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February 04, 2017 – Weekend Market Comment

February  04, 2017 – 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).

What started off as a soft week for stocks ended on a strong note. Friday's gain was enough to keep stock indexes basically flat for the entire week. But there was some improvement on the charts. Also encouraging was the fact that financials led Friday's rally. So did small caps and transports.

Here is what our charts say:

101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend.  NOTICE THE SLOPE (second window), we might be starting another long ride up.  Bull market -- expect bullish outcomes.
103 NYSE High Low Market Forces
Wow breadth is still very strong. Nothing but strength. 

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
Hey an uptick in industrial production.  That is good news.

115 Renko
The big march forward, 11 bricks up !

203 OBV
OBV (red line) is back with the market. Bullish!
207 VIX
Fear is way down, in fact to all time new levels.... For now Bullish but overdone.

209 VIX Evaluator
Very much bullish.

211 S&P500 over 50 day
Now about 65% of stocks are above their 50 day MA,  down a tad down from last week when it was 69%.

213 Green Arrow
Only put new money to work when I draw a green arrow. TRIX says green light, could be a green arrow soon.

301 NASDAQ Summation
Looks like it might get more stable. for now consolidation. 

303 Aggressive Defensive
Aggressive is back in style. 

305 Consumer Bonds vs Equities
Bonds down. Consumer deflating? neutral 

307 Bond Direction
Bonds hit moving average and die. Goldfinger say: NO Mr. Bond I expect you to Die. 

309 Sectors
Consumer and Nasdaq try to run, banks stall.

311 Nations
Emerging markets perk up. 

313 Major sectors
Emerging Markets strong.

! = Pay attention this chart is important this week.

What I Find Interesting

With some broad market indexes making record highs, one would think that total mutual fund assets would be following suit. But no. As of the end of December Total Stock Mutual Fund Assets were still below the record highs set in 2015, and are failing to confirm record price highs. (These data are collected by the Investment Company Institute and are published a month in arrears. January's totals won't be available until the end of this month.) Don't panic yet but with no new profesional money there often is am impending correction. 

Super Bowl
Tomorow is Superbowl Sunday. Some investors believe the outcome of the Super Bowl, the final game of the U.S. NFL football season, and how stock prices behave for the rest of the year are connected. Interestingly, this relationship does hold up under statistical scrutiny. 

However, you must better understand what such a statistical outcome means before making financial decisions based on a football game. The so-called "Super Bowl Halo Effect" is a statistical oddity. Historically, the Dow Jones industrial average is more likely to decline over the course of the full year after which the AFC team wins the championship. When the NFC team is crowned, the Dow is more likely to finish the year higher. This basic rule has held 80 percent of the time thus far. Because the Super Bowl occurs within the first two months of the year, investors who wish to bet on this halo effect have ample time to buy or sell based on the game's outcome.

What Works Now

Arconic is a spinoff of Alcoa and makes percision aluminum products for aerospace and automobiles. Insiders are buying and the firm beat revenue guidance by 60%. (ticker:ARNC)

What I Think

I think this is a bull market and I have been positive after the last pull back and that makes me very happy. The Bull Bear lines kept you on the right side of the trade you should be happy too. 

Friday had strong results for fiancials and it looks like a gap up in to a new range. Very bullish.

Be long increase your speculative holdings, play high growth. Febuary is historicly a great month for stocks. Everything looks great. 

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