Archive for the ‘Chart School’ Category

Joe Friday; Looks Like One Of These Assets Is Not Telling The Truth!

Courtesy of Chris Kimble

Historically Stocks, Yields and Doc Copper often trend in the same direction. Unless its different this time, one asset(s) is way out of whack!

This chart looks at the S&P 500, Doc Copper and the Yield on the 10-year note over the past 5-years.

From late 2015 until late 2018, correlations between the three were pretty decent, especially at the 2016 lows.

A big correlation change has taken place since December of 2018. Since then, the S&P has rallied while Yields and Copper have experienced declines, creating one of the largest spreads between the three in many a blue moon!

Joe Friday, Just The Facts Ma’am; This historically large spread should narrow, odds are low it will continue for months to come.

The billion-dollar question is this; which asset(s) will play the biggest game of “Catch-Up???” Are stocks overextended or has Copper/Yields declined way more than they should have?

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Doc Copper Attempting To Break 20-Year Rising Support

Courtesy of Chris Kimble

If the saying “So Goes Doc Copper, So Goes The Global Economy” is true, what Ole Doc Copper does from current levels will send an important message to global markets!

Doc Copper has spent the majority of the past two decades inside of bullish rising channel (1), as it has created higher lower and higher highs.

Since the 2011 highs, Doc Copper has spent a good deal of time creating lower highs and lower lows.

This downward price action has Copper attempting to break below its 20-year rising channel.

A horizontal support line has been created by Copper at the $2.50 level over the past few years.

Doc Copper is again testing the key support level this week at (2). What Doc Copper does at the $2.50 zone could well send an important message to the global markets!

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Energy vs Tech could be the monster mean reversion of a lifetime

 

Energy vs Tech could be the monster mean reversion of a lifetime

Courtesy of 

Check out my Chart o’ the Day from Jon Krinsky, I love this stuff. It gets right to heart of all the things we talk about here – cyclical vs secular, and how to tell which is which, value vs growth, innovation vs entrenchment, etc.

Energy vs. Technology – the daily RSI hit 9 yesterday, the lowest reading since we have GICS data back to 1990. Interestingly, the ratio itself is nearing its all-time low made on March 24th, 2000 which was of course the all-time high for the Nasdaq 100.

Source:

Stranger Things… Energy vs. Tech spread most oversold since at least 1990, reversion likely… 
Baycrest Partners – February 5th, 2020

Follow Jon on Twitter!





Tesla Completing A Bearish “Eiffel Tower” Topping Pattern, While At Resistance?

Courtesy of Chris Kimble

Tesla have been charging higher since the lows of last May, as it has rallied from $200 a share to nearly $800! Is it about to run out of juice?

This chart looks at Tesla (TSLA) over the past 9-years. It has spent the majority of the past 7-years, inside of bullish rising channel (1). It touched the bottom of the channel last May, where the powerful rally got started.

The rally off the May low has TSLA testing the top of the rising channel, as its Fibonacci 261% extension level of the 2016 lows and 2017 highs at (2).

While testing the underside of the channel and the 261% extension level, TSLA could be creating a very large weekly bearish reversal pattern, near mid-week.

I’m wondering this morning if; This is an 800-pound resistance test? Will the bearish reversal pattern still be in play at weeks end? Is TSLA completing an “Eiffel Tower” topping pattern at these resistance levels?

Where TSLA finishes the week should go a long way towards giving us a clue to these answers!

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Greatest Short Squeeze of All Time?

 

Greatest Short Squeeze of All Time?

Courtesy of 

Now this is just breathtaking – I have no skin in the game on this one but cannot stop watching it. I think what’s happened with Tesla recently represents the greatest short squeeze of all time. A rally since around October when they surprised to the upside in an earnings report has just culminated in an explosive 100% year-to-date gain at this morning’s open.

In the top pane (blue) I’m showing total return over the last 6 months of 285%!

In the middle pane I’ve got growth in market capitalization (orange), which soared alongside the stock price, going from $50 billion to over $130 billion, which it make it more valuable than Costco, Lockheed Martin, Goldman Sachs, Starbucks and 400 other components of the S&P 500!

Finally, you can see the short interest as a percentage of shares outstanding. Six months ago, roughly 25% of all the shares outstanding were being borrowed by short-sellers and sold. These shares must be replaced by the short-seller buying them back (or covering their short), which would be profitable if the stock had declined. Needless to say, covering your short in Tesla after the stock has tripled in value would produce the opposite effect – massive, ruinous losses, especially for the unsophisticated who were naked and hadn’t hedged this losing bet in the options market.

I’m not sure we’ll ever see a short squeeze this epic ever again in our lifetimes. In dollar terms it has to be the biggest for the United States. In Europe, during the financial crisis, there was an epic short squeeze in shares of Volkswagen, which was driven up to 1,000 euros per share for a brief moment, making it worth $420 billion, or the single largest company on earth. Its market cap, on paper had eclipsed the value of PetroChina, Microsoft and ExxonMobil, three of the largest in the world at that time, as desperate hedge funds caught leaning the wrong way were forced to cover and run. You can read more about that story here.

No matter what happens from here, this will certainly become one for the books! And it may not even be over yet.

UPDATED: Okay, we get into it here too:





WTI Holds Losses Below $50 After Bigger-Than-Expected Crude Build

Courtesy of ZeroHedge

Oil prices plunged to one-year lows, with WTI back below $50 for the first time since Jan 2019 as global demand concerns trumped OPEC+ jawboning that they could do something to stall the decline.

“We’re getting close to the bottom and it’s clear OPEC is not going to sit on their hands,” said Phil Flynn, an analyst at Price Futures Group Inc.

“There’s some dire predictions being priced in right now.“

As Bloomberg reports, the deadly virus has menaced markets by upending trade flows and is estimated to have cut 20% from China’s oil demand as quarantined cities and closed factories cripple industrial activity in the second largest economy in the world. Refineries are curbing operations, while the nation’s top processor is trying to resell millions of barrels of crude it no longer needs.

“How much OPEC decides to cut production will be a deciding factor for price stabilization,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB.

But for now, the machines will focus on inventories…

API

  • Crude +4.18mm (+3mm exp)

  • Cushing +960k

  • Gasoline +1.96mm (+1.8mm exp)

  • Distillates -1.78mm (-200k exp)

After a surprise build in the previous week, analysts expected another sizable build for crude and API reported a bigger than expected 4.,18mm build (and another build for gasoline stocks)…

Source: Bloomberg

Investors will be keenly focused on refinery utilization, says Andrew Lebow, senior partner at Commodity Research Group. “Refiners are beginning maintenance, which is why we can expect to see an inventory build.”

Ahead of the API print, WTI was trading around $49.60 and dipped modestly lower on the data…

But for now the $50 line in the sand is what matters…

“WTI is trying to hold on to that $50 support level,” says Olivier Jakob, analyst at Petromatrix.

“But it’s going to be difficult unless OPEC takes decisive action, otherwise we’ll get to the lows of 2018.”

And finally, we note that the front-end time-spreads for Brent have flipped negative once again…

Not a good signal for the recovery of China.

 





Crude Oil Sending Stocks A Buy Signal For The 4th Time?

Courtesy of Chris Kimble

Is Crude Oil bottoming for the 4th time the last 8-months? Is Crude Oil suggesting that stocks are at a low about to experience a strong rally?

Crude Oil has rallied off support line (1), which is the $50 level, three different times since May of 2019. Each time Crude turned higher off the $50 level, it experienced at least 15% rally.

At the same time, Crude was pushing higher off support, the S&P 500 was at a low and about to experience a quality rally as well.

Oil and Stock bulls are keeping a close eye on what Crude does at (2) this week, as Crude could be sending a positive message to markets for the 4th time in the past 8-months.

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TSLA Tops $900 – Where Does The Parabolic Surge End?

Courtesy of ZeroHedge View original post here.

On a morning when one of Tesla's biggest bulls, New Street's Ferragu downgrades the stock, saying:

"Limited sources of further appreciation in the next 12 months. .. We see 2020 playing out fine, but it is largely expected, and we see some risks on the stock: end of the short squeeze, 1Q20 miss on gross margins"

It is up almost 15% in the pre-market – topping $900 for the first time ever…

But Ron Baron was on CNBC earlier saying he isn't selling a single share and sees Tesla rising to $1TN in revenue in 10 years.

Nothing to see here…

So where does it stop?

If it's like Bitcoin, maybe $1200?

It it's like the VW squeeze in 2008, maybe $1600?

And it it's the South Sea Company, it could hit $1800…

Updated for today's price action. We can do it! pic.twitter.com/QQHvU76Q2m

— Keubiko (@Keubiko) February 3, 2020

Trade accordingly.





Dow Jones Utility index could trade like the FANGs

Courtesy of Read the Ticker

dow-jones-utility-index-could-trade-like-the-fangsThe world is changing because the US FED is considering capping the US 10 yr interest rate under the US inflation rate, or negative real interest rates forever. Further massive destruction of the US dollar purchasing power.

Previous Post: Formula for when the great stock market rally ends

In the previous post this blog said:

When valuations for the boring water company or the boring electric company is trading like your Facebook, Apple, Amazon or Netflix or Google (ie FANG) you know something is wrong. This is when a seriously over valued market is screaming at you. 

Of course the reader must understand in a world where money printing goes super nuts (Zimbabwe style) the stock market may go hyper inflationary and picking a time frame for a top is never a good idea, but we are not there yet. There is no Ben Bernanke helicopter money to the masses yet (ie MMT). We may be there, 'helicopter money lite'. If the intention is to cap interest rates under inflation, this is a form of massive easy money (or easy debt).

Of course the effect of negative real interest rates is the US 10 yr is now broken because it does not protect you from inflation, this is interest rates suppression, or fake. The US FED has enacted this policy before, during WW2, are we in WW3? No. Yet the debt levels as a percentage of GDP suggest we are. Crazy.

This means investors will hunt for a UST 10 yr alternative, hence utility stocks with their high dividends will attract a lot more investor interest. Yes a water company may go to a P/E of 40. 

This means demand for quality utility stocks around the world will be strong, and if the US dollar falls, utility stock in other parts of the world will be attractive. 

A good place to hunt for Wyckoff, cycles and Gann angles. Long term channels

 

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Crude Oil Bulls May Need To Take Cover If This Support Breaks!

Courtesy of Chris Kimble

Crude Oil has seen some pretty wide price swings over the years.

And, as we wrote about earlier this month, stock market bulls don’t like it when crude oil prices reverse lower.

In today’s chart, we look at crude oil’s latest turn lower and why bulls need prices to firm up ASAP.

The trend for crude oil remains up, as prices have remained inside the rising trend channel (1) since the 2015 lows.

Support is support until broken and a strong support test is in play at this time!!!

BUT the recent price reversal lower has crude oil testing dual support at (2). This area is marked by lateral support and its rising trend support line.

Crude Oil bulls may need to take cover if this dual support area fails to hold. Stay tuned!

This article was first written for See It Markets.com. To see original post CLICK HERE

To become a member of Kimble Charting Solutions, click here.





 
 
 

Zero Hedge

Why Is Maduro Still Pushing The Petro?

Courtesy of ZeroHedge View original post here.

Authored by William Luther via The American Institute for Economic Research,

In a recent Wall Street Journal article, Mary Anastasia O’Grady writes that Venezuela’s “National Superintendency for the Defense of Socio-Economic Rights is reportedly pressuring stores to accept the government’s new digital fiat currency, the petro.” The Venezuelan government claims its digital...



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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part IV

Courtesy of Technical Traders

As we continue to get more and more information related to the Coronavirus spreading across Asia and Europe, the one thing we really must consider is the longer-term possibility that major global economies may contract in some manner as the Chinese economy is currently doing.  The news suggests over 700+ million people in China are quarantined.  This is a staggering number of people – nearly double the total population of the entire United States.

If the numbers presented by the Chinese are accurate, the Coronavirus has a very high infection rate, yet a moderately small mortality rate (2~3%).  Still, if this virus continues to spread throughout the world and infects m...



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Phil's Favorites

Why Trump's post-impeachment actions are about vengeance, not retribution

 

Why Trump's post-impeachment actions are about vengeance, not retribution

President Trump fired Army Lt. Col. Alexander Vindman for testifying in his impeachment trial. AP Photo/Susan Walsh, File

Courtesy of Austin Sarat, Amherst College

Since the end of his Senate impeachment trial, President Donald Trump has carried out a concerted campaign against ...



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Biotech & Health

Deep learning AI discovers surprising new antibiotics

 

Deep learning AI discovers surprising new antibiotics

A colored electron microscope image of MRSA. NIH - NIAID/flickr, CC BY

Courtesy of Sriram Chandrasekaran, University of Michigan

Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.

That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...



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Kimble Charting Solutions

King Dollar Going To Lose Strength Here? Gold & Silver Hope So!!!

Courtesy of Chris Kimble

Is King$ and the Euro facing important breakout/breakdown tests at the same time? It looks like it in this chart!

The US$ trend remains up, as it has created a series of higher lows since the start of 2018. The opposite can be said for the Euro, as it has created a series of lower highs since early 2018.

The US$ is currently testing the top of its 18-month rising channel, as the Euro is testing the bottom of its falling channel.

What King$ and...



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Insider Scoop

The Daily Biotech Pulse: Heron Pain Drug Review Extended, Disappointment For Teva In Tourette Syndrome Study

Courtesy of Benzinga

Here's a roundup of top developments in the biotech space over the last 24 hours.

Scaling The Peaks

(Biotech Stocks Hitting 52-week highs on Feb. 19)

  • Adverum Biotechnologies Inc (NASDAQ: ADVM)
  • Akebia Therapeutics Inc (NASDAQ: AKBA)
  • Ana...


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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

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Comment: Wall of worry, or cliff of despair!



Date Found: Tuesday, 01 October 2019, 06:54:30 AM

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Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



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Members' Corner

How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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