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September 24, 2016 – Weekend Market Comment

September 24, 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).

Well as predicted last week the buy the dip crowed bought the dip.There was a low volume pull back on Friday. There are some postive signals, the percent of stocks above the 200 day averge is holding up. Retails and consumers are not as strong as I would like to see. Industrials are running out of steam too.  
But there are some new signs in the market and they are concerning... lets see what the charts show. 

101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is up. Notice our long term indicators dark green 50 day and red 200 day are leveling off, not that that means much, one good Sept. rally and that could pick up again.  Bull market -- expect bullish outcomes.
103 NYSE High Low Market Forces
Bouncing back but the strength we saw last month might be gone. 

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
Bullish but the 12 period green average says perhaps more pain yet. 

115 Renko
White brick after black brck, probably a new up trend or perhaps sideways. 
203 OBV
OBV is really lagging the market, too soon to worry but keep an eye on this. 
207 VIX
VIX in a clasic up down right in time with the CCI indicator. Are we going to bottom under the red line again and return to more volitility?

209 VIX Evaluator
Nothing but strength. 

211 S&P500 over 50 day
Now 50% stocks are above their 50day MA, slightly up from last week. Possitve turning point?

213 Green Arrow
Only put new money to work when I draw a green arrow. With the TRIX red over gren a green arrow is not possible. You were warned. 

301 NASDAQ Summation
NASDAQ is at a record high. Very bullish for tech stocks.

303 Aggressive Defensive
back to risk on, bullish mode.

305 Consumer Bonds vs Equities
Bonds and consumer rebound, clearly the market likes esay money policy 

307 Bond Direction
Long term bonds are lagging but recent price action is strong. 

309 Sectors
As predicted, defensives are pulling ahead... hmm do I see the pros crowding around the exit?

311 Nations
Only Germany looks strong.

313 Major sectors
rotation out of U.S. equities in to emerging markets. 

! = Pay attention this chart is important this week.

What I Find Interesting

A recent article in Bloomberg showed how the U.S. standard of living is slipping by global standards. Apparently there is more to a great society than endless all you can eat wings, over sized vehicles and 500 tv channels. Who knew?

Health was a big issue, despite lots of "Tough Mudders" and a surge of interest in stand up paddle boards, Americans continue to tip the scale as the most obese society in history. 

Other issues include violence, urban crime, workplace safety, pollution and education standards. Of course there might be more to American culture,  I noticed that the U.S. got no points in culture for publishing some very artistic works in the Victoria Secret Catalogue. (I am a big fan).

What Works Now
Japan is doing very well the Vangaurd Japan index (tcker: EWJ) has been on a good march forward. 

What I Think
I think we are in one of the longest bull markets in history. I think we dodged a bullet by not raising rates and the market is celebrating. That said, the On Balance Volume tells me it mostly amateurs playing now and the TRIX on the Green Arrow chart is warning that this is not the full steam rally of the spring. The sector chart shows the action is in defensives an utilities, so that's lots of reasons not to trust this run up.  Still it is a bull market and you can't be too afraid. 

This week I am writing from London, heart of the European financial comunity

You can learn more about my indicators by visiting the CME4PIF school by clicking here.

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