Posts Tagged ‘wall st. sector selector’

Last Week Was Just the Beginning

Last Week Was Just the Beginning

Courtesy of John Nyaradi, Wall St. Sector Selector 

Weekly Stock Market and ETF commentary from Wall Street Sector Selector

Last week was difficult, at best, for global stock markets as the S&P 500 dropped more than -3% and the bond market surged as investors continued their “flight to quality.” Fear spread around the world with global markets shedding recent gains.  It was definitely a “risk off” week and the beginning of what I believe will continue to be a “risk off” period as we move through the closing days of summer.

The macro news was mostly poor, as we’ll discuss in a moment, and the technical picture deteriorated. In our portfolios, we moved to “Red Flag Flying” mode, expecting lower prices ahead, and moved from our remaining cash positions to inverse ETFs in the Standard Portfolio, while keeping our option portfolio positioned for more downside ahead. 

Our new “High Conviction Trade Alert triggered its first ‘buy’ signal and I’m looking forward to reporting more details on this to our Pro members in the weekly Position Update. The High Conviction Trade Alert is designed to identify high conviction/low risk opportunities.  It won’t trade very often but should offer excellent risk/reward opportunities. 

Looking at My Screens 

On a technical basis, significant damage was inflicted last week to equity markets around the world.  As we’ve been saying, an imminent decline in U.S. markets seems to be upon us, and it appears that last week’s action could have been the beginning of that move.

 

chart courtesy of StockCharts.com

In the chart above you can see that the S&P 500 has dropped below its 200 day moving average and also below its 50 Day Moving Average, indicating that the long and medium term trend is down.  These significant moving averages now become resistance rather than support and we see the next support levels at 1060 and then near 1020 at the June lows. 

The 50 Day Moving Average remains below the 200 Day Moving Average, forming the widely watched “death cross,” which typically accompanies significant trend changes.  Additionally, the 12 month moving average of the S&P 500 was also violated which is another bearish indicator for major markets. 

As if all of this isn’t gloomy enough, last week’s stock market action triggered a “Hindenburg Omen,” named after the German zeppelin that crashed and burned in New York…
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At the Tipping Point (Still)

At the Tipping Point (Still) (SPY, DIA, GLD, USO)

Courtesy of John Nyaradi at Wall St. Sector Selector, July 27, 2010

Instratrader Indicators: 

  • Yellow Flag: We Expect Choppy Prices Ahead 
  • Daily Technical Sentiment Indicators: Very Optimistic (short term bearish) 
  • Short Term Market Condition:  Very Overbought (short term bearish) 
  • Short Term Trend: Up 
  • Medium Term Trend: Neutral 
  • Long Term Trend: Neutral 
  • % of Stocks Above 200 Day Moving Average/Daily Change: 59.5%/-1.9% 
  • % of Stocks Above 50 Day Moving Average/Daily Change:    75.5%/-1.6% 

Market Update:

Market Closing Price %Change
Dow Jones Industrials (DIA) 10,537 +0.1
S&P 500 (SPY) 1113 -0.1
Gold  $1162 -1.9
Oil  $77.41 -2.0
VIX 23.1 +2.0
Shanghai Comp 2575 -0.5

Commentary:

Today’s (7/27) news was mixed with the Case/Shiller Housing Index registering gains along with positive earnings reports and outlook from DuPont while Consumer Confidence took a tumble and Moody’s downgraded Bank of America, Citigroup and Wells Fargo on their “supported ratings” which assumes a government bailout of the “too big to fail” category.  Because financial reform passed, government intervention is less likely to happen or be less extensive.

Gold and oil were crushed today, down some 2% each, while the VIX rose 2%.  The S&P 500 slipped to even with its all important 200 Day Moving Average, closing at 1113.84 compared to 1113.93 for the average.

Markets remain overbought and overoptimistic and subject to short term correction.  We remain in the “Yellow Flag Flying” mode, expecting choppy prices ahead.  A failure to materially break above overhead resistance between 1120-1130 on the S&P 500 will likely lead to lower prices ahead.  One of our indicators points to the growing possibility of a significant downturn ahead, but, of course, no one has a crystal ball and so the timing of that potential event is unknown.

Disclosure: psq, rwm, sh, skf, spy put

Read our weekend newsletter, Wall Street Sector Selector Review, for full market updates and analysis. 


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Manic Markets Continue: ETF Daily Outlook

Manic Markets Continue: ETF Daily Outlook

red flagCourtesy of John Nyaradi

Click here for a Special Report from Wall Street Sector Selector

Instratrader Indicators: 

Red Flag: We Expect Lower Prices Ahead 

Daily Technical Sentiment Indicators: Neutral 

Short Term Market Condition: Overbought (short term bearish) 

Short Term Trend: Up 

Medium Term Trend: Down 

Long Term Trend: Down 

% of Stocks Above 200 Day Moving Average/Daily Change: 51%/ +23% 

% of Stocks Above 50 Day Moving Average/Daily Change:    60% /+51% 

Market Update:

Market closing price  % change 
DIA 10,322 +1.99%
SPY 1093 +2.3%
GLD $1194 +0.8%
Oil $79.10 +3.3%
Vix $24.63 -3.9%
Shanghai Comp 2562 +1.1%

 

 

 

 

 

 

 Commentary

Back to back manic days as the markets continue to struggle with poor macro economic news and mostly positive earnings. 

Today it was “risk on” as Microsoft, Caterpillar and UPS earnings were cheered while Amazon missed, housing reports and unemployment all were negative.  Chairman Bernanke continued his commentary on Capitol Hill but today, unlike yesterday, the markets rallied.  Jobless benefits were extended by Congress.  Tomorrow brings earnings reports from Ford and McDonalds and the long awaited “stress tests” designed to show the health of the European banks. 

For the weekend, we have a tropical storm heading for the BP well in the Gulf of Mexico and apparently the well be unattended and operations will stop.  There are all kinds of varying forecasts about what will happen that range from nothing to a methane rain over the Gulf Coast. 

1100 on the S&P remains formidable resistance as does the 200 Day Moving Average at 1113 just above today’s close.  Point and Figure charts remain on “sell” signals but close to changing.  This is a titanic struggle that will resolve one way or other over the coming days.

We remain in the “red flag” mode, expecting lower prices ahead.

Disclosure: psq, rwm, sh, skf, spy put

Read our weekend newsletter, Wall Street Sector Selector Review, for full market updates and analysis.


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Zero Hedge

US Pending Home Sales Soar In October

Courtesy of ZeroHedge View original post here.

After surprising to the downside in September, October's pending home sales soared 7.5% MoM, for greater than the +1% expected (from a downwardly revised 2.4% MoM drop). However, despite the jump, sales are down on a YoY basis for the 5th straight month...

Source: Bloomberg

The pending home sale index is back near post-COVID highs...

Source: Bloomberg

Sales were up in...



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Phil's Favorites

Red Friday

 

Red Friday

Courtesy of Scott Galloway, No Mercy/No Malice@profgalloway

Smoking wasn’t popular among women until Edward Bernays, the father of public relations, rebranded it. In 1929 he capitalized on the feminist movement and repositioned cigarettes with a “torches of freedom” campaign. Bernays hired women to march down Fifth Avenue smoking as a public display of emancipation and rebellion. Within six years, women were purchasing 1 in 5 cigarettes, up from 1 in 20 in 1923.

The strategy is simple: If people associate something negative with your product (e.g., cancer), change the conversation — “You’ve come a long way, baby.”

Facebook’s rebranding...



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Biotech/COVID-19

The hunt for coronavirus variants: how the new one was found and what we know so far

 

The hunt for coronavirus variants: how the new one was found and what we know so far Scientists find variants by sequencing samples from people that have tested positive for the virus. Lightspring/Shutterstock

Courtesy of Prof. Wolfgang Preiser, Stellenbosch University; Cathrine Scheepers, University of the Witwatersrand; Jinal Bhiman, National Institute for Communicable Diseases; ...



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Politics

The first Thanksgiving is a key chapter in America's origin story - but what happened in Virginia four months later mattered much more

 

The first Thanksgiving is a key chapter in America’s origin story – but what happened in Virginia four months later mattered much more

In the 19th century, there was a campaign to link the Thanksgiving holiday to the Pilgrims. Bettman/Getty Images

Courtesy of Peter C. Mancall, USC Dornsife College of Letters, Arts and Sciences

This year marks the 400th anniversary of the first Thanksgiving in New England. Remembered and retold as an allegory for perseverance and cooper...



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Chart School

Gold and Silver still working higher

Courtesy of Read the Ticker

Using Gann Angles from zero we can time the next run up, and it is near.

The last two days gold and silver are down on the back of central bankers talking the US Dollar higher in a attempt to off set inflation. A rising dollar is a form of tightening. Also the talk of a faster 'taper' has sent interest rates higher. But Luke Gromen knows this cant not last.

@LukeGromen Externally-financed twin deficit nations with insufficient external financing (ie the US, not Japan) cannot abide rising real rates for long.


RTT Comments: What this means a higher US Dollar makes it harder for those outside the US to buy the vast quantity of US Treasuries. 


U...

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Digital Currencies

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

 

Stablecoins: these cryptocurrencies threaten the financial system, but no one is getting to grips with them

Safe as houses? iQoncept

Courtesy of Jean-Philippe Serbera, Sheffield Hallam University

Cryptocurrencies have had an exceptional year, reaching a combined value of more than US$3 trillion (£2.2 trillion) for the first time in November. The market seems to have benefited from the public having tim...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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