March 20, 2016

Sunday Newsletter

The Week in Review (3/20/16)

 

US Index performance (5d): SPX +1.4%, DJIA +2.2%, RTY +1.3%, NDX +1.1%, TLT +1.3%

Equities climbed for a 5th week in a row and the SPX is now positive for the year +1.3%. Last week, central banks were in the spotlight with the BOJ and the US Fed holding their meetings. While the BOJ kept their stimulus plan in effect it was the US Fed with the biggest surprise that kept the upward momentum. Fed Chair Janet Yellen not only did not raise interest rates but also scaled back expectations for further 2016 rates increases from four to two. This caused the US dollar to sell off which in turn contributed to further gains in commodities and dollar sensitive sectors like Industrials. For the week, Crude oil gained another +2.4% and is now up a startling +50.5% from the February 11th low. Other commodities that also gained last week were Coffee +6.8%, Sugar +4.8%, Nat Gas +3.9%, and Timber +3.7%.

 

Weekly Perf 3-19

The Week Ahead

Next week in US Economics we have more Home Data, Durable Goods, and 4th quarter GDP estimates (see table below for details). On Monday, Apple is expected to unveil its smaller screen iPhone and an updated iPad. The meeting is expected to start at 1 pm EST. Further election primaries continue as Arizona, Alaska, Idaho, Hawaii, Utah and Washington voters head to their presidential primaries and caucuses. Companies releasing earnings include Enel SpA, Hermes International SCA, Nike Inc. and Petroleo Brasileiro SA. European and U.S. markets are closed on March 25 as part of the Easter holiday.

ECON 3-19

 

A couple of observances in the ESM6 (S&P futures) Daily chart:

  1. 2045 VPOC (Virgin Point of Control) – Remember, a point of control is the level in the futures that is inside the value area where the greatest amount of volume traded in the prior session. A VPOC is a previous point of control that has never been touched or tested and can act as a “magnet” for price. Once the magnet is touched / tested price may then retreat away from it. The ESM6 closed at 2038 and is only 7 points away from this 2045 VPOC (see below).
  2. The RSI (Relative Strength Index) is now in overbought territory at 70.6. The last time we the RSI was over 70 on the ES was 11/3/15 which represented a 6 month high.

ESM6 –   Daily Chart

ESM6 3-19

Source: ThinkorSwim

 

ETF Flows for the Week

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About Christian Fromhertz
Christian Fromhertz is the founder & CEO of The Tribeca Trade Group.

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