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‘Chart School’ Category
by kimblechartingsolutions - November 6th, 2018 9:20 am
Courtesy of Chris Kimble.
A swift 30 point drop (nearly 15%) from mid-September through the end of October has the Transportation Sector (IYT) testing important long-term support. The Dow Jones Transports Sector (IYT) also represents an important slice of the domestic and global economy. So losing support here would not be good. Let’s look at the weekly chart of IYT.
A triple support test is in play for the Dow Transports at (1).
The long-term trend remains “up” but the price action could be concerning, due to the drop-off in long-term momentum. A lot is at stake here friends. Keep an eye on how this bonce performs and watch this important support zone!
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This article was first written for See It Markets.com. To see original post CLICK HERE
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by kimblechartingsolutions - November 5th, 2018 8:29 am
Courtesy of Chris Kimble.
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Junk Bonds have sent an important message to stocks at important tops and bottoms over the past 20-years! Junk bonds sent bullish messages to stocks as they created bullish divergences at the lows in 2003 and 2009.
They also created bearish divergences, sending a negative message to stocks in 2000 & 2007, as they turned lower months ahead of S&P topping.
This year junk bonds have been diverging with the S&P 500 for almost a year. This chart highlights that Junk bonds and the S&P 500 are both testing support off the 2009 lows at the same time.
Keep a close eye on what Junk bonds do between now and the end of the year as they test 9-year rising support. How they perform at support, should send an important message to the S&P 500.
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by Chart School - November 5th, 2018 4:23 am
Courtesy of Blain.
Words rarely spoken the past few years: “The market was due for a bounce back after some intense selling.” Modest selloffs Monday and Friday bookmarked 1%+ rallies Tue-Thu on the S&P 500. It’s not so much the rally during a selloff to examine as the action after the rally. So we should have a good amount of information at this time next week – bears have been so used to rallies just continuing straight up the past half decade plus so we’ll see if there is a change in nature. Aside from fixing some technical damage bulls would want to see a significant drop in volatility.
October once again struck as one of the trickiest months on the calendar for markets: The S&P 500 shed 6.9% for its biggest monthly decline since September 2011, while the NASDAQ dropped 9.2% in October for the biggest fall since November 2008.
(Far) across the pond, we mentioned the bullish “outside reversal” day a few weeks ago in the Chinese market – despite the selling in U.S. markets this reversal held up and the Chinese market looks like it has put in a short term bottom at least!
For the week the S&P 500 gained 2.4% while the NASDAQ added 2.7%.
In economic news, Monday the government announced consumer spending rose 0.4% in September, matching forecasts. Incomes rose a smaller 0.2%, the smallest rise in 13 months.
Thursday, ISM Manufacturing fell to a six month low of 57.7 vs economists’ expectations of 58.7. Still a very strong number.
Friday, the government reported job gains of 250,000 in October, beating economists’ expectations for payrolls to rise by 202,000. The unemployment rate remained flat at 3.7%, while the report showed year-over-year wage gains rising to 3.1%, slightly above the consensus estimate of 3%.
Here is the 5 day weekly “intraday” chart of the S&P 500 … via Jill Mislinski.
The week ahead…
Earnings season is slowing down but still some heavy…
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by Zero Hedge - November 4th, 2018 11:15 am
Courtesy of Lance Roberts, RealInvestmentAdvice.com
Market Stalls At Resistance
This past Tuesday, I wrote “A Sellable Rally” in which I laid out the 4-reasons for a rally based on the psychological, fundamental, technical, and seasonal underpinnings. That rally came to fruition over the last few days.
For us, it has been the technical backdrop which remains the most compelling. To wit:
“Unlike the February lows, the recent sell-off fell 4-standard deviations below the 50-dma which is a rare event historically speaking. Such deviations do not last long as such an extreme move away from the average price tend to be corrected in fairly short order.“
As shown, the combination of both the extreme oversold and deviated conditions contributed to a bounce which hit our “target neighborhood” of 2740-2750 on Friday morning.
In accordance with our portfolio management strategy, when the markets reached our target zone yesterday morning we executed sells of positions that have been under-performing both the market and other holdings within our portfolios. As we have stated many times previously, one of the primary tenants of portfolio management is to “sell losers.”
“Only losers, add to losers.” – Paul Tudor Jones
With portfolios reduced to 50% equity, we have a bit of breathing room to watch the elections next week. There is more than a decent chance the currently Republican-controlled House of Representatives switches to Democratic control which would likely lead to further market volatility. However, Kevin Giddis from Raymond James laid out three likely scenarios last week.
“What could a potential change do for bonds and stocks? There are many possible scenarios, so the devil is in the details. I will lay out a couple of them for you:
1) The Republicans could lose the House, or the House and Senate. Either of these possibilities could derail the President’s agenda, leading us back to a period of gridlock that has plagued this country in the past. This would likely be good for bond prices and bad for equity prices.
2) The Republican majority remains intact, and the President pushes forward his plans of another tax cut, among other items as well. This would likely be good for stocks and bad for bond prices.
3) A complete rout that not only gives the majority of
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by kimblechartingsolutions - November 2nd, 2018 9:05 am
Courtesy of Chris Kimble.
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The long-term trend for Commodities, Gold, Silver, Copper & Miners remains down at this time. Could the long-term bear trends be coming to an end? Possible!
This chart looks at the Australian Dollar where it highlights that the AU$ has spent the majority of the past 30-years inside of the blue shaded rising channel. The correlation between the AU$ and commodities has remained high over the past 30-years.
The AU$ created a “W” (Double Bottom) back in 2001 as a 13-year bear market was coming to an end as a new 10-year bull market was getting started. As the AU$ was moving moving much higher from 2001 to 2011, Gold, Silver, and Commodities went along for the ride.
The AU$ peaked in 2011 as it was hitting the top of this 30-year channel, where a major trend reversal took place. As the AU$ was peaking in 2011, Gold, Silver, miners, and Commodities did the same! The 7-year bear market in the AU$ has it now testing 30-year rising support at (3).
Joe Friday Just The Facts Ma’am- The AU$ is testing 30-year support at (3), with momentum oversold. If 30-year support holds and it breaks above falling resistance, it would send a bullish message to Gold, Silver, and Commodities not see in years!
If taking advantage of opportunities in Gold, Silver, Miners, and Commodities is of interest to you, check out our Metals and Commodities weekly reports!
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by Chart School - November 1st, 2018 2:01 pm
Courtesy of Read the Ticker.
Change comes to every thing, the oxygen we breath slowly ages all human cells, and some how it is a big surprise change has come to the FANG stocks.
In the charts below the FANG stocks (FB, AAPL, AMZN, NFLX, GOOG) are compared to the benchmark XLU (utility stocks) in readtheticker.com sector rotation chart. Utility stocks are nice and safe and slow. An excellent control set against the aggressive FANG stocks.
Here is the picture just before the volatility of 2018. The rock stars are in control of the majors trends. All FANG stocks are judged as very strong compared to the benchmark (XLU).
Now after the recent pre 2018 mid term sell off. The picture shows FANG stocks still a strong, but strength compared to the benchmark XLU is rapidly evaporating. Time to buy during a moment of weakness, or a time to adjust portfolios? The readtheticker.com asset rotation chart helps you to watch asset class rotation.
Investing Quotes…
…"The game taught me the game. And it didn’t spare the rod while teaching."…
Jesse Livermore
…"The four most dangerous words in investing are 'This time it's different' "…
John Templeton
..“How many millionaires do you know who have become wealthy by investing in savings accounts?”
Robert G Allen
…“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”…
Martin Zweig (The inspiration behind a number of Martin Zweig’s methods came, from Jesse Livermore).
..“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.”..
Bernard Baruch
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by kimblechartingsolutions - November 1st, 2018 8:54 am
Courtesy of Chris Kimble.
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This chart looks at the King Dollar over the past 10-years. It remains in a long-term uptrend, creating a series of higher lows and higher highs inside of rising channel (1). King$ has spent the majority of the past 3-year trading sideways between 90 and 105.
In August King$ created a weekly bearish reversal pattern and sold off a small percentage (3%). The rally over the past 5-weeks has it back at August highs, where it could be creating another bearish reversal pattern this week at the August highs.
Sentiment for the US$ currently stands at 77% bulls, as a good deal of investors are confident it will rally.
Metals bulls would love King$ to be creating a double top this week! Potential important price point in play for the Dollar and metals!!!
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by ilene - October 31st, 2018 11:06 am
What a friend we have in time
Gives us children, makes us wine
Tells us what to take or leave behind
– John Denver
The good thing about having a long-term time horizon is that, with dollar cost averaging of the sort you do in a 401(k) or similar account, the effects of market peaks are eventually blunted. It begins not to matter that some of your allocation to the stock market occurred at high points.
But that’s over multi-year periods and decades.
J.P.Morgan Asset Management is out with its 2019 Long-Term Capital Markets Assumptions piece this week and, in the chart below, they take a look at the effects of ten-year returns for investors buying the S&P 500 a year before the market peaks, at the peak, and then a year later. In none of these cases are the results egregious, and again, the chart assumes a one-time lump sum, which is not the way people actually invest IRL. But anyway, here it is…
Speaking of market peaks, do not miss Michael’s excellent survey of charts looking at the drawdown in Amazon this fall. It’s one of only 25 stocks that have added over $100 billion in market cap since the March 2009 bottom, and since then its shareholders have had to endure five (5!) separate drawdowns of 20% or more. Despite these recurring drawdowns, the stock has appreciated at roughly 40% a year on average, which is breathtaking.
Did you know that Amazon has lost more in market cap this fall than THE ENTIRE COMPANY WAS WORTH IN 2016? True story, link below:
A Top or The Top? (Irrelevant Investor)
Source:
2019 LONG-TERM CAPITAL MARKET ASSUMPTIONS EXECUTIVE SUMMARY (JPMorgan Asset Management)
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by kimblechartingsolutions - October 31st, 2018 7:52 am
Courtesy of Chris Kimble.
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This chart looks at the NYSE Index over the past 20-years on a weekly basis. This very broad index has traded sideways for the past 15-months, while the long-term trend remains up.
Weakness this month finds the index testing dual long-term support as weekly momentum is creating lower highs as it nearing oversold levels.
Support is support until broken and this broad index is testing a very important support zone as October is coming to an end!
The long-term bull trend would get receive a concerning price message if dual support fails to hold.
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by ilene - October 30th, 2018 8:38 pm
Since the S&P 500 bottomed in March 2009, there are 337 stocks that were part of the index then that still remain in it today. Of those 337, Amazon is one of 38 that has gained 1,000%. The stock has compounded at nearly 40% a year for the better part of the last decade, for a gain of 2,350%.
It is one of 25 companies to add $100 billion to its market cap.
Amazon has been one of the most important drivers of this bull market.
But that was then and this is now. Amazon is 25% off its highs, and in its fifth separate 20% drawdown since 2009…
…with all of its recent decline coming in October, this will be its worst month since November 2008.
So the question is, was this just a top, or the top?
It’s hard to compare Amazon in 2018 to Amazon in 2011 for a multitude of reasons, with perhaps size being the obvious one. In its last 20% decline (February 2016), the market cap was $227 billion. From its bottom in 2016 to the recent peak, it rocketed up 320%, and now, with its 25% decline over the last 40 sessions, it shed more market cap than the entire company was worth in 2016!
What’s also obviously different are interest rates. In February 2016, the 2-year treasury rate was 0.75%, today it’s 2.85%.
Another major difference between Amazon today and in previous drawdowns is that their core business growth is decelerating. Cooper Smith writes “Amazon’s core e-commerce business slowed to 11% year-over-year growth in Q3, down from 22% a year ago…Revenue from Amazon’s international business grew just 15% YoY, down from 28% a year ago.”
Maybe the simplest explanation here is the most likely one. The stock went, excuse me for a second, too far, too fast. At one point earlier in the year, Amazon added more in market cap than the combined value of Walmart Target and Costco. Even after this decline, it’s still up 32% in 2018.
Is today another opportunity to buy one of the most transformative companies ever at a discount, or are we staring at Cisco in 2000?
*Data from Ycharts and Bloomberg
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site