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fib_1618

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So with the BETS now showing a fully balanced marketplace between buyers and sellers with a reading of zero this week, along with many of the major market indices reaching our initial minimal upside price targets of their 200 day EMA's, it might be very good time for a healthy consolidation to digest the humongous gains of the last 3 weeks which have ranged from 8-13%. During this time, there should continue to be a high amount of volatility, but any downside retracements should be able to be cushioned readily with the higher degree of liquidity that has now returned to the markets.

After consolidating in and around their respective 200 day EMA's for much of the week, the major market indices finished off with a strong showing on Friday and closed up by an average of .94% over last weeks settlement, with the value issues showing gains of over 1%, while the secondary and small cap issues showed gains of just over .50%.

Looking at the breadth charts array for this week shows a continued strong showing in the NYSE Composite, NYSE Common Only, NYSE Specialty CEF and Precious Metals advance/decline lines, while the interest rate sensitive issues that make up the NYSE Bond CEF and NYSE Preferred advance/decline lines closed again at new all time highs. Also in the interest rate area both the Investment Grade and the Junk Bond advance/decline lines continued to show increases in their money flow components as well. Taken together then, we have substantive proof that the liquidity pool in equities continues to rise, and this path of least resistance should provide a continuation of higher stock prices for the unforeseen future.

On the flip side of things, and with the exception of the CAC advance/decline line, overseas issues remain a problem in negotiating above their intermediate term declining tops lines. This disagreement of global uniformity in cumulative money flows still hasn't hurt US equities, but between the longevity of the move here in the US, and this weak showing abroad, this forces us to remain on guard to some sort of corrective process in order clear up these global discrepancies. Yes, this could also turn out to be one of those "pulled up by their boot strap" moments since Friday's closes here in the US penetrated above the 200 day EMA's on the large cap indices, but we also have to work with what's "reasonable" given our technical experiences.

So with the BETS climbing again this week to a reading of +10, the North American markets continue to show good improvement since their February 11th lows that came in conjunction with the price lows of crude oil. With the NYSE Composite breadth McClellan Summation Index also reaching "escape velocity" this week by moving above the +500 level (see cumulative charts), this should continue provide good buoyancy to stock prices as we finally move into next Friday's quarterly OPEX period. Because of this, let's look for equities to remain firm, with a bullish bias, throughout next week, and continue to work with the idea that we'll see some sort of back and fill period after that where a more important buying point will come about by early April after we "shake the tree" a bit of the weak hands.

Have a great trading week!

US Equity Markets:

[breadthspx031116]


[breadthdjia031116]

[breadthspec031116]

[breadthpre031116]

US Interest Rates:

[breadthtnx031116]

[breadthig031116]

[breadthjunk031116] 

US Real Estate:

[breadthreit031116]

Precious Metals:

[breadthpm031116]

[breadthxau031116]

Australia:

[breadthaus031116]

England:

[breadthftse031116]

France:

[breadthcac031116]

Germany:

[breadthdax031116]

India:

[breadthbse031116]

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