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Author Archive for Market Montage

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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Zero Hedge

Algos Getting Concerned Low Volume Levitation May Not Work Today

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

It has been exactly six days in which algos, reversing the most recent drop in the S&P with buying sparked by a casual Nikkei leak that the BOJ may, wink wink, boost its QE (subsequently denied until such time as that rumor has to be used again), have pushed the market higher in the longest buying streak since September, ignoring virtually every adverse macroeconomic news, and certainly ignoring an earnings season that is set to be the worst since 2012. Today, the buying streak may finally end on rumors even the vacuum tubes are scratching their glassy heads if more buying on bad or no news makes any sense now that even the likes of David Einhorn is openly saying the second tech bubble ha...



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Phil's Favorites

China Manufacturing Output and New Orders Contract Once Again

Courtesy of Mish.

Chinese manufacturing remains in contraction for 2014. Output and new orders were down for the 4th consecutive month, but at a slightly reduced pace according to the HSBC Flash China Manufacturing PMI.



Commenting on the Flash China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co - Head of Asian Economic Research at HSBC said:

“The HSBC Flash China Manufacturing PMI stabilised at 48.3 in April, up from 48.0 in March. Domestic demand showed mild improvement and deflationary pressures eased, but downside risks to growth are still evident...



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Chart School

STTG Market Recap April 22, 2014

Courtesy of Blain.

We continue in this "V shaped" move off last week's touch of the 200 day moving average on the NASDAQ.  The S&P 500 gained 0.41% and the NASDAQ 0.97%.  The indexes are nearing overbought near term so a day or two of rest would serve the bulls well to try to attempt a new leg higher.  In economic news existing home sales hit 4.59 million in March, versus a 4.55 million estimate.

In terms of the indexes the S&P 500 stalled at the trend line that connected the lows of summer 2013; some congestion lies ahead at year highs.

The NASDAQ has come back from deeply oversold conditions as this index is heavy with biotech and momentum stocks.  The dotted blue line is the previous high; since early March we have not seen the NASDAQ make...



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Market Shadows

Soy Numero Uno

Soy Numero Uno

By Paul Price of Market Shadows

Bunge Limited (BG) is the world’s largest processor of soybeans. It is also a major producer of vegetable oils, fertilizer, sugar and bioenergy.

When commodities got hot in 2007-08, Bunge’s EPS shot up and the stock followed, rising 185% in 19 months.

The Great Recession took its toll on operations, dropping EPS to a low of $2.22 in 2009.  Since then profits have recovered.  They ranged from $4.62 - $5.90 in the latest three years. 2014 appears poised for a large increase. Consensus views from multiple sources see BG earning $7.04 - $7.10 this year and then $7.83 - $7.94 in 2015.

...



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Option Review

Casino Stocks LVS, WYNN On The Run Ahead of Earnings

Shares in Las Vegas Sands Corp. (Ticker: LVS) are up sharply today, gaining as much as 5.7% to touch $80.12 and the highest level since April 4th, mirroring gains in shares of resort casino operator Wynn Resorts Ltd. (Ticker: WYNN). The move in Wynn shares appears, at least in part, to follow a big increase in target price from analysts at CLSA who upped their target on the ‘buy’ rated stock to $350 from $250 a share. CLSA also has a ‘buy’ rating on Las Vegas Sands with a $100 price target according to a note from reporter, Janet Freund, on Bloomberg. Both companies are scheduled to report first-quarter earnings after the closing bell on Thursday.

...

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All About Trends

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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Sabrient

What the Market Wants: Market Poised to Head Higher: 3 Stocks to Consider

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

Courtesy of David Brown, Sabrient Systems and Gradient Analytics

Yesterday, the market continued its winning ways for the fifth consecutive day.  The S&P 500 closed within 1% of its all-time high, and the DJI was even closer to its all-time high.  Healthcare, Energy and Technology led the sectors while Financials, Telecom, and Utilities finished slightly in the red.  All three sectors in the red are typically flight-to-safety stocks, so despite lower than average volume, the market appears poised to make new highs.

Mid-cap Growth led the style/caps last week, up 2.87%, and Small-cap Growth trailed, up 2.22%. This week will bring well over 100 S&P 500 stocks reporting their March quarter earn...



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OpTrader

Swing trading portfolio - Week of April 21st, 2014

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.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly. Click here and sign in with your PSW user name and password, or sign up for a free trial.

...

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Digital Currencies

Facebook Takes Life Seriously and Moves To Create Its Own Virtual Currency, Increases UltraCoin Valuation Significantly

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

The Financial Times reports:

[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process. 

The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...



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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.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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Pharmboy

Here We Go Again - Pharma & Biotechs 2014

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

Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.

And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference.  Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014?  The Biotech ETF beat the S&P by better than 3 points.

As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...



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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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