20120914 Intermarket Relative Strength Review
As we trek through this week’s special events, how the market would react was all the buzz. The mantra quickly became buy the rumor and sell the news. That didn’t work out so well as buyers showed up the last two days in droves. Looking closer, the Weekend Breadthalizer showed the move continues to broaden with each week. Neither Uncle Ben nor little Timmy disappointed this week. The events went off like a champ and so did the markets plowing over those who tried to out smart the trend.
Continuation this week solidified the equity breakouts we have been talking about for a while. Surprisingly the $QQQ looks the least extended on this leg which bodes well for more.
The $DIA continues to bring up the rear, but the RS pecking order is as bullish as it gets at the moment.
Bonds and Currency
Risk continues to stay way out ahead with $JNK not looking back again this week.
$LQD continues to hang tough as well, but I still feel we should look for more distribution here as money rotates fueling the next leg in equities.
$IEF and $TLT continue to get sold hard even with the Fed announcement this week. more risk tells.
$UUP continued to get whacked as the Fed continues to try and inflate. So much fuel for risk in this section this week.
$SLV stays the top dog in RS this week as it surges Thursday through its small tight flag. The $DBC is next with $JJC not far behind now. Commodities are dominating in this environment and I expect that to continue but not in a straight line.
$DBA ended the week with a nice breakout above the highs and the big VaP bar.
$USO right at a cluster of resistance, but looks higher none the less.
Interesting to see $GLD at the bottom of the commodity list, but this chart shows buyers have been showing up in growing numbers. May rest but wants more.
Looking at these charts together we can see the markets got what they wanted from all sides this week. The last chance for the bears was for Bernanke to disappoint, and that didn’t happen. He actually game out guns blazing. This should continue to fuel things in the coming months. It would actually be nice to have a few down days to reset a little. I think we will be lucky if we get it.
Good Luck! It is there for you to make.
If you like what you see, follow me on StockTwits or Twitter.