Indices

The VIX measures expected stock market volatility based on S&P 500 options and is often considered the market’s fear index. As it reaches extremes, contrarian signals may be triggered.

The RS has moved from the weak channel (between the lower blue and red bands) into the neutral region between the blue bands (blue arrow). The RSI is on the cusp of turning bullish, I.e. moving above 50 (red arrow).

The UK100 continues to trade in its daily chart’s bullish area between the upper blue and red bands. The hourly chart on the right also shows bullish developments. Its trend-following EMAs have crossed bullishly, as has its momentum based stochastic indicator (black ellipses). If the stochastic makes its way to the 80+ region (blue arrow), and holds, an underlying positive momentum will be present. This will be price supportive.

Following yesterday's CPI print, showing the slowest inflation in over a year, we consider the US 10-Yr real rate (top chart). December into January, price action resembles a flag (green parallel lines). This is a continuation pattern. The measured move suggests that real rates have a bias to decline.

The UK100 monthly chart is trading in its bullish channel between its upper blue and red bands. The index is near 7,779, close to its all-time high (ATH) of 7,903.40 (green horizontal line).

The weekly chart of FXCM’s CHN50 CFD shows a series of higher troughs followed by higher peaks. This is an uptrend. Its RSI is also on the bullish side of 50 (green rectangle). The longer it maintains this position, the greater the likelihood of further price appreciation.

Markets reacted positively to the fact that Fed Chair Powell did not comment on monetary policy yesterday, now awaiting Thursday’s CPI inflation

The daily CHN50 chart is trading in its bullish area between the upper blue and red bands. Maintaining the upper channel increases the likelihood of price appreciation. The red Bollinger bands are moving in opposite directions, which shows a growing volatility. The hourly chart shows the stochastic has crossed up (aqua ellipse). A move towards the 80+ region (blue arrow) will suggest a positive momentum. A cross by the trend-following…

The monthly chart of FXCM’s CHN50 CFD is showing value tendencies. It spent 12 months in its bearish channel (notwithstanding a temporary spike in June 2022), between its lower blue and red bands. The current candle is attempting to move into its neutral channel between the blue bands (green vertical rectangle). This is bullish. The monthly RSI still needs to cross above 50 into the indicator’s bullish area (blue arrow).…

The US30 dropped 165 points yesterday. This followed the ADP surprise to the upside, showing 235K jobs were created (153K - forecast). This prompted renewed rate hike fears, given the Fed concern over wage inflation.

The GER30 daily chart is trading in its bullish area between the upper blue and red bands. The Bollinger bands are expanding (black ellipses). This suggests increasing volatility. The hourly chart on the right has underlying support at the central pivot, P. If the trend-following EMAs and momentum based stochastic cross up (green ellipses), this will be viewed as a bullish development. If stochastic makes its way above the 80…