Rendimento das famílias trava a fundo no início do ano

[Figas]

THURSDAY a.m.
August 14, 2003

Grinding it Out
by David Nichols

The stand-off continues in the U.S. stock market, as the grinding trading range extends on into the summer. The weekly chart of the S&P 500 (SPX) is still cordoned off between 975 and 998 on a closing basis, and we'll still look at a break out of this range -- that sticks through a Friday close -- as a big clue where the pent-up energy is going to be released.



Another clue comes from the 10-week exponential moving average. It's the green line on the chart below, with the pink line the 40-week exponential moving average. The 10-week EMA has been holding up price for many, many weeks, and continues to do so, in spite of the general inability of the market to push forward. I'll admit, that's pretty bullish on the surface. The market is certainly reluctant to "give it up". But right now the SPX is flirting with going below its 10-week average at 979



Throughout the bear market until now, the 40-week EMA (pink line) has held back all the rallies, with all the decent-sized rallies making it back to this pink line. So even if the market has really flipped into a longer-lasting bullish mode, a trip back down to this pink line -- currently at 944 -- would go a long way to creating the necessary sentiment fuel to push prices back up, even if it's just for one more stab back at the highs at SPX 1015 or so.

Our contributing analyst Tom McClellan updated his chart of the Nikkei/Nasdaq comparison last night, so I want to re-print it here as I get tons of requests for updates on this comparison.



This is obviously not an exact guide to our markets, but only a historical precedent, and we likely need to see some more downside work --accompanied by a pop up in the VIX -- before we can grind it back up, as called for by this road-map. As I've mentioned, the markets will be hard-pressed to spawn a meaningful rally from these low, low levels on the VIX.

As long as we're on the subject of Japan/US bubble comparisons, it's worthwhile to also match up a chart of the yields on Japanese Government Bonds from their post-bubble era to a current chart of yields on U.S. Treasury Notes. (Thank you to Contrary Investor for this nifty chart).



It was this big market-driven jump in yields that is widely blamed for choking off a fledgling recovery in the Japanese economy back then. Interestingly, we're now hearing these exact same rumbles in the U.S. -- at the same point in our post-bubble period. It's becoming an increasing concern that a rise in interest rates will choke off what little recovery is actually occurring in the U.S. economy. That's why the Fed is trying to "jaw-bone" rates down further. But so far, their talk is having little effect, as yields jumped again yesterday.

Sentiment Dashboard
by Adam Oliensis



SENTIMENT TANK: Filled up 4 points to 10% full of negative sentiment.

SHORT-TERM: Hourly gauge has not broken its advance phase but that phase has weakened.

MID-TERM: Progressed 1 point to 38% on the advance side of the gauge but Confidence regressed to a neutral 0. The lack of momentum in the level of the tank has this gauge cycling through faux advance and decline phases in the middle half of its range (within the bounds of 75 and 25).

LONG-TERM: Weekly gauge moved from neutral to the decline side at 8%. Confidence "pipped" to a bearish 1. This gauge has been trying to roll over for weeks without success.

BOTTOM LINE: The momentum of sentiment is slight, its oscillations more ripples than waves. So, how will we know if/when a more meaningful wave begins? If the tank breaks over 29% or if the SPX breaks to a new low and the tank fails to register a level of 29%. Either of those scenarios would look extra bearish. And on the bullish side? Most bullish would be the odd combination of a higher reading on the tank with an SPX break over 1015. Or a surge of fear without the SPX breaking down...which would give the bulls some fuel to burn.