New Market Quilt
In case you haven't noticed, the news media has been propping up the "In Mid-January the markets will decline" story over the last couple of weeks. They seem hell-bent on keeping us invested going into the new year. Thing is I don't see this story playing out when I look at the market's timing. The market does what it wants to do and it's often not what the experts expect.
Over the last two days the Big 3 have been relatively uneventful. That's a good thing as volume is low and we've all seen how low volume has been floating the markets higher. It ain't much, but it's better than losing money and I don't expect the real direction to unfold until next year. A quick look at the big 3, over the last 2 days the S&P 500 has been rejected at 1130.38 twice. On all three charts I'm watching for a break & close above or below the trendlines as an indication of price direction.
For 2010 I'm going to add a (39, 1) Slow stochastic Market Quilt covering Bonds, the American Markets, and the I-Fund. This is designed to paint a broad easy to read picture of what is happening and when the markets are turning. To make for a faster read, I've painted each chart Green, Yellow, & Red. Green being good, and Red being bad. Feel free to let me know what you think. Here is what the Market Quilt looks like and this one shows a broad view of the Bond Market. Simply put, it's ugly and everything is embedded to the downside.
Next are the American Markets, everything is green and the Transports show the most strength.
Now for the I-Fund, I'll start with the Currencies. I should point out FreeStockCharts doesn't have every ticker symbol, so I've had to use suitable substitutes to paint the picture. For the I-Fund to get in full swing, these charts need to turn from red to yellow, to green.
Lastly here is the Market Quilt of the I-Funds overseas markets using EFA and the top 8 most heavily weighted countries and once again I've had to use some suitable substitutes. We can see the broad picture isn't that bad and today I had the pleasure of turning Switzerland from yellow to green.
Oh and I forgot to mention, the Market Quilts are Daily charts covering a 3-Month time frame. That's it, good luck and thanks for dropping in... Jason
