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July 9, 2016 – Weekend Market Comment

July 9, 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).

As I mentioned last week, if we break resistance the markets could move up shaply and on Friday they did just that. Some lag in employment was showing on our charts, now all trace of that is gone. This bull rally could go a lot longer. 

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

103 NYSE High Low Market Forces
Nothing but positive, in fact wow crazy possitive. 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 white brick, nothing but strength.
203 OBV
CAUTION: OBV says pros were not with this market as volume fails to join up searge.
207 VIX
VIX shows rapidly increasing uncertainty now about 13.
209 VIX Evaluator
Nothing but strength.

211 S&P500 over 50 day
Now nearly 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.
New Green Arrow!

301 NASDAQ Summation
Nothing but strength here.

303 Aggressive Defensive
Turning Aggressive.
305 Consumer Bonds vs Equities
Bonds lag consumer rises, bullish!!

307 Bond Direction
Strength in bonds indicates overall market caution.

309 Sectors
Defensive staple stocks like dividends, utilities are starting to retrat as risk is coming on stronger. 

311 Nations
A look like international weak. Germany is rebounds as Briexit turns to who cares!

313 Major sectors
Canada and Gold takes a pause!

! = Pay attention this chart is important this week.

What I Find Interesting
Here is a chart on Bloomberg.... notice how factory orders and recessions are correlated, that is of course why we look at factory output in our 100 series charts.

Manufacturing as a share of the U.S. economy has been plummeting. In 1965, manufacturing accounted for 53 percent of the economy. By 1988 it only accounted for 39 percent, and in 2004, it accounted for just 9 percent. Some say the markets and manufacturing have decoupled, and that Americans can do just fine with new consumer oriented jobs like WalMart greeters and Starbucks Baristas. But those jobs do not pay like manufacturing jobs and they only exist as long as their is value being created in the economy. Their is also a ever enlarging civil service that pays better but by taxing who?

What Works Now

What I Think

Fridays bounce was impressive and both the Bull Bear Lines and the NYSE 52 week high low arelooing very strong, we have a green arrow, its a very aggressive bull market. Yes the OBV is lagging a bit and you could make an argument for over-bought, but really the only place to be in this market is long. 

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