2/25/2007 9:54:46 AM
Dynamic Trading remains in SELL MODE.
There was some big news last week, as Iran defied the world with its continuing nuclear ambitions and the Bank of Japan bumped interest rates to .50, the highest level in a decade (although still modest).
The Yen initially jumped some on the hike, but soon settled back to its previous levels as all those who are benefiting from the Yen-carry trade started their media blitz. We may not see a quick spike up in the Yen, but I still expect steady strengthening over the near to mid-term.
Also, the January CPI came in stronger than expected and we got more bad news from the sub-prime mortgage arena.
Together all these factors conspired to weaken the markets. Sentiment is slowly starting to sour and the markets have been responding with weakness. It is taking more, in the form of positive economic or earnings news, to drive the market higher, and less negative news to take it down. I expect this to amplify in the coming weeks.
The attached charts show the declining trends and momentum of the major indexes, especially the 60 minute chart. The histogram under the 60 minute chart is one of my momentum indicators on the NDX.
As always, please email me with any questions, suggestions or comments: dynamictrading@stockbarometer.com.