Wednesday, September 5, 2012

Morning Market Analysis

The transport ETF has been trading between 88 and 94 for the last three months.  More importantly, prices are now at the lower end of the trading range while also being below the 200 day EMA.  Prices are weak and momentum is dropping.  This chart does not bode well for the overall market as a whole.

The homebuilding ETF, while still rallying, has lost some of its upward momentum.  For the last three weeks, the index has printed three small candles.  However, the underlying technicals are still strong -- momentum and the CMF are rising, and the EMAs are all moving higher.  But a big negative is the declining volume, indicating that interest in the rally is waning for now.

So far this week, the Chinese ETF is trading below its lower support.  This could mean that traders have given up on a possible stimulus from the central government in China and are selling shares.

The Indian market is also right at support.  A trend break here would make the next logical target the multi-year lows.

The German market (top chart) and the French market (bottom chart) are both still in an uptrend.  However, notice that both also have declining MACDs and EMAs that are becoming more horizontal in their orientation.  Also note that prices have been trading sideways with a slight downward bias for the last two weeks.