S&P 500 index (SPX) could test the 200 day MA next

$SPX daily 

For S&P, since it broke the 50 day MA (yellow line on the daily chart), it has a good chance to test the 1738 area near the 50 week MA (i.e., 200 day MA currently at 1761, 3% down from last Friday’s 1816 close). We need to see how it reacts once it tests the 200 day MA area. Whether it is going to seriously break down there as it did in 2010 and 2011 remains to be seen.

$SPX weekly

As shown on the weekly chart, once the 200 day MA is broken, then the next support zone lies in the 1585/1485 range (i.e., 38.2% and 50% retracements of the Oct 2011/Apr 2014 rise).

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.