Sunday, May 10, 2015

Commodities Charts and Other Things: Part II

In addition to commodities there are some other index funds that are making some interesting moves that I think are quite significant. I'd certainly be interested in hearing what other people have to say on the subject!

U.S. Treasuries: PLW
  • U.S. Tresuries are listed as a speculative long/buy
  • There was a sharp sell of last week and I anticipated the bottom a little too soon. Some of my near term indicators, like the slow stochastics (5,3) and PMO, are already showing a bullish crossover while longer term indicators are turning up and poised to cross over.
  • Curious is my observation with PLW that two separate bottoms were put in in it's current declining channel. One in mid-February and the other in the first week of March. These double bottom lines were also observed by in the weekend edition when examining the S&P and Dow Jones. It may appear to breakdown in it's current configuration, but with those two horizontal lines guarding against any drop, not any time soon.
  • Upper resistance are $32.90

Chinese Index: FXI
  • Listed as an extremely risky long/buy.
  • I have been quite cynical of the Chinese stock market's rise for around a year now (perhaps longer, to be honest I've forgotten). Four million brokerage accounts were added last week alone and now, more than ever before, the Chinese economy seems to be trying to maintain unrealistic growth expectations through increasingly risky lending and leverage mechanisms
  • I was expecting to write about possible shorts against FXI but after the Chinese Central Bank's announcement today that it was cutting interest rates by a quarter percentage point the desired effect of levitating markets will be apparent, at least in the short-run.

Euro Index Fund: VGK
  • Listed as a speculative short/sell.
  • At lot of movement in the near-term is going to be driven by events surrounding Greece. Friday was a strong day for markets with good U.S. employment numbers, German growth and James Cameron's victory in the U.K. elections.
  • Confusing stories were coming from sources on Friday involved in the Greek negotiations with the Greek Prime Minister saying "positive steps have been taken" and European members saying "an agreement seemed unlikely by Monday." They have 48 hours left. Members of Merkel's own party today lobbied her to finally cut Greece lose.
  • VGK is still in a bearish pennant despite it's 2.4% climb.

Jakob Richardson © 2015