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February 29, 2016 – Market Comment

February 29, 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  For full details read my disclaimer (link at the bottom of this page).

Sorry I am late this week, as you can see it is leap year day Monday, but when you live on a tropical island sometimes friends and a beer on the beach take priority.

101 Bull Bear
Bear market (red over dark green). The light green line has come a long way up, and the dark green line is beginning to turn up, perhaps the end of this sell off. Bear Market = Bearish outcomes.

103 NYSE High Low Market Forces
In the right side highlight we see green is below yellow. Breadth issues are drying up, the sell off may be over.

105 Non Farm Payroll
Lots of jobs! But this is a lagging indicator. 

107 Industrial Production
Not good. Watch this carefully, all recessions have falling industrial production, but data is from the end of Dec.

115 Renko
Obviously – 3 white bricks trend is heading up.
203 OBV
DANGER the pros are fading this bounce. Smart money is not participating, recover weak!!!

207 VIX
VIX is the fear gage .. near 19.5 is calming but still in the dangerous zone.

209 VIX Evaluator
Heading down clearly.

211 S&P500 over 50 day
Now 61% of stocks are above their 50day MA. However top window shows a MACD near top.

213 Green Arrow
Only put new money to work when I draw a green arrow.
I have added a new rule to eliminate too many arrows, now I do not draw arrows if the TRIX is red over green.
No sign of a green arrow..

301 NASDAQ Summation
Looks solid for NASDAQ don’t bet against strength here

303 Aggressive Defensive
Looks way overbought, expect market to fade in coming days. Be ready to go deeper short.

305 Consumer Bonds vs Equities
Consumer rebounds. Bonds are the safe haven trade.

307 Bond Direction
Bonds are the safe haven trade.

309 Sectors
Consumer is in strong rebound.

311 Nations
Emerging markets return

313 Major sectors
Defensives weak again, looks like recovery!


 ! = Pay attention this chart is important this week.

What I Find Interesting
The OBV line is lagging:

What I Think

I was expecting a sell off last week, and clearly there is more strength in the market than I expect. Now if I am wrong or just early we find out now. 
We are at a tipping point. This week will tell if we are in a bull or a bear trap, if the market sells off the bear continues, if not, this might be the turn. It is still a bear market and I expect bearish outcomes. Despite contrary indicators on other charts I am going to focus on the OBV line, until it catches up in the market I expect the Aggressive Defensive chart to roll over later this week.

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.