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When does this all end – Update2

Courtesy of Read the Ticker.

when-does-this-all-end--update2To buy or not to buy: The US 10 year versus high yielding utility stocks.

Previous Post: When does this all end – Update

The US 10 year yield is at 2.34%

And compared to utility dividend stocks …

American Water Works (Dow Jones Utility: AWK) dividend @ 1.87%
NI Source (Dow Jones Utility: NI) dividend @ 2.58%
American Electric Power (Dow Jones Utility: AEP) dividend @ 3.25%

The question is, which asset class do you trust to provide a return for 10 years? Of course your ability to judge future inflation expectations (see TIP for iShares TIPS Bond ETF) and how extended the price trend is over time for each class.

Recently the Dow Utility Index has shown 3 thrusts higher in to new ground, the Dow Jones Utility index is now struggling to get higher as each thrust suffers a loss of power. These thrusts are simply a push higher into new ground to allow the big accounts to sell into, as this move high creates the BIDs to meet the large accounts ASKs. The big boys need the uniformed to buy at highs so they can sell to them.

Higher interest rates will either demand the Dow Jones Utility (DJU or RTT:!UTIL) pay a higher dividend, or create a slump in trend the Dow Jones Utility. The massive bullish stock market trend from March 2009 is extreme, and a leading bearish signal will be the Dow Jones Utility as it reflects the crazy prices paid for yield. Do you get the feeling we are near the turn?

UTIL 3 tops

Longer term trend

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UTIL long trend

NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net

Investing Quote…

..”If we wish to avert failure in speculation we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. Faraday said: `There is nothing in the Universe but mathematical points of force.”…

William D Gann

..“The main purpose of


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S&P ‘Bull Trap’ Becomes A ‘Bear Trap’

Courtesy of Declan

As this rally has often done, just as you expect a reversal to start, bulls come in (hard) to bid up the market. The S&P had the clearest switch as it moved from a 'bull trap' to a 'bear trap'. If it can post a break of 2,597 it will have little to stop it; in such a scenario watch for a fresh MACD 'buy' which would confirm recent losses as a pullback 'buy' opportunity. Stops on a loss of 2,557.
 


More impressive was the recovery in the Russell 2000. I'm not sure it has done enough to consume what will be plentiful supply all the way to 1,515.  Despite the 1.5% gain there wasn't a significant improvement in technicals. There will not have been many longs to have taken a punt on the drift below the 50-day MA so much will depend on the strength of the short squeeze -  today was a good start.
 


The Nasdaq didn't disappoint. It was the safest long trade and despite the morning gap it was able to post additional gains. Upper channel resistance remains the upside target. Today's volume registers as confirmed accumulation.
 

The Dow Jones only managed a weak bounce but the telegraphed 'buy' at support should have survived a stop test.
 


Today's action was a useful start. Key to tomorrow will be closing in the upper part of today's intraday range – irrespective of how much ground it gives up over the course of the day.





Bears Turn The Screw

Courtesy of Declan

The Russell 2000 was again under pressure as it shed another 0.5%. The Russell 2000 now trades below its 50-day MA despite recovering some of today's intraday losses. It looks like controlled selling with an artificial prop to prevent a rout. The 200-day MA is the next port of call but a 1% loss of more will bring sellers in fast. Technicals are weak but not oversold.
 

The S&P looks to have confirmed a 'bull trap' with a return inside the prior rising channel. Such action typically results in a move back to rising channel support.  First port of call will be the 50-day MA.
 


The Nasdaq is holding up better than either Small and Large Caps with relative performance ahead of the curve although it has a MACD trigger 'sell' to work off.
 


The aggressive long in the Dow Jones isn't looking so great. It's still hanging on to support but after a day like yesterday it really should have closed higher. With the S&P already back inside its former rising channel I would be looking for the Dow Jones Index to do the same.
 


For tomorrow, look for an acceleration of selling in the Russell 2000, a drop inside the former channel for the Dow Jones and drip losses in the S&P. If premarket suggest bulls are going to be in control (e.g. a gap higher) then the Nasdaq may be the better index to trade. However, if the S&P can gain enough to bring itself to challenge the 'bull trap' then it will also be a good long trade (in essence, switching from a current 'bull trap' to a 'bear trap').
 





Bulls Able To Recover Early Losses

Courtesy of Declan

Another day where bulls had to dig deep to make back early losses but there was little more beyond that.

The Russell 2000 remains the index most feeling the pressure. It's trading below the 50-day MA but hasn't experienced the kind of day where longs will feel pressured to sell. Some traders may take an aggressive long with stops below 1,463 with the index hugging support of the (failing) 'bull flag' – although it doesn't look a particularly attractive trade. Technicals are all net negative and relative performance is very poor (for Small Caps).
 

A better punt for longs might be the Dow Jones Industrial average. It's resting on former channel resistance-now-support. Volume action since August has strongly favoured accumulation and the price trend is solidly bullish – only relative performance is a bit of a non-entity.
 


The Nasdaq is using its 20-day MA to lean on. Narrow doji just above this support on low volume is healthy action. There is a MACD trigger 'sell' to monitor although it's well above the bullish zero line. Other Technicals look okay.
 


I would say watch the Volatility Index but for 2012 through to 2015 it did very little when it looked like it would spike and the market went on a charge.
 


For tomorrow, the Dow Jones Index might give longs something to work. Shorts can still linger around the Russell 2000 as any selling is likely to accelerate as a sense of panic could start to creep in.
 





Russell 2000 Turns Net Bearish Despite Intraday Recovery

Courtesy of Declan

The index-to-watch for Monday was the Russell 2000 and while it didn't really excite it did suffer a net bearish turn in technicals. On the positive front, it held on to its 50-day MA for a third day in a row. There may still be enough for bulls to reverse the bearish technicals but there is little room for maneuver.
 


The S&P is able to mount a defense of former resistance turned support using the convergence with the 20-day MA as the bullish kicker.  Volume climbed in bullish accumulation.
 


The Nasdaq remains inside its rising channel and is on course to tag rising channel resistance. There was a 'sell' trigger in the MACD but today's engulfing pattern of Friday's intraday range is bullish.
 


The Semiconductor Index is doing its best Bitcoin impression as it makes back some of last week's losses. Technicals have started to weaken with 'sell' triggers in the MACD and CCI.
 


For tomorrow, keep an eye on the Russell 2000 and play for a bounce off support in the S&P.





Weekly Market Recap Nov 12, 2017

Courtesy of Blain.

While it was the first losing week in 8 for the major averages, bulls should continue to be happy as such minor losses after significant rallies are just part of a consolidation period.   Tuesday was the only positive day for the week but again we are talking about a very low volatility environment, where “down days” are often in the spirit of -0.15%.   That said the weakness in the Russell 2000 was interesting this past week.

While these type of quotes – now incessant it seems – should worry you, it hasn’t matter to the market….

There is no reason for stocks to go down substantially at this point, as earnings growth is robust and global economy is improving. The path of least resistance is higher,” said Steve Chiavarone, portfolio manager at Federated Global Allocation Fund.

I don’t really see how this bull market gets derailed,” said Maris Ogg, president at Tower Bridge Advisors.

News flow was really quiet outside of some tussling over tax reform.

The mega capitalization glamour stocks – especially in technology….

….are hiding it but we are seeing some weakness in interesting areas – biotechs, transports, etc.

Here is the 5 day weekly “intraday” chart of the S&P 500 .. via Jill Mislinski.

The one year rally since Trump was elected, and the DJIA rally since then has been the best since 1945!

The DJIA has advanced 28.50% since Nov. 8, 2016. (as of Wednesday’s close) That represents its best performance after a White House contest since 1945, when the blue-chip gauge was up 29.83% in a year following the election of Franklin D. Roosevelt. The average 12-month gain following Election Day is 6.04%.  The gains have been primarily concentrated within two sectors: technology stocks, up 42.2% over the past 12 months, and financials, up 37.5%.   Trump has taken full credit for the equities rally, offering this assessment this week: “The reason our stock market is so successful is because of me.”

The week ahead…

Retail sales Wednesday (expected 0.1% growth!) is the only economic…
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Russell 2000 Finishes Neutral; Tech Posts Minor Gains

Courtesy of Declan.

It wasn’t a particularly exciting Friday but there were some points-of-action of interest. I had tweeted about the weakness in the Russell 2000 but there wasn’t much satisfaction for either side. The Russell 2000 finished with a narrow doji at the 50-day MA. As it failed to close below the 50-day MA bulls will be satisfied with a successful defense of the 50-day MA but the narrow intraday range offers a bigger swing trade off a break of the high/lows from Friday. There is still a chance a break below the 50-day MA will kickstart an acceleration towards the 200-day MA and this still looks like the preferred outcome. Any move back inside the ‘bull flag’ will open up for a ‘bear trap’ and a likely break of 1,500 – a move above 1,480 will open up a long trade opportunity.

Tech indices held on to Thursday’s recovery and then managed to post a small gain (or at least a higher open). The Nasdaq is holding to its rising channel which keeps the broader bullish picture intact.

The S&P stuck to upper channel resistance (now support). Volume was down so no real switch to selling/profit taking. If the Russell 2000 can post a bounce then I would look for a fresh run to new all-time highs in the S&P; looks like traders need Small Cap leadership at this time.

The Nasdaq Summation Index doesn’t look like it’s suggesting we are at a bottom yet; significant market lows for the Nasdaq require an upturn (and cross of 5-day EMA) with the index below -500.  This is clearly not the case yet.

The Percentage of the Nasdaq Stocks above the 50-day MA are also in a scrappy bearish decline; nothing suggesting a swing low yet.

Bullish Percents are attempting a low but well away from oversold levels; for this index I would want to see sub-30s for long term buys.  At best, it’s a short term buying opportunity if there is a close above the…
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Russell 2000 Hangs On

Courtesy of Declan

There were gains for all market but the Russell 2000 was able to dig in and come back after an early loss of 'bull flag' support. The Russell 2000 was able to rally back after testing its 50-day MA; those traders waiting for this will have benefitted from a handy risk:reward.
 


The S&P generated a fresh MACD trigger 'buy' on higher volume accumulation. Technicals returned to net bullish technicals with accelerating relative performance.
 


The Nasdaq undid yesterday's losses and return it on course to test channel resistance. Relative performance is also good.
 


However, the Percentage of Nasdaq Stocks above the 50-day MA accelerated lower; the early 'buy' signal in the CCI reversed down with other technicals bearish.  This bearish divergence with respect o the Nasdaq has been playing out for the last few weeks – there can be only one winner and bears look more likely to take it. 
 


Meanwhile, the most bullish Semiconductor Index managed a new closing high.  It would appear traders are unwilling to sell as they wait for ever higher profits.
 


For tomorrow, look to the Nasdaq to continue its quest to tag upper channel resistance. Value buyers can look to the Russell 2000 to build on its bullish 'hammer'.  The Semiconductor Index will soon reward shorts but it may yet be too early for this.
 





Russell 2000 Doesn’t Take The Bait

Courtesy of Declan

Some light selling across Large Caps and Tech indices meant there was little of interest for today/s action. The only action of note came in the Russell 2000.

After inching towards 'bull flag' resistance the Russell 2000 took a leaf out of the sellers book and reversed back towards 'bull flag' support. It's looking vulnerable to a further profit taking which would threaten 'bull flag' support, although the fast approaching 50-day MA could step in to help.  Technicals are weak and weakening as relative performance swings away from Tech (strongly away) and Large Caps.  A failure at the 50-day MA would next open the 200-day MA; at the latter point I would expect Stochastics [39,1] to be oversold.
 


The S&P finished with a neutral 'doji' after posting new highs. Keep an eye on the MACD trigger line; it looks ready to generate a new 'buy' signal well above the bullish zero line. Other technicals – including relative performance – are firmly in the bull camp.
 


The Nasdaq experienced a little more selling than the S&P on higher volume distribution. However, technicals remain strong and the index remains on course to tag upper channel resistance.
 


The Semiconductor Index finished with a very narrow doji at new highs. This close to parabolic run looks close to an end as relative performance against the Nasdaq 100 starts to shift away from this sector into others.
 


Although there was very little (really, none) hurt in the Nasdaq 100. Note how relative performance against the Russell 2000 has remained range bound for the last six months; look for a break out of this range to suggest the Nasdaq 100 will become the next market leader.
 


For tomorrow, keep it simple. What happens in the Russell 2000 will likely determine overall market action for the rest of the year. Small Caps typically leady the market and if 'bull flag' support fails I would look for profit taking to extend into Tech and Large Caps in the weeks ahead.





Semiconductor Index: Shooting Star? Russell 2000 to Breakout

Courtesy of Declan

More gains for the market kept the rally intact which leaves little to add today. The only potential cloud on the horizon is the Semiconductor Index. Today finished with a gap higher with a bearish hammer which may become a bearish shooting star if there is a gap down and further losses by the close tomorrow. The rally from September lacks a pullback so some form of sell off is anticipated.
 


The S&P edged a small gain but not quite a MACD trigger 'buy'.
 


The Nasdaq made it closer to channel resistance and remains the upside target.
 


The Russell 2000 looks ready to break out of its 'bull' flag. Today left the index at channel resistance; tomorrow could deliver a breakout. Watch this closely.
 


Keep an eye on pre-market trading; weakness in lead indices has the potential to set up a bearish 'shooting star' in the Semiconductor Index. In a bullish pre-market, look for the breakout in the 'bull' flag from the Russell 2000…





 
 
 

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Why it matters when big tech firms extend their power into media content

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Shutterstock

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The two obstacles that are holding back Alzheimer's research

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The blockchain does not eliminate the need for trust

 

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When does this all end - Update2

Courtesy of Read the Ticker.

To buy or not to buy: The US 10 year versus high yielding utility stocks.

Previous Post: When does this all end - Update

The US 10 year yield is at 2.34%

And compared to utility dividend stocks ...

American Water Works (Dow Jones Utility: AWK) dividend @ 1.87%
NI Source (Dow Jones Utility: NI) dividend @ 2.58%
American Electric Power (Dow Jones Utility: AEP) dividend @ 3.25%

The question is, which asset class do you trust to provide a return for 10 years? Of course your ability to judge future inflation expectations (see TIP for iShares TIPS Bond ETF) and how extende...

more from Chart School

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10 Stocks To Watch For November 17, 2017

Courtesy of Benzinga.

Related AMAT 8 Stock's Moving In Thursday's After-Hours Session 12 Stocks To Watch For November 16, 2017 ...

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By U.S. Navy photo by Mass Communication Specialist 2nd Class Jesse B. Awalt/Released [Public domain], via Wikimedia CommonsRobert Mugabe is safe

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Puts things in perspective

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Puts things in perspective:

The circles don't look to be to scale much!

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Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

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Brazil; Waterfall in prices starting? Impact U.S.?

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Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

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Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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