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Potential Bearish MACD Crosover on S&P 500

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

We have an interesting set of divergences in the major indexes – the S&P 500 is starting to pose some issues as it fell back below the early August highs and this morning is breaking below the 38.2% retrace level of the September rally that it held yesterday.  We also have what, if nothing changes later today, is a bearish MACD crossover.

Meanwhile the NASDAQ and Russell 2000 are holding up much better – range bound the past week and a half.

The DJIA on the other hand is a big mess.

Usually you don’t such divergent conditions on the 4 indexes.

 

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings





First 5 Day Loss of the Year

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Rare as a dodo in 2013 are any form of long losing streaks; recall how long we entire early part of the year without so much as 3 down days in the DJIA.  Yesterday’s reversal late in the day pushed stocks into the red again and we now have the first 5 day losing streak of the year.  After being extremely overbought last Wednesday after the Fed surprise announcement the indexes have now worked off that condition.  As you can see in the chart below the S&P has now retraced 38.2% of the September rally.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings





WSJ’s Hilsenrath on Janet Yellen

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

With the demise of Larry Summers, all eyes point to Janet Yellen as the next Federal Reserve head.  Frankly it is a bit surprising she was not the leading candidate all along.   Earlier this year, we posted a NY Times piece on the woman [Apr 25, 2013: NY Times Does Janet Yellen] from a more personal level and now we have one on the Fed whisperer himself, Jon Hilsenrath – more specific to policy and personality.  From the description, Yellen is far more like Greenspan than Bernanke.   Some excerpts:

  • Janet Yellen, the lead candidate to succeed Federal Reserve Chairman Ben Bernanke, brings a demanding and harder-driving leadership style to the central bank, in contrast to Mr. Bernanke’s low-key and often understated approach. 
  • Ms. Yellen, the Fed vice chairwoman, is highly regarded by many central bank staff members, who call her an effective leader with a sharp mind. But she has clashed with others and left some hard feelings in the wake of those confrontations, according to interviews with more than a dozen current and former staff members and officials who worked with her directly in recent years.
  • Most agree that Ms. Yellen—who has climbed the ranks from Fed researcher to Fed governor and regional Fed bank president, in between stints outside the central bank—is exacting and exceptionally detail-oriented.  At Fed policy meetings, Ms. Yellen is courteous, respectful, serious and meticulously prepared, according to officials who have attended meetings with her. She has staked out strong positions in favor of the Fed’s easy-money policies that sometimes put her at odds with opponents of the policies, these people said.
  • People differ over Ms. Yellen’s style and its effectiveness. Many senior Fed officials, including those who have opposed her on tough policy questions, say the 67-year-old Brooklyn, N.Y., native would be easy to work with if picked to lead the institution. “She listens to all sides of a debate,” said Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, who wants the Fed to end its $85 billion-a-month bond-buying program, which Ms. Yellen has strongly supported.
  • Some others who have worked with her behind the scenes disagree.  Dick Anderson, who served a brief stint as the chief operating officer of the Fed’s Washington board, ending in December 2012, said, “Yellen’s abrasive,


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Perhaps More than a Pause

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

This pullback is a bit more severe than probably most bulls would want.  The entire Fed sugar high from last Wednesday has now been erased.  At this rate the rally from a week ago when Larry Summers was pushed out the door for Fed chairman also might be retraced.  A lot of individual names have seen a lot more damage than you’d expect in a 3 day pullback.  Interesting to see.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings





A Much Needed Pause

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

After the euphoria of late Wednesday when it became apparent that Ben Bernanke will not be taking back any QE during 2013, and likely through the end of his term, markets were as overbought on some measures as they had been the entire year.  The NYSE McClellan Oscillator was at levels seen only a handful of times the past 3 years.  The S&P 500 had been up every single day of the month except for one – so in a way it was a bit of a blow off short term top based on surprising news.  There was a small pullback Thursday and the largest pullback of the month Friday.  But within the context of the move preceding it this was not a shock to the system.

With the S&P 500 we essentially had a breakout over early August highs mid week, and then a retrace to them late in the week.  The MACD indicator is still in fine condition and some digestion here would be healthy.

Sector wise there was not that much rhyme or reason last week.  Some of the yield specific sectors rallied sharply Wednesday on the surprise move by the Fed, but then gave back much of those gains (if not all) the next 2 days.

Treasury yields on the 10 year, which had approached 3%, have fallen back in the 2.7%s which helps take some pressure off the housing market – which seems to be Ben’s top concern.

 

With German elections over the weekend more or less going as expected and the Fed out of the way, the main concern near term will be the debt ceiling issue.  Of course we have been trained now for the politicians to posture and make lots of comments but eventually cave in.  So it will be interesting how serious the market takes it this time around when we see this stuff on an annual basis.

Economic data this week is centered on housing and consumer confidence, not the type of things that usually are market shaking.   Next week we will return to the big econ data (ISMs, and employment) and earnings season will also begin

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned
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Worst Breadth for the Month

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Today is the worst breadth day of the month but considering there have only been 2 down days all month that was an easy hurdle.  Also recall at the close Wednesday, the S&P 500 was the most overbought it had been since the previous summer per the NYSE McClellan indicator.  These past 2 days have helped work that condition off.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings





Bullard Says Tapering Still on Table for 2013 … Blah Blah

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

St Louis Fed head James Bullard is out on the wires saying there could still be tapering in 2013.

  • St. Louis Fed President James Bullard said the central bank could taper its $85-billion-a-month bond-buying program during its October meeting.  “This was a close decision here in September,” Bullard said in an interview with Bloomberg, emphasizing the role that economic data has played and will continue to play in Fed decisions

This reminds me after the May comments by Bernanke that tapering might be on the horizon, a bevy of Fed speakers came out in the following week to counterbalance that by saying it is very conditional on economic data and nothing is guaranteed.  Now we have the exact opposite… Bernanke surprised everyone by doing nothing so now they send out minions to say “but we just might do in the future…any moment now!”  Yada yada yada.  One thing Bernanke really had been good with was utilizing the bully pulpit and he could use his gift of gab in lieu of action at times… but now it is difficult to take what he says with credibility.  If they did not do it this meeting it is (a) difficult to see them doing it in a meeting without a news conference immediately after to react to the insufferable whining from the stock market community and (b) since the next meeting with a news conference is not until the holidays, do you think Ben is going to ruin Christmas like that?  Sure seems to not be his style.  I thought he would start to taper mostly because he wanted to set the precedent before he left office but even that doesn’t seem to matter so it seems status quo until 2014.

Two more Fed speakers later today including the only hawk.  But all this is noise now.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings





The Most Overbought Point in 2013

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Quite an explosive rally yesterday at the 2 PM mark, in fact about 70% of yesterday’s gains came in a minute or so per Bespoke Investment; the power of algos.   Obviously the Fed, by surprising just about everyone with “no taper at all”, lit another fire under the market but coming off a near vertical rally since late August it is still a bit surprising to see the relentless bid with no rest this month.  Per at least one indicator this is the most overbought moment of 2013 – and it is not even close.  The NYSE McClellan Oscillator rarely exceeds 60 and yesterday was approaching 90 at the close.  This rare 80+ type of reading only happened twice in 2012 and four times in 2011.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings





No Taper

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Party on Garth.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings





Taper, Taper-Lite, or No Taper?

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

The business media likes to hype up almost all of these Federal Reserve meetings as if there is a seismic shift afoot due to a comma being moved in paragraph 4 of the statement, or if the word gradual is changed to average in paragraph 2.  It’s a lot of nonsense to try to create an event where there is none.  However, today’s FOMC announcement has the potential for more impact than the usual dog and pony show.  Since May, when it was first floated that some form of “tapering” (not the correct word really) of quantitative easing could be afoot by the end of the year yields on 10 year rates have backed up considerably - brushing along the 3% level recently.

With economic data still mixed and Bernanke set to leave after this term there is still debate on what will happen today although the consensus is around “taper lite”; i.e. not a full taper of $15-$20B a month and not no taper, but something to get the ball started before Bernanke leaves his position… i.e. $10B a month.  Of course there could be no taper which the algobots will love, but it seems unlikely that there will be more taper (anything over $15B) than the market expects because if anything is clear the Bernanke Fed is a slave to the stock market and never wants to do anything to upset it.  Here is a list of expectations by major investment banks; in fact the entire piece from BusinessInsider is worth a read.

  • an Hatzius, Goldman Sachs:  $10 billion all in Treasuries
  • Vincent Reinhart, Morgan Stanley: $10 billion all in Treasuries
  • Aneta Markowska, Societe Generale: $10 billion all in Treasuries
  • Drew Matus, UBS: $7 billion  in Treasuries, $3 billion in MBS
  • Joseph LaVorgna, Deutsche  Bank: $10 billion in Treasuries, $5 billion in MBS
  • Michael Feroli, JP Morgan: $10 billion in Treasuries, $5 billion in MBS
  • Neal Soss, Credit Suisse: $10 billion in Treasuries, $10 billion in MBS
  • Michael Hanson, BAML:  $10-$15 billion total, split evenly between Treasuries and MBS
  • Michael Gapen, Barclays:  $15 billion total, split between Treasuries and MBS

 

Whatever the case expect a sleepy morning and then fireworks this afternoon.  This is also one of the meetings Bernanke has a press conference so if no taper now, it is doubtful…
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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743"

Thank you for you time!

 
 

Phil's Favorites

How RenTec Made More Than $34 Billion In Profits Since 1998: "Fictional Derivatives"

How RenTec Made More Than $34 Billion In Profits Since 1998: "Fictional Derivatives"

Courtesy of Zero Hedge

Ten days ago Bloomberg reported that as a result of various tax dodges, one of the fastest-trading hedge funds in the US, Jim Simmons' Renaissance Technologies, had managed to avoid paying ordinary income tax on billions in profits, by classifying trades that often times had a holding period of minutes if not seconds, as a long-term capital gain. As part of this finding, it was reported that there would be a hearing chaired by none other than ...



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S&P 500 Snapshot: An Intraday Record High

Courtesy of Doug Short.

The pre-open release of the Consumer Price Index showed core inflation in June to be a tad lighter than forecasts. The S&P 500 opened at its 0.10% intraday low and rallied to its 0.64% record intraday high about ninety minutes into the session. Strong existing home sales announced at 10 AM certainly helped. The index spent the rest of the day in a narrow trading range and closed with a 0.50% gain, a mere 0.10% off its record close of July 3rd.

The yield on the 10-year note ended the day at 2.48%, 1 bp below yesterday's close. It is now only 4 bps above its interim closing low of May 28th.

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US State Department "Confident" MH17 "Mistakenly" Downed By Separatists, Finds No Direct Link To Russia

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

With a somewhat shocking lack of evidence, AP reports that US officials (on condition of anonymity) have stated that intelligence suggests Malaysian Airlines Flight MH17 was mistakenly shot down by separatists and can find no link to Russia.

However, the unnamed non-proof-providing officials believed Russia "created the conditions" for the downing of MH17. For now there is not even a YouTube clip to confirm this... as officials do not make the new technical evidence public...

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Sizable Call Spread Trades On Orexigen

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Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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NQ Mobile Shares Plummet After Announcing Dismissal Of PwC

Courtesy of Benzinga.

Related NQ Investors Focus On Earnings Rather Than Geopolitical Tensions NQ Mobile In Possible Short Squeeze; Muddy Waters Sticks To Guns

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Sector Detector: Bulls remain unfazed by borderline Black Swans

Courtesy of Sabrient Systems and Gradient Analytics

Despite a highly eventful week in the news, not much has changed from a stock market perspective. No doubt, investors have grown immune to the daily reports of geopolitical turmoil, including Ukraine vs. Russia for control of the eastern regions, Japan’s dispute with China over territorial waters, Sunni vs. Shiite for control of Iraq, Christians being driven out by Islamists, and other religious conflicts in places like Nigeria and Central African Republic. But last Thursday’s news of the Malaysian airliner tragically getting shot down over Ukraine, coupled with Israel’s ground incursion into Gaza, had the makings of a potential Black Swan event, which in my view is the only thing that could derail the relentless bull march higher in stocks.

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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. 

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We tried holding up stock prices but couldn’t get the job done. Market Shadows’ Virtual Value Portfolio dipped by 2% during the week but still holds on to a market-beating 8.45% gain YTD. There was no escaping the downdraft after a major Portuguese bank failed. Of all the triggers for a large selloff, I’d guess the Portuguese bank failure was pretty far down most people's list of "things to worry about." 

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Bitcoin Vs Gold - The Infographic

Courtesy of ZeroHedge. View original post here.

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

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

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