Crude Oil Declines

Ever since I exited my long crude oil position around June 15th, many of you have been asking me why I don't get back into this market. Well if you look at the above chart you will see why. The momentum is clearly down which tells me to stay on the sidelines until the momentum shifts back to the upside. If things change I will post my opinion on crude oil in future updates but for now I'm not touching this market. Here is the link to my post from June 15th.

Bonds Rally On Good Volume

Today TLT (bonds) reached its highest level in the past 31 days. You'll also notice the increase in volume on today's rally. Looks like the seasonal rally I've been posting about is underway.

Japanese Yen Surges

It's been awhile since I've posted about the Japanese Yen so here's an update. Back on May 12th I became bullish on the Yen based on the inverse head and shoulders pattern. Today's surge in the Japanese Yen took this currency well into the head and shoulders upside objective. If you are long this currency, the current price level would be a good area to exit the trade. You can see my original post and what the chart looked like from May 12th by clicking here. You can also view the June 9th update by clicking here.

Stock Market Technicals Continue To Weaken

Last week I commented about how the technical picture for the stock market was turning bearish, well today's action added further confirmation to that viewpoint. The dow is now making lower highs and lower lows which can mean only one thing, the short-term trend is now down.

Stock Market - Technical Picture Turning Bearish

Above is a daily chart of the S&P500 and as you can see there is a head and shoulders pattern developing. A move below last month's low will confirm the pattern suggesting lower prices for the stock market in the days and weeks to come.

Below is a weekly chart of the S&P500 and in the lower pane is the stochastic indicator. As you can see the stochastics are on a sell signal right now after being in overbought territory. Notice on the price chart how the S&P tends to reverse its trend once it touches the 50 week moving average. In my opinion the technical picture is beginning to turn bearish for stocks especially if last month's low is taken out.

TLT - At A Key Level

Last month I wrote about how the bond market tends to put in its seasonal low around the May/June time period. As you can see in the above chart of TLT, this market has made its low in June which is when I'd expect this market to bottom. The question that comes to mind is whether or not this is a minor bottom or the beginning of a new uptrend.

Right now this market is at a key level. There is a very significant trendline as well as a resistance level right here where the market closed. If TLT can clear this area by closing above 95.00, there is a good chance in my opinion that the trend will then have turned back up. As always we'll see what happens.

NASDAQ- Support Holds

Stocks moved higher today with the NDX, S&P and Dow all up about 2% from yesterday's close. As you can see buyers have entered the market at the NASDAQ's 50 day moving average. As long as stocks continue to make higher highs and higher lows we have to assume that the trend is up. A move below this week's low will turn the trend from up to down.