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March 18, 2017 – Weekend Market Comment

March 18, 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).

The major averages closed higher for the week, with the Dow Jones industrial average holding a 0.06 percent weekly gain. The bulk of the week's gains came Wednesday after the Fed raised rates, as expected, but took a more dovish tone than expected.

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 down.  Bull market -- expect bullish outcomes.
103 NYSE High Low Market Forces
Breadth lines almost crossed, but this was narrowwly avoided. Also notice the second window three red patches recently. This is the sign the market is running out of steam.

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
Flat but strong industrial production.  That is good news.

115 Renko
Small caps are going nowhere...
203 OBV
OBV (red line) is slightly below the market. But one day is meaningless. 

207 VIX
Fear is way down.

209 VIX Evaluator
Very much bullish.

211 S&P500 over 50 day
Now about 69% of stocks are above their 50 day MA,  slightly up from last week when it was 68%.
213 Green Arrow
Only put new money to work when I draw a green arrow. Notice loss of TRIX momentum. CAUTION

301 NASDAQ Summation
Nasdaq breadth is recovering. Pay attention trouble could be volatile.
303 Aggressive Defensive
Clearly aggressive. 

305 Consumer Bonds vs Equities
Bonds fail. Get used to this in a rising rate environment. Consumer stalls

307 Bond Direction
Bonds sideways moving average. 

309 Sectors
Everything is doing well but banking. Bazaar.

311 Nations
Global lift except USA and Canada

313 Major sectors
Ray of hope with gold lagging.

! = Pay attention this chart is important this week.

What I Find Interesting

Eko Atlantic is the name of a grandiose project to create a new economic capital for Africa—notably, right next to the current economic capital for Africa- Nigeria. This man made 5 mile long island is under construction now. The development includes everything from sky-scrapers to luxury apartments, a new financial district, a private power-grid, and a shopping boulevard in the image of New York’s Fifth Avenue. It’s the brainchild of the Chagoury brothers, two Nigerian-born billionaires of Lebanese descent who own South Energyx Nigeria Ltd, a real estate development company created to build out Eko Atlantic. Eko Atlantic is meant to be an antidote to Lagos’s deepest recession in 30 years. The city is meant to bring 250,000 new jobs and address a housing shortage brought on by a surging population. This, and the fact that it’s privately-funded, have lent it the support of the state and federal governments. It’s being sold to investors as “a valuable foothold in Africa” one of the world’s last emerging growth markets.

What Works Now

Computer Graphics

What I Think

Bull market expect bullish outcomes. I have dropped a few of my defensive position and am long and even adding a few aggressive positions. But it is still good to be cautious we have had red patch on the NYSE breadth chart (chart 103) recently and that is not a good sign. We also on the green arrow chart have the TRIX rolling over, that points to long term weakness. The market is fully valued and there is not much to be excited about. Clearly everyone is long, and that is dangerous. But keep in mind,  we made new highs recently and there is no reason not expect more of the same. Tops take a long time to form and this run has been near record setting for over 8 years 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.

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