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February 6, 2016 – Weekend Market Comment

February 6, 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 Market sold off hard on Friday,  the Nasdaq was the biggest loser on the day... the biggest single-day drop since August's Black Monday plunge... (Nasdaq now lowest close since Oct 2014). The USDollar Index crashed by the most since June 2009 this week (despite a bounce today) led by JPY strength (biggest week since Oct 2008!). Gold's best 3-week gain in over a year to near 4-month highs and Silver's best 3-week run since May 2015



Now if you follow my posts you saw this coming a long time ago in the charts, but oddly the press says Friday's sell off was due to a week jobs number. Well... yes in a recession, industrial production fails, and then layoffs follow... yes we all know that. Well Industrial production has been lagging since the summer of 2015 so.... part two = layoffs. Ah but you point out that jobs are not declining yet, this is just slower growth. Well, true but the jobs that are laying off are high paying jobs in key economic areas like manufacturing and transportation and the jobs that are growing are near minimum wage and essential services positions like bartenders and nursing aids. So loosing a cargo pilot job paying $150,000 a year is not the same as gaining a  Starbucks Barista making $12. No amount of politically motivated  statistics can cover up this stink.







 !
101 Bull Bear
Bear market (red over dark green). The light green line is turning down signalg the end of the “dead cat bounce”. The trend now continues in the direction of the dark green line.  Bear Market = Bearish outcomes.

103 NYSE High Low Market Forces
In the right side highlight we see green is below yellow. Still many breadth issues.

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 -- Six black down bricks the trend is broken and heading down, fast. Still no up brick even after a great day Friday.

203 OBV
There were some strong upspikes. That looks to be over .

207 VIX
VIX is the fear gage .. near 24 is beyond fear back to all out panic.

209 VIX Evaluator
Heading up again fear returns.

211 S&P500 over 50 day
Now only 31% of stocks are above their 50day MA.

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
Possible up turn.
 !
303 Aggressive Defensive
A predicted the bounce fizzled even before the top part of the chart could complete a cycle. .

305 Consumer Bonds vs Equities
Disturbing, the consumer is lagging. Bonds are the safe haven trade.

307 Bond Direction
Bonds are the safe haven trade.

309 Sectors
Only defensive areas outperforming S&P500.

311 Nations
Philippians surge

313 Major sectors
Gold strong uptick!




! = Pay attention this chart is important this week.


What I Find Interesting
 
Prominent Wall Street lawyer Peter J Chepucavage has filed on behalf of two anonymous clients (assumed to be employees of Blackrock Inc), a letter detailing how dangerous ETFs are in times of market instability. Click here to read. If you want it translated -- it says that in a market crash many important ETFs and ETNs will not behave as predicted because the underlying hedges will blow up.




What Works Now 
Short ETFs Tickers: DOG, SH, MYY, QID

 


Gold Ticker:GLD

Short Junk Bonds, recommended by me many times, since the summer of 2015, this toxic waist is going straight down.
ticker: SJB

Rum punch
No ticker, sold over the counter only, at least you get some potential "R.O.I.".
 


What I Think
This is bear market, and in a bear market you expect bearish outcomes. Do not buy and hold, if you are conservative be in cash if you are looking for return buy the above mentioned ETFs like MYY or gold



 



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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Lets see what is in the charts this week:

CLICK HERE: To see the 100 and 200 series charts



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