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March 28, 2016 – Market Comment

March 28, 2016 – Welcome to my 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).

I know what your thinking, what happened to you? Well I have been sailing in the Caribbean ... sorry but Barbados and St. Lucia were calling. But you missed nothing, the story really has not changed up until now. 





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 turned up, clearly a strong recovery. In short this is impressive and although still technically a bear market this no time to go deeply bearish, trying to time a sell off.  Bear Market = Bearish outcomes.
  ! 
103 NYSE High Low Market Forces
Very important: This is the chart that makes me rethink my stand. Notice the second panel of this chart, as red disappears you begin to see that this recovery is getting very broad and that is the sign of a healthy market.

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 February. I see a clear round top in the 12 period moving average

115 Renko
Obviously – 7 white up bricks trend is heading up. Clearly we have come a long way back. Hard to be a bear in an up trend this obvious
  ! 
203 OBV
Pros are lagging the market volume fades! Don’t ignore this, with volume comes safety.
  ! 
207 VIX
VIX is the fear gage .. over 15 and rising. Notice what often happens when the top panel CCI is in the oversold brown zone, it often is the start of a rise in VIX and in this case that would mean the end of the bounce. Be ready to play your short plays.

209 VIX Evaluator
Heading down clearly. Caution.

211 S&P500 over 50 day
Now 90% of stocks are above their 50day MA. However top window shows a MACD near top. Clearly a monster move, but is this the roll over?

213 Green Arrow
Only put new money to work when I draw a green arrow.
TRIX has crossed signalling a possible green arrow in the future?.
Notice the slope is loosing momentum.
No sign of a green arrow..


301 NASDAQ Summation
NASDAQ looks over bought here.
  ! 
303 Aggressive Defensive
Finally a topping roll over, end of the strong uptrend?

305 Consumer Bonds vs Equities
Consumer still steady. Bonds bottom?

307 Bond Direction
Short term bonds stumble in a strong uptrend.

309 Sectors
Consumer and defensives lead in a mostly sideways chart.

311 Nations
Meh!

313 Major sectors
Also Meh!

  ! = Pay attention this chart is important this week.



What I Find Interesting

Is this the great global economic slowdown? That’s the question. Well the answer is in the DOW theory, that tells us to watch transportation stocks for an insight in to the future. Listen now to the expert, this is what CEO of the worlds largest container-ship company, Nils Andersen told the Financial Times in an interview after the earnings release in February:

It is worse than in 2008. The oil price is as low as its lowest point in 2008-09 and has stayed there for a long time and doesn’t look like going up soon. Freight rates are lower. The external conditions are much worse, but we are better prepared.” So revenues at container carrier Maersk Line plunged 25% in Q4 to $5.19 billion mostly due to the collapse in rates. Maersk’s shipping volume was flat at 2.4 million forty-foot equivalent (FFE) containers. And this, it said, was “in line with the global container demand which is estimated to have grown 0-1% in Q4 2015.
Nils Smedegaard Andersen


What I Think
Well we are at a tipping point. It is a bear market, we expect bearish outcomes. We have had a strong upturn. It looks overbought. 

So what could go wrong? Well as John Murphy points out the 200 moving average is just below the current price and he expects it to hold. You gotta respect the words of the god of technical analysis. 


So in short, it looks like it is about to roll over and go lower. Hot shots can buy some short positions here, a good place to take a shot I guess. Conservative investors don't try to be in too early, wait for a clearer sign, don't catch falling knives, stay in cash.



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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