Tuesday, March 12, 2013

Morning Market Analysis

Yesterday, Marketwatch ran a story titled, Bond Rally Showing Fresh Signs of Fatigue.  Above are three charts of several bond markets.  On top we see the junk bond ETF, which broke a long-term trend in early February, but which has continued to move higher, except not it's using the previous support as resistance.  The intermediate corporate ETF is in the middle while the long-term corporate ETF is on the bottom.  The intermediate ETF has been trading sideways for about five months, while the long-term bond ETF has been moving in a slightly downward sloping channel for five months.  Both have long-term declining MACDs and both are at important support levels.

While none of these is showing clear signs of a sell-off, the sideways movement indicates there may be some fatigue setting in.

Of the major international ETFs I watch,  the Indian ETF was the best performer last week.  On the year-long daily chart (top chart) notice that the ETF broke trend in February and sold-off to the 200 day EMA.  A six month chart (middle chart) shows that prices rebounded sharply, rallying over 7%, moving from the 56 level to the 60 level.   On the P&F chart (bottom chart) notice that prices overall are consolidating with resistance at the 63 level.