Equities: the indices have diverged to some extent. The Hang Seng has been correcting since late Feb. The Dax looks to have begun a consolidation/correction last week in my anticipated turn window, and continued it this week. The SP500 is unclear – either Monday’s action was a fakeout to the upside and the correction begun last week continues, possibly sideways, or it is still in an uptrend. The Nasdaq looks very much still in its uptrend, digesting Monday’s gains and ready for more. Apple remains in its uptrend too.
It’s unclear. We aren’t generally seeing a set of extremes in overbullish and overbought indicators (whilst recognising that we are overall elevated) – there are just a couple of indicators calling for an immediate turn – such as a persistent high extreme CS Fear Index and a Nasdaq RSI of over 75. Yet, US Economic Surprises dropped again, and we continue to see divergences in this and in my geomagnetism models from the US stock indices. Chris Puplava’s latest analysis negates the likelihood of an imminent bear market for stocks, and I generally anticipate sideways action. So I continue to wait for a better opportunity in equities – either at overbought/overbullish extremes or the opposite, whichever comes first.
Bond yields have fallen back in the last few sessions, perhaps following Bernanke’s dovish comments, and commodities have fallen back also, with concerns over China’s growth playing. Gold now looks to have been repelled at the 200MA so perhaps needs more time to consolidate before gaining upside traction. Oil inventories were higher than expected yesterday, putting oil at the lower side of its recent range. If oil were to break downwards out of this range, then that would also suggest more time is required before commodities are ready for a momentum rally, so let’s see. Portugese CDSs dropped out of their long term uptrend, in an interesting development. Yet Spanish CDSs have not weakened in the same way. Italy CDSs are unclear.
I have little else to add at the moment, and don’t want to post ‘filler’. It’s been a week with not much to report or analyse, so patience it is for now, and we’ll see what transpires.