Saturday, 25 March 2017

March 25, 2017 – Weekend Market Comment

March 25, 2017 – 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).


U.S. equities closed mixed Friday after a choppy trading session after U.S. House of Representatives pulled a key health-care bill. The Dow Jones industrial average, which had traded more than 100 points lower earlier in the session, closed about 60 points lower. However the memorable day this week was Tuesday March 21 the DOW fell by about 238 points, a drop of more than 1%. It was its biggest slide of the year and biggest decline since the Trump election.




Here is what our charts say:





101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend.  NOTICE THE SLOPE (second window), we might be starting another long ride down.  Bull market -- expect bullish outcomes.
!
103 NYSE High Low Market Forces
Breadth lines almost crossed, but this was narrowly avoided. Also notice the second window three red patches recently. We had many patches like this after mid 2007. This is the sign the market is running out of steam. See the What I Find Interesting section below.

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
Flat but strong industrial production.  That is good news.

115 Renko
12 up but the latest is down... caution.
!
203 OBV
OBV (red line) is slightly below the market. But the pros are still with this market. 

207 VIX
Fear is on the way up, but could stall here.

209 VIX Evaluator
Don't panic yet but that is an up tick ... hmmm.


211 S&P500 over 50 day
Now about 56% of stocks are above their 50 day MA,  down from last week when it was 69%.
!
213 Green Arrow
Only put new money to work when I draw a green arrow. Notice loss of TRIX momentum. CAUTION

!
301 NASDAQ Summation
Nasdaq breadth is evaporating. Pay attention --trouble -- could be volatile.
!
303 Aggressive Defensive
Just turned aggressive, may not hold.

305 Consumer Bonds vs Equities
Bonds win, "smart money" heading for the exit? Consumer up tick. 

307 Bond Direction
Bonds sideways moving average. 

309 Sectors
Everything is doing well but banking. Bazaar.

311 Nations
Global lift in the anything except USA trade

313 Major sectors
Ray of hope with gold lagging.

! = Pay attention this chart is important this week.


What I Find Interesting

Breadth
One reader asked last week how I knew recently the market was getting soft and if I could give some advise to lower risk. Regular readers of the Market Comment know that I am big believer in using Market Breadth as my "canary in the coal mine". 



I could write a ton of stuff here, but I said it so well before in Lesson 5 of the CME4PIF school. Please revisit that lesson to see why I am less impressed with the market right now. 

Now lets visit chart 103 our NYSE High Low chart:
Notice the red spikes in the histogram (second window). 

The NASDAQ is even worse: 


It is too soon to panic, but I think we could easily be heading into a period of choppy markets. Choppy trading periods often preceded a recession, but in the markets, nothing is 100% certain. 


What Works Now
China Unicom (Ticker: CHU) is a huge telecommunications company -- it ranks 4th in the world for subscribers. 


What I Think

Bull market expect bullish outcomes. So yes we could have a bounce upward.

Last week I  added a few aggressive positions, well that lasted a about an hour into Tuesday. I was glad it was not a big positions because of a warning  I wrote here:  "it is still good to be cautious we have had red patch on the NYSE breadth chart (chart 103) recently and that is not a good sign". I also said "Clearly everyone is long, and that is dangerous". 

So yes it is a bull market... but this is a very tired bull. Don't panic, but raise your stops, stay away from risk and take some profits. 







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, 18 March 2017

March 18, 2017 – Weekend Market Comment



March 18, 2017 – 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 major averages closed higher for the week, with the Dow Jones industrial average holding a 0.06 percent weekly gain. The bulk of the week's gains came Wednesday after the Fed raised rates, as expected, but took a more dovish tone than expected.

Here is what our charts say:





101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend.  NOTICE THE SLOPE (second window), we might be starting another long ride down.  Bull market -- expect bullish outcomes.
!
103 NYSE High Low Market Forces
Breadth lines almost crossed, but this was narrowwly avoided. Also notice the second window three red patches recently. This is the sign the market is running out of steam.

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
Flat but strong industrial production.  That is good news.

115 Renko
Small caps are going nowhere...
!
203 OBV
OBV (red line) is slightly below the market. But one day is meaningless. 

207 VIX
Fear is way down.

209 VIX Evaluator
Very much bullish.


211 S&P500 over 50 day
Now about 69% of stocks are above their 50 day MA,  slightly up from last week when it was 68%.
!
213 Green Arrow
Only put new money to work when I draw a green arrow. Notice loss of TRIX momentum. CAUTION

!
301 NASDAQ Summation
Nasdaq breadth is recovering. Pay attention trouble could be volatile.
!
303 Aggressive Defensive
Clearly aggressive. 

305 Consumer Bonds vs Equities
Bonds fail. Get used to this in a rising rate environment. Consumer stalls

307 Bond Direction
Bonds sideways moving average. 

309 Sectors
Everything is doing well but banking. Bazaar.

311 Nations
Global lift except USA and Canada

313 Major sectors
Ray of hope with gold lagging.

! = Pay attention this chart is important this week.


What I Find Interesting

Eko Atlantic is the name of a grandiose project to create a new economic capital for Africa—notably, right next to the current economic capital for Africa- Nigeria. This man made 5 mile long island is under construction now. The development includes everything from sky-scrapers to luxury apartments, a new financial district, a private power-grid, and a shopping boulevard in the image of New York’s Fifth Avenue. It’s the brainchild of the Chagoury brothers, two Nigerian-born billionaires of Lebanese descent who own South Energyx Nigeria Ltd, a real estate development company created to build out Eko Atlantic. Eko Atlantic is meant to be an antidote to Lagos’s deepest recession in 30 years. The city is meant to bring 250,000 new jobs and address a housing shortage brought on by a surging population. This, and the fact that it’s privately-funded, have lent it the support of the state and federal governments. It’s being sold to investors as “a valuable foothold in Africa” one of the world’s last emerging growth markets.


What Works Now

Computer Graphics
NAVIDIA (ticker:NVDA)


What I Think

Bull market expect bullish outcomes. I have dropped a few of my defensive position and am long and even adding a few aggressive positions. But it is still good to be cautious we have had red patch on the NYSE breadth chart (chart 103) recently and that is not a good sign. We also on the green arrow chart have the TRIX rolling over, that points to long term weakness. The market is fully valued and there is not much to be excited about. Clearly everyone is long, and that is dangerous. But keep in mind,  we made new highs recently and there is no reason not expect more of the same. Tops take a long time to form and this run has been near record setting for over 8 years 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


Saturday, 11 March 2017

March 11, 2017 – Weekend Market Comment


March 11, 2017 – 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).


U.S. equities rose in choppy trade Friday following a strong jobs report, while investors were already looking ahead to a Federal Reserve meeting next week. The Dow Jones industrial average gained around 45 points, with UnitedHealth Group contributing the most gains. The S&P 500 gained a third of a percent, with utilities outperforming. The Nasdaq composite advanced 0.4 percent. The major indexes, however, posted weekly losses, with the S&P and Nasdaq snapping six-week winning streaks. The Dow snapped a four-week winning streak.
Here is what our charts say:





101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend.  NOTICE THE SLOPE (second window), we might be starting another long ride down.  Bull market -- expect bullish outcomes.
!
103 NYSE High Low Market Forces
Breadth lines almost crossed, last November this was what set off the year end correction. Also notice the second window three red patches recently. This is the sign the market is running out of steam.

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
Flat but strong industrial production.  That is good news.

115 Renko
Black brick not good

203 OBV
OBV (red line) is beyond the market. likely bounce, Bullish!

207 VIX
Fear is way down.

209 VIX Evaluator
Very much bullish but flatter.


211 S&P500 over 50 day
Now about 68% of stocks are above their 50 day MA,  down from last week when it was 78%.

213 Green Arrow
Only put new money to work when I draw a green arrow. Heading down. Notice loss of TRIX momentum. CAUTION

!
301 NASDAQ Summation
Nasdaq breadth is rolling over. Pay attention trouble could be brewing.

303 Aggressive Defensive
Clearly defensive. Perhaps overdone. Could be a sharp turn like Jan 1 or a mess like Nov 1.

305 Consumer Bonds vs Equities
Bonds fail. Get used to this in a rising rate environment. Consumer stalls

307 Bond Direction
Bonds sideways moving average. 
!
309 Sectors
Everything is doing well but consumers. Bazaar.

311 Nations
no comment

313 Major sectors
Ray of hope with gold lagging.

! = Pay attention this chart is important this week.


What I Find Interesting

China Debt
China's corporate debt levels are too high but it will take time to bring them down to more manageable levels, the head of the central bank of China said on Friday, underlining an uphill battle to put the world's second-largest economy on a more sustainable footing.


Click here to read more from Reuters

Or read my own take on the China Problem that I wrote last October.


What Works Now
Banks

Northern Trust (Tricker:NTRS)


What I Think

I think this is a bull market. Bull Market means we expect bullish outcomes. Heck folks it has not even been a month since the market hit all time highs. That said a few weeks ago I went on the defensive side of things and that also was the right move. 

Like most defensive moves we see large-caps are holding up quite well over the last few weeks, but mid-caps and small-caps are not and continue to bear the brunt of the correction. "Correction" is the key word here. The long-term trends are clearly up and any weakness would be deemed a correction within these bigger uptrends. Even though SPY and QQQ have yet to correct, we can see corrections unfolding in the S&P SmallCap iShares (IJR) and some other ETFs. 

Charts 103, and 301 measure market breadth. That's a fancy way of saying how many stocks up and how much down. Chart 301 is based on the NASDAQ, and represents smaller companies with more volatile stocks. So it is no surprise that it gives warnings of market weakness much earlier. Chart 103 is a based on the big board NYSE companies and of course reacts slower. The 301 NASDAQ chart has shown weakness for several weeks now, but we are starting to see trouble in the 103 NYSE breadth too. 

Don't panic, it is still a bull market, we might correct here but it is way to soon to worry too much, just be aware. 
I am long but much much more defensive. Anticipating a bounce soon. 



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, 4 March 2017

March 04, 2017 – Weekend Market Comment

March 4, 2017 – 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 markets pulled back this week, as I said last week they would. Thursday was a day of profit taking as all of our major indices retreated with the small cap Russell 2000 taking the biggest hit, falling 1.27%.  During trading the concern was about the anticipated interest rate hike of 25bps on March 15. The worry was that it would NOT happen, since traders were worried the economy is weaker than expected.


Here is what our charts say:






101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend.  NOTICE THE SLOPE (second window), we might be starting another long ride up.  Bull market -- expect bullish outcomes.

103 NYSE High Low Market Forces
Wow breadth is still very strong. Nothing but strength. 

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
Flat but strong industrial production.  That is good news.

115 Renko
2 new up bricks! positive.
!
203 OBV
OBV (red line) is with the market. Bullish!

207 VIX
Fear is way down.

209 VIX Evaluator
Very much bullish.


211 S&P500 over 50 day
Now about 78% of stocks are above their 50 day MA,  up from last week when it was 76%.
!
213 Green Arrow
Only put new money to work when I draw a green arrow. Heading down. Notice loss of TRIX momentum.

!
301 NASDAQ Summation
Nasdaq breadth is rolling over. Pay attention trouble could be brewing.

303 Aggressive Defensive
Clearly defensive.

305 Consumer Bonds vs Equities
Bonds fail. Get used to this in a rising rate environment. Consumer stalls

307 Bond Direction
Bonds sideways moving average. 
!
309 Sectors
Everything is doing well but consumers. Bazaar.

311 Nations
bounce for Canada?

313 Major sectors
not much here -- all about the USA.

! = Pay attention this chart is important this week.



What I Find Interesting


Sugar is Killing You
I wrote this im my thoughts blog click hear to view. Sugar is a man made toxic chemical and likely is more dangerous to your overall health than any other food you routinely ingest. You have been purposely feed a lot of misinformation by a powerful lobby organization called the Sugar Association, formerly known as the Sugar Research Foundation. We have been duped by the packaged food industry into a lifestyle of foods that cause us to look and feel terrible. It is far worse than any of us believed and I think you will find the information below both eye opening and deeply concerning. click hear to view




Wall Fail
A Mexican congressman has gone to new heights to mock President Trump’s plans for a “big beautiful wall,” in a stunt designed to show how easy it is to climb the oft-touted structure. “I was able to scale it, climb it, and sit myself right here,” Braulio Guerra, a representative from the state of QuerĂ©taro, said in a video, as he sat atop a 30-foot-high fence along a Tijuana beach.


Computer Card Shark

Computer scientists from the University of Alberta in Canada report that their program, known as DeepStack, roundly defeated professional poker players, playing 3,000 hands against each. The program didn’t win every hand — sometimes the luck of the draw was against it. But after the results were tallied, DeepStack beat 10 out of 11 card sharks, the scientists report online March 2 in Science.

Poker is the quintessential game of imperfect information, and it has been a longstanding challenge problem in artificial intelligence. In a study involving dozens of participants and 44,000 hands of poker, DeepStack becomes the first computer program to beat professional poker players in heads-up no-limit Texas hold'em.



What Works Now
Fat People

Weight Watchers (Ticker:WTW)


Das Bank

Germany remains strong and banking is doing well. Deutsche Bank (Ticker: DB)



What I Think

Bull market expect bullish outcomes. Consumer weakness is a concern. Weakness in consumer stocks isn’t new this year. While still the bull market’s leader, the group is the S&P 500’s second-worst performer in 2016 with a gain of just 1.3 percent, on pace for its weakest year since 2008. Similarly, groups of homebuilding and home-improvement stocks are on track for their worst years in a comparable period. Of concern are poor earnings from Apple, Under Armour and Macy's. Don't panic yet but along with housing, these consumer goods firms are the backbone of the U.S. economy. 

On Friday the Federal Reserve announced this:

"Since monetary policy is only modestly accommodative, there appears little risk of falling behind the curve in the near future, and gradual increases in the federal funds rate will likely be sufficient to get to a neutral policy stance over the next few years."

That is just what the street wanted to hear. I would not be surprised to see a rally on Monday, but beyond that the news is less than great. Many worry that Trump infrastructure projects, military expansion and tax cuts will be watered-down in compromise as the plans hit the congress. We know the president can talk a good story but will it keep this bull market alive?

I continue to be long but defensive. 





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