Posts Tagged ‘DAX’

Global Chart Reveiw Shows Key Inflection Point

Chart Review by Michael Clark

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

    -- John Maynard Keynes

SO, IS THIS FINALLY THE 'REAL' CORRECTION?

What a week it was.  The Bears gave the Bulls some payback.  Obama got a wake-up call.  And the banks got a well-deserved scare (and we hope they will get a well-deserved hair cut).

The markets reacted, as one might expect, with selling.  Actually, the selling began before the Massachusetts election and before Obama sent a shot across the Goldman Sach's bow.  Last week Intel announced surprisingly strong earnings; and the stock started up and then sank.  For the past half-year investor behavior had been the reverse: a buying spree for any stock that did not lose as much as it might have — beating 'Street expectations' that had been dumbed down over and over again during a quarter so that the company could report 'surprising' strength.  Suddenly, now, even good earnings are being greeted with selling.  Then came Massachusetts — wasn't that a Bee Gees' song?
 

All the lights went out in Massachusetts

Anyway, readers want to know where the markets stand today, after the sell-off this week.  My view of it — my 'view', not my gut-feeling — is that we are, so far, merely correcting from an over-extended rally.  This rally has been bizarre, to say the least.  This has been a 'fear rally' — usually the 'fear' side of the equation is when selling comes in, 'greed' driving the expansion.  But fear of systemic failure has driven this rally; and Ben Bernannke has been the captain sailing the 'Boat of Fear',   Ben's logic — that more debt will solve the insolvency crisis — has a shadow side, the logic that a collapse in stock prices will result in systemic failure, international chaos, revolution, repression…made him believe that preservation of the status quo was requiired, at any price.  A 'make-believe' recovery could be jump-started, perhaps, if the Fed could just stimulate (and simulate) another asset-bubble.  After all – that is how his mentor and predecessor, Alan Greenspan, had become the darling of the coctail party crowd, leading member of Time Magazine's 'Committee to Save the World';
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Germany’s DAX: Insight Into Europe’s Leading Economy

Note: Our friends at Elliott Wave International have announced the beginning of their "FreeWeek event, where they throw open the doors to some of their most popular paid services to non-subscribers for one week." This time, they’re offering complete access to The Asian-Pacific Short Term Update and The European Short Term Update. – Ilene

FreeWeek Kicks Off With Germany:  Click HERE to sign on and get invaluable insight into Europe’s #1 market.

Germany’s DAX: FREE Insight Into Europe’s Leading Economy

Courtesy of Elliott Wave International

It’s one of the first rules in the book of mainstream economic wisdom: a country’s economy is the thermometer which "reads" its stock market’s temperature. If financial conditions are heating up, stocks rise; if they are cooling down, stocks fall. Were it so simple — millionaires wouldn’t make up a measly .15% of the global population.

Obviously, there’s a major flaw with this logic; namely, it isn’t true. Time and again, stock prices smolder to near boiling even as economic growth chills to the bone. (The opposite also holds: Stock prices cool down even as the economy is on fire.)

Take, for instance, Germany’s main stock index, the DAX 30. On August 13, Europe’s number one economy reported a .3% rise in gross domestic product (GDP) — Germany’s first quarter of growth since January 2008. Soon after, the DAX began to rally and finished the day at a fresh, ten-month high.

In no time at all, every financial media outlet from Wall Street to la-la land had their story: "Germany’s DAX rose nearly 1% on the GDP data. The big picture will be one of ongoing gradual recovery through 2010." (LA Times)

One problem: the DAX’s bullish flame has been burning since the index landed at a two-year low on March 9, 2009. YET — the economic data over those six months has been about as "hot" as the Arctic Circle. Here, the following news stories from the time say plenty:

  • March 24, Wall Street Journal: "There’s a slew of evidence that Germany is in an economic freefall: A 19% drop in industrial output, a 23% decline in exports, a 35% drop in new manufacturing orders, and on. The numbers we’re seeing are just mind-boggling."
  • April 30, New York Times reveals a 17% year-over-year decline in Germany’s exports and writes, "With 47% of its GDP generated by


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Testy Tuesday – A Very Dangerous Line in the Sand

Well we are up in the pre-markets (7am) – that's something

Interestingly the global markets took our dip rather well.  The Shanghai fell 2.8%, the Hang Seng gave back yesterday's 3.5% gain, India hit the 2.5% rule, and the Nikkei fell 2.2% – a bad day but not worse than ours, as is often the case in Asia.  The DAX is, of course, leading Europe lower with a 2% loss into lunch but the CAC and FTSE are down just a point.  I had a busy evening doing a Big Chart Review and indulging in my political rant of the week about the budget fiasco but maybe that will be a weekend article as my comments alone in the members section were over 2 pages.

We went mildly bullish into yesterday's close, mainly by covering our long index puts, looking for at least a bounce off what is now a 1,100 point drop since February 9th, when we did our previous Big Chart Review.  We are actually 14% below the 8,280 on the Dow that we held that morning so another 1% down to go before we hit our next bounce, just over the 7,000 mark.  The gravity of the 5% rule dictates that we are more likely to go down than up now that we blew through 12.5% and finished at yesterday's low and getting back to that 12.5% line (7,245) will be our challenge for the day.  On the S&P we'll be looking for 760 to be taken back but we are just a hair over 738, which is the 15% drop off that 2/9 open.  The Nasdaq is about 2% over 1,352 and just under the 12.5% line at 1,392 so we'll be looking for leadership there to the upside. 

The NYSE is our most worrying index.  They are aleady down more than 15% (4,675) at 4,633 and the Russell (see David Fry's chart) is the NYSE's partner in crime, failing the 15%, 400 mark by 5 points already.  So it's going to be an easy day to look for a turn as we need the NYSE to break over 4,675 and 4,790 is our next stop.  The Nasdaq needs to hold 1,352 and get back over 1,392 and the Russell must break over 400 and return to 411 in…
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Monday Melt-Down, The Fallen (Big Chart Review)

What a disaster!

Once again we are in a market that environment that reminds me of the Simpsons episode where Homer jumps over a gorge, crashes, is taken up by a helicopter (Ben) smashing against the wall along the way only to fall all the way from the top again.  Pain, pain and more pain every time we try to get long.  Today we finished near 11-year lows on the Dow and S&P, so much for that decade of savings…. 

I said this morning that we had a "wall of worry" to climb this week and we didn't get very far up it before falling off a market cliff of our own.  Fortunately, as I mentioned in the morning, we went pretty bearish into Friday's close and I said at the end of the morning post "we’re certainly not going to be impressed by anything under 1.25% today."  It's very important to have a trading plan and we peaked out right at the open, well below our 1.25% target.  My opening comment at 9:36, despite the "rally" was:  "AAPL and the Qs not doing too well this morning.  Financials up 3% already, SKF below $180 .  We need a nice move in the Transports to shut up those Dow Theory people but this is a very weak morning move so far.  Dollar is strong and that’s keeping us down (stocks are a commodity) but weak is weak so, like I said, roll up the long puts when you can and no need to cover the other half with short puts until we pass 1.25% at least."

Nonetheless our F play went well as an agreement with the UAW was announced at 9:44 giving us a quick trip to $1.90 before pulling back to a 10% gain on the day.   We bottom fished a little on UNH and X but I said to members at 11:39: "Watch out if $7.40 breaks on XLF, that can drop us 5% fast in the financials.  Hopefully it will hold."  XLF finished the day down 3.5% but we ended up deciding it may be a little overdone.  We shorted FAS and that went well but then we tried to day-trade them to the upside and that led to two aborted attempts to go long as we were trying to catch a wave up that never came.  It was all over at…
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Zero Hedge

Going Down With The Ship: After Raging At Moody's For Downgrade To Deep Junk, Masa Son Pledges 40% Of SoftBank Stake To Lenders

Courtesy of ZeroHedge View original post here.

Last October, in the aftermath of the WeWork and Uber fiasco, we asked if SoftBank, that chronic seed (and not so seed) investor in cash-incinerating zerocorns startups would be "The Bubble Era's "Short Of The Century." Subsequent events have only made our query more pressing: with the global economy frozen, with social distancing and self-quarantine now a mandatory part of life...



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Phil's Favorites

Stimulus package will remain half-baked unless local governments get more of the dough

 

Stimulus package will remain half-baked unless local governments get more of the dough

People still need baked goods even during a lockdown. Frederic Brown/AFP via Getty Images

Courtesy of Stephanie Leiser, University of Michigan

Lawmakers are pinning their hopes on a US$2 trillion package to prop up the U.S. economy and provide relief to individuals and business ravaged by the coronavirus. ...



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The Technical Traders

These Index Charts Will Calm You Down

Courtesy of Technical Traders

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you ...



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Kimble Charting Solutions

Broadest Of All Stock Indices Testing Critical Support, Says Joe Friday!

Courtesy of Chris Kimble

One of the broadest indices in the states remains in a long-term bullish trend, where a critical support test is in play.

The chart looks at the Wilshire 5000 on a monthly basis over the past 35-years.

The index has spent the majority of the past three decades inside of rising channel (1). It hit the top of this multi-decade channel to start off the year, where it created a monthly bearish reversal pattern.

Weakness the past 2-months has the index testing rising support and the December 2018 lows at (2).

Joe...



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Insider Scoop

Why SmileDirectClub's Stock Is Trading Higher Today

Courtesy of Benzinga

SmileDirectClub (NASDAQ: SDC) shares were trading higher on Friday, after the company announced it's now producing medical-grade face shields for health care workers amidst the coronavirus (COVID-19) pandemic.

SmileDirectClub says it has capacity to print up to 7,500 face shields per day and is accepting orders from healthcare org...



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Biotech/COVID-19

Coronavirus treatments and vaccines - research on 3 types of antivirals and 10 different vaccines is being fast-tracked

 

Coronavirus treatments and vaccines – research on 3 types of antivirals and 10 different vaccines is being fast-tracked

Scientific research on the novel coronavirus has progressed at unprecedented speed. Mongkolchon Akesin / Shutterstock

Courtesy of Ignacio López-Goñi, Universidad de Navarra

Just three months after China first notified the World Health Organization about a deadly new coronavirus, studies of numerous antiviral t...



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Chart School

Cycle Trading - Funny when it comes due

Courtesy of Read the Ticker

Non believers of cycles become fast believers when the heat of the moment is upon them.

Just has we have birthdays, so does the market, regular cycles of time and price. The market news of the cycle turn may change each time, but the time is regular. Markets are not a random walk.


Success comes from strategy and the execution of a plan.















Changes in the world is the source of all market moves, to catch an...

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Digital Currencies

Bitcoin Tested As A Safe Haven After Biggest Stock Crash Since 2009

Courtesy of ZeroHedge View original post here.

Authored by Horus Hughes via CoinTelegraph.com,

Gold and Bitcoin react to global panic

Amid all of yesterday's chaos in bond, commodity, and stock markets, with the yield on the 10-year US Treasury note dropping below 0.5% for the first time in history - a strong indicator that investors are desperately looking for safe harbors - two supposed safe-havens in 'alternative currencies' behaved qui...



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Members' Corner

Bloody Mob Sh*t: An Interview with Lincoln's Bible

 

Bloody Mob Sh*t: An Interview with Lincoln's Bible

We talk Trump, Mogilevich, Epstein, Giuliani, Fred Trump, Roy Cohn, and more.

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

(Originally published on Feb. 21, 20.)

...

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ValueWalk

Entrepreneurial activity and business ownership on the rise

By Jacob Wolinsky. Originally published at ValueWalk.

Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upwards over the past 19 years, according to the 2019/2020 Global Entrepreneurship Monitor Global Report, released March 3rd in Miami at the GEM Annual Meeting.

Q4 2019 hedge fund letters, conferences and more

The Benefit Of Entrepreneurial Activity ...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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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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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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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.