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Yearly Charts Signaled Major Trends

Jul. 19, 2013 11:49 AM ETSPY, GLD, QQQ, IWM, DIA
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TomAspray's Blog
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It has been a good week for stocks even if they close lower today. In the middle of January, I reviewed the yearly charts of many of the key markets. From the ranges in 2012, the key levels for the stock market were the 2012 highs at: S&P 500-1474, Dow-13,662, Nasdaq 100-2878, and Russell 2000-869.

The Russell 2000 overcame the 2012 highs on the first trading day of 2013. The S&P 500 and Dow Industrials surpassed their 2012 high on January 17. The Nasdaq 100 confirmed on April 30 by finally exceeding the 2012 high.

The yearly ranges can be important in all markets as the USD/JPY surpassed its 2012 high in early January signaling a much weaker yen. It is down close to 16% for the year and has created some good opportunities in the Japanese stock market.

Therefore, for the rest of 2013, one should keep an eye on both the 2012 ranges, as well the current highs and lows for 2013.

Click to Enlarge

Chart Analysis: The yearly chart of the S&P shows the breakout above the resistance at line a that connected the 2000 and 2007 yearly highs. This completed a 900-point trading range, which has upside targets over 2400.

  • The yearly chart of the S&P 500 (SPY) looks quite strong with January's upside breakout.
  • For the Spyder Trust (SPY), its 2012 high at $148.11 was also overcome on January 17.
  • Basis the yearly chart, the next important support is at $142.41, which was the 2012 close.
  • For the Dow Industrials, the 2012 close was at 13,104 while the Dow Jones Transportation Average closed at 5307.
  • The yearly S&P 500 volume was the highest in 2009 but has since formed lower highs.
  • The on-balance volume (OBV) is now well above the 2012 highs, which is a positive sign.

The Comex gold futures closed 2012 at $1675.80, which was well above the 2011 close at $1566.80.

  • For 2013, this made the yearly range of $1798.10 and $1526.70 the important levels to watch.
  • The 2012 low of 1526.7 was violated when prices plunged on April 13.
  • Comex closed the day at $1501 and subsequently has dropped as low as $1179.
  • This is a drop of $322 per ounce since the 2012 lows were broken on a daily closing basis. The 2010 low is at 1044.
  • The yearly OBV has turned lower but did make a new high in 2012. It is well above its WMA.
  • The SPDR Gold Trust (GLD) closed 2012 at $162.01 with a yearly high of $174.07 and a low of $148.53.
  • The quarterly pivot for GLD is now at $129.89 with the S1 support at $105.92.
  • Comex silver dropped below the 2012 low at $26.07 on April 12, and it has a quarterly pivot at $21.97.

Click to Enlarge

After all the press the dollar has received this year, many may be surprised by the relatively narrow ranges on the dollar index's yearly chart.

  • The Dollar Index closed 2012 at 79.87, which was just below the 2011 close of 80.52.
  • The yearly chart shows that a doji was formed in 2012, which was a sign of indecision.
  • A 2013 close above 84.24 would trigger a high close doji buy signal.
  • The 2012 high at 84.24 has been slightly exceeded in 2013, which is a positive sign.
  • The yearly OBV is acting much stronger than prices.
  • The major yearly resistance is in the 88.80 to 89.71, which includes the yearly highs from 2008-2010.
  • The EUR/USD rate closed at 1.3193, which was a bit above the 2011 close of 1.2959. The 2012 low was 1.2012 and the high was 1.3486.
  • The 2012 high in the EUR/USD was exceeded on February 1 as it made a high of 1.3572. This is level to watch for the rest of the year with the 2013 low now at 1.2746.
  • A breakout of these ranges is likely to be significant.

Crude oil closed 2012 lower at $91.82, which was significantly below the 2011 close of $98.83. So far in 2013, crude oil has stayed between the 2012 high and low.

  • There is yearly resistance from 2012 at $110.55 with the 2011 high at $114.83.
  • The quarterly R2 at 107.57 is now being tested.
  • The quarterly pivot support is at 94.39 with further support at 91.82, which was the 2012 close.
  • For yearly support, this year's low at $85.61 is the key level to watch.
  • If it were broken one would then focus on the 2012 low at $77.28 and then the 2011 low of $74.85.
  • The yearly OBV is rising and is not far below the 2011 high.

What It Means: Based on the yearly charts, the dollar and crude oil look the most interesting. It would likely take significantly higher rates to push the dollar index above 89.71 for a multi-year breakout that would have major implications.

Given the technical readings on crude oil, a move above the yearly resistance at 110.55 does look likely.

How to Profit: No new recommendation.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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