Bursa KLCI

17 July 2018 – Powell Testifies, indices shot up

Indices
Dow Transportation closed at 10463.13 with a small bullish candle below its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 73.02. Intermediate Cycle is negative and rising slope. Short Term Cycle is negative and rising slope. Market direction – Sell. It is in a weekly Squeeze.

Dow Industrial closed at 25119.89 with a bullish candle above its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 165.78. Intermediate Cycle is positive and rising slope. Short Cycle is positive and rising slope. Market direction – Buy. It is in a weekly Squeeze.

Russell 2000 closed at 1687.26 with a bullish candle above its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 13.941. Intermediate Cycle is positive and falling slope. Short Cycle is positive and rising slope. Market direction: Neutral.

Nasdaq 100 gapped down and closed at 7403.89 with a bullish marubozu candle above its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 130.13. Intermediate Cycle is positive and rising slope. Short Cycle is positive and rising slope. Market direction: Buy.

S&P 500 gapped down and closed at 2809.55 with a marubozu candle above its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 24.95. Intermediate Cycle is positive and rising slope. Short Cycle is positive and rising slope. Market direction: Buy.

Metals and Commodities
WTI Crude oil futures (CL) closed at $66.61 per barrel with a spinning top doji candle below its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 1.41. Intermediate Cycle is positive and falling slope. Short Cycle is negative and falling slope. Market direction: Sell.

Gold futures (GC) closed at 1227.4 with a bearish candle below its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 19.2. Intermediate Cycle is negative and falling slope. Short Cycle is negative and falling slope. Market direction: Sell.

Agriculture (DBA) ETF closed at 17.33 with a small doji candle below its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 0.13. Intermediate Cycle is negative and falling slope. Short Cycle is negative and rising slope. Market direction: Sell.

Commodities (DBC) ETF closed at 16.69 with an inverted hammer candle below its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 0.16. Intermediate Cycle is negative and falling slope. Short Cycle is negative and falling slope. Market direction: Sell.

Bonds
Bond futures (/ZB) closed at 144’31 small spinning top doji candle below its 8 EMA and above its 21 EMA and 50 SMA. Daily trading range was 0.5. Intermediate Cycle is positive and falling slope. Short Cycle is positive and falling slope. Market direction: Sell.

High Yield bond ETF (HYG) closed at 85.58 with a bullish candle above its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 0.205. Intermediate Cycle is negative and rising slope. Short Cycle is positive and falling slope. Market direction: Buy. It is in a weekly Squeeze.

Currency
The dollar index ($DXY) closed at 94.985 with a bullish candle above its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 0.768. Intermediate Cycle is positive and rising slope. Short Cycle is positive and rising slope. Market direction: Buy. It is in the Squeeze.

EUR/USD closed at 1.1660 with a bearish candle below its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 0.0094. Intermediate Cycle is negative and rising slope. Short Cycle is negative and falling slope. Market direction: Sell.

USD/JPY closed at 112.86 with a bullish candle above its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 0.699. Intermediate Cycle is positive and rising slope. Short Cycle is positive and rising slope. Market direction: Buy.

6S(Swiss Franc) – closed at 1.0054 with a bearish candle below its 8 EMA, 21 EMA and 50 SMA. Daily trading range was 0.0076. Intermediate Cycle is negative and falling. Short Cycle is negative and falling. Market direction: Sell. It has exited its daily Squeeze.

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

On a 3-monthly lookback, the relative strength order of the ETFs that are outperforming the S&P 500 are XLK, XLY, XLV, XLP and XLU respectively.

Market Internals
Market sentiment is bullish. Market breadth is sloping downwards showing more losers to gainers. Accumulation/ Distribution is sloping upwards showing nett accumulation. Skew is at 149.58. Vix is at 12.06 and Vix futures is at 14.

The Week Ahead&lt
Market internals have mixed signal but still has strength. Vix remains low but Vix futures has moved above 14 indicating the market is expecting some near future volatility. Skew has increased over the last three days from above 142 to above 149 which is exceptionally high. Transportation and Russell 2000 gained slightly for the day and is not showing any sigh of upward leadership. Hence the gain for the day based on Fed Chairman Jeremy Powell is suspect. The prognosis is to watch for the Skew and the downward selling pressure to be resolved.

Futures Summary(Daily chart):
ES – Intermediate Cycle – Positive/Rising. Current – Positive/Rising. Market direction – Buy.
NQ – Intermediate Cycle – Positive/Rising. Current – Positive/Rising. Market direction – Buy.
YM – Intermediate Cycle – Positive/Rising. Current – Positive/Rising. Market direction – Buy. Weekly Squeeze.
RTY – Intermediate Cycle – Positive/Falling. Current – Positive/Rising. Market direction – Neutral.
GC – Intermediate Cycle – Negative/Falling. Current – Negative/Falling. Market direction – Sell.
CL – Intermediate Cycle – Positive/Falling. Current – Negative/Falling. Market direction – Sell.

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