Trades meeting my entry criteria versus outside influences

09 July

This is an update on some ideas I have been watching.

Patni Computer (PTI) v NASDAQ 100 Trust (QQQ)

This continues to consolidate between Bollinger bands. However, I am now not so sure that this will resolve to the upside, or that even if it does, that it will be sustained.

In my methods section, I discussed some cycles work that I follow. This does not offer a good backdrop for an emerging market outperformance trade now, neither from the market index or US Dollar perspective.

I have to leave it as that, as it is not my work to reproduce but the point is this: By selecting the best of the other commentary that is out there, I can get some perspective on my output and use it as a filter on my results. Also, it can direct the stock scans that I run, looking for examples that meet my criteria on series that are most relevant to that other commentary.

US Steel (X) v S&P 500 Index

On 11 June I wrote that I the bullish RSI divergence on this may bring about a rally, which proved to be the case. Given what I’ve said above, I wouldn’t chase this now for further upside.

US Dollar vs Japanese Yen

This still needs to break above its short term base. An end of week close above 80.44 would increase confidence that this long term turn is taking place.

Simon Property Group (SPG) v iShares Real Estate (IYR)

This gave a false signal a few weeks ago you may recall but the new high gives another bearish weekly RSI divergence.

The daily chart now has a new high with the RSI below 70. Another entry signal could be below the blue line or even below the 18 June low.