Figure 1:
Figure 2: FED acitivity and sentiment of primary dealers ( banks) - the indicator in the upper graph panel shows slightly declining trend in the demand of banks for the FED money. Markets are overbought, there is nowhere to put the money. The worsening sentiment of banks is also reflected in their Net Short positions for stock futures contracts ( COT reports). Net SHORTS are slowly going up. However activities of the FED are growing up as well. It is the FED again that affects current growth in prices of stocks. FED currently has reduced reverse short-term repurchase operations ( TOMO) and in addition we can see a pick up in security lending operations.
Figure 3: SPY + weekly price oscillators - all oscillators are rising right now
Figure 4: MAIN index - this is a synonym for a small cap universe. This virtual index is made of the U.S. mostly mid cap cyclical stocks, however it has been largely correlated with IWM in recent months. You can see that traders have bought these stocks in the last few weeks. Strong accumulation might portend OUT PERFORMANCE of small cap stocks in the months ahead. But first I expect some correction which would be in line with bad seasonality during August and September.
Figure 5: US Treasuries + LONG positions ( COT reports - stochastic oscillator) - you can see that LONG positions went slightly down in the last few weeks. However this situation seems to me rather supportive for the U.S. Treasuries. Both banks and speculators are bullish as for these assets.
Figure 6: This chart shows that stocks are overbought right now. I see it as negative, however I do not think that this is the market TOP.
Figure 7: Gold - I see gold as positive right now. Summer months are good for metals from the point of seasonality. Stocks are overbought and vulnerable to some correction and that is good for gold as well.
That is all for the time being now.
Petr.