Sunday, April 24, 2016

Week In Review: Some Breakdowns And Some Waiting (A Lot In Fact)

Here are some of the charts people should be keeping an eye on in the coming week. A lot you will notice have ascending bearish wedges that have not completed there patterns, while others like Consumer Staples (XLP) have. Northman Trader has just posted an excellent summary of why the bullish case isn't supported by a lot of evidence at this stage, so look upon the following charts as further support.

Consumer Staples: XLP
XLP broke down three sessions ago and is coming up to it's first support at around $51.00. Momentum you will notice has fallen quite steeply so $51.00 looks like a good resting spot.
Real Estate: IYR
It took two and a half weeks and it wasn't a sharp change in direction but IYR finally fell and found support on the EMA(34)Strong support appears just above $75.00 and $74.00. This appear to be a good point to put in a lower high before continuing downwards.
Europe: VGK
Around Tuesday this week the European Index Fund VGK came up to resistance at around $50.50 while part of a bearish ascending wedge. Strong resistance is present at $51.50 and $52.00 so I don't see this going any higher. Furthermore, there are already two hits on the lower support line for the wedge so we may beginning the breakdown.
Finance: XLF
XLF continues to move strongly upward but resistance is going in around $24.00. At the moment it's filling a gap going back to January.
Healthcare: XLV
Healthcare normally traces Biotechnology quite closely, but lately Healthcare and XLV in particular has taken on a life of it's own. It's just had five up sessions in a row and finds itself inside a bearish ascending wedge with heavy resistance at $72.50.
Latin America: ILF
I don't normally report on Latin American Index ETF ILF but it too is in a large ascending bearish wedge having come up to resistance at around $26.50. The wedge already has two hits on the lower support line so this past week we may have already witnessed the beginning of a breakdown.
Russia: RSX
RSX is a strong short/sell having put in an ascending wedge for the better part of two months. Recently strong resistance appeared at $17.25 and $17.55.
Semiconductors: SMH
I haven't been a fan of SMH for almost three weeks now. The ascending wedge pattern has come and gone but EMA(13) and (34) are converging and support appears around $52.00.
Small Caps: IWM
IWM has been tearing it up lately but has nothing but resistance to look forward too. Our next pause should come at $115.00, however if I am wrong about the ascending wedge pattern we should see it rise to $118.00.
Technology: XLK
XLK broke down on Friday after experiencing several weeks of lateral movement. Support should appear at $42.00 and after that, $40.50, but after that I'm not sure what happens next!
Transportation: XTN
XTN has put in a beautiful ascending wedge that appears to be terminating at a resistance level of $47.50. Any downturn should see support at $44.50.
Treasuries: TLT
TLT is frightening - support is in at $127.00 however a descending triangle is being put in. Does this mean that a breakdown will be precipitated by bullish news from the Fed and Japan next week? Upper resistance is in at $131.50.
Volatility: VXX
I previously called a long/buy on VXX with support at $15.50 and upper resistance at $18.00 and $20.50.