Monday, August 2, 2010

8/2 Morningline

  • Nasdaq-100 whipsaws to bull phase (QQQQ).
  • High-yield corporate debt shows intermittent bear sign (JNK).
  • Oil shows a bull phase after brief bear walk (USO).
  • Gold signals bull on fourth day of rise (GLD).
  • Emerging markets gap up above resistance, set higher high (EEM).

Stocks and Rates

QQQQ remained only two days in bear phase on Person's Proprietary Signal (pps) before this morning's reversal. The period produced a 2% decline in price. Today' signal came on an upward gap that brought the price to near-term resistance.

The pps bear signal on JNK was ghosting -- fading in and out like the Cheshire Cat. If the signal becomes persistant at the close, it will be counter the rise that began on July 1. The pps bull phase kicked in on July 7, and today's open was 2.6% above that level. All of that, and a 9.6% annual yield paid monthly.

Below, oil and gold, and global indicators.

Oil and Gold

USO's gap above near-term resistance is as significant, if not more so, than the pps switch to bull phase. The four-day bear phase that preceded produced a 2.8% price gain, open to open, so was a failed signal.

GLD has yet to set a higher high in its four-day climb. With bull signals on both the pps and the parabolic sar, it appears poised to make the effort. However, GLD is still trading below the 20-day simple moving average, and the signal runs counter to a decline that began June 28 and cost GLD 8.5% of its value at the low. The recent bear phase produced only a 0.5% decline over its full lifetime, although the low was 3% below the opening price.


EEM's gap brings to price to where it was on May 3, right before it began the recent sharp decline. The move, to more than 2.5% above Friday's close, was unaccompanied by any signals that would suggest the beginning of a trend.

The Great Reflation: How Investors Can Profit From the New World of Money
OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we reemerge from the wreckage.

Indicator Exchange-Traded Fund Symbols:
EEM - emerging markets
EUR/USD - euro/dollar currency pair
GLD - gold
JNK - high-yield corporate bonds
QQQQ - Nasdaq 100 index
SPY - S&P 500 index
TLT - Treasury long-term bonds
USD/JPY - dollar/yen currency pair
USO - crude oil
VIX - fear index


  • psar - Parabolic Stop and Reverse
  • adx - Average Directional Index
  • pps - Person's Proprietary Signal.
  • ma20 - 20-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
  • adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
  • psar, pps, macd: green for bull mode, red for bear
  • sto: green for overbought, red for oversold, yellow for the neutral zone.

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