Disappointing Japanese GDP to further pressure the Nikkei, just as yen strength bodes ill for the risk-on carry-trade

nikk 16feb14

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“Major monetary intervention” signaled by last week’s SSEC divergence truly massive, compares to China’s financial crisis injection in late 2008

ssec2 16feb14

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Breakout in Silver suggests SLV will out-perform GLD

Breakout in SLV, on the strength of its own miners vs. the metal, suggests SLV will out-perform GLD over the balance of their advance

sil 16feb14

slv1 16feb14

slv2 16feb14

slv3 16feb14

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Russell 2000 in relative strength downturn

Russell 2000 joins other former market leading sectors in relative strength downturn (critical because relative weakness begets absolute weakness)

rut-spy 14feb14

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Divergent and declining dollar-yen continues to pressure the Nikkei and the all-important carry-trade

usd-yen 14feb14

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Retail reports validating earlier slumping XRT price action; pattern must right itself soon, or risk an important primary trend break

xrtw 13feb14

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Gold miners continue to leverage their impressive divergent bottom

Pullback contained, the gold miners continue to leverage their impressive divergent bottom, pushing past one resistance after another

gdxd 11feb14

gdxw 11feb14

goldm 11feb14

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Although the VIX is speaking, only part of its message is being heard

Many believe the following chart of the VIX signals the end of the global correction.    The fear index climbed to the 20-level late last week, as it did twice on apparent corrections in 2013, only to fail at resistance and allow stocks to turn higher again.

vix d 09feb14

A similar expectation would be reasonable now, were it not for the weekly chart of the VIX below.   It shows a continuing positive divergence in the VIX primary trend, with the indicators healthier on this test of resistance than on both prior tests.  The differences suggest a different outcome this time around, arguably a push past 22.

vix w 09feb14

But the weekly is not the only improved VIX pattern.  The monthly VIX shows development of its own upturn.  And if it’s not quite as mature, even a forecast breakout in the long-term VIX carries consequences for stocks that far exceed those associated with the weekly.  In fact, nothing could affect stocks more.  Think of the last divergent monthly upturn in the VIX circa 2007.

vix m 09feb14

The monthly VIX has been improving for a year.  Progress began in March 2013, when the index posted its last new low.  In the eleven months since, each VIX low has been successively higher.  Each bounce high over the period has also been successively higher.  That’s a pattern that should be respected, especially against a backdrop of positively divergent indicators.  Instead, as of this writing, the pattern has been ignored.  It should not be.

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Gold miners reluctance to correct, or correct meaningfully, signals systemic issues (hardly inflation)

gdx-gld 05feb14

gdxd 05feb14

gdxw 05feb14

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German equities already trading compromised, now increasingly primary trend vulnerable

ewg 04feb14

ewgw 04feb14

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Primary trend upturn in Treasury bond performance vs. Muni and TIP bond performance another deflation signal

tlt 03feb14

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The trading breakdown in the bank sector stocks was one thing, their primary trend breakdown, as of today, is quite another

bkx 03feb14

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Major averages all break support, committing their respective primary trends to likely longer, deeper corrections

rut 03feb14

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Carry-trade update: outlook worsens

Carry-trade update: outlook worsens, as Nikkei breaks 10-month trend line, indicators continue negative and, most importantly, yen breaks to a new trading high

nikk 03feb14

 

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Continuing bear market in copper threatens new lows, challenging growth claims pretty much everywhere

jjc 02feb14

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Market Outlook

indud 02feb14

rutd 02feb14

rutw 02feb14

vixw 02feb14

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Message from Interest Rate Divergence

Message from interest rate divergence, first, and relentless yield slide, since the divergence, finally heard, as Goldman becomes the first to revise GDP down

tnxd 02feb14

tnxw 02feb4

tip-tlt2-1-14

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