Bursa KLCI

30 December 2016 – A lower close to end 2016

The indices closed the year with a lower close as tax loss selling dominated. Volume was light and fund manager positioned themselves for the year ahead.

The US Dollar index ended the year at 102.40 and the US dollar did not manage to achieve parity with the EURO. Treasury bond futures broke above its upfractal resistance and closed higher. WTI oil futures closed out the year at $53.89 per barrel.

The last few months have been a comeback for the oil which has seen it trading below $27 per barrel at its lowest point. Gold lost its lustre and attempts at breakouts have not succeeded. The financial sector has been on a roar and made big gains since the US Presidential election. And looking at 2017 and the incoming Trump administration, we can expect more uncretainty which means more volatility.

For the year, the Dow Industrials was up around 13% for the year, the S&P about 10% and the Nasdaq 100 up over 7%. The Dow Industrial did not manage to touch 20,000 and the rally in the indices fizzled out in the last week of the year.

Indices (Weekly chart)
Dow Transportation closed the week at 9043.90 with a bearish candle within a bearish doji sandwich candle pattern. Weekly momentum remains upward. Weekly volumetric buying pressure is at 12.6%.

Dow Industrial closed the week at 19762.60 with a bearish candle. The index is still within striking distance of 20000. Momentum is sharply upward. Weekly volumetric buying pressure is at 90.3%.

Russell 2000 closed at 1357.1298 with a bearish candle for the week. Momentum is sharply upward. Volumetric buying pressure is at 57.5%.

Nasdaq 100 closed at 4863.6196 with a big bearish candle. Momentum remains upward. Volumetric buying pressure is at 75.2%. The index is in a weekly and monthly Squeeze.

S&P 500 closed at 2238.83 with a bearish candle. Momentum is still upward. Volumetric buying pressure is at 78.8%.

Metals and Commodities (Weekly charts)
WTI Crude oil futures closed at $53.89 with a small bullish candle. It needs to break through the upfractal at 54.51 to continue on its uptrend.

Gold futures closed the week at 1152.00 with a bullish candle. It has to close with another bullish candle next week to form a morning star candle pattern. Momentum remains downward.

Silver futures closed slightly higher at 15.960 with an inverted hammer candle. Momentum remains downward.

Agriculture (DBA) ETF closed up for the week at 19.97 with a small bullish candle. It is now range trading between 20.35 and 19.62.

Commodities (DBC) ETF closed at 15.84 with a small bullish candle. Momentum is upward.

Bonds (Weekly charts)
Bond futures (/ZB) closed with a bullish candle at 150’09. Momentum remains downward and there is a short term reversal signal.

High Yield bond ETF (HYG) closed with a small doji candle at 86.55. Momentum remains slightly upward.

Bonds ETF (TLT) closed with a bullish candle at 119.13 and a reversal candle upward.

Currencies (Weekly charts)
The dollar index closed with a bearish candle at 102.400. Momentum remains upward.

EUR/USD closed slightly upward with a big spinning top doji candle at 1.05266. Momentum remains downward.

USD/JPY closed with a bearish spinning top doji candle at 117.053. A reversal signal has appeared on the forex pair. Momentum remains upward.

Relative Strength – Sectors
On a monthly lookback, the relative strength order of the ETFs that are outperforming the S&P 500 are XLU, XLK, XLP, XLF and XLV respectively.

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

Market Internals
Vix closed at 14.04. Vix futures is at 15.125. Skew is at 127.26. Market sentiment is slightly bearish. Market breadth is sloping downward. Volumetric accumulation/distribution is sloping downward.

The Week Ahead
Market internals are showing weakness. The Bond futures are showing a reversal. The prognosis is for the market to reverse downward.

Stock of the Day
The Stock of the Day is AGN. Allergan is a specialty pharmaceutical company. The company is engaged in the development, manufacturing, marketing and distribution of pharmaceutical products, medical aesthetics, biosimilar and over-the-counter pharmaceutical products.


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