Saturday, 20 August 2016

August 20, 2016 – Weekend Market Comment

August 20, 2016 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. You can read the latest version each week by bookmarking http://cme4pif.blogspot.ca/. For full details read my disclaimer (link at the bottom of this page).
It is the 200th Market Comment, can you believe I have posted the same 18 charts now for almost about 4 years and you have been reading them?







101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is up sharply. Bull market -- expect bullish outcomes.
 !
103 NYSE High Low Market Forces
Nothing but positive. In the right side highlight we see green is above is below yellow. Really positive.

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.

107 Industrial Production
Bullish

115 Renko
Nothing but strength.
 !
203 OBV
OBV is still with market. Bullish.
 !
207 VIX
VIX should bounce about this red line for a while but very bullish for now, could even head in to a new range. WOW

209 VIX Evaluator
Nothing but strength.

211 S&P500 over 50 day
Now over 68.6% stocks are above their 50day MA, slightly down from last week 71%. Strength.
 !

213 Green Arrow
Only put new money to work when I draw a green arrow. Notice the trix converge... danger?
flat


301 NASDAQ Summation
After a little pause, nothing but strength here. 

303 Aggressive Defensive
First sign of troubles as defensive regain a lead.

305 Consumer Bonds vs Equities
Bonds flat, but consumer has small uptick Bullish.

307 Bond Direction
Strength in bonds but trend might break

309 Sectors
Its all about tech as the Nasdaq sweeps ahead. Expect Nasdaq stocks to loose steam soon.

311 Nations
International has small down tick after steady gains as U.S. market looks overbought.

313 Major sectors
U.S. equities are the only game in town.


! = Pay attention this chart is important this week.


What I Find Interesting


Gordon Chang in World Affairs Journal has really hit the nail on the head with his insightful post China's Triple Bubble.

  • Beijing’s official National Bureau of Statistics appears to be posting fantasy numbers.
  •  Credit creation during the just-completed quarter was more than twice that in the previous quarter

What Works Now

Copart, Inc., headquartered in Dallas, Texas, is a provider of online vehicle auction and remarketing services. The Company provides vehicle suppliers, insurance companies, with a range of services to process and sell salvage vehicles over the Internet through the Company's Virtual Bidding Second Generation Internet auction-style sales technology.


Copart the leader in auto recycler and auction-services provider turned in double-digit revenue and earnings growth. This makes two quarters in a row of solid revenue growth after a sales stall in late-2014 through 2015. Management doesn't appear ready to rest on this rebound, with the company continuing to invest in more capacity.




Square
The maker of those super popular small business pointment of sale system. If you are wishing you bought Facebook at $35 this is your chance to get in, buy and hold this for a few years and hope for 10 to 1. Click here for chart




What I Think
Bull rages on. Except for a starting rotation in the aggressive defensive chart all looks very strong. At best you might talk about overbought, but that can go on a long time. 

It is true things are moving a bit sideways after a strong run and I would have a long look at the green arrow chart, notice the trix converging? This might be the end of the summer rally?






You can learn more about my indicators by visiting the CME4PIF school by clicking here.

Don't squint, All graphics can be enlarged by click on them.


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Saturday, 13 August 2016

August 13, 2016 – Weekend Market Comment

August 13, 2016 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. You can read the latest version each week by bookmarking http://cme4pif.blogspot.ca/. For full details read my disclaimer (link at the bottom of this page).

Well the summer rally continues with a much needed small pull back Friday. 






101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is up sharply. Bull market -- expect bullish outcomes.
 !
103 NYSE High Low Market Forces
Nothing but positive. In the right side highlight we see green is above is below yellow. Really positive.

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.

107 Industrial Production
Bullish

115 Renko
Nothing but strength.
 !
203 OBV
OBV is still with market. Bullish.
 !
207 VIX
VIX should bounce about this red line for a while but very bullish for now, could even head in to a new range.

209 VIX Evaluator
Nothing but strength.
 !
211 S&P500 over 50 day
Now over 71% stocks are above their 50day MA, slightly down from last week 73.4%. Strength.

213 Green Arrow
Only put new money to work when I draw a green arrow.
flat


301 NASDAQ Summation
After a little pause, nothing but strength here. 

303 Aggressive Defensive
First sign of troubles as defensive regain a lead.

305 Consumer Bonds vs Equities
Bonds flat, but consumer has small uptick Bullish.

307 Bond Direction
Strength in bonds but trend might break

309 Sectors
Its all about tech as the Nasdaq sweeps ahead.

311 Nations
International has small down tick after steady gains as U.S. market looks overbought.

313 Major sectors
U.S. equities are the only game in town.


! = Pay attention this chart is important this week.







What Works Now

New Vista Energy on the TSX exchange...






What I Think

Bull rages on. Except for a starting rotation in the aggressive defensive chart all looks very strong. At best you might talk about overbought, but that can go on a long time. 

Canada is looking stronger even as the emerging markets corrected ever so slightly this week. Wednesday oil surge 6% as the bottom looks to be in for now.





You can learn more about my indicators by visiting the CME4PIF school by clicking here.

Don't squint, All graphics can be enlarged by click on them.


Read My Disclaimer Here

Sunday, 7 August 2016

August 06, 2016 – Weekend Market Comment

August 06, 2016 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. You can read the latest version each week by bookmarking http://cme4pif.blogspot.ca/. For full details read my disclaimer (link at the bottom of this page).

Well the Market did really well this week. Financial stocks did well, breaking through its spring high to reach the highest level this year.  Of all the sectors in the market, financials are the most sensitive to the direction of interest rates. Their upside breakout appears to reinforce the view that bond yields have bottomed, and that bond prices have peaked. The three financial groups that benefit the most from from rising yields are banks, brokers, and life insurers. Not surprisingly, those three groups are leading the XLF ETF higher.






101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is up sharply. NOTICE THE SLOPE (second window), this could be part of a long term up trend, which might pull back here.  Bull market -- expect bullish outcomes.
 !
103 NYSE High Low Market Forces
Nothing but positive. In the right side highlight we see green is above is below yellow. Really positive.

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.

107 Industrial Production
Could be turning up again, if not expect rally to fail.

115 Renko
Nothing but strength.
 !
203 OBV
OBV is still with market and new break out of consolidating range. Bullish.
 !
207 VIX
VIX should bounce about this red line for a while but very bullish for now, could even head in to a new range.

209 VIX Evaluator
Nothing but strength.
 !
211 S&P500 over 50 day
Now over 73.4% stocks are above their 50day MA, slightly down from last week 76%. Strength.

213 Green Arrow
Only put new money to work when I draw a green arrow.
Still rising.


301 NASDAQ Summation
After a little blip, nothing but strength here.

303 Aggressive Defensive
Very aggressive.

305 Consumer Bonds vs Equities
Bonds drop, but consumer does not react. Could be a bit of fear returns.

307 Bond Direction
Strength in bonds indicates overall market caution. .

309 Sectors
Its all about tech as the Nasdaq sweeps ahead.

311 Nations
International gains interest as U.S. market looks overbought, Germany marches ahead.

313 Major sectors
Only emerging markets are doing better than U.S. equities. As I mentioned last week, gold unable to rally in face of strong market.


! = Pay attention this chart is important this week.


What I Find Interesting
The Economist has long used an index to compare the purchasing power of currencies using local prices of Big Macs. In July, Nomura introduced its own index using the iPhone 6S. They clash. In the countries shown, Big Macs cost less than in the U.S. at today’s exchange rates, which indicates their currencies are undervalued. But iPhones cost more abroad, indicating those same currencies are overvalued.

By contrasting the two "indexes" you get a sort of index of disparity, where there is very high poverty, but an elite ruling class you see the biggest disparity in the two indexes. Russia, Brazil and Mexico lead in these areas.




What Works Now
Emerging Markets -- The Vanguard Emerging Market ETF (ticker:VWO)

or PowerShares RAFI Emerging Market Index. (Ticker: PXH)

or for a single stock consider materials giant BHP Billiton (ticker: BHP)

Canadian pipeline company Veresen (Ticker: VSN tsx exchange)


What I Think
I think that was a bit of a surprise, the normal cycle of pull back and move forward was short circuited this week as the US jobs report was strong than expected. Again fundamentals trump technical indicators. This market is strong and resilient and you had hints of that in the OBV and 52week High Low charts that have remained strong for weeks now. As a I said a few weeks ago, when the market is this strong, long equities is the only game in town.




You can learn more about my indicators by visiting the CME4PIF school by clicking here.

Don't squint, All graphics can be enlarged by click on them.

Read My Disclaimer Here

Saturday, 30 July 2016

July 30, 2016 – Weekend Market Comment

July 30, 2016 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. You can read the latest version each week by bookmarking http://cme4pif.blogspot.ca/. For full details read my disclaimer (link at the bottom of this page).

The action on this week was different than what we've seen recently as investor focus seemed to turn to safety ahead of the GDP report and after the FOMC announcement on Wednesday. Consumer staples (XLP, +0.44%) and utilities (XLU, +0.39%) led the six advancing sectors while basic materials (XLB, -0.14%) was the worst.






101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is up sharply but rounding. NOTICE THE SLOPE (second window), this could be part of a long term up trend, that might pull back here.  Bull market -- expect bullish outcomes.
 !
103 NYSE High Low Market Forces
Nothing but positive. In the right side highlight we see green is above is below yellow. Really positive.

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.

107 Industrial Production
Could be turning up again, if not expect rally to fail.

115 Renko
Nothing but strength.
 !
203 OBV
CAUTION: OBV is still with market but we are now consolidating in a range.

207 VIX
VIX should bounce about this red line for a while as traders start to understand a pull back here might help.

209 VIX Evaluator
Nothing but strength.

211 S&P500 over 50 day
Now over 76% stocks are above their 50day MA, down form last week 86%. Strength but looking a bit overbought.

213 Green Arrow
Only put new money to work when I draw a green arrow.
Still rising, notice MACD is fading.


301 NASDAQ Summation
Nothing but strength here.
 !
303 Aggressive Defensive
Aggressive but could be the end of the cycle. Overbought can go on how long?

305 Consumer Bonds vs Equities
Bonds gain a bit, but consumer does not react. Could be a bit of fear returns.

307 Bond Direction
Strength in bonds indicates overall market caution. .

309 Sectors
Its all about tech as the Nasdaq sweeps ahead.

311 Nations
International gains interest as U.S. market looks overbought, Germany marches ahead.

313 Major sectors
Only emerging markets are doing better than U.S. equities.

! = Pay attention this chart is important this week.


What I Find Interesting
Bloomberg had an interesting bit on a new type of weather called a rain bomb. It also pointed out this week the Empire state building was struck twice by lightning. I imagine what the guy in that office thought... Watch it on video here:




What Works Now
Canadian metals giant Teck Resources

Oshkosh by gosh!





You Asked
A reader of this blog asked me this week if this is a good time to be in gold. Well no one knows the future . . . If another 911 type event happens this week and sure buy some gold. But it is not the heart of my portfolio First off in general, I don't like gold if for no other reason than it has no value except if you fear everything else. Unlike equities that can rise due to hard work and earnings gold is a vote for apocalyptic visions. So it was a fine thing for the characters in a post-apocalypses movie to use to barter for food or medicine, but it is not a great investment, because often cooler heads eventually prevail.  



Now if you look at my 100 series charts, we see we are in a bull markets, with strong breadth, strong employment, rebounding manufacturing, not much of an apocalypse. But we are over bought...

If you zoom back and look at the big picture you can often see the overall direction of a market. By using Renko charts you eliminate the question of time and can just see direction. Here are two Renko charts one is for IWN the Russell 2000 stocks, used here to represent equities and one is for gold... So now ask yourself, would you rather be in equities or gold?




Don't get me wrong, I am expecting a small pull-back here in equities, after some sideways consolidation In a pull-back I expect gold will rise a bit. That said, so will t bills, VIX futures (very dangerous animals) and other safe haven investments so gold might advance, but you will probably do better with something else. 

Gold is in a rebound off its low, but as you can see it has come a long way already. 

So the final answer is, if you don't mind short term trading,  sure hold some gold in to this pull-back, if you like, but don't linger, it should sell off after the summer pull back, and IF the market is solid this fall it probably will not out perform equities.



What I Think

Look over my charts this week to see the plethora of BUY signals, you seldom see the market so strong for so long. Look how many charts I say Nothing but strength on.  Yet the market is traveling sideways and has been for 12 days. Should we expect an upside break or downside break?

There are two ways to approach this type of price activity. It is the "cup half-empty" or "cup half-full" approach. If you are in the bearish camp (half-empty), you would rightly point out that price has been unable to penetrate the top of this range for days and therefore, it is time for a decline. However, a bull "cup half-full", would point out correctly that price has held on to support for days and has refused to break down. Whose idea holds the most promise? Well by a tiny margin I would say the intermediate-term indicators are calling for a short decline.

Major indexes are extended after big gains the last five weeks. In addition to being ripe for a corrective period, August is here and this has been a weak month on the seasonal charts. SPY is up over 9% the last five weeks and a pullback or corrective period would be perfectly normal at this stage.  


If we look at the aggressive defensive chart we can see we have been in this over bought area too long, and the OBV chart is still going sideways, but I expect the support to fade. But then again I though that last week and we made an S&P500 high.




You can learn more about my indicators by visiting the CME4PIF school by clicking here.


Don't squint, All graphics can be enlarged by click on them.

Read My Disclaimer Here