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March 25, 2016 – Weekend Market Comment

March 25, 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 Britain has kissed the rest of Europe goodbye. The departure is a blow to globalization, challenging a decades-long embrace of freer movement of goods, services and people. The success of the Brexit movement, fed by an influx of foreign migrants,  stagnant wages and resentment over inequality since the Great Recession, is one more jolt for a global economy left bruised by years of crisis fighting that’s restricted momentum.






101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is down sharply. Bull market -- expect bullish outcomes.

103 NYSE High Low Market Forces
Nothing but positive. In the right side highlight we see green is above is below yellow. This is the number on reason I am still seeing possible upside.

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.

107 Industrial Production
Not good. Watch this carefully, all recessions have falling industrial production, new data is from the end of March, looking worse.

115 Renko
A new down black brick, nothing but strength for weeks has ended. .
 !
203 OBV
CAUTION: OBV says pros were not with this market as volume falls. However recent drop is now in line with OBV.
 !
207 VIX
VIX shows rapidly increasing uncertainty now above 22 again over 2 points in a week.
 !
209 VIX Evaluator
Still says dangerous odds are things getting worse. Recent renewed upward pressure .

211 S&P500 over 50 day
Now over 73% stocks are above their 50day MA. Strength despite sell off.

213 Green Arrow
Only put new money to work when I draw a green arrow.
Well declining interest in broad market is clear in the 20-day slope (top panel).  .


301 NASDAQ Summation
Nothing but weakness here.

303 Aggressive Defensive
Was turning Aggressive until end of this week. Now clearly defensive but could be the end of the cycle.
 !
305 Consumer Bonds vs Equities
Bonds explode consumer dies. Very bearish.

307 Bond Direction
Strength in bonds indicates overall market caution. .

309 Sectors
Defensive staple stocks like dividends, utilities are strong. Tech is falling as investors fear risk.

311 Nations
A look like international weak. Germany is Kaput!

313 Major sectors
Gold and commodities shine things look good for Canada!

! = Pay attention this chart is important this week.



What I Find Interesting
Allen Greenspan was looking very dark and gloomy today on CNBC.


"This is the worst period, I recall since I've been in public service. There's nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I'd love to find something positive to say."

Wow Allen take a Prozak. Britain ruled the world, while openly fighting Europe for 700 years. I am sure they will be alright without Brussels telling them how to package their cheese.

What Works Now
I have been saying this for weeks now . . .Well in case you are sick of hearing it GOLD! Last night CA-CHING!!!



What I Think
I think I could buy a few rounds of Guinness with all my returns last night on my gold position. I hope you followed my advice on that. In the big picture though if this sell off continues -- it will be more to do with High P/E multiples and a 7 year bull run than the U.K. staying in the European union. Lets face it without adopting the Euro the U.K. only had one foot in the water in the first place.

OK so who knows Monday could be a bloodbath or a huge bounce back. I am not clairvoyant, but I want stay clear if it plummets and to act quick if it bounces up. I have a clever plan . . .

The way I am going to play this is I have a "buy on stop order" on the Dividend ETF (Ticker:DVY) because it is more stable than the general market. I am simply going to lower the stop daily until the buyers come back in. If they never do, I don't need to buy in a sinking market.  But if it recovers the computers will buy for me! Look mom no hands!







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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…