Monday, 29 February 2016

February 29, 2016 – Market Comment


February 29, 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 http://cme4pif.blogspot.ca/.  For full details read my disclaimer (link at the bottom of this page).


Sorry I am late this week, as you can see it is leap year day Monday, but when you live on a tropical island sometimes friends and a beer on the beach take priority.








101 Bull Bear
Bear market (red over dark green). The light green line has come a long way up, and the dark green line is beginning to turn up, perhaps the end of this sell off. Bear Market = Bearish outcomes.

103 NYSE High Low Market Forces
In the right side highlight we see green is below yellow. Breadth issues are drying up, the sell off may be over.

105 Non Farm Payroll
Lots of jobs! But this is a lagging indicator. 

107 Industrial Production
Not good. Watch this carefully, all recessions have falling industrial production, but data is from the end of Dec.

115 Renko
Obviously – 3 white bricks trend is heading up.
  !
203 OBV
DANGER the pros are fading this bounce. Smart money is not participating, recover weak!!!

207 VIX
VIX is the fear gage .. near 19.5 is calming but still in the dangerous zone.

209 VIX Evaluator
Heading down clearly.

211 S&P500 over 50 day
Now 61% of stocks are above their 50day MA. However top window shows a MACD near top.

213 Green Arrow
Only put new money to work when I draw a green arrow.
I have added a new rule to eliminate too many arrows, now I do not draw arrows if the TRIX is red over green.
No sign of a green arrow..


301 NASDAQ Summation
Looks solid for NASDAQ don’t bet against strength here

303 Aggressive Defensive
Looks way overbought, expect market to fade in coming days. Be ready to go deeper short.

305 Consumer Bonds vs Equities
Consumer rebounds. Bonds are the safe haven trade.

307 Bond Direction
Bonds are the safe haven trade.

309 Sectors
Consumer is in strong rebound.

311 Nations
Emerging markets return

313 Major sectors
Defensives weak again, looks like recovery!

 




 ! = Pay attention this chart is important this week.



What I Find Interesting
The OBV line is lagging:







What I Think

I was expecting a sell off last week, and clearly there is more strength in the market than I expect. Now if I am wrong or just early we find out now. 
 
We are at a tipping point. This week will tell if we are in a bull or a bear trap, if the market sells off the bear continues, if not, this might be the turn. It is still a bear market and I expect bearish outcomes. Despite contrary indicators on other charts I am going to focus on the OBV line, until it catches up in the market I expect the Aggressive Defensive chart to roll over later this week.

 
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.



Saturday, 20 February 2016

February 20, 2016 – Weekend Market Comment

February 20, 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 http://cme4pif.blogspot.ca/.  For full details read my disclaimer (link at the bottom of this page).

The keys to the sustainability of the recent rally will be twofold:  (1) will there be enough buying pressure to clear key resistance levels as they're approached and tested? and (2) will there be enough rotation to aggressive areas of the market to confirm breakout attempts? I stick with my original idea that this is a dead cat bounce. Bear markets expect bearish outcomes.




101 Bull Bear
Bear market (red over dark green). The light green line is rounding signalling the top of a “dead cat bounce”. Bear Market = Bearish outcomes.

103 NYSE High Low Market Forces
In the right side highlight we see green is below yellow. Still many breadth issues.

105 Non Farm Payroll
Lots of jobs! But this is a lagging indicator. 

107 Industrial Production
Not good. Watch this carefully, all recessions have falling industrial production, but data is from the end of Jan.

115 Renko
Obviously – 8 Black down bricks the trend is heading down, fast.
 !
203 OBV
Sharp OBV drop Friday, a sign that the pros are fading the market.

207 VIX
VIX is the fear gauge .. near 20soon

209 VIX Evaluator
Heading up again fear returns.

211 S&P500 over 50 day
Now 44% of stocks are above their 50day MA. looks like a top.

213 Green Arrow
Only put new money to work when I draw a green arrow.
I have added a new rule to eliminate too many arrows, now I do not draw arrows if the TRIX is red over green.
No sign of a green arrow..



301 NASDAQ Summation
Looks bullish for now.
 !
303 Aggressive Defensive
Looks way overbought, expect dead cat bounce to die here.

305 Consumer Bonds vs Equities
Disturbing, the consumer is lagging. Bonds are the safe haven trade.

307 Bond Direction
Bonds are the safe haven trade.

309 Sectors
Only defensive areas outperforming S&P500.

311 Nations
Canada surge on gold

313 Major sectors
Gold strong uptick!


  ! = Pay attention this chart is important this week.

What I Find Interesting
Recent Lipper Analytics fund flow data shows in the latest week, there was $12.2 billion in equity outflows, from equity funds the largest weekly redemption in 5 months also gold (suggested here months ago) had record 2-week inflow ($3.2bn) since May’10, which according to BofA is a "hedge against “risk-off” & “dollar-off”


Housing Money Laundry
More in the Canadian press about crazy Vancouver real estate deals as dirty money flees from China.



What Works Now










 

What I Think
Nowadays the charts shows a market alarmingly similar to 1987, 2000, and 2008. The market’s engine is stalling. Each of these bear-market years resulted in declines in excess of 35%. The severity of the decline is indeed a concern, but more importantly is the time it takes from the highs to the lows. 


Several classic signs of a bear already are here:

• Daily volatility has spiked. “This is a war between the bulls and the bears ... and so far the bulls are losing.”

• Margin debt peaked last spring and has been falling ever since. “Past peaks in margin debt have coincided with, or led, peaks in the stock market.”

• Many stocks already are in bear markets. Over 60% of the stocks in the S&P 500 Index are down 20% or more from their highs, and so are the small-cap Russell 2000 Index and Dow Jones Transportation Average. Bear markets in the Russell and Dow Transports haven’t preceded bear markets in the broader indexes “only three times in the past 35 years.”


Global trade sucks, Baltic Index is at record low meaning container ships are at the dock with no cargo to move.  
The market was fairly quiet Friday and as a result, overhead resistance held as a new price top was formed. A look at the charts, however, and we are reminded that this rally is likely dying on the vine. I put some more money at risk by shorting the NASDAQ (QID) This is a very volatile ETF and you can not use it for long term plays, if you are risk adverse use cash instead.
 





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.



Saturday, 13 February 2016

February 13, 2016 – Weekend Market Comment

February 13, 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 http://cme4pif.blogspot.ca/.  For full details read my disclaimer (link at the bottom of this page).

The rout in the markets I have been warning about since last August continues with a small relief rally Friday.
Gold hit a 52 week high in trading yesterday, marking the first time since 2011 (5 long years ago...).

Momentum shifted positive Friday on a 2% plus rally, not surprising. We are at the limits in further downside without getting terribly oversold. Bear market rallies are not for the faint of heart as they generally don't last long, so even if price can rally, internal weakness will continue to put downward pressure on price.
While this means that momentum has shifted positive, it is likely going to be short-lived based on the indicators I'll discuss below.










101 Bull Bear
Bear market (red over dark green). The light green line is turning up signalling the start of a “dead cat bounce”. Bear Market = Bearish outcomes.

103 NYSE High Low Market Forces
In the right side highlight we see green is below yellow. Still many breadth issues.

105 Non Farm Payroll
Lots of jobs! But this is a lagging indicator. 

107 Industrial Production
Not good. Watch this carefully, all recessions have falling industrial production, but data is from the end of Dec.

115 Renko
Obviously – 8 Black down bricks the trend is heading down, fast. Still no up brick even after a great day Friday.

203 OBV
There were some strong upspikes. That looks to be over .

207 VIX
VIX is the fear gage .. near 25 is beyond fear back to all out panic.

209 VIX Evaluator
Heading up again fear returns.

211 S&P500 over 50 day
Now only 27% of stocks are above their 50day MA.

213 Green Arrow
Only put new money to work when I draw a green arrow.
I have added a new rule to eliminate too many arrows, now I do not draw arrows if the TRIX is red over green.
No sign of a green arrow..



301 NASDAQ Summation
Possible up turn.
  !
303 Aggressive Defensive
Looks way oversold, expect dead cat bounce. .

305 Consumer Bonds vs Equities
Disturbing, the consumer is lagging. Bonds are the safe haven trade.

307 Bond Direction
Bonds are the safe haven trade.

309 Sectors
Only defensive areas outperforming S&P500.

311 Nations
Canada surge on gold

313 Major sectors
Gold strong uptick!


 ! = Pay attention this chart is important this week.



What I Find Interesting
 
Russia still has 4000 ICBM warheads pointed west and for the first time in decades they are talking about a possible war with NATO. Click here to read about the saber rattling as reported by BBC. I have often called the Putin presidency as a reboot to USSR 2.0, well here you have the latest example. 


Tensions between the West and Russia have increased in recent years, in large part -- at least in the view of the West -- due to Russia's annexation of the Ukrainian peninsula of Crimea and its support for separatists elsewhere in eastern Ukraine.

More recently, some in the West have questioned whether Russia's intervention in Syria is helpful. Russia says it is attacking terrorists. But some observers contend that Moscow is intent primarily on propping of the regime of Syrian President Bashar al-Assad, who is hanging onto power despite a five-year civil war.

Gen. Philip Breedlove, NATO's supreme allied commander Europe, told CNN that NATO does not agree with Medvedev's assessment. At an earlier briefing at the Munich Security Conference, Breedlove said Russia is not just trying to change the rules but rewrite them.

 
What Works Now
Well as I said 12 months ago basic foods like Hormel inc the makers of SPAM

Ticker HRL


Gold, recommended here in January, is doing well ticker: GLD


and of course my 2016 number one pick this year SHORT the midcap 400 with ticker: MYY



What I Think

First as you learning ion CME4PIF school lesson one: NEVER forget rule number one of my investment philosophy:

WHEN THE BULL BEAR LINES ARE GREEN OVER RED NEVER BE SHORT AND WHEN THE BULL BEAR LINES ARE RED OVER GREEN BE IN CASH OR SHORT, NEVER BE LONG. IF ON THE EDGE -- CASH IS A POSITION TOO.


which helps you with Mr. Buffett's rule #1
 


I think the aggressive defensive chart says we are oversold and due for a relief rally, but it will be short lived and then the chaos will resume. I am taking off my leveraged shorts for a few weeks and continue to hold cash and short ETFS.


 
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.



Saturday, 6 February 2016

February 6, 2016 – Weekend Market Comment

February 6, 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 http://cme4pif.blogspot.ca/.  For full details read my disclaimer (link at the bottom of this page).

The Market sold off hard on Friday,  the Nasdaq was the biggest loser on the day... the biggest single-day drop since August's Black Monday plunge... (Nasdaq now lowest close since Oct 2014). The USDollar Index crashed by the most since June 2009 this week (despite a bounce today) led by JPY strength (biggest week since Oct 2008!). Gold's best 3-week gain in over a year to near 4-month highs and Silver's best 3-week run since May 2015



Now if you follow my posts you saw this coming a long time ago in the charts, but oddly the press says Friday's sell off was due to a week jobs number. Well... yes in a recession, industrial production fails, and then layoffs follow... yes we all know that. Well Industrial production has been lagging since the summer of 2015 so.... part two = layoffs. Ah but you point out that jobs are not declining yet, this is just slower growth. Well, true but the jobs that are laying off are high paying jobs in key economic areas like manufacturing and transportation and the jobs that are growing are near minimum wage and essential services positions like bartenders and nursing aids. So loosing a cargo pilot job paying $150,000 a year is not the same as gaining a  Starbucks Barista making $12. No amount of politically motivated  statistics can cover up this stink.







 !
101 Bull Bear
Bear market (red over dark green). The light green line is turning down signalg the end of the “dead cat bounce”. The trend now continues in the direction of the dark green line.  Bear Market = Bearish outcomes.

103 NYSE High Low Market Forces
In the right side highlight we see green is below yellow. Still many breadth issues.

105 Non Farm Payroll
Lots of jobs! But this is a lagging indicator. 

107 Industrial Production
Not good. Watch this carefully, all recessions have falling industrial production, but data is from the end of Dec.

115 Renko
Obviously -- Six black down bricks the trend is broken and heading down, fast. Still no up brick even after a great day Friday.

203 OBV
There were some strong upspikes. That looks to be over .

207 VIX
VIX is the fear gage .. near 24 is beyond fear back to all out panic.

209 VIX Evaluator
Heading up again fear returns.

211 S&P500 over 50 day
Now only 31% of stocks are above their 50day MA.

213 Green Arrow
Only put new money to work when I draw a green arrow.
I have added a new rule to eliminate too many arrows, now I do not draw arrows if the TRIX is red over green.
No sign of a green arrow..




301 NASDAQ Summation
Possible up turn.
 !
303 Aggressive Defensive
A predicted the bounce fizzled even before the top part of the chart could complete a cycle. .

305 Consumer Bonds vs Equities
Disturbing, the consumer is lagging. Bonds are the safe haven trade.

307 Bond Direction
Bonds are the safe haven trade.

309 Sectors
Only defensive areas outperforming S&P500.

311 Nations
Philippians surge

313 Major sectors
Gold strong uptick!




! = Pay attention this chart is important this week.


What I Find Interesting
 
Prominent Wall Street lawyer Peter J Chepucavage has filed on behalf of two anonymous clients (assumed to be employees of Blackrock Inc), a letter detailing how dangerous ETFs are in times of market instability. Click here to read. If you want it translated -- it says that in a market crash many important ETFs and ETNs will not behave as predicted because the underlying hedges will blow up.




What Works Now 
Short ETFs Tickers: DOG, SH, MYY, QID

 


Gold Ticker:GLD

Short Junk Bonds, recommended by me many times, since the summer of 2015, this toxic waist is going straight down.
ticker: SJB

Rum punch
No ticker, sold over the counter only, at least you get some potential "R.O.I.".
 


What I Think
This is bear market, and in a bear market you expect bearish outcomes. Do not buy and hold, if you are conservative be in cash if you are looking for return buy the above mentioned ETFs like MYY or gold



 



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.