Pullback Mode Remains the Short-Term Theme
My general theme of pullback mode for stocks continues in all of the major indices except for the NASDAQ 100. Gold and silver have been a more exciting story, but they, too, have paused since I wrote about them last week. Sector leadership remains very strong with semis, banks, transports and energy near their highs at the same time the defensive group has been weak. I wrote about consumer staples looking especially troubled a few weeks ago and nothing has […]
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Date: October 11, 2016
Canaries in the Coal Mine Part I – The Major Indices
For the past month, four of the five major indices have been in pullback mode after three of the five spent the previous month digesting gains from the huge post-BREXIT rally. While that theme continues today, I think the market is getting closer to resuming its uptrend with the Dow heading to 19,000. Turning to the purpose of this article, I am going to first go through the major indices in the context of canaries in the coal mine to […]
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Date: October 10, 2016
Sell Signal Closed Out. New Leadership Emerged
Today is the last day of the month as well as the last day of the quarter. The S&P 500 closed down -0.12% in August and is on track to close down in September unless the bulls can mount a major offensive, which I am not ruling out, and close above 2071. That means a down August and September for the S&P in a presidential election year, something not seen since 1956. You can put that in the category of […]
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Date: September 30, 2016
Post-FOMC Sell Continues as Does Pullback Mode
Our post-FOMC sell signal from Thursday’s close remains in place. That short-term trade will end this week. Stocks begin the week on the defensive as Europe and Asia are showing red. The media will likely blame it on pre-debate jitters, but that’s just nonsense. Pullback mode remains in place as it has been for the past few weeks. As I keep mentioning, it should not be a big deal. The Dow and S&P 500 continue to be the weak sister […]
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Date: September 26, 2016
Fed Trend Says Sell but Fedex Gives Thumbs Up
After Thursday’s strength, one of our post-FOMC trading systems gave a sell signal and that calls for weakness over the next 3-5 days. This has a high degree of accuracy, greater than 75%. If stocks rally further on Friday, it will trigger another trend calling for lower prices with a hit rate above 85%. If correct, this should just be a quick and relatively mild bout of weakness that can be bought for another move to new highs on the […]
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Date: September 22, 2016
I Screwed Up
Yesterday, I said that all of our Fed related trends were muted to less than 60% accuracy. That was wrong. One of our best Fed systems said there was a 78% likelihood that stocks rallied. I didn’t realize this until well after 2pm when it was too late to email and take advantage. What a powerful response to the Fed not raising rates and issuing a more hawkish statement, exactly what I and most others predicted. I did find it […]
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Date: September 22, 2016
Yellen Set to Raise Rates, But…
As the Fed’s Open Market Committee meeting heads into day two, our own trends and systems for the trading day are surprisingly mute. Today typically sees stocks trade in a +.50% to -.50% band until 2 pm before the market gets a shot of volatility. Usually, we see a strong upside bias into the close, but the odds of that are under 60% from the usual 75%+. In other words, the edge just isn’t there today. Tomorrow, Friday and early […]
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Date: September 21, 2016
Bulls Continue to Ready Their Arsenal
The major indices begin the week without being on the same page as the multi-week pullback theme remains in place. This is very typical of a market that is digesting gains. Below is the S&P 500 where you can see the big red and green bars on the right side. Those were huge spikes in volatility in both directions. Over the past week, however, the bars have become shorter and shorter, meaning less movement from high to low each day. […]
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Date: September 19, 2016
Volatility Remains Elevated Until the Bulls are Ready Again
While stocks didn’t much on the surface on Wednesday, it was definitely disappointing for the bulls that there hasn’t been any follow through from Monday’s big reversal. The bulls should make another attempt on Thursday. The pullback theme remains intact, but we are starting to see some more encouraging readings in the sentiment area, specifically on the ETF volume side. The most prominent ETFs, SPY and QQQ have seen volume spike lately which means that investors are favoring the liquidity […]
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Date: September 14, 2016
Questioning Brainard’s Ethics Again
What a show of strength by the bulls on Monday. After what looked like a continuation of Friday’s bloodbath, the bears folded like a cheap suit shortly after the open. Credit is being giving to Fed head, Lael Brainard, who gave a very dovish (against raising rates) speech, but the truth is that stocks were already moving up long before she took the podium after lunch. Her comments just added fuel to the fire. By the way, this is the […]
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Date: September 13, 2016
