Archive for the ‘Chart School’ Category

Weekly Market Recap Dec 4, 2016

Courtesy of Blain.

The week that was…

The market needed a pause after the frenetic post election rally, and it finally arrived this week.  The pullback was mild as bulls would like.  This week’s “fear of the week” was Italy’s political referendum which happened today… and was rejected.

Italian voters were asked in a referendum to approve changes to the country’s constitution, which have been called the most sweeping since the end of World War II. The proposed reforms would cut the Senate’s size by two-thirds and reduce powers held by the country’s 20 regional governments. Italian Prime Minister Matteo Renzi believes the changes will aid efficiency in parliament.

The reforms could also “make it easier to implement important legislation (such as measures to assist the country’s ailing banking sector) without the threat of a government collapse during periods of political disagreement,” said Peter Donisanu, global research assistant at Wells Fargo, in a note published Nov. 11.

So at times when the market needs to pull back a bit, it finds a reason; this was a pretty weak knee one but it is sufficient.

As I type this S&P futures are PLUNGING 0.3% on the “no” vote.  Hide the children.

danger

(only our older readers will understand the gif above)

The other main story was OPEC which finally agreed Tuesday to a cut in production…. on paper.  If any of their members actually follow through in reality and don’t try to cheat – who knows.

OPEC has agreed to cut daily production by 1.2 million barrels a day to 32.5 million.  The cut will come into effect in January. OPEC kingpin Saudi Arabia will tak thee biggest output reduction at about 486,000 barrels a day, according to Al-Sada.   On top of the 1.2 million-barrels-a-day OPEC cut, key non-OPEC producers have agreed to scale back their production by 600,000 barrels a day, with Russia taking on half of that cut.

Impressive, 1.2M barrels!??!  Pssst come closer, I’ll tell you a secret….. that is 1% of global production.

Economic data was largely positive this past week.  Monday, the second reading of gross domestic product showed the economy…
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Nasdaq 100 Net Bearish

Courtesy of Declan.

Friday’s action was relatively uneventful with indices finishing near the day’s lows, but none accelerating on Thursday’s losses.




The one change on the intermediate term time frame was the net bearish turn in technicals for the Nasdaq 100. The index remains range bound from August and has struggled as Semiconductors, Small Caps (and now Large Caps) have shone.






If there is a positive for the Nasdaq 100, along with other indices, it’s that the two-day action for Thursday/Friday has the look of bullish haramis (and harami crosses).  Traders can look to set up long-side trades with a stop below Thursday/Friday lows.




The Russell 2000 is heading towards its 20-day MA, a potential catalyst for a bounce. However, the index will have to deal with its recent MACD ‘sell’ trigger as technicals start to feel the pinch of last week’s selling.





Semiconductors made up some of Thursday’s lost ground as the index bounced off 840 support. Three supporting technicals are bearish (MACD, CCI and ADX), but stochastics haven’t yet signaled the end of the rally started in July.





Long term charts which had been favoring bears over the summer are finally reversing back in bulls favor (or at least adopting a more neutral stance).  For example, the Discretionary-Staples relationship has bounced strongly.





While the Dow Jones/Transports relationship is showing a solid rally for Transports (bullish for the economy)





It looks like markets are taking a real shine to Trump.




You’ve now read my opinion, next read Douglas’ blog.




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









December Macro Update: Employment Growth Is Decelerating

 

December Macro Update: Employment Growth Is Decelerating

Courtesy of 

Summary: The macro data from the past month continues to mostly point to positive growth. On balance, the evidence suggests the imminent onset of a recession is unlikely.

That said, there are some signs of weakness creeping into the data. Most importantly, employment growth is decelerating, from over 2% last year to 1.6% now. Housing starts and permits have flattened over the past year. There is nothing alarming in any of this but it is noteworthy that expansions weaken before they end, and these are signs of some weakening that bear monitoring closely.

Overall, the main positives from the recent data are in employment, consumption growth and housing:

  • Monthly employment gains have averaged 188,000 during the past year, with annual growth of 1.6% yoy.  Full-time employment is leading.
  • Recent compensation growth is near the highest in 7 years: 2.5% yoy in November. 
  • Most measures of demand show 3-4% nominal growth. Real personal consumption growth in October was 2.8%.  Retail sales reached a new all-time high in October, growing 2.6% yoy.
  • Housing sales are near a 9 year high. Starts made a new 9 year high in October.
  • The core inflation rate has remained near 2% since November 2015.
The main negatives are concentrated in the manufacturing sector (which accounts for less than 10% of employment):
  • Core durable goods growth rose 1.0% yoy in October. It was weak during the winter of 2015 and it has not rebounded since. 
  • Industrial production has also been weak, falling -1.0% yoy due to weakness in mining (oil and coal). The manufacturing component grew +0.1% yoy.
Prior macro posts from the past year are here.
 
*****

Our key message over the past 3 years has been that (a) growth is positive but slow, in the range of ~3-4% (nominal), and; (b) current growth is lower than in prior periods of economic expansion and a return to 1980s or 1990s style growth does not appear likely.

Modest growth should not be a surprise. This is the typical pattern in the years following a financial crisis like the one experienced in 2008-09.


continue reading





Semiconductors Hit Hard

Courtesy of Declan.

Internet troubles have limited me tonight, but the one chart I want to show is the near 5% loss in the Semiconductor Index.  Having escaped relatively unscathed from recent day’s selling it was a whirlwind of action for the index today.






This had obvious consequences on the Nasdaq. The Nasdaq did relatively well to suffer just over a 1% loss.  However, there were ‘sell’ triggers for On-Balance-Volume and Directional Index. There was also an acceleration in the relative underperformance of the index to the S&P.  Bulls will look to the 50-day MA as a possible defense point.





The S&P managed to stay out of the crossfire, experiencing a relatively small loss with only a ‘sell’ trigger in On-Balance-Volume.





The Russell 2000 also took modest losses having been the first index to experience profit taking after extended gains. Technicals remain net bullish with no ‘sell’ triggers.





Semiconductors remain vulnerable further losses as Micron weighs on the index. Bulls can look to 50-day MAs to mount a defense, although such action would need to occur in early morning trading for the Nasdaq and Semiconductor Index as both indices finish with tags of these MAs.




You’ve now read my opinion, next read Douglas’ blog.





I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









US 30 yr yield, your best defence is?

Courtesy of Read the Ticker.

us-30-yr-yield-your-best-defence-isIt is said that a rising stock market with rising interest rates is healthy ! Then why are there massive shipments of ‘Adult Diapers’ to Wallstreet (joke) ?

The cost of money ($USD) is changing
- Share buy backs will cost more
- Mortgage rates will rise
- Dividends will have to match this
- US Govt interest bill increasing
- ‘Deals’ just cost more more more!

Short Answer: This is not good.

Click for popup. Clear your browser cache if image is not showing.
TYX

Remember the FED QE tends to see interest rates rise…so that wont help! Maybe Janet Yellen will say ‘We will do what it takes to save the dollar, and it will be enough!’

QE and Interest Rates

Are you ready for the next crisis? Take your pick!

Disclosure: Got both!

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…

..”Tape reading is rapid-fire horse sense…The Tape Reader aims to make deductions from each succeeding transaction — every shift of the market kaleidoscope; to grasp a new situation, force it lightning-like through the weighing machine of the brain and to reach a decision which will be acted upon with coolness and precision”..

Richard D Wyckoff

..”Money couldn’t buy friends, but you got a better class of enemy”..

Spike Milligan

My experience has been that in successful businesses and fund management companies, which performed well over the long-term, some courageous decisions were taken. Courageous fund managers reduce their positions when markets become frothy and accumulate equities when economic and social conditions are dire. They avoid the most popular sectors, which are therefore over-valued, and invest in neglected sectors because being neglected by investors they are by definition inexpensive. The point is that it is very hard and that it takes a lot of courage for a fund manager to avoid the most popular sectors and stocks and to invest in unloved assets. Finally, every investor understands the principle ‘buy low and sell high’, but when prices are low nobody wants to buy.

Marc Faber

..“One must search through a maze of complex and contradictory details to get to the


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Small Caps Maintain Selling – Tech Joins In.

Courtesy of Declan.

Sellers kept pressure on the Russell 2000 with the Nasdaq and Large Caps also partaking in the profit taking merrymaking.




Large Caps had begun with a boost, the Dow in particular had started well, but was pegged back to finish with an inverse ‘gravestone’ doji. With sellers picking up the pace in the Nasdaq and Russell 2000 there is a good chance the ‘gravestone’ doji will hold to its name and deliver trouble tomorrow.






The Nasdaq gave up a percentage point on higher volume distribution, giving up the breakout in the process. On-Balance-Volume is close to generating a ‘sell’ trigger.  There was a relative loss against the S&P.





The Russell 2000 didn’t experience the same degree of loss, but it did chalk up its third day of loss in a row. Despite this, it remains the lead performing index relative to the Nasdaq and S&P.





For tomorrow, look for more of the same. With just one day of profit taking under the belt there hasn’t been a decent run of selling since the election. Shorting opportunities won’t present themselves until there is a failed rally following such a sell off.  Remember, the Russell 2000 has already flagged itself for profit-taking as prices moved inside the 10% zone of historic highs relative to its 200-day MA.




You’ve now read my opinion, next read Douglas’ blog.





I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Bulls Make Comeback

Courtesy of Declan.

It didn’t last long, but sellers quickly ran out of steam. Monday had the look of a profit taking, but buyers were quick to make a reappearance. Will markets make it back to Fib retracements? They look a long way way away.






The Nasdaq continues to hold breakout levels. Volume confirms accumulation with all technicals net bullish.





The Russell 2000 was the only index not to post a gain, although after a series of extended gains I would have expected a greater loss.





Can bulls return to the attack? Small Caps will find it harder, but the Nasdaq is well positioned to take advantage.




You’ve now read my opinion, next read Douglas’ blog.





I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Russell 2000 Experiences Profit Taking

Courtesy of Declan.

Friday’s partial trading delivered a final boost before holiday hangover selling kicked in. There is plenty of room for profit taking in the Russell 2000; look to Fib retracements for pullback opportunities. One thing I had missed was the profit take warning in this index; the Russell 2000 has tagged the 14.3% and 12.3% push above its 200-day MA which is in the 10% zone of historic price action dating back to 1987 (see table at the end of this post).






Other indices haven’t yet extended themselves so far. Profit Taking, while expected, isn’t as likely to be as extensive as for the Russell 2000.




The S&P has Fib retracements to look too.





The Nasdaq likely hasn’t driven far enough beyond resistance to encourage significant profit taking, but it can’t be excluded if sellers do make an appearance in other indices.





For tomorrow, look for additional profit taking in the Russell 2000 and other indices to follow.




You’ve now read my opinion, next read Douglas’ blog.





I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Weekly Market Recap Nov 27, 2016

Courtesy of Blain.

The week that was…

While it is never always positive, it does “feel” like Thanksgiving week is often quite bullish for stocks.  Light volume, generally positive feelings of the holiday, mild meltups often seem to happen in years not called 2008 or 2000.   This year we had the added bonus of a break to the upside preceding this past week and the NYSE McClellan Oscillator finally giving us a buy signal, so true to form it was generally a solid week with a nice start Monday and a nice close Friday sandwiching two very quiet days.  We continue to see a lot of nice moves in “growth sectors” vs defensive sectors. For the week the NASDAQ rose 1.5%, while the S&P gained 1.4%. The Russell climbed 2.3%.

“The post election narrative is still in place, with investors continuing to focus on fiscal policy and regulatory easing. That’s giving the market reason to be optimistic, and it means that the path of least resistance is higher for now,” said Aaron Clark, a portfolio manager at GW&K Investment Management, which has $33 billion in assets under management.  Despite that, Clark added that “I’m surprised by how quickly markets have priced in the positive impact of the election, as though changes to taxes and regulation can be done with the snap of a finger. I don’t think we’ve overshot on the upside, but we could see buyer’s remorse if the market starts to think it is ignoring risk.”

A Federal Reserve rate hike in December is now built into this market and the minutes released Wednesday did nothing to dissuade that line of thought.  The Fed minutes showed that policy makers agreed an interest-rate increase may be appropriate relatively soon.

Economic news was sparse with the highlight being Wednesday’s durable goods # which surged 4.8% in October, in large part due to strong demand for commercial aircraft.

Fun fact:  Online shopping on Thanksgiving Day itself delivered $1.15 billion in sales, an increase of 13.6% over last year, according to Adobe Systems. Of that revenue, $449 million came via a mobile devices…
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Gold Cycle Update

Courtesy of Read the Ticker.

gold-cycle-updateUsing our Jim Hurst Cycle tools we can find major cycle bottoms in a time series.



Time series do cycle, and multiple times cycles find major bottoms. A gold cycle bottom is hear or very near. Simply a price bounce is due.





Click for popup. Clear your browser cache if image is not showing.

Gold Cycle




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…



..“In a narrow market, when prices are not getting anywhere to speak of but move within a narrow range, there is no sense in trying to anticipate what the next big movement is going to be.  The thing to do is to watch the market, read the tape to determine the limits of the get nowhere prices, and make up your mind that you will not take an interest until the prices break through the limit in either direction.”..



Jesse Livermore





..“It is much harder to sell stocks correctly than to buy them correctly.” Because of the emotional aspect of trading, if a “stock went up, the average investor would hold because he wants more gains – he’s exhibiting greed. If the stock declines, he also holds on and hopes the stock will come back so he can at least sell and break even – he’s hoping against hope”..



Bernard Baruch





..”If past history was all there was to the game, the richest people would be librarians”..



Warren Buffett





..”Until an hour before the Devil fell, God thought him beautiful in Heaven”..



Arthur Miller, “The Crucible”

 [Contrarian Investing]











..“Investing should be like watching paint dry or watching grass grow. If you want excitement…go to Las Vegas.”…



Paul Samuelson











 
 
 

Zero Hedge

Core Durable Goods Orders Contract For 22nd Straight Month - Longest Non-Recessionary Streak In US History

Courtesy of ZeroHedge. View original post here.

For the 22nd straight month, US durable goods order (ex-transportation) declined on a year-over-year basis in October. This is the longest non-recessionary streak in US history bar none.

But it's probably nothing, because this was pre-election and since then everything (survey-wise) has been soaring... we are yet to see "hard data" items.

...

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ValueWalk

The biggest gold heist of all time

By Sovereign Man. Originally published at ValueWalk.

In 524 BC, a group of pirates set sail for Sifnos, an ancient Greek island famed for its vast gold and silver mines.

The mines of Sifnos were unparalleled in the ancient world.

They produced so much gold and silver that the local government at Sifnos could erect countless monuments, invest in new public works, and still easily have a substantial balance remaining at the end of each year to distribute to the citizens.

Photo by RonPorter (Pixabay)

When the pirates arrived, they robbed ...



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Phil's Favorites

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

European Stocks Little Changed With Industry Rotation on Hold (Bloomberg)

European stocks were little changed, as a recent rotation out of so-called defensive sectors and into shares seen benefiting from economic growth eased. Utilities and real estate companies climbed with banks, while miners trimmed recent lofty gains.

Yuan Rises for a Second Day as Fixing Signals Government Support (Bloomberg)

China’s yuan rose for a second day after an unexpectedly strong central bank fixing spurred specul...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

European Stocks Little Changed With Industry Rotation on Hold (Bloomberg)

European stocks were little changed, as a recent rotation out of so-called defensive sectors and into shares seen benefiting from economic growth eased. Utilities and real estate companies climbed with banks, while miners trimmed recent lofty gains.

Yuan Rises for a Second Day as Fixing Signals Government Support (Bloomberg)

China’s yuan rose for a second day after an unexpectedly strong central bank fixing spurred specul...



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Promotions

Phil's Stock World's Las Vegas Conference!

 

Come join us for the Phil's Stock World's Conference in Las Vegas!

Date:  Sunday, Feb 12, 2017 and Monday Feb 13, 2017.            

Beginning Time:  8:00 am Sunday morning

Location: Caesar's Palace in Las Vegas

Notes

Caesar's has tentatively offered us rooms for $189 on Saturday night and $129 for Sunday night. However, we have to sign the contract ASAP. We need at least 10 people to pay me via Paypal or we may lose the best rate for the rooms. (Once we are guaranteed ten attendees, I will put up instructions to call the hotel for individual rooms.)

The more people who sign up,...



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Members' Corner

Once In A Lifetime?

Courtesy of Nattering Naybob.

Summary
Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:
  • Dec 4th Italian Constitutional Referendum
  • Referendum Result; Market Reaction
  • Political Reaction; Opposition Party Reaction
Last Time Out
Since the end of World War II, 71 years have passed during which, the "perfect" balance has resulted in 63 different Italian governments, or more often than most change shoes.  Instead of being a real second legislative check, that balance is seemingly a weapon of mass distraction and instrument of political vetoes whi...

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OpTrader

Swing trading portfolio - week of December 5th, 2016

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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Kimble Charting Solutions

Inflation indicator testing multi-year breakout cluster!

Courtesy of Chris Kimble.

Some tools are used to measure inflation or lack of. Some look at the price of Crude Oil, Doc Copper or the Commodities Index (CRB) to determine if inflation or deflation is in play. Since 2011, most commodities have created a series of lower highs and lower lows and for many, it has been easier to make the case of deflation than inflation, is in play.

Below looks at another tool, that is often used to determine if inflation or deflation is in play. This tool we are referring too is the TIPS/TLT ratio-

CLICK ON CHART TO ENLARGE...



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Chart School

Weekly Market Recap Dec 4, 2016

Courtesy of Blain.

The week that was…

The market needed a pause after the frenetic post election rally, and it finally arrived this week.  The pullback was mild as bulls would like.  This week’s “fear of the week” was Italy’s political referendum which happened today… and was rejected.

Italian voters were asked in a referendum to approve changes to the country’s constitution, which have been called the most sweeping since the end of World War II. The proposed reforms would cut the Senate’s size by two-thirds and reduce powers held by the country’s 20 regional governments. Italian Prime Minister Matteo Renzi believes the changes will aid efficiency in parliament.

The reforms could also “make it easier to implement important legislation (such as measure...



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Digital Currencies

Largest US Bitcoin Exchange Is "Extremely Concerned" With IRS Crackdown Targeting Its Users

Courtesy of ZeroHedge. View original post here.

Last Thursday we reported that in a startling development seeking to breach the privacy veil of users of America's largest bitcoin exchange, the IRS filed court papers seeking a judicial order to serve a so-called “John Doe” summons on the San Francisco-based Bitcoin platform Coinbase.

The government’s request is part of a bitcoin tax-evasion probe, and se...



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Mapping The Market

The Most Overlooked Trait of Investing Success

Via Jean-Luc

Good article on investing success:

The Most Overlooked Trait of Investing Success

By Morgan Housel

There is a reason no Berkshire Hathaway investor chides Buffett when the company has a bad quarter. It’s because Buffett has so thoroughly convinced his investors that it’s pointless to try to navigate around 90-day intervals. He’s done that by writing incredibly lucid letters to investors for the last 50 years, communicating in easy-to-understand language at annual meetings, and speaking on TV in ways that someone with no investing experience can grasp.

Yes, Buffett runs an amazing investment company. But he also runs an amazing investor company. One of the most underappreciated part of his s...



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Biotech

Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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All About Trends

Mid-Day Update

Reminder: Harlan 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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FeedTheBull - Top Stock market and Finance Sites



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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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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