On the currency front, we can see that the US$'s EV pattern is still weak, as is the Euro's pattern. The US$ pattern could be explained by the liquidity squeeze in China: Chinese producers suddenly want to sell their US$ in order to plug holes.
Another interesting case is the Gold Futures market. I had expecting gold to be kept under pressure by a rising US$, but even if gold has not risen much, it has not tested its recent lows. It might be a sign that the market anticipates that mines could shut down at some point and physical could take more time reaching customers waiting for supply. We need to stay alert here.
As we can see below, the Yen pull-back is not being sold. This means that traders are expecting another yen bounce, which could be a negative for Japanese equities, while other Asian countries' equities could gain from a stronger Yen.
As we can see below, EWJ is close to resistance and slightly under pressure. It makes sense to short it here.
EPP (Asian equities ex Japan) is also is close to a resistance level. Buying here is iffy, because you could buy either a break above resistance or pull back to support. Probably not worth dabbling in today.
I think the most interesting story these days is the oil uptrend and its effect on a weak natural gas sector. We can see below that Natural gas is gaining some support. Investing in UNG is not advisable because of the contract roll-over games played by professional traders against this type of ETF, but the Nat Gas equipment producers look interesting.
As we can see below, this sector just issued a buy signal, which means that it is a good timing to buy it, especially since natural gas is gaining some support.
Yesterday, I wrote about WPRT. It pulled back while large players did not sell. I believe that yesterday was a good entry point. I will buy more if it falls back to the $31 support level. We can see that the stock entered into the stable "lower than 10%" supply level. This means that if it bounces, it will easily gain traction, because few funds are sellers at these prices.
CMI looks also interesting. It was not picked up yesterday by the EV stock selection algo, but it looks nice to me and I might buy it today. The stock still needs to clear strong resistance, but above that resistance, there is are clear skies for more upside and the Supply figure shows that we are in a very stable zone too.
The stocks selected by the EV Stock picking algo today are: PWRD, WPO, NTRI, PRGO. CECO is a second choice.
More traditional, longer term-oriented systems would select QCOR and TSLA.
Conclusions:
- Stay long only for US based equities. Buy stocks from the EV long stock list, preferably on an intraday pull-back.
- Buy WPRT and CMI
- Short EWJ
