financial market volatility and sluggish inflation at home. But it left open the possibility of a modest policy tightening later this year. Analysts said the Fed's message was dovish.
(ZeroHedge) When China transitioned to a new currency regime last month, what should have been immediately apparent to everyone, was that the Fed was, from there on out, cornered. Boxed in.Trapped.Screwed.
We reiterated this earlier today as the market still seems to be quite confused as to what exactly happened that caused Janet Yellen to resort to what many thought was the most unlikely option going into this week's meeting: the "dovish hold", or, as Deutsche Bank (XETRA:DBKGn) recently called it, the "clean relent."
Gold bounces from its Cycle Bottom support.
Gold bounced from its Cycle Bottom support at 1104.42 to its Intermediate-term resistance at 1143.45.It also retested its Head & Shoulders neckline, closing beneath it.The next immediate target for the rally may be new lows beneath 1072.30.
(WSJ) Gold prices jumped following the Federal Reserve’s decision a day ago to hold interest rates steady, as the U.S. central bank’s concern about soft global economic growth burnished the case for investing in safe-haven precious metals.
The gold market closed Thursday before the release of the Fed statement and subsequent news conference by Chairwoman Janet Yellen, so Friday’s settlement was the first to reflect investors’ sentiment in the wake of the U.S. central bank’s decision to stand pat on interest rates. Gold prices posted a large jump upon release of the Fed statement and continued adding to the gains throughout Friday’s session.
Crude Oil rests on Short-term support/resistance.
Crude consolidated in a wider range this week, closing above Short-term support/resistance at 44.68.The probability of a resumption of the decline is high this week.A lesser Trading Cycle low is due late next week. Should it exceed the August 24 low, the decline may then continue through mid-October
(MarketWatch) Oil futures on Friday saw their largest daily drop in almost three weeks as the U.S. Federal Reserve’s decision to keep interest rates unchanged raised worries about the U.S. economy—and energy demand.
Prices failed to find much support even after data released Friday showed a third straight weekly decline in active U.S. oil-drilling rigs.
October West Texas Intermediate crude CLZ5, -3.73% settled at $44.68 a barrel, down $2.22, or 4.7%, on the New York Mercantile Exchange. Prices, which suffered from their largest daily point and percentage loss since Sept. 1, settled a nickel, or 0.1%, higher than the week-ago settlement of $44.63.
Shanghai Composite tests 3000.00 again.
The Shanghai Index probed beneath 3000.00 on Wednesday before pulling back.The massive intervention from the PBOC intervention doesn’t appear to have worked.Should the August 26 low be breached, there may be up to a month of additional decline.
(Bloomberg) China’s stocks capped their steepest weekly loss this month as turnover shrank amid growing concern government measures to support the world’s second-largest equity market and economy are failing.
The Shanghai Composite Index dropped 3.2 percent this week, led by technology companies and commodity producers. The gauge rose 0.4 percent to 3,097.92 at the close on Friday, spurred by gains for property developers. Trading volumes were 45 percent below the 30-day average, while a gauge of 100-day volatility climbed to an 18-year high this week.
((ZeroHedge) Having blamed the entire financial crisis on one reporter (despite the implicit government encourage of people to "invest in stocks"), detained "malicious sellers" (which killed the entire futures market), and now cracking down on overly-aggressive stock-pumping by "sinister stock squads," we thought we had seen it all from China. Until now... CHINA OFFICIAL: LUCKY THAT STOCK BUBBLE BURST BEFORE TOO LATE...
The Banking Indexcloses beneath mid-Cycle support.
--BKX closed beneath mid-Cycle support at 70.68.The Cycles Model suggests that the decline may intensify very quickly next week for a probable drop to or beneath the Weekly Cycle Bottom at 62.76 over the next two weeks.
(WSJ) No wonder bank-stock investors are feeling a chill. The Fed has left them out in the cold.
This was supposed to be the year when super low interest rates stopped squeezing net-interest income at U.S. banks. As recently as June, consensus estimates were that this would decline by just 0.8% in 2015 at large-capitalization banks, according to Sanford Bernstein’s John McDonald. Analysts thought next year would see a rebound with 6.6% growth.
That was predicated on the U.S. Federal Reserve raising short-term interest rates for the first time in nine years. Instead, the decision by the Fed Thursday to stand pat—along with the fact that the overall tone emanating from the central bank was more dovish than expected—is forcing investors to rethink banking prospects.
(ZeroHedge) Last week we warned of the ominously rising risks evident under the surface in US financials. Following Yellen's decision to chicken-out yesterday, it appears interbank counterparty risk is even ominous-er. With bank stocks prices tumbling, catching down to credit market's concerns, the TED Spread - implicitly measuring interbank credit risk - jumped over 21% yesterday - to its highest in 3 years.
Is this the real reason The Fed did not hike?
(ZeroHedge) As we already commented extensively, while the Fed's dovish non-hike was a violent surprise for the market, and has led to what may be the first thoroughly unanticipated (at least by the market) policy mistake by the Federal Reserve (judging by the market), the biggest news was the very symbolic, yet all too ominous, negative interest rate forecast in the Fed's projection materials by one FOMC member.
This was the first time in Fed history that an FOMC member has on the record predicted NIRP in the US.
(StreetTalkLive) Over the last year, I have written extensively about how despite the Fed's best intentions to raise rates, the real economic backdrop would likely impose a major impediment in doing so. However, I also suggested that with the Fed now caught in a liquidity trap, they would potentially hike rates to avoid being caught at zero during the next economic downturn. To wit:
"Currently, there is little evidence that is supportive of higher overnight lending rates. In fact, the current environment continues to support the idea of a'liquidity trap' that I began discussing in 2013.
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