11 October 2019 – Weekly Review – Temporary Trade Truce?

Indices (Weekly chart)
Dow Transportation closed at 10291.98 with a bullish candle above its 200 SMA and intertwined with its 8 EMA, 21 EMA, 50 SMA. Weekly trading range – 544.48. Fractal Chaos Band – Closed within its FCB. Long Cycle Wave – positive and falling. Medium Cycle Wave – negative and falling. Short Cycle Wave – positive and falling. Market direction – Neutral. Momentum – Weak Downward. RSI – 49.2. The index is in a weekly and monthly Squeeze.    

Dow Industrial closed at 26816.59 with a bullish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 874.17. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and rising. Medium Cycle Wave – positive and falling. Short cycle Wave – positive and falling. Market direction – Strong UpTrend. Momentum – Weak Downward. It is in a monthly Squeeze. RSI – 54.7.

Russell 2000 closed at 1511.9005 with a small bullish candle below its 8 EMA, 21 EMA, 50 SMA and above its 200 SMA. Weekly trading range – 53.28. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and falling slope. Medium Cycle Wave – negative and falling slope. Short Cycle Wave – negative and falling slope. Market direction – Strong DownTrend. Momentum – Strong Downward. RSI – 47.4.       

Nasdaq 100 closed at 7843.875 with a bullish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 300.29. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and falling. Medium Cycle Wave – positive and falling. Short cycle – positive and rising. Market direction – Strong UpTrend. Momentum – Weak Downward. RSI – 56.5.     

S&P 500 closed at 2970.27 with a bullish candle above its 8 EMA, 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 100.62. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and falling. Medium Cycle Wave – positive and falling. Short cycle Wave – positive and falling. Market direction – Strong UpTrend. Momentum – Weak Downward. RSI – 55.4.

Metals and Commodities (Weekly charts)
WTI Crude oil futures (CL) closed at $54.91 per barrel with a bullish candle below its 8 EMA, 21 EMA, 50 SMA and and above its 200 SMA. Weekly trading range was 3.55. Fractal Chaos Band – Within its FCB. Long Cycle Wave – negative and rising slope. Medium Cycle Wave – negative and falling slope. Short cycle – negative and falling slope. Market direction:- Strong DownTrend. Momentum – Downwards. RSI – 46.7.

Gold futures (GC) closed at 1493.5 with a bearish candle below its 8 EMA and above its 21 EMA, 50 SMA and 200 SMA. Weekly trading range was 63.6. Fractal Chaos Band – Within its FCB. Long Cycle Wave – positive and falling slope. Medium Cycle Wave – positive and falling slope. Short cycle – negative and falling slope. Market direction:- Weak UpTrend. Momentum – Strong Downward. RSI – 63.6.

Bonds (Weekly charts)
Bond futures (/ZB) closed at 160’21 with a bearish marubozu candle below its 8 EMA and above its 21 EMA, 50 SMA, 200 SMA. Weekly trading range was 5.1562. 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 – 56.9.         

High Yield bond ETF (HYG) closed at 86.77 with a bullish candle below its 8 EMA and above its 21 EMA, 50 SMA, 200 SMA. Weekly trading range – 0.7899. Fractal Chaos Band – within its FCB. Long Cycle Wave – positive and falling slope. Medium Cycle Wave – positive and falling slope. Short cycle – positive and falling slope. Market direction:- Neutral. Momentum – Weak Downward. RSI – 52.6.

Currencies (Weekly charts)
The dollar index ($DXY) closed at 98.332 with a bearish candle on its 8 EMA and above its 21 EMA, 50 SMA, 200 SMA. Weekly trading range – 1.028. Fractal Chaos Band – Closed within its FCB. Long Cycle Wave – positive and rising slope. Medium Cycle Wave – positive and rising slope. Short cycle – positive and falling slope. Market direction:- Weak UpTrend. Momentum – Strong Upward. RSI – 54.

EUR/USD closed at 1.1042 with a bullish candle on its 8 EMA and below its 21 EMA, 50 SMA and 200 SMA. Weekly trading range – 0.0121. Fractal Chaos Band – Closed within its FCB. Long Cycle Wave – negative and falling slope. Medium Cycle Wave – negative and rising slope. Short cycle – negative and rising slope. Market direction:- Weak DownTrend. Momentum – Weak Downward. RSI – 43.8.   

USD/JPY closed at 108.43 with a big bullish candle above its 8 EMA, 21 EMA and below its 50 SMA, 200 SMA. Weekly trading range – 1.9839. Fractal Chaos Band – Within its FCB. Long Cycle Wave – negative and rising slope. Medium Cycle Wave – negative and rising slope. Short cycle – positive and rising slope. Market direction:- UpTrend. Momentum – Strong Upward. RSI – 50.7.

Relative Strength – Sectors
On a 3-monthly lookback, the relative strength order of the ETFs are XLK, XLU, /ES, XLP, SPX, SPY, XLY, XLF, XLI, XLB, XLV and XLE respectively.

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

Market Internals
Market Sentiment is rather bullish. Market Breadth is sloping upwards showing more gainers than losers. Volume Acc/Dis is sloping upwards showing accumulation. Skew is at 122.40. Vix is at 15.58 and Vix futures 15.89.

The Week Ahead
Market had been volatile the whole week. What looks like a bearish market has a new lease life with news that small progress has been made with the trade negotiation. Indices reversed upwards and bonds sold off. Market internals are showing strength. Hight Yield bond also reversed and trended upwards. The prognosis is for continuing strength and for the indices to keep trending upwards. .

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