When analyzing markets I need a graphical way of resuming a defined context. That is why I have my market “constelator”.
I plot in the vertical axis the z-value of the last 67 daily percentage returns and in the horizontal axis I plot the YTD return in percentage.
In the commodity sectors you can see that back on june 19th:
Today we have wheat vibes and some think this is among the grains sector. But this is part of a secular move because the only ones that are not moving in the same direction are energies.
The concept behind these charts is as follow:
I think in the following weeks we’ll se energies goin to the zero zone (red) while the rest might take a tease at the up trend continuation territory.
There is also the possibility of energy pulling everybody to take a fall at the down trend continuation pattern, which would be according to the uncertainty from China.
Since stocks are in a range attitude possibly this all about getting in the red area and sell volatility to take a profit.
The third option likes me better. How about you?