20 September 2019 – Weekly Review – China Trade Delegation flies home, Indices followed South

Indices (Weekly chart)
Dow Transportation closed at 10454.36 with a bearish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 405.63. Fractal Chaos Band – Closed within its FCB. Long Cycle Wave – positive and rising. Medium Cycle Wave – positive and rising. Short Cycle Wave – positive and rising. Market direction – Strong UpTrend. Momentum – Strong Upward. RSI – 51.2. The index is in a weekly and monthly Squeeze.    

Dow Industrial closed at 26935.07 with a bearish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 373.02. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and rising. Medium Cycle Wave – positive and rising. Short cycle Wave – positive and rising. Market direction – Weak UpTrend. Momentum – Strong Upward. It is in a monthly Squeeze. RSI – 56.3.

Russell 2000 closed at 1559.7649 with a bearish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 36.249. Fractal Chaos Band -Within its FCB. Long Cycle Wave – positive and rising slope. Medium Cycle Wave – positive and rising slope. Short Cycle Wave – positive and rising slope. Market direction – Strong UpTrend. Momentum – Strong Upward. RSI – 53.1.       

Nasdaq 100 closed at 7823.5533 with a doji candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 158.625. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and rising. Medium Cycle Wave – positive and rising. Short cycle – positive and rising. Market direction – Strong UpTrend. Momentum – Strong Upward. RSI – 56.5.     

S&P 500 closed at 2992.07 with a doji candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 43.42. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and rising. Medium Cycle Wave – positive and rising. Short cycle Wave – positive and rising. Market direction – Weak UpTrend. Momentum – Strong Upward. RSI – 57.8.

Metals and Commodities (Weekly charts)
WTI Crude oil futures (CL) gapped up and closed at $58.39 per barrel with a bearish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range was 8.56. Fractal Chaos Band – Within its FCB. Long Cycle Wave – negative and rising. Medium Cycle Wave – negative and rising. Short cycle – positive and falling. Market direction:- Strong UpTrend. Momentum – Weak Upward. RSI – 52.9.

Gold futures (GC) closed at 1524.4 with a bullish hammer candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range was 33.8. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and rising. Medium Cycle Wave – positive and falling. Short cycle – positive and falling. Market direction:- Weak UpTrend. Momentum – Weak Upward. RSI – 73.3. Gold is still overbought on the weekly chart!

Bonds (Weekly charts)
Bond futures (/ZB) closed at 161’16 with a bullish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range was 3.9375. Fractal Chaos Band – Closed within its FCB. Long Cycle Wave – positive and falling. Medium Cycle Wave – positive and falling. Short cycle – positive and falling. Market direction:- Weak UpTrend. Momentum – Weak Downward. RSI – 61.9.         

High Yield bond ETF (HYG) closed at 87.48 with a bullish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 0.38. Fractal Chaos Band – Closed above its FCB. Long Cycle Wave – positive and rising. Medium Cycle Wave – positive and rising. Short cycle – positive and rising. Market direction:- Strong UpTrend. Momentum – Strong Upward. RSI – 60.6.

Currencies (Weekly charts)
The dollar index ($DXY) closed at 98.462 with a bullish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 0.8859. Fractal Chaos Band – Closed within its FCB. Long Cycle Wave – positive and rising. Medium Cycle Wave – positive and rising. Short cycle – negative and rising. Market direction:- Strong UpTrend. Momentum – Strong Upward. RSI – 56.1.

EUR/USD closed at 1.1015 with a bearish candle below its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 0.0096. Fractal Chaos Band – Closed within its FCB. Long Cycle Wave – negative and falling. Medium Cycle Wave – negative and falling. Short cycle – negative and rising. Market direction:- Weak DownTrend. Momentum – Strong Downward. RSI – 40.9.   

USD/JPY closed at 107.57 with a low closing doji candle above its 8 EMA and below its 21 EMA, 50 SMA, 200 SMA. Weekly trading range – 1.054. Fractal Chaos Band – Within its FCB. Long Cycle Wave – negative and rising. Medium Cycle Wave – negative and rising. Short cycle – positive and rising. Market direction:- Weak DownTrend. Momentum – Strong Upward. RSI – 46.5.

Relative Strength – Sectors
On a 1-monthly lookback, the relative strength order of the ETFs are XLU, XLV, SPX, /ES, XLB, XLF, SPY, XLI, XLE, XLK, XLY and XLP respectively.

On a 12-monthly lookback, the relative strength order of the ETFs are XLU, SPX, /ES, XLK, XLP, XLI, XLY, XLF, XLB, XLV and XLE respectively.

Market Internals
Market Sentiment is bullish. Market Breadth is sloping upwards showing more gainers than losers. Volume Acc/Dis is sloping downwards showing distribution. Skew is at 117.50. Vix is at 15.32 and Vix futures 17.27.

The Week Ahead
The market closed down on news that the China trade delegation was heading home early. The implication is that the trade war will be prolonged and there is no end in sight. Indices which looked to break out to new high looks to be reversing downwards. The market has become very news driven and is more suitable for short term trading. The prognosis is for continuing market volatility.

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