Technical Leaders ETF

Please find here http://etfinvestmentoutlook.com/commentary.php?id=10430&s=Technical%20Leaders%20ETF some infos concerning ETF based on technical analysis.

Zinc-Nyrstar

Après avoir formé une large figure baissière en forme de tête et épaule sur les années 2005 et 2006, le prix du zinc a depuis quelques mois déja atteint l'objectif de cette figure.Depuis lors après une stabilisation sur une importante droite de tendance haussière, le cours semble fortement repartir à la hausse.

Le premier objectif de cours au cours des prochaines semaines se situe environ 12% plus haut.(flêche sur le graphique)

Le prix du zinc a un fort impact sur les résultats opérationnels de Nyrstar. Une hausse de 100 dollars la tonne se traduit dans les comptes par une plus value de 26 millions de dollars.

Le titre est techniquement bien orienté, un dépassement au-dessus des 16.75€ ouvrirait la voie vers les 20€.

Nyrstar publiera ses résultats annuels le 18 mars.

Consumer Confidence

US consumer confidence fell more than forecast in February to the lowest level in five years as the labor market cooled and the economy faltered.The chart below compares the SP500 in yellow and the Consumer Confidence index.

Technical Weekly 25012008

Equities
Most short term indicators are now at oversold levels and most intermediate term indicators we looked are also at oversold readings.
Market internals remain oversold but are improving.
So that the market is oversold enough to rally but for now there is no pattern suggesting a sustained rally.
Taking risks have few chances to be rewarded as long as a valid signal did not appear.A wait and see market is the norm after a very strong decline but, as long as the process of reflection did not come to a end (base forming or distribution pattern?), it is highly preferable to stay on the sidelines.
This week we take a look at emerging markets, the MSCI EM Latin America made a new high (for 2008) last week and is strongly outperforming the Stoxx 600 (black line)















The MSCI EM Asia remains weak and volatile and the MSCI EM Eastern Europe technically ranges between the two others and is outerperforming European stocks.

Bonds

On the short term, positive action is expected (higher yields) towards the upper end of the descending channel (around 4.1%) but as you see the mid-term trend is still down.

Commodities

Most commodities are showing parabolic upside accelerations.

Their momentum is incredibly strong and most of them have made significant technical bounces since last month but are trading now close to resistance zone.

Aluminium, copper, oil and agriculture are just reaching long term key resistances.

The chart below shows the DJ-AIG Agriculture total return index; any break through these areas would suggest that the advance may extend a lot further.

Euro

The exchange rate is still trying to break above the 1.5 resistance level.

A break above this level could open the door to the 1.55-1.56.

Solaria update Part2

The downside target is close to be reached!

According to Bloomberg, analysts are still bullish with an average target price @ 22.35€.(12 month consensus)

It seems that none of them knows the statistics about double tops.

Here are the numbers :
percentage meeting price target :73%(one of the highest)

break even failure rate : 11%

pullback rate :59%

Fibonacci time projection

Time cycle is often forgotten when analysing markets but it may be more important than price levels in the current environment.
So far, there is still a risk of seeing renewed weakness over the next few weeks, which would probably provide trading opportunities.
It remains difficult to assess the downside risk of such a move and especially whether the January lows will be broken or not.
According to the weekly chart below showing the SP500 and Fibonacci time projections an important low could occur during the end of April.

Technical weekly 18022008

Equities

Last week I said equity markets were likely to test new lows.

As you can see on the daily chart of the DJ Euro Stoxx 50, the index seems to draw what looked like a flag pattern. This pattern is a bearish one, so that the odds favor a break down and a retest move on the January lows.

A successful re-test could be the basis for at least a stronger rally attempt.

With developing a second down-leg and re-testing the January trading lows, we could expect a double bottom speculation coming into the markets near-term.

I'm watching out for a key reversal confirmation on the support and for a confirmation of at least a double bottom pattern to start buying tactically.

The next chart, a weekly-based chart of the MSCI World Index, continues to confirm that we are in a bear market. There has been a moving average downside crossover (20 weeks below 40 weeks), and the moving averages and Macd continue to move downward.

Bonds

This week, I compare the prices of 3 German Govt bonds.

They represent different durations in the yield curve. (30 years in red, 10 years in yellow and 1 year in black)

The chart shows that the longer duration bonds did better than the shorter-term ones. That situation, however, may be changing.

Recently, longer duration bond have fallen faster than shorter-duration funds.
That could be a reaction to new fears of inflation and that is why we decide to buy inflation linked bonds for our clients.

These are bonds that have some protection against inflation built into their pricing. That would seem to make them a good alternative in the current environment of falling yields and rising inflation pressures (record high commodities).

Brent(Oil)

No change , the Brent remains caught in a trading range (broadening pattern) between 87 and 98$.The long term trend is still up.

Euro

No change, the exchange rate was not able to break above the 1.5 resistance level. The short term correction may continue to the 1.43 support level.

Solaria update

Solaria shares drop 20%!

A rumour in the market says that Co books 2008 sales in 2007, and will account them again in 2008.

As a technical analyst, I don't care about rumours but I was worriyng about the "big bearish double top".

Charts don't lie but people (or companies) sometimes do!

DJ Euro Stoxx 50 hourly chart

The DJ Euro Stoxx 50 rebounds from a very oversold condition.
Technically speaking a trading buy signal will be validated only above the 3900 resistance level.
A breakout above this level could extend the rally 6% higher.

Technical weekly 12022008

Equities

Equity indices remain quite weak and they will more likely retest January lows.

We are waiting for a major selling climax (capitulation) and a bottoming process to go long (buy equities).

Most significant bottoms are a several step process, as steep market declines usually do not reverse straight to the upside (’V’ recovery), but typically involve a period of backing and filling.

For instance, the last major bear market bottom which ended in 2002 (SP 500) involved a period of base building, as prices tested the lows not once, but twice over a several month period.

For now the market (investors) thinks on the possibility of a technical recovery or of the continuation of the bearish trend.

But it will still spend several weeks to decide.

The hourly chart below shows that the trend is still down for the DJ Euro Stoxx 50 and that trading indicators like RSI or Stochastics are neutral.

Bonds(yields)

The trend is still down with the 3.65% level as target.

The risk/return is not so good for bonds (lower end of the descending channel) and once the current fly to quality will run its course, we believe bond price will be vulnerable to downside risk.

Brent(Oil)

The Brent remains caught in a trading range (broadening pattern) between 87 and 98$.The long term trend is still up.

Euro

The exchange rate was not able to break above the 1.5 resistance level. The short term correction may continue to the 1.43 support level.

Solaria

New energy shares : hype and reality.
Hoping the price will not reached the target of this (big) double top.

Technical ranking Stoxx sectors based on 3 different rates of change (1,3 and 6 months).
Momentum leads price, the challenge is to identify emerging strength and weakness with accuracy and consistency.
While major markets moves tend to be global in scope, some markets (sectors) are stronger than other, enabling investors to maximize bull markets profits by identifying the leaders and avoiding the laggards.
That’s why the current ranking position is compare to the position n days ago (normally 1 week ago.)

"click on the table to enlarge"

Technical scoring Stoxx sectors based on the 20 day (short), 50 day (mid), 100 day (long) and 200 day (very long) moving averages.From zero to ten points, scoring is green when improving, red when deteriorating and blue when unchanged compared to the previous scoring.

"click on the table to enlarge"

As you can see the sectors rotation forecast is mainly a relative one!

Buy&sell signals DJ Euro Stoxx 50 members

"click on the table to enlarge"

ISM non manufacturier

L'ISM services US a très fortement chuté en janvier. C'est la plus forte baisse depuis le début de la série (juillet 97). Elle impliquerait - si on restait sur ces niveaux - une baisse du PIB de 6% au premier trimestre (en rythme annuel), ce que l'on a plus vu depuis début 1982.

Le graphique compare le SP 500 et une moyenne mobile de l'ISM non manufacturier.

Technical Weekly 04022008

Equities

With an oversold bounce over the last two weeks, the DJ Euro Stoxx 50 is approaching a resistance zone from broken support and the 50-day moving average.(yellow line)

Before going further, we should know that the overall trend remains down for two reasons.

First, the index broke down in January with a decisive move below its 2007 lows.

Second, the 50-day moving average is below the 200-day.

The next thing to expect is a reaction rally back toward the recently violated neckline support, which is now overhead resistance.

While the market's recent performance has been good for bulls, you can see on the chart below that strong overhead resistance in the form of the long-term rising trend line lies dead ahead.

The next chart shows the same index but on a monthly basis.

Note that the monthly stochastic lines have just given a sell signal and the monthly MACD histogram has been negative for two consecutive months.

This downside crossover is the first since the last bear market began in 2000.

Technically speaking, I think the current rally may continue in the near term but I also think renew weakness will follow with indices possibly retesting January lows.

One last observation, according to the Stock Trader's Almanac, the January Barometer predicts the year's course for the SP 500 with a .754 accuracy and every down January on the S&P since 1950, without exception, preceded a flat or bear market

Bonds

No change, yields are still caught in a downtrend channel.

For the coming months I can not exclude the possibility of a deeper correction towards the important support of 3.65%.

Brent(Oil)

Oil is trading above support and the double top pattern highlighted last week was not validated . The long term trend remains bullish.

Euro

The rate continues to trade below the important resistance of 1.5.

Watching the two last candlestick patterns, I do not expect significant move in the coming days.