The collision of global markets and social mood

Monday, March 14, 2016

Monday -- Central Banks, Sentiment, Bullish Divergence

S&P E-mini Futures:
Chop chop.

Some head-of-investment-strategy dude from Australia told Bloomberg Radio, “Central banks are going to be dominating market sentiment."

Even though a socionomist would see the causality reversed -- that sentiment is dominating central banks -- it feels as if there is a grain of truth in his words.

With the Dow now having rallied nearly 2,000 points from its recent "ugly" and "grim" sentiment extremes, sentiment is back to levels that usually mark tops. SPX DSI (daily sentiment index) is back to its highest level since it peaked at 75 on 11/3/15, per Chad Gassaway @WildcatTrader.

Asia was green last night, and so far Europe is green (but for Italy which is flirting with flat).

Friday's Bradley Turn Date appears to have been a non-event thus far.

JPY stronger thus far against an even stronger dollar, and commodity currencies are slightly weaker.

Prices are trying to make a stand after nearly a month of choppy correction.

WTI crude and NG notably down.

Gold, platinum, and palladium down. Silver and copper up.

S&P Outlook:
All I'm watching at the moment, a view currently supported by action in ES futures. Price may have a few subdivisions higher.

Note the action in Advancers and Decliners. The charts are showing bullish divergence: more advancers, fewer decliners than at last November's high both on a daily and weekly perspective.


To echo the opening quote, this is a week dominated by the Fed and the BOJ. No reason to be a hero in front of it, but it may to be aggressive in the after effects.

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