AI
Saturday, August 21, 2004 4:47:22 PM
>>>CYCLE/TREND Update for the week Ahead>>>
As mentioned in my previous update with which this post replies,"I had a hard time staying interested in this weeks action. As they say, "never short a dull market" may apply here." I also mentioned a cycle turn back around the 12th and the 38.2% Fibo line in the sand, both of which appear to have played out successfully. We moved higher throughout the week into Ops Exp and it also appears as though MaxPain "lives on" with QQQ 34 being taken out in the face of $49 bbl oil. An impressive week for sure, but technicals alone may not have been entirely responsible for the current move, the Econ #'s and some earnings reports seem to have played an important role in this equation as well.
As for the Econ #'s this past week, we started out with a miserable NY Empire State Index that just absolutely fell off a cliff, but CPI and Core CPI fell and this was most likely the catalyst that sustained this weeks move. Then Building Permits and Housing Starts also climbed higher than expected although Capacity Utilization and Industrial Production did back off slightly. The LEI came in slightly lower, Initial Jobless Claims fell by 4K and the Philly Fed also slightly lower than expected. All in all not a bad week Econ# wise and then with a little help from AMAT, NTAP and MRVL who all had healthy earnings #'s and good forward guidance, we had what looked to be overwhelming good news in light of the continuing bad news (i.e. Iraq, Oil, etc.).
On tap for the coming week we have New & Existing Home Sales, Durable Orders, Initial Jobless Claims, GDP and Michigan Sentiment.
Looking back now it is evident that a move to the upside was well overdue and not just because of oversold conditions and technical indicators, but the Econ #'s and earnings #'s helped solidify this current move. Now the big question is whether or not it is a sustainable move...
So what can we expect for the week to come? Oil is the word... With WTIC going to $49 it is almost a forgone conclusion that we will see $50 bbl, but we did retreat from the $49 level and WTIC finished red on Friday. Could this be the beginning of a downtrend? Hard to say and I have the feeling that no real top in oil will be seen until at least after the Labor Day weekend when summer drives, vacations and the RNC Convention are in the books. I have seen some disconnects recently between oil/oil services and the price of oil which I noted here #msg-3830884 although the last couple of trading days have been favorable for the oil/oil services holdings. On a technical level, the COMPQ is at 1838 and we have decisively filled the 20pts gap at the 1810-1830 area, but we are currently bumping the first line of resistance. If we can get through 1840, then we have an even stonger resistance area at the 1865-1900 level to contend with. These will be tough obstacles to overcome, but if we do not get any extraordinary surprises I believe the overall trend will remain to the upside. Before getting too far ahead of ones self, let's see how we do with the 1840 area first. Below are a couple of COMPQ charts, one of where we are now and the other is my own rendering of what may possibly play out over the coming weeks.
NOTE: At this time I am still holding my UOPIX position
Disclaimer: This disclosure is not a recommendation to buy or sell or to do as I do, it is for no other purpose than to let people know what it is that I am doing and create a track record.
As mentioned in my previous update with which this post replies,"I had a hard time staying interested in this weeks action. As they say, "never short a dull market" may apply here." I also mentioned a cycle turn back around the 12th and the 38.2% Fibo line in the sand, both of which appear to have played out successfully. We moved higher throughout the week into Ops Exp and it also appears as though MaxPain "lives on" with QQQ 34 being taken out in the face of $49 bbl oil. An impressive week for sure, but technicals alone may not have been entirely responsible for the current move, the Econ #'s and some earnings reports seem to have played an important role in this equation as well.
As for the Econ #'s this past week, we started out with a miserable NY Empire State Index that just absolutely fell off a cliff, but CPI and Core CPI fell and this was most likely the catalyst that sustained this weeks move. Then Building Permits and Housing Starts also climbed higher than expected although Capacity Utilization and Industrial Production did back off slightly. The LEI came in slightly lower, Initial Jobless Claims fell by 4K and the Philly Fed also slightly lower than expected. All in all not a bad week Econ# wise and then with a little help from AMAT, NTAP and MRVL who all had healthy earnings #'s and good forward guidance, we had what looked to be overwhelming good news in light of the continuing bad news (i.e. Iraq, Oil, etc.).
On tap for the coming week we have New & Existing Home Sales, Durable Orders, Initial Jobless Claims, GDP and Michigan Sentiment.
Looking back now it is evident that a move to the upside was well overdue and not just because of oversold conditions and technical indicators, but the Econ #'s and earnings #'s helped solidify this current move. Now the big question is whether or not it is a sustainable move...
So what can we expect for the week to come? Oil is the word... With WTIC going to $49 it is almost a forgone conclusion that we will see $50 bbl, but we did retreat from the $49 level and WTIC finished red on Friday. Could this be the beginning of a downtrend? Hard to say and I have the feeling that no real top in oil will be seen until at least after the Labor Day weekend when summer drives, vacations and the RNC Convention are in the books. I have seen some disconnects recently between oil/oil services and the price of oil which I noted here #msg-3830884 although the last couple of trading days have been favorable for the oil/oil services holdings. On a technical level, the COMPQ is at 1838 and we have decisively filled the 20pts gap at the 1810-1830 area, but we are currently bumping the first line of resistance. If we can get through 1840, then we have an even stonger resistance area at the 1865-1900 level to contend with. These will be tough obstacles to overcome, but if we do not get any extraordinary surprises I believe the overall trend will remain to the upside. Before getting too far ahead of ones self, let's see how we do with the 1840 area first. Below are a couple of COMPQ charts, one of where we are now and the other is my own rendering of what may possibly play out over the coming weeks.
NOTE: At this time I am still holding my UOPIX position
Disclaimer: This disclosure is not a recommendation to buy or sell or to do as I do, it is for no other purpose than to let people know what it is that I am doing and create a track record.
**Happy Trading**
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