Weekly Index Chart Check and $UUP, $EUO, $TLT, $TBT

By | July 27, 2014

The trend on the weekly index charts is higher. They continue to hold above their 10 week (50 day) moving averages, the Russell just barely, and the 10 week averages are above the 40 week (200 day) averages. There are some caution signs on this timeframe, however, like the DOW testing the lower end of the rising triangle pattern it has been trading in for several months, the small doji star on the S&P 500 chart, and the more serious gravestone doji on the Russell at key moving average support.

55. Index weekly chartchart

There are more issues on the daily charts as well, in particular the NASDQ chart. The price action this month is a smaller iteration of the pattern seen on the Russell since the beginning of the year. A horizontal channel defined by two highs and two lows, and a recent trend line break. Similarly, just as a gravestone doji formed on the Russell weekly chart, a doji formed on the NASDAQ daily chart. These charts need some immediate damage control next week to avert further technical deteriorations.

55. RUT daily chart

Treasury yields continue lower with the ten year closing on its low of the week, and likely to test the 38% retracement level of its 2012 low and 2013 high. The TLT broke out of out of a small channel consolidation, and the TBT is back down to its 2012 and 2013 lows.

55. 10 year bond weekly chart

55. TLT TBT chart

I had previously written about the bottom that was forming in the PowerShares US Dollar Index Bullish Fund (UUP), below clearly defined resistance. This week there was a break above that resistance and the 50 day moving average. There was also a break above an important resistance line in the ProShares UltraShort Euro (EUO) fund which, of course, reflected the continuing weakness in the Euro currency.

55. UUP EUO chart

The Volatility Index was up 7% on Friday and the 5% on the week, adding to the sense of bearishness that several of these index charts project.

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