Signs of The Times
Perspective
There seems to be bad news in the Headlines Department and good news from
the Financial Department. The former is indicating contraction, which could
be the main theme and the latter seems to be a seasonal move, which could have
limited duration.
In the late 1980s, the Tokyo market perfected "Zaitech" which was the name
for financial engineering. The financial contraction normal to the Tokyo Bubble
that blew out at the end of 1989 has prevailed despite bold attempts to end
it.
Stock Markets
The sensational season continues, well, sensational.
And with blatant assistance from the Fed, "Zaitech" thrives in the financial
markets.
As the song from the 1960s goes, "When will they ever learn?".
In the meantime, the stock market has been registering technical excess. As
determined in January, around March was a target for a high and a few weeks
of pause has set up another run to glory.
Using the NYA, the rally carried to the 200-Day ma on March 14th and the index
declined with it until last Thursday. It is well above it now, which is constructive.
How long will it remain constructive?
As the saying goes, analysts have found it difficult to quantify effervescence.
Technical measures have been strong enough to effect change. But it looks
like excess over more time is needed to conclude that everyone is in or squeezed.
As that happens, effervescence will have been quantified.
Initially, ending action could show up as late-in-the-day buying in volume
quits. Our main benchmark has been to have a lower-low that the week before.
Currencies
The DX dropped down to 93.62 on April 11, with the Daily RSI at 30. This is
the third visit to that oversold level, which is similar to the pattern that
launched the rally that began at 93 in October.
Yesterday, the DX stair-stepped up during the 390 New York minutes of the
trading day. This tested Tuesday's low at 93.9 and closed at 94.50. There is
resistance at the 95 level and getting above would be constructive.
We have been looking for the dollar to bottom. A rising dollar would again
be confounding to the establishment.
The Canadian dollar has had an outstanding rally. From an exhausted low at
68.20 in January, it has stair-stepped up to 79. On the Weekly RSI, it is the
most overbought since 2012. Also there is a band of resistance at the 79 level.
Precious Metals
Again because of outstanding dynamics, the Precious Metals Sector has been
covered by the ChartWorks and a couple of "Specials".
Mid-cap golds (GDXJ) soared from 16.87 in January to 35.83 yesterday. This
is up to 78 on the Weekly RST, which is higher than reached in 2011.
A significant correction has been earned.
VIX has the Makings of an Upside Reversal from a Divergent Low
