Russell Index ($RUT) could test 1083 near the 200 day MA soon

 $RUT daily chart

For RUT, since it broke and closed below the rising trendline (linking 1010/1083 lows), the first target now is 1083 area near the 50-week MA (i.e. 200 day MA on the daily chart). It was back in the summer of 2011 when RUT seriously broke through the 200 day MA and tested and the bull channel support from 2009 low. The other times it broke the 200 day MA but quickly reversed above it. It could do that again here this time: it first consolidates between the 200 day and 50 day MAs before sliding through and go for the bull channel support as shown on the weekly chart. Or it could break through the 200 day MA quickly and go for the bull channel support. Let’s see how it reacts here this week.

$RUT weekly chart

As shown on the weekly chart, once the 200 day MA is broken, 943 near the bull channel support (right above the 200 week MA and also near 38.2% retracement of the 602/1213 rise @ 975) could be potentially tested. That could be a good buying area. That is about another 15% decline from last Friday’s close at 1111.0.

QQQ confirmed a lower top on Friday (4/4/14) on high volume sell-off since Oct 2011; Extending weakness towards the 200 day MA

Friday's price action is very negative for the market as whole. QQQ confirmed another lower high at 89.68. It has a good chance to extend the downtrend towards the 200 day MA. RUT was the next, closing in on March 27's 1147 low, which, if broken, would confirm a lower high too, extending the downtrend towards the 200 day MA next. SPY had a key reversal day Friday. The next key level is March 27's 183.90 low near the 50 day MA. If broken, That would confirm a double top and then the 200 day MA would be the next focus. 

EPI, EWZ and IF were among the best EM performers. FXI and RSX followed. They all have outperformed S&P. It would be interesting to see if their outperformance continues as the US equities continue to continue to correct. The current technical readings suggest that the EMs may see a pullback near term as they are overbought. As far as the pullback is shallow, then they should continue to outperform. They need to be monitored closely. 

Continuous Commodity Index (CCI): Long-term Triangle Breakout; Bullish Indicators Point higher

• Continues to base above the key 500 level. The latest upside break above the long-term down trendline, coupled with strengthening indicators, suggests that there is scope for further gains towards 529 and higher.

More information on the CCI index:

The CCI stems from the original CRB Index, created in 1957. It is a ‘snapshot’ of the index at its 9th revision in 1995, before it underwent weighting and rebalance changes in the 10th revision. It is sometimes referred to as the ‘Old CRB’.

The 17 components of the CCI are continuously rebalanced to maintain the equal weight of 5.88%. Since CCI components are equally weighted, they therefore distribute evenly into the major sectors: Energy 17.65%, Metals 23.53%, Softs 29.41% and Agriculture 29.41%. While other commodity indices may overweight in certain sectors (e.g. Energy), the CCI provides exposure to all four commodity subgroups.

The Thomson Reuters Equal Weight Continuous Commodity Index is published Real Time and is widely disseminated to subscribers including traders, analysts, consultants and media outlets. It is licensed for the creation of over-the-counter products by Thomson Reuters.

Greenhaven Funds developed a fund that tracks the CCI, called the Greenhaven Continuous Commodity Index Fund (GCC).

SP 500 Futures (H4) Weekly: 15-month bull trendline breakdown; DJIA: Testing 200 day moving average

• Broke below 15-month bull trendline amid weakening indicators
• Risk remains for further downside towards 1640.5 near the 59-month bull channel support zone (off March 2009 low)

• Corrected lower to test the 200 day/ 50 week MA
• Deteriorating indicators suggest that scope remains for further downside towards 14719 near the 27-month bull channel support

30-year Treasury Bond threatens 132-12/23 key resistance level; 30-year bond yield forms a double top, going lower

• T-bond found support near the 6-year bull trendline at 127-23 before recovering higher
• The strong recovery is threatening the key 135-12/135-23 resistance area near the 200-wk moving average
• Strengthening indicators suggest that scope for an upside range breakout is possible.

• 30-year Treasury yields confirmed a double top at 3.940/3.976 on the break below 2.532.
• Bearish indicators suggest further weakness remains possible towards 3.492 then 3.250 area.

 

2/30’s Yield Curve Weekly Chart: Flattens to new 2-month lows, testing key long-term support zone

• 2/30’s spread has been easing to post new 6-month lows, testing the 6–year key support trendline (former resistance) currently at 328 and the 200 week MA at 317.
• Weakening indicators suggest there is scope lower towards 301.

S&P 500 ETF (SPY): Forms a bearish Tweezer Top on monthly chart; Potential head & shoulders topping pattern on daily chart

SPY (SPDR S&P 500 ETF Trust) ($178.18)

February 1, 2014

---------------------------------------------------------------------------------------------------------------------

SPY consolidates within a 5-day range under Jan 30’s 179.81 high;

176.88 (Jan 29 range low)/177.32 (Dec 18 reaction low)/177.98/(Nov 20 low) becomes key support area;

Potential head & shoulders topping pattern could be forming if the above support line (pink) is broken;

Forms a bearish Tweezer Top (184.69 (Dec 2013 monthly high)/184.94 (Jan 2014 monthly high) which typically resolves to the downside;

--------------------------------------------------------------------------------------------------------------------

SPY:  Consolidats within a 5-day range under 179.81 last week. Weakening momentum and bearish RSI divergence continue to weigh. The pink trendline (connecting 176.88 (Jan 29 range low)/177.32 (Dec 18 reaction low)/177.98/(Nov 20 low)) forms the potential shoulders line of a 3-month head & shoulders topping pattern which requires a breakdown to confirm.

 

If SPY bounces off the 176.88 support near 38.2% of the upmove from 10/9/13 low (164.53/184.94 rise) and 100 day moving average at 177.00,  that would prolong the consolidation and reopen the 179.81, then 181.75 (11/29/13 range high/181.66 (1/24 daily high-gap low)/181.34 (1/13 range low) short-term resistance area.

 

If SPY decisively breaks below the aforementioned pink-line support,  medium-term supports rest at 174.76 (Nov 7 higher low) near 14-month bull trendline from November 2012 low (connects 11/16/12 and 10/9/13 lows) and 50% of the 164.53/184.94 rise.

 

Beneath would open 173.60 (9/19/13 high) near 23.6% of the entire upleg from 11/12/16/12 low (134.70/184.94), 170.97 (8/2/13 high) /169.07 (5/22/13 high) near 50% of the upmove from 6/24/13 low (155.73/184.94), the 200 day moving average and potential H&S target.

 

Long-term supports lie at 164.53 (10/9/13 higher low) near 38.2% of entire upleg from 11/12/16/12 low (134.70/184.94) and 159.71 (4/11/13 high)/160.22 (7/3/13 low) near 50% of entire upleg from 11/12/16/12 low (134.70/184.94)

 

Momentum: Daily – Sell mode; Weekly – Sell mode; Monthly – Sell mode (Overbought/Tweezer Top)

Resistance:

***184.69 (12/31/13 high)/184.94 (1/15 record peak) double top area

181.75 (11/29/13 range high/181.66 (1/24 daily high-gap low)/181.34 (1/13 range low)

*179.81 (30 Jan range high)

Support:

***176.88 (Jan 29 range low)/177.32 (Dec 18 reaction low)/177.98/(Nov 20 low) near 38.2% of the upmove from 10/9/13 low (164.53/184.94 rise) and 100 day moving average

177.64 (11/7/13 range high) /177.51 (10/30/13 range high)

174.76 (11/7/13 low) near 14-month bull trendline from November 2012 low (connects 11/16/12 and 10/9/13 lows) and 50% of the upmove (164.53/184.94)

173.60 (9/19/13 high) near 23.6% of the entire upleg from 11/12/16/12 low (134.70/184.94)

170.97 (8/2/13 high) near the 200 day moving average

**169.07 (5/22/13 high) near 50% of upmove from 6/24/13 low (155.73/184.94) and potential H&S target

164.53 (10/9/13 higher low) near 38.2% of the entire upleg from 11/16/12 low (134.70/184.94)

159.71 (4/11/13 high)/160.22 (7/3/13 low) near 50% of entire upleg from 11/16/12 low (134.70/184.94)

157.52 (10/11/2007 peak) near 23.6% the entire upswing from March 2009 low (67.10/184.94)