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April 30, 2016 – Weekend Market Comment


April 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).

Well as you will see this would be a great time to pull in your horns. Perhaps this bull has room to run, but I am skeptical. 









101 Bull Bear
Bull market (Dark Green over red). That said the short term light green line is heading down. Notice the topping pattern in the second window showing some loss of momentum in the 50 day slope. Bull Market = Bullish outcomes.

103 NYSE High Low Market Forces
Nothing but strength.

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 this data is from the end of March. Notice a clear round top in the 12 period moving average. This is the sign of a recession looming.

115 Renko
Obviously – 11 white up bricks trend is heading up. Clearly we have come a long way steady up. Hard to be a bear in an up trend this obvious
 !
203 OBV
OBV lags market. Pros are not with this market -- volume lags but only the last two days.
 !
207 VIX
VIX is the fear gage ... 15.7 and rising fast. This turn could be short lived but the pros are buying insurance that is for sure!

209 VIX Evaluator
A tiny tick upward, a blip or a new trend?
 !
211 S&P500 over 50 day
Last week 80.2% this week now 68% of stocks are above their 50day MA. This has been sliding lower since 3 weeks ago. Loss of momentum.

213 Green Arrow
Only put new money to work when I draw a green arrow.
ALERT! Notice the slope is loosing momentum.
TRIX is green over red, expect positive outcomes.
No sign of a green arrow..


301 NASDAQ Summation
Nasdaq is weak. Looks ready to roll over and die

303 Aggressive Defensive
Finally a toping a roll over, end of the strong up trend? Clearly more defensive.

305 Consumer Bonds vs Equities
Consumer up a bit. Bonds bottom. Bonds have done very well this week. Risk off fear on.

307 Bond Direction
Short-term bonds rise in a rounding top to the long term up trend.

309 Sectors
Notice the defensives/utilities are bouncing up hard, consumer is up but financials and tech are down. Bearish.

311 Nations
Commodities bounce back and Canada perks up!

313 Major sectors
Some recent signs of life in commodities and Gold.

  ! = Pay attention this chart is important this week.



What I Find Interesting

Rhyming couplets can rarely be expected to serve as sound investment advice. But "sell in May and go away" may be a prominent exception and not just in the USA but all over the world. In 37 global markets, returns in the May-to-October period were found to be smaller than those in the November-to-April period.

It used to be that people would say, 'Oh, investors go away for their summer vacations, that's why the market does this.' But if that was the case, this shouldn't work as well in Rio [where summer starts in December] as it does in New York,". Indeed, in the U.S., selling in May generated 6.9 percent of outperformance in recent University of Miami study. That compares to 10.5 percent in Brazil, and a stunning 25.9 percent in Russia.



What Works Now

GOLD - As you know I have been a gold bull since New Years. Since New Years day the worlds ultimate currency is up over 15%.  

Precious metals extended their rally on Friday, with gold and silver rising to 15-month highs. Gold futures climbed 2%, or $29.55 an ounce, to as high as $1,298.95, a level reached for the first time since January 2015. Silver futures rose 2%, or $0.22 an ounce, to about $17.980.



What I Think

Well I have been say since January that we have trouble coming. We are 7 years in to a bull market --- now with falling industrial production -- Slowing global trade -- Look out a recession year is highly likely. But when does it start, well May is often the time for weakness. Monday is the first trading day of May and the first trading day of a month statistically is a strong up day, Monday might be no different. But after Thursdays 200 point plunge in the DOW and strong results for gold I expect this overbought market to pull back in May. That said the Bull Bear lines are bullish and I would not go crazy leveraged short right here either.

If you are aggressive you could be short by to holding MYY (or SH) and hedging with defensive long equities like Hormel ticker HML, gold with the ticker:GLD ETF and ticker:DEF an ETF of stable defensive stocks. BUT I am ready with my figure on the button to change my long short ratio. For the investors on the simple plan just go to 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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Yet another parabolic up week for the markets. Honestly folks valuations are really stretched here. The air is so thin at this altitude. Then again the markets can and do (on a short term basis) anything they want. Still I would expect a little pull-back in the next two weeks.


Lets see what is in the charts this week:

CLICK HERE: To see the 100 and 200 series charts



101 Bull Bear Bull market (dark green over red) and now the short term (light green) is up sharply. Also note the dark green 50 day average is in a firm uptrend. NOTICE THE SLOPE (second window), this could be part of a new long term uptrend.Bull market -- expect bullish outcomes…