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August 27, 2016 – Weekend Market Comment

August 27, 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).

Ho hum it is summer and the market on almost no volume is going nowhere. Look at this closeup of the recent market action:

So as you can see we are going no place. Friday's action was a little extream. 

By the way, I am in Europe visting friends and doing some investment banking work in London, so this and the next 4 market comments are likly to be short and late. Also I am learning to edit this work on a tablet and there will be some formating issues for sure. 

101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is up sharply, but pulling back in last few days. 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. Really positive.

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

115 Renko
Nothing but strength.
203 OBV
OBV is still with market, but what a day Friday. Bullish.
207 VIX
VIX at a critical point, looks overdone but if it does not correct here could be wild ride next week. 

209 VIX Evaluator
Nothing but strength. But could this be a flatting for a turn?

211 S&P500 over 50 day
Now over 59% stocks are above their 50day MA, slightly down from last week 68%. Weaker.

213 Green Arrow
Only put new money to work when I draw a green arrow. Notice the trix converge... danger?

301 NASDAQ Summation
NASDAQ is near record highs but as you can see the breadth is deteriorating.

303 Aggressive Defensive
First sign of troubles as defencives regain a lead.

305 Consumer Bonds vs Equities
Bonds flat, consumer flat, not great.

307 Bond Direction
Strength in bonds but trend might break

309 Sectors
Its all about tech as the NASDAQ sweeps ahead. Expect NASDAQ stocks to loose steam soon.

311 Nations
International has small down tick after steady gains as U.S. market looks overbought.

313 Major sectors
U.S. equities are the only game in town.

! = Pay attention this chart is important this week.

What I Find Interesting

Last week the Economist Magazine ran a cover page article on how the U.S. many have yet another housing fiancial cisies in the offing. Click Here to Read

There is over 26 trillion of debt in the U.S.fiancail system related to mortgages. Thats bigger than the whole U.S. stock market system. While U.S. banks have tightend standards and are better capitalized there has been a move toward lower level unregulated broker mortgages that are backed by even shakier institutons than in the last mess. 

What Works Now
Well what has been working is high risk investing, small stock, technology companies, but trees don't grow to the sky and for most readers I would sugest this might be a good time to take some profits. 

What I Think
Last week I said, It is true things are moving a bit sideways after a strong run and I would have a long look at the green arrow chart, notice the trix converging? This might be the end of the summer rally? 

This week that trend continued. However this still is a very strong bull market, and it is hard to say if we are seeing  healthy pull back from some profit taking or a full scale exit before the dangerous early fall period. Of course that is the rub, buying opertunity or time to get lighter? I am going to wait and see, but no big risky bets right now. 

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.

Read My Disclaimer Here