Current Stock Push Has Hurdles To Clear

By: Chris Ciovacco | Mon, Mar 12, 2012
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The rally off the lows of last week has some work to do before it becomes convincing. While the longer-term outlook remains favorable from a technical perspective, the conviction from buyers needs to pick up in the short-term.

When Williams %R, which measures momentum, fails to clear -20 during a rally, the odds of a retest of the recent lows increase. As the orange boxes show below, numerous markets have not yet seen Wm %R clear -20. This is not a big deal, but we would like to see it cleared up before investing additional cash. Gains lasting one or two days could easily clear these conditions.

$WTIC (Oil (EOD)) CME

The candlesticks from last Friday in the charts above and below also show some indecision. Again, not a big deal, but it is just good to be aware of as we kick off a new week.

XOP (SPDR S&P Oil&Gas Exp) NYSE

EEM (iShares MSCI Em Mkts) NYSE

EWG (Germany iShares NYSE

EWJ (Japan iShares) NYSE

SCZ (iShares MSCI EAFE SC) NYSE

The equity markets, especially in the U.S., appear to have more upside looking out longer-term. The vast majority of longer-term charts have moved into bullish territory.

Commodities have a much more muted outlook for now, but that could improve in the coming weeks. The U.S. dollar is also holding up relatively well, which typically does not mesh with a "risk on" environment. Therefore, we have a mixed picture of sorts; stocks strong, commodities relatively weak, and a stable U.S. dollar.

The charts of small caps look a little better than those shown above. There was not as much hesitation in their candlesticks late last week (see below).

IWM (Russell 2000 iShares) NYSE

IWO (Russ 2000 Gth iShr) NYSE

 


 

Chris Ciovacco

Author: Chris Ciovacco

Chris Ciovacco
Ciovacco Capital Management

Chris Ciovacco

Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC. More on the web at www.ciovaccocapital.com.

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Ciovacco Capital Management, LLC is an independent money management firm based in Atlanta, Georgia. CCM helps individual investors and businesses, large & small; achieve improved investment results via research and globally diversified investment portfolios. Since we are a fee-based firm, our only objective is to help you protect and grow your assets. Our long-term, theme-oriented, buy-and-hold approach allows for portfolio rebalancing from time to time to adjust to new opportunities or changing market conditions.

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