It’s the close of the month, as well as the quarter too. Let’s see what the differently monthly charts tell about the longer term trends…
The S&P500 closed at a historical high with renewed strength in the MACD, ready to push forward and upward. There appears to be no bearish hints here; although I would be very cautious.
JNK, the high yield bond ETF, monthly chart appears to have a little bullish retracement, although the longer term has a bearish bias. It actually appears more like a bearish retracement action, if I had to make a call on this one.
The small caps ETF, IWM, has had a nice rally until a bearish harami just formed, right at the top and a little stretched from the mean. In October, there are higher bearish probabilities, up to the start of a 20% retracement.
WTI Crude oil is clearly very bullish and continues to be so after a mild retracement to the up trending support line. The monthly MACD just moved into bullish territory, indicating longer term bullishness in crude, perhaps beyond 80. Crude should be about 80 in October.
Gold on the other hand does not have such glittering outlook. It still appears bearish, and much more so as the MACD is crossing back into bearish territory. Looks like a fair price for gold downside target might be about 1050.
The USD is still bullish going forwards, as indicated in all technical aspects observed, and there appears a lot of space for theUSD strength going into 2019. This has implications for gold and oil. Gold would be further pressed to be going down with height USD, but Crude oil is showing much strength to rally alongside a rising USD. The implied consequences are plenty, and perhaps that is another story for another day. Meanwhile, expect a very much stronger USD, and very likely rate hikes.
China Large Cap ETF, FXI, clocked a long term double top, or at least the upper and lower boundaries of a huge channel. Currently, it is bearish, but the last three months price action has kept it less bearish than it should be and mitigated the decline, keeping it above the 55EMA. Range bound with a more bearish bias on China.
The India NIFTY 50 ETF, INDY, is clearly passed its top and bearish for the next few months into 2019. Price is currently at the long term up trend support, concomitantly on the lower end of the channel range. Breaking down from this point, which is very likely, would bring it down to the 55EMA levels and perhaps below. Bearish to the downside targets that have been marked.
The Emerging Market ETF, EEM, is in a little of an enigma where it is bearish in nature, but had bounced off the 55EMA. This one might be consolidating….
The Latin America ETF, similar in nature, having corrected sharply, and now consolidating just below the 55EMA. This suspiciously looks like the retracement for a second leg rally. The next few months would be telling of the committed long term trend.
Japan appears to be one of the winners out of this trade war exchange. It’s correction was shallow and staged a strong come back in September. This suggests that it would be testing the previous highs through into 2019, with a good 8% upside.
Thailand ETF, THD, is another worthy note. It’s tremendous recovery since mid 2018, bounced off ahead of the 55EMA (bullish), proceeded to end the month with a strong bullish candlestick, forcing the MACD to turn bullish again. Similarly, THD is likely to be testing the previous highs going into 2019.
The EM bonds took half the time to wipe out a bullish rally and hit the marked downside target a few months in advance. This powerful bearish move puts it significantly deviated from mean, and despite bearish indicators, and a stronger USD, it staged a significant technical rally. Over the next few months, it should be gathering strength in returning to mean (55EMA), which could be about 10% upside from where it currently is.