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fib_1618

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Please note that the charts have been rescaled this week to provide better interpretive value moving forward.

US Equity Markets
:

The NYSE composite A/D line has continued to move into new all time high territory over the last 2 weeks, but Friday's higher price highs in the SPX were not confirmed by breadth of market. Given the abrupt loss of momentum on a short term basis as measured by the McClellan Oscillator last Thursday (see cumulative charts), it's likely that we're seeing some kind of blow off price top right now, with the technical expectation for next week for choppy behavior as we go about digesting the price gains of the last several weeks.




While the NYSE common only A/D line continues to have its problems moving above its orange overhead resistance line, the DJIA price pattern has once again snapped back to what was its intermediate term rising trend line for the third time in as many months. Given the implied weakness seen with the NYSE composite A/D line and its derivatives late last week, it wouldn't be too surprising to see the NYSE common only A/D line to once again begin a move lower to test the lower level support lines seen on the chart.



The NYSE preferred only A/D line has continued to trend higher over the last couple of weeks without much in the way of a rest. At the same time, the NYA price pattern had a successful retest of the breakout line of its symmetrical triangle on Thursday and then fully met its minimal upside price objective of the May 2010 highs on Friday that was given by the McClellan Oscillator back in July. As long as this A/D line continues to make higher highs, this promises good things for the bulls later on down the line.



US Interest Rates:

The NYSE Bond CEF A/D line continued its amazing climb higher over the last two weeks, while the 10 year note yield fulfilled its technical expectation of snapping back to the declining tops line that was previously controlling the pattern. As long as this A/D line remains locked within its rising trend, monetary policy will remain fluid enough to promote higher equity prices, while at the same time, 10 year yields will remain at or near their 16 month lows for the unforeseen future.
 



US Real Estate:

The NYSE REIT A/D Line continued to have problems making head way above its June highs last week, and this has produced a bearish non confirmation of the recent highs made in the Real Estate iShares. Because of this continuing non confirmation between breadth and price, the technical expectation remains for prices to back and fill for the short term so that a proper bullish configuration can be accomplished, and with it, the opportunity for the intermediate term uptrend to continue.



Precious Metals:

With the price of spot gold moving to all time highs over the last couple of weeks, the Precious Metals A/D and XAU A/D lines continue to maintain positive money flow characteristics consistent to the current uptrend remaining in force for the short term...with the XAU basket of stocks showing better relative strength in money flow at the current time.






Australia:

The XAO A/D line was pretty much flat lined this past week, and this has kept the XAO index itself in a tight price range over the last 10 days. It will take a break above this A/D line's 2nd fan formation declining tops line (in brown) for the price index itself to have any chance of moving above the price highs seen in April of 2010. For now...steady as she goes.



England:

Not only is the FTSE cumulative A/D line at the highest level we've seen since the fall of 2007, it's also now within 5000 data points from its all time highs. The pause in breadth seen over the last week has allowed the FTSE price pattern to play catch up, and now both breadth and price are moving in sync with each other. After any near term sympathetic pause that might be seen in the short term, the bullish cadence being shown here should provide good global leadership qualities over the next several weeks to months.



Germany:

After "falling out of bed" in the month of August, the DAX cumulative A/D line has not only been able to move back up and into its intermediate term trend channel during the month of September, but it found good near term test support off this trend line on Friday. Given that the August decline held A/D line support at the longer term trend line from the March 2009 lows, any continued buoyancy in this money flow component should create higher price highs in the DAX index itself sometime before the end of the year.




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