Bancos centrais não param de acumular ouro. Tendência deve manter-se no próximo ano

[Camisa_Roxa]

MARKET TIMING:
STOCKS: NEUTRAL (as of 08/30/02 close)
BONDS: BEARISH (as of 01/03/01 close)
GOLD: BULLISH (as of 12/20/99 close)

MARKET OUTLOOK:


SUPPORT RESISTANCE
Nasdaq Composite 1345 1380
S&P 500 875 905
Dow Industrials 8330 8540

Stocks headed higher at Monday's open, with the Dow up 96.47 points while the Nasdaq rose by 18.02 points. JC Penney's (JCP) reported today same store sales targets were met for last week while the company was running slightly ahead of plan for this Christmas season. Ameren (AEE) has forecasted that they well fall short of 2003
analyst estimates. Shares of Ameren are trading at 41.14, under Friday's close of 41.95.

In the TrendWatch from November 14th of this year (click here to view), we took a look at expiration Friday's and realized that the volatility associated with expiration Friday's may have become a thing of the past, as those Friday's typically closed about where they opened.

We also mentioned that most of the volatility that had previously occurred on Friday was starting and playing out earlier in the week. Today, since this week is the notorious "triple-witching" week, I thought we'd look at recent changes during the triple witching week to see if there were trends that should be noted. Indeed, while the triple-witching Friday may have been tame, the week didn't necessarily have to be. The results for changes in the Dow are in the table below.

DOW CHANGES - TRIPLE WITCHING WEEK



This data does not particularly bode well for this week, and confirms some of the recent bearishness we've been seeing and writing about. Even removing the triple witching week from September of 2001, seven out of the other ten weeks were losing weeks. This is not to say that this week will be bearish, as the market is up as I write this. But there is a clear tendency for a bearish triple-witching week.



We?ve often mentioned, ?but a single close does not a trend make.? The Nasdaq Composite proved this rule yet again with Monday?s strong reversal of the single close below our key 1370-support/level and allowed the market to not only trade back into the 1380-1400-neutral zone, but close at the very high end of it.

Remember, we?re bearish below 1380-1400, neutral within and bullish above, from a price technical perspective. As a result, we?re still neutral the OTC.

Meanwhile, from a trend following perspective, the short-term trend remains lower for the OTC, so we remain bearish there, while at the same time the intermediate-term bearishness was not confirmed, as we didn?t get the confirmation close below 1370. Therefore, the bullishness has been saved, for now.

However, we?re still in the oversold reading of the stochastic indicator, which continues to support the bearish short-term daily trend until we see a cross above 20 by %D (red).

Also, take a look at the rather impressive head and shoulders formation on the daily chart in the tech market. We have two shoulders around 1400-1420 on either side of the head at 1500. This adds up to a potentially bearish formation should we see follow through again below 1370.

Therefore, we?ll become particularly bearish in the intermediate-term as well should we see follow through below 1350 at this point. Meanwhile, the market has the opportunity to reverse this bearish formation with follow through higher and a hold above the major support/resistance line of 1400 we?ve mentioned so often.

Daily Chart of OTC showing neutral enviro below 10dayEMA (red) and above 50dayEMA (blue) yet plotting a potentially bearish head and shoulder formation



In addition to Santa bringing the bulls an early Christmas in what looks like the beginning of a traditionally positive week heading into Christmas, Lehman increased its model portfolio exposure by a whopping 25% Monday, with specification to go into tech.

On the economic front, the reports are rather light this week with the CPI coming in at 8:30amET Tuesday and the Leading Economic Indicators (LEI) report scheduled for Thursday.

Economic Overview



Indicators:

The RYDEX (Nova + OTC)/Ursa Ratio is estimated to have come in at 1.33 Monday following the 1.22 reading Friday following the 1.33 reading Thursday. The ratio continues to drift lower after along the key lower band of extreme pessimism, but has yet to violate the indicator. Monday we likely saw a tick up in the indicator, yet with no actual penetration and now confirming closes higher, the bias remains neutral. The lower band stands at 1.06, while the upper band is at 2.63.

Daily Chart of the Rydex (Nova+OTC)/Ursa Ratio



The CBOE Volatility Index (VIX) opened near Friday?s high and above the prior close only to be totally reversed to close below the open and at a new term low. This is therefore bullish, and as such, even though we?ve yet to break below the 30-level, the additional follow through on the recent bullish (for equities) prints lend weight
to an early switch back to bullish, after switching to neutral briefly recently. Stop will come above Monday?s high of 32.73, while confirmation will come below 30.

Daily Chart of the Volatility Index (VIX)



The CBOE equity put/call ratio (EPCR) was 96% Monday following the 67% Friday reading following the 68% Thursday reading. The indicator is now above the key upper band even with the rise in the market. Option players were trading puts like crazy on this day with such a strong move higher. Add to that a spike to 135% during the first block of trade, which led to the strength throughout the session and you certainly have a bullish situation for the equity market. However, as we haven?t seen an actual turn lower in the sentiment to below the key upper band, this bullish bias remains unconfirmed. The lower band is at 0.39, while the upper band is at 0.89.

Daily Chart of the CBOE Equity Put/Call Ratio



Bottom Line:

The bulls went on a stampede Monday as buyers kept bidding up shares right into the close. The bearish move from Friday was not confirmed and as a result, the markets plotted moves right back into the bullish zones above key levels of 455-460-OEX and 1370-OTC. However, these moves have yet to be confirmed and the short-term trend remains bearish below the key 10dayEMA from a trend following perspective. However, as long as the markets hold above the aforementioned levels, which serve as stops, the bullishness remains from a price technical perspective, while sentiment?s also supporting with its own bullishness. For now we?re neutral to bullish awaiting confirmation.

Indication Summation