I won’t be around on Sunday, so I decided to jump the gun and post my Sunday night post today. I doubt today’s action will change the weekly very much even with OPEX. If there is a change, I’ll append an update at the end.
Generally, I think it is time to hang it up for 2009. There are only 7 full trading days left for the entire year plus a half day on the 24th. Unless there is an exogenous event, it is unlikely that the market will move out of its trading range until 2010.
We’ve been in a range since early November.
I’ve gone through the key moving averages as I have the last couple of months. As you can see below, there are a few notable changes from last week. FXI, GLD and SLV have all broken below their 50-day SMAs. I don’t think the US market can go higher without China.
The 50-day SMA on FXI is broken as well as the 89 day. There is a convergence of horizontal support and the 200-day SMA at $39. It looks to me that this is the next stop for FXI. I would expect $39 to be a magnet.
Meanwhile, UNG appears to have finally bottomed and has moved above its 50-day SMA. Also notable is that DMM has broken down below its 50-day SMA. For those not familiar with DMM, it is tied to an index that rises when housing prices decline. So DMM breaking down shows further evidence of housing prices bottoming.
| Primary Trends | 12/20/2009 |
| 50 day MA – SPX | Above |
| 200 day MA – SPX | Above |
| 300 day MA SPX | Above |
| 50 day MA -QQQQ | Above |
| 200 day MA – QQQQ | Above |
| 300 day MA -QQQQ | Above |
| 50 day MA – FXI | Below |
| 200 day MA – FXI | Above |
| 300 day MA – FXI | Above |
| 50 day MA – IWM | Above |
| 200 day MA – IWM | Above |
| 300 day MA – IWM | Above |
| 50 day MA – GLD | BELOW |
| 200 day MA – GLD | Above |
| 300 day MA – GLD | Above |
| 50 day MA – SLV | Below |
| 200 day MA – SLV | Above |
| 300 day MA – SLV | Above |
| 50 day MA – PTM | Above |
| 200 day MA – PTM | Above |
| 300 day MA – PTM | Above |
| 50 day MA – USO | BELOW |
| 200 day MA – USO | Above |
| 300 day MA – USO | Even |
| 50 day MA – UNG | ABOVE |
| 200 day MA – UNG | Below |
| 300 day MA – UNG | Below |
| 50 day MA – SGG (Sugar) | Above |
| 200 day MA – SGG (Sugar) | Above |
| 300 day MA – SGG (Sugar) | Above |
| 50 day MA – LD (Lead) | Below |
| 200 day MA – LD (Lead) | Above |
| 300 day MA – LD (Lead) | Above |
| 50 day MA – NIB (Cocoa) | Above |
| 200 day MA – NIB (Cocoa) | Above |
| 300 day MA NIB (Cocoa) | Above |
| 50 day MA – JO (Coffee) | Above |
| 200 day MA – JO (Coffee) | Above |
| 300 day MA – JO (Coffee) | Above |
| 50 day MA – JJG (Grains – Corns, Soybeans, Wheat) | BELOW |
| 200 day MA – JJG (Grains – Corns, Soybeans, Wheat) | Above |
| 300 day MA – JJG (Grains – Corns, Soybeans, Wheat) | Above |
| 50 day MA – JJN (Nickel) | Below |
| 200 day MA – JJN (Nickel) | Above |
| 300 day MA – JJN (Nickel) | Above |
| 50 day MA – JJC (Copper) | Above |
| 200 day MA – JJC (Copper) | Above |
| 300 day MA – JJC (Copper) | Above |
| 50 day MA – BAL (Cotton) | Above |
| 200 day MA – BAL (Cotton) | Above |
| 300 day MA – BAL (Cotton) | Above |
| 50 day MA – COW (Livestock) | Below |
| 200 day MA – COW (Livestock) | Below |
| 300 day MA – COW (Livestock) | Below |
| 50 day MA – $USD | Above |
| 200 day MA – $USD | Below |
| 300 day MA – $USD | Below |
| 50 day MA -LQD | Above |
| 200 day MA – LQD | Above |
| 300 day MA – LQD | Above |
| 50 day MA – FXE | Below |
| 200 day MA – FXE | Above |
| 300 day MA – FXE | Above |
| 50 day MA – FXA | Below |
| 200 day MA – FXA | Above |
| 300 day MA – FXA | Above |
| 50 day MA – FXB | Below |
| 200 day MA – FXB | Above |
| 300 day MA – FXB | Above |
| 50 day MA – FXC | Below |
| 200 day MA – FXC | Above |
| 300 day MA – FXC | Above |
| 50 day MA – FXY | Below |
| 200 day MA – FXY | Above |
| 300 day MA – FXY | Above |
| 50 day MA – FXF | Below |
| 200 day MA – FXF | Above |
| 300 day MA – FXF | Above |
| 50 day MA – JNK | Above |
| 200 day MA – JNK | Above |
| 300 day MA – JNK | Above |
| 50 day MA – TLT | Below |
| 200 day MA – TLT | Below |
| 300 day MA – TLT | Below |
| 50 day MA – DMM | BELOW |
| 200 day MA – DMM | |
| 300 day MA – DMM |
With respect to investing themes, the only theme I have going at this time is buying secondary offerings of recapitalized companies that were previously threatened with government takeover or bankruptcy.
USD continues to impact the market. I have posted previously that my expectation is for USD to consolidate after this brief move up. So I’m watching to see if $57 is breached on $USDUPX. I’m not sure whether the range will be from $54-57 or a more expansive range of $54-59.
The bet on short term treasuries by foreigners continues to be a good one. While those bets are not collecting yield, there is a nice payoff on the currency exchange. It makes sense to continue watching short term treasuries as it might give us an early warning on the reversal of this USD bet.
My conclusion is that there is no reason to buy stocks before the end of the year. USD continues to strengthen which will at the very least keep a lid on the market. Additionally, FXI remains under pressure as well as much of Europe (see EWI, EXP and EWO). On the other hand, the major indexes are trading above their 50 and 200 day MAs. In many cases, many indexes are still above their 20-day SMA. I don’t want to short a market that is still technically strong.
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zstock, Pro Select!
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terenceleechan
