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8 December 2016 – Ever higher for the indices!

Market exuberance continues to push the major indices higher. The Dow Transportation, Dow Industrials, Russell 2000 and S&P 500 indices made new all-time highs at 9426.72, 19664.97, 1386.3678 and 2251.69. Nasdaq 100 is playing catch-up to the other indices as euphoria continues to sweep the market since the US Presidential election. There is no fear in the market. Investors continues to pile into the global equities and the sectors leading this market up are industrials, materials and financials. Defensive sectors lagging are utilities, healthcare and consumer staples.

ECB announced it will begin tapering the amount of monthly bonds purchases starting in April 2017 to EUR 50 bln each month until the end of December 2017.

Dow Transportation pulled back in the first hour after market open before rallying upward. It made new all-time high of 9426.72 which broke the all-time high in November 2014. It closed with a small hammer candle above all its moving averages. Momentum remains upward. Volumetric buying pressure is at 100%. The index is in a monthly Squeeze.

Dow Industrial pulled back in the first hour before rallying upward till later in the day. It made new all-time high of 19664.97 and then pulled back to close with a small bullish candle above all its moving averages. Momentum remains upward. Short term volumetric buying pressure is at 100%. The index is still in a monthly Squeeze.

Russell 2000 was sideways for the firsh hour before surging upward till the end of the day. It hit an all-time high of 1386.45 and closed with a bullish candle above all its moving averages. Momentum is upward. Volumetric buying pressure is at 99.9%.

Nasdaq 100 grinded upward till midday before pulling back in the afternoon. It closed with a small spinning top doji candle above all its moving averages at 4859.1859. Momentum has reversed upward. Volumetric buying pressure is at 100%. The index is in a weekly and monthly Squeeze.

S&P 500 traded sideways in the first hour before trading upward till after midday. It made new high at 2251.69 before pulling back before closing with a small bullish candle above all its moving averages. Momentum is upward. Volumetric buying pressure is at 100%. The index is in a monthly Squeeze.

Metals and Commodities
WTI Crude oil futures traded upward and is trading at $50.90 per barrel. Investors prepare for OPEC and non-OPEC countries to meet this weekend.

Gold futures pulled back and is trading at $1169.1 per ounce. Momentum remains downward.

Silver futures pulled back and is trading at $17.005 per ounce. It is in a Squeeze.

Agriculture (DBA) ETF pulled back and closed below its 8 EMA at 19.82.

Commodities (DBC) ETF traded sideways and closed at 15.52 above its 8 EMA.

Bonds
Bond futures (ZB) traded downward and continued on its downtrend. It closed at 148’28.

Yields rose across board amid strength in the dollar and expectations the FOMC will raise rates next week at their meeting. Economic data today was gain positive, giving the FOMC more reason to raise rates amid an economic recovery.

High Yield bond ETF (HYG) traded upward and closed above its 50 SMA at 86.45.

Bonds ETF (TLT) traded sideways and closed on at 118.98. Momentum is downward.

Currencies
The dollar index made gains and is at 101.205. The Euro fell against the dollar due to reaction to the ECB policy meeting today. It was a biggest one day drop since Brexit in late June. The volatility was the result of the ECB announcing a reduced stimulus starting in April 2017 till December 2017.

EUR/USD traded upward but hit resistance on its 50 SMA. It closed with a bearish candle below its moving averages and is at 1.06082 below its 21 EMA. It is now in a Squeeze.

USD/JPY traded upward and is trading at 114.399 above its moving averages.

Relative Strength – Sectors
On a monthly lookback, the relative strength order of the ETFs that are outperforming the S&P 500 are XLF, XLE, XLB, XLI and XLY respectively.

On a 3-month lookback, the relative strength order of the ETFs that are outperforming the S&P 500 are XLF, XLE, XLI, XLB and XLY respectively.

Market Internals
Vix closed at 12.64. Vix futures is at 13.50. Skew is at 119.08. Market sentiment is overly bullish. Market breadth is sloping upward. Volumetric accumulation/distribution is sloping upward.

The Week Ahead
The market internals continue to show strength. Market sentiment is overly bullish and vulnerable to profit taking. The indices are ripe for profit-taking. The prognosis is for the market to pause and pull back before carrying on higher.

Stock of the Day
The Stock of the Day is MITK. Mitek Systems, Inc. develops, markets and sells mobile capture and identity verification software solutions for enterprise customers.

 

To YOUR wealth!

Would you like to learn to trade stocks, options or futures? Drop us an email at jefftohch@gmail.com or call +6010 4343 948.


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