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May 7, 2016 – Weekend Market Comment

May 7, 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).

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 loss of momentum in the 50 day slope. Bull Market = Bullish outcomes.
103 NYSE High Low Market Forces
Nothing but strength. Take this as a note of caution, all is not lost until we start seing some red spikes. 

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
New black brick, the trend could be broken.

203 OBV
OBV leads market. Pros are with this market – Caution could signal a upward pull back from this sell off.

207 VIX
VIX is the fear gage ... 14.7 -- This turn could be short lived but the pros are buying insurance that is for sure!
209 VIX Evaluator
Last weeks tiny tick upward, is gone. Still looks positive.

211 S&P500 over 50 day
Last week 68% this week now 63% of stocks are above their 50day MA. This has been sliding lower since 4 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.

303 Aggressive Defensive
Finally a topping 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 dies on News of oil sands fire!

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

  ! = Pay attention this chart is important this week.

What I Find Interesting
John Mauldin has written a neat summary of the problem of the boomers retiring. This chart shows the trend in Europe but it also fits all the G7 countries as fewer young tax payers fund more retired freeloaders.

Easy fix. . . time to put the old folks out on an ice flow. 

What Works Now
GOLD - as I have been saying since New Years. 

Besides that owning gold makes you feel like a really cool evil mastermind . . .

What I Think

Well it has been a nice start to sell in May and go away, the markets are down, gold is up and all right on schedule if you read my blog last week. Yes we are oversold and the jump in the OBV chart and no red yet on the NYSE high Low, says we might get a continuation of Friday's oversold bounce. 

But in the long term I am looking at the Bull Bear lines second window -- slope. This shows you the long trend and right now it is consistent with a general down trend. 

Against all of the above let’s look at some fundamentals. China continues to slow down, global shipping is in a major stall with more container ships at the dock than in any time in modern history. The only bright spot is U.S. employment but that is mostly growing in low paying service jobs. We have a mess in the Middle East with a belligerent and emboldened Russia supporting the Assad regime. U.S. corporate earnings are weak and the PE ratio of the market is high.

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.