Tactical Global Markets

March 28, 2013

Below we take a look at research from Northington Dahlberg Research.  The research below is geared more to the technical traders out there.  Carson and Kirk examine over a dozen global macro markets on multiple time frames (and with a lot of colors).

Below are a few quotes before the download:

—-ES1 (S&P500): The ES1 is now likely to reach its upper weekly compression target at 1600 during the next three weeks; by 4/12/2013. Beware that at or near 1600 is a likely point at which a short term correction would begin. The compression range is 7% which is the normal span of a mild correction. If headline news abates it should close higher by week’s end.

DXY: In the coming week the dollar (DXY) should continue its sideways trajectory. However we believe it will also continue to push into current resistance. Beyond next week the real focus is whether or not DXY closes above 83.42; weekly SR3 line. That would begin to signal a longer term uptrend continuation.

In Summary: US equity markets should continue their intermediate bullish trends; however in the three weeks to come expect more volatile intraday ranges. The most notable levels to watch are 1600 on the ES1, and 1607 on the SPX. These two levels, if reached, are the most likely to trigger the long awaited correction. If the correction is unaccompanied by severe headline events then the correction should span the existing weekly resistance compression ranges which is 7%. Further adding strength to this forecast is the evidence of Transports (IYT) beginning to weaken. Also pay attention to the dollar (DXY). Should it close above 83.42, its weekly SR3 line, this could also add a headwind to equities. At some point dollar appreciation will affect exports; if not already as evidenced by the IYT.

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Northington Dahlberg Research, LLC is a financial markets research firm. Our subscribers include registered investment advisors, money managers, and institutions. Our expertise lies with quantitative research into predictive relative strength.  Regarding our research, we make it our goal to be transparent in our approach, responsible in our testing, objective in our conclusions, and easy to incorporate.