Weekly 360° view – 13 / 2012

Summary

Last week’s call worked out  almost as predicted: “sideways move with the low in the range of 1-2%”. We saw the low of the week bellow 1.18% of the opening. The week closed with a loss of -0.4%.

Setup for week 13 is  positive, hence I do expect a higher close. In case we see a pull-back it certainly won’t be a deep one (max 1.0 %)




Price Action

[bullish]

  • Direction: long term up, intermediate-term up
  • Historical volatility: long-term low,  short-term rising
  • Trend-health: long-term trending environment (TSI >1.65) and intermediate trend conditions are high.
  • Channel: intermediate channel position bellow mid-point.
  • OB/OS: RSI(5)>50 and <75, RSI(10)>50 and <75, intermediate term time stretch bellow mid-point.
Overall price action is providing a bullish environment (B-J).

.

Seasonality

[bullish]

Seasonality is bullish for March (K) as well as for week 12 of the year (L).

.

Correlation

[neutral]

Correlation (M) among S&P500 members is higher (>0.25) . Short-term we continue to see a significant expansion (RSI2>95).

Read more about  my correlation related research here.

.

Breadth

[neutral]

Market Breadth (N) for top performers is at high absolute levels and decreased over the week.

.

Sectors

[bearish]

Sector setup  (O)  is bearish. The sector leaders are XLI (Industrials) and XLF (Financials).

.

Bonds

[positive]

RISK ON for the bond market (P). Generally this is positive for the stock market, especially with a combined setup (BONDS and DIRECTION).

.

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