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14 September, 2009
The S&P500, DJIA and NASDAQ Composite all reached new highs last week signaling another breakout to the upside. The Shanghai All Share Index (SSE-ALL) has had a strong rebound off it's Fibonacci 50% retracement low of 2640. To confirm this rebound the SSE-ALL must rise above 3005, some 15 points away. This is quite an important thrust as fundamental commentators on the Chinese equity indices have seen the weakness associated with this retracement as the potential end to the demand for resources and hence a potential end to the international equities up trend. A continuing rise above 3005 will show the retracement to be nothing more than a standard technical retracement following a massive rise of 98% from October 2008 to 4 August 2009. European markets also all made new highs for 2009 last week.
The
equities trends march onwards and upwards for the time being. Active
investors in equities should remain 100% invested until price action
shows otherwise and there are no early signs yet of any change in the
technicals.
Gold, Silver and Platinum all had fresh break outs to the upside with Gold closing above $1000.
Zinc and
Lead finished the week down after both making new highs for 2009 earlier
in the week. Copper has reached a strong level of resistance and has
been tracking sideways for a month now forming a rectangle, which is
typically a continuation pattern. If the trend plays out like a text
book trend, a breakout in Copper should occur to the upside in the next
week or two. If not, and a breakout to the downside occurs this could be
a strong sign of weakness in metals prices which could flow through to
weakness in equities.
The next levels of resistance in the S&P500 are 1122 and then 1200 with 1200 being the stronger of the two. There is a real chance now of the S&P500 going all the way to 1200 before we have another retracement of note. As you should know by now as a follower of this e-newsletter, "anything can happen." So weekly analysis must continue looking for a signal of weakness upon which to act. The S200 is rising steadily. The S&P500 is rising along the upper trend line of it's channel threatening a breakout, potentially into a new channel at a steeper gradient. Of course the opposite could happen with a fall into the lower half of the channel but the odds favour the former. Divergence occurred with the SIROC in August. Divergence patterns can be found in many market tops. However, there was a failed divergence in June which is common in strong trending markets. To confirm failure of the current divergence pattern the SIROC must rise higher than 76.11 where it reached at the end of August. These divergence patterns are also evident in most other momentum indicators such as the MACD. Should the S&P500 reverse it's direction support should hold at 1006 in the first instance and then the rising dotted trend line. There is strong support at 950 which, if transgressed, would indicate strong weakness.
The ALL-ORDS made a new high close for 2009 with all sectors in the green for the week, even the ailing Utilities sector. This is a strong market and cannot be ignored. Doomsdayers that have remained on the sidelines are now well behind the game. There is still plenty of cash not in this market but we have seen rising volumes in the last two months as more comes into the market. The ALL-ORDS is trading in the upper half of its channel reaching a weak level of resistance on Friday. Thursday and Friday also saw a small break above the Fibonacci 38.2% retracement level. The next level of resistance is around 4930, some 7% away from Friday's close. On the downside, support is on the rising dotted trend line and below that at the S40 or the solid black support line at 4290. The SPA3CFD Public Portfolio shot ahead by 31.72% over the last week and is up 141.5% over the last 12 months. This is what can happen with leverage when you have one or two open trades that are flying, such as Medusa (MML) and United Group (UGL). When the medium-term trends eventually end in these stocks, despite locking in some juicy profit there is bound to be some end-of-trade drawdown on large leverage that will cause a retracement in the portfolio equity curve. But that is to be expected when trading with leverage. The SPA3 public portfolios continue to outperform the market by a large margin. See the performance table below that shows the comparative compounded annual returns.
Compounded Annual Return
The SPA Hedge portfolio uses the SPA3 hEdge rules to hedge the SPA3 Portfolio during SPA3 High Risk Market periods. For more information on using SPA3 to manage your active investment portfolio click here. The ALL-ORDS can be used as an indication of equity Managed Fund and equity Managed Super Fund past performance. All actions each day for SPA Portfolio 1 are available to ShareFinder members who use Market Master through our daily download software along with the actual public portfolio files for importing into the SPA software. Intelledgence and SPA Buy Signals The table below shows the number of Intelledgence and SPA Buy signals for the past three weeks.
*Our scan includes stocks that have had four zero trading days unless it is a suspension. Before entering we ensure that the position size calculated has at least 5 times the average daily traded liquidity for that stock. The table below shows a sample of some of the Intelledgence and SPA buys that occurred last week.
For SPA buys, a complete list is available to SPA customers by using
the 'SPA Scan' under the 'SPA' pull down menu in Market Master X-ec.
For Intelledgence buys, a complete list is available to Intelledgence
customers in the Members Zone by choosing 'Intelledgence', 'Alerts'. ShareFinder provides more detail on all of the above items at our eUGMS. The eUGMs are monthly multimedia presentations available to ShareFinder members only. |
