Thursday, 30 June 2016

June 30, 2016 – Weekend Market Comment

June 30 – 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).

No full market comment this weekend as I am sailing for 3 days. Thursday was a surprise bounce predicted last week. Gold did well now is the time to review our holdings, and consider some profit taking.



Charts 100 200 series click here



Charts 300 series click here
 




What I Think

Thursdays rally was impressive with a strong gap up. If in the coming week we break in to a new all time high this rally could go much further and we will finally break in to new highs signaling a strong bull market.

  
The good news, breath is very strong with a lot of S&P500 stocks hitting 52 week highs and nearly zero hitting 52 week lows. 

The bad news, the rally has been lead by consumer staples and utilities. Gold marches ahead.  Very big lags in tech and consumer discretionary stocks signaling a mood of over all caution. 









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Friday, 24 June 2016

March 25, 2016 – Weekend Market Comment

March 25, 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).

Well Britain has kissed the rest of Europe goodbye. The departure is a blow to globalization, challenging a decades-long embrace of freer movement of goods, services and people. The success of the Brexit movement, fed by an influx of foreign migrants,  stagnant wages and resentment over inequality since the Great Recession, is one more jolt for a global economy left bruised by years of crisis fighting that’s restricted momentum.






101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is down sharply. Bull market -- expect bullish outcomes.

103 NYSE High Low Market Forces
Nothing but positive. In the right side highlight we see green is above is below yellow. This is the number on reason I am still seeing possible upside.

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
Not good. Watch this carefully, all recessions have falling industrial production, new data is from the end of March, looking worse.

115 Renko
A new down black brick, nothing but strength for weeks has ended. .
 !
203 OBV
CAUTION: OBV says pros were not with this market as volume falls. However recent drop is now in line with OBV.
 !
207 VIX
VIX shows rapidly increasing uncertainty now above 22 again over 2 points in a week.
 !
209 VIX Evaluator
Still says dangerous odds are things getting worse. Recent renewed upward pressure .

211 S&P500 over 50 day
Now over 73% stocks are above their 50day MA. Strength despite sell off.

213 Green Arrow
Only put new money to work when I draw a green arrow.
Well declining interest in broad market is clear in the 20-day slope (top panel).  .


301 NASDAQ Summation
Nothing but weakness here.

303 Aggressive Defensive
Was turning Aggressive until end of this week. Now clearly defensive but could be the end of the cycle.
 !
305 Consumer Bonds vs Equities
Bonds explode consumer dies. Very bearish.

307 Bond Direction
Strength in bonds indicates overall market caution. .

309 Sectors
Defensive staple stocks like dividends, utilities are strong. Tech is falling as investors fear risk.

311 Nations
A look like international weak. Germany is Kaput!

313 Major sectors
Gold and commodities shine things look good for Canada!

! = Pay attention this chart is important this week.



What I Find Interesting
Allen Greenspan was looking very dark and gloomy today on CNBC.


"This is the worst period, I recall since I've been in public service. There's nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I'd love to find something positive to say."

Wow Allen take a Prozak. Britain ruled the world, while openly fighting Europe for 700 years. I am sure they will be alright without Brussels telling them how to package their cheese.

What Works Now
I have been saying this for weeks now . . .Well in case you are sick of hearing it GOLD! Last night CA-CHING!!!



What I Think
I think I could buy a few rounds of Guinness with all my returns last night on my gold position. I hope you followed my advice on that. In the big picture though if this sell off continues -- it will be more to do with High P/E multiples and a 7 year bull run than the U.K. staying in the European union. Lets face it without adopting the Euro the U.K. only had one foot in the water in the first place.

OK so who knows Monday could be a bloodbath or a huge bounce back. I am not clairvoyant, but I want stay clear if it plummets and to act quick if it bounces up. I have a clever plan . . .

The way I am going to play this is I have a "buy on stop order" on the Dividend ETF (Ticker:DVY) because it is more stable than the general market. I am simply going to lower the stop daily until the buyers come back in. If they never do, I don't need to buy in a sinking market.  But if it recovers the computers will buy for me! Look mom no hands!







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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Saturday, 18 June 2016

June 18, 2016 – Weekend Market Comment

June 18, 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).







101 Bull Bear
Bull market (dark green over red) and now the short term (light green) is leading up. Bull market -- expect bullish outcomes.

103 NYSE High Low Market Forces
In the right side highlight we see green is above is below yellow. This is the number on reason I am still seeing possible upside.

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
Not good. Watch this carefully, all recessions have falling industrial production, new data is from the end of March, looking worse.
 !
115 Renko
A new down black brick, nothing but strength for weeks has ended. .
 !
203 OBV
CAUTION: OBV says pros are not with this market as volume falls. .
 !
207 VIX
VIX shows falling uncertainty now below 20 again. Could be the end of the cycle of fear, notice cci looks likes it topped for now.

209 VIX Evaluator
Still says dangerous odds are things getting worse..

211 S&P500 over 50 day
Now over 53% stocks are above their 50day MA.MACD (top window) say more pain to come?

213 Green Arrow
Only put new money to work when I draw a green arrow.
Well declining interest in broad market is showing a bit in the 20-day slope (top panel).  .


301 NASDAQ Summation
Nothing but weakness here.

303 Aggressive Defensive
Defensive but could be the end of the cycle.

305 Consumer Bonds vs Equities
Bonds way overbought consume fuddles along..

307 Bond Direction
Strength in bonds indicates overall market caution. .

309 Sectors
Defensive staple stocks like dividends, utilities are strong but the consumer is rising. Financials are rising. On tech is falling as investors avoid the overbought.

311 Nations
A look like international stronger, but the mix moves here from growth countries to stable Europe.

313 Major sectors
Gold and commodities shine things look good for Canada!

! = Pay attention this chart is important this week.



What I Find Interesting
According to Bloomberg AirBnB just raised another billion in debt. Apartment-sharing startup Airbnb Inc has secured a $1 billion debt facility from some big U.S. banks to aid its new services and finance its expansion plans, a source close to the company said. 

Airbnb is an online rental service that enables people to list, find, and rent vacation homes. It is an online marketplace for vacation rentals that charges a fee for connecting users with property to rent with users looking to rent the property. It has over 1,500,000 listings in 34,000 cities and 191 countries. 

Past funding . . .
As of July 2011, the company had raised US$119.8 million in venture funding from Y Combinator, Greylock Partners, Sequoia Capital, Andreessen Horowitz, Digital Sky Technologies, General Catalyst Partners[47] and undisclosed amounts from Youniversity Ventures partners Jawed Karim, Keith Rabois, and Kevin Hartz,[48] and from A Grade Investments partners Ashton Kutcher and Guy Oseary.

In April 2014, the company closed on an investment of $450 million by TPG Capital at a valuation of approximately $10 billion.[49]

As of March 2015, Airbnb is raising a new round of funding that will place the company at a $20 billion valuation.[50]

In 2015, Airbnb raised $1.5 billion in funding led by growth equity firm General Atlantic, and joined by Hillhouse Capital Group, Tiger Global Management, Kleiner Perkins Caufield & Byers, GGV Capital, China Broadband Capital, and Horizon Ventures.[51]
 


Not publicly traded yet . . .





What Works Now
Gold





What I Think
I think we had a little sell off and probably from here we bounce up. If you look at the CCI on our 207 VIX chart this is normal as far as fear goes. That said the OBV chart is diverging and some of the worst sell offs start that way. So I sugest going long in broad safe indexes like (ticker:DVY) and buying Gold (ticker: GLD) and set your stops tight and wait and see what the market gives you.


and have a happy Father's Day . . .








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.
Read My Disclaimer Here

Saturday, 11 June 2016

June 11, 2016 – Weekend Market Comment

June 11, 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).

U.S. stocks closed lower Friday, weighed by renewed global growth concerns as benchmark yields fell to record lows and investors looked ahead to U.K. vote on whether to leave the European Union. I think some of this today is "Brexit," some of it is global growth concerns, some of it's the Fed,"







101 Bull Bear
Bull market (Dark Green over red). Nothing but strength. Notice the turn around pattern in the second window showing gaining momentum in the 50 day slope. The 4 day (light green line) turning down. Bull Market = Bullish outcomes.

103 NYSE High Low Market Forces
Nothing but strength.

105 Non Farm Payroll
Lots of jobs! But this is a lagging indicator. Personal consumption represents 70% of U.S. GDP, therefore a financially healthy and employed consumer plays an outsized role in swaying economic trends. The newest data was a small disappointment and it shows as the lines have slightly converged, this is not time to panic yet.  

107 Industrial Production
Not good. Watch this carefully, all recessions have falling industrial production, but this data is from the end of April. Notice a clear round top in the 12 period moving average. This is the sign of a recession looming.

115 Renko
Three white bricks, the trend is up.
!
203 OBV
CAUTION: Notice that Friday was a sharp sell off. OBV lags the market. Pros are not buying this could be a sucker run up – Caution could signal a pull back from this run up.

207 VIX
VIX is the fear gauge ... last week 13.58 now 16.16 The experts are buying insurance.
!
209 VIX Evaluator
Could be the start of an uptrend. Don’t panic yet.

211 S&P500 over 50 day
Last week 69% this week now 62.8% of stocks are above their 50day MA. Now gaining loosing momentum.
!
213 Green Arrow
Only put new money to work when I draw a green arrow.
Looks possible ready to roll over..
TRIX is green over red, but it is narrowing. Expect positive outcomes. ..




301 NASDAQ Summation
Nasdaq is weakening, this is the first red in the second window in 4 weeks.

303 Aggressive Defensive
Still aggressive but late in the game, expect a defensive move now.

305 Consumer Bonds vs Equities
Consumer slowly fades (concerning). Bonds explode up. Experts are buying bonds to avoid a equity pull back?

307 Bond Direction
Short-term bonds are strong -- long term up trend is up. The pros are getting very defensive.

309 Sectors
Notice the defensives/utilities are rising fast, consumer is at bottom of normal range, financials are dropping and tech is sliding a bit.

311 Nations
Global markets sell-off hard..

313 Major sectors
Some recent signs of life in commodities and gold.



! = Pay attention this chart is important this week.


What I Find Interesting

Britan
A referendum is being held on Thursday, 23 June to decide whether Britain should leave or remain in the European Union. The race is close with the current poles running with in 1% of each other.


Surging numbers of applications for British citizenship have been submitted by European Union nationals alarmed that a Brexit vote could jeopardise their status in the UK, it has emerged.


Red Squirrel, a publisher of textbooks preparing candidates for citizenship tests said sales had quadrupled since it became clear that David Cameron would hold his promised EU membership referendum in June.

The Economist has excellent coverage of the whole issue. London is flooded with east block migrants from Poland and the Czech republic and it is creating social unrest.  The issue is not only Globalization, and whether it is always a good idea. Particularly the issues of the right of citizens to travel across boarders for work. 


Chandeliers
The Chandelier Exit was developed by Charles Le Beau and it was introduced in Alexander Elder's books as a stop-loss strategy (trailing stop) that is based on the volatility measured by the Average True Range (ATR) indicator.

Including volatility component in a stop-loss strategy is one of the one of the way the volatility is used in technical analysis. It is logical to have bigger trailing stop (stop-loss) during higher volatility trading as it helps to avoid choppy trading. At the same time, a smaller trailing stop (stop-loss) during lower volatility trading allows to close position closer to the top by getting maximum gain.

The idea is if you are trading a stock that exploded up and down like a technology stock you need more room for your stop than say an index of big banks that move slowly. Below are two charts, notice how much simpler it is to judge the stops on the Dividend paying stock ETF than it is to track a controversial volatile stock like Herbalife. The red line is 3X Chandelier stop.




The Chandelier Exit is a wonderful tool to tell you when to sell a steady investment but the down side is most brokers do not offer a Chandelier stop in their trading platform so you must manual move the stop on a regular basis to keep it relevant. 



What Works Now

Gold




Commodities


What I Think
Fridays reaction to the Fed statements caused a bit of a sell 
off, except for a small bounce off the bottom going in to the close. However any one day reaction is NOT a trend, so we need to see what Monday brings.  We are still green over red on the Bull Bears (bull market) and we have a very strong market breadth in NYSE new high low chart, so don't panic yet. That said, on Thursday the market was way over bought and the VIX was near the bottom of its range so as I said last week a pull back would be appropriate here. 

If you really want to stay up at night worrying, you might consider that we are getting some very poor numbers in consumer discretionary and in short term employment numbers. Couple that with a down trend in manufacturing and I would say this is a time to raise your stops and play it with caution. My primary long holding right now is DVY the dividend ETF, and I have a stop above my cost to lock in profit if we sell off here. Still long but very conservative. 




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.

Read My Disclaimer Here


Saturday, 4 June 2016

June 4, 2016 – Weekend Market Comment

June 4, 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).

U.S. stocks closed slightly lower Friday, as gains in utilities offset declines in financials after a sharp miss on the May jobs report. The major averages came well off session lows to close slightly lower on the day and narrowly mixed for the week. The Dow Jones industrial average closed about 31 points lower after earlier falling 148 points with Goldman Sachs contributing the most to declines.





101 Bull Bear
Bull market (Dark Green over red). Nothing but strength. Notice the turn around pattern in the second window showing gaining momentum in the 50 day slope. The most you could say negative is that the 4 day (light green line) is a long way from the 50, and so a bit of revision to the mean would not be a surprise. Bull Market = Bullish outcomes.

103 NYSE High Low Market Forces
Nothing but strength.
!
105 Non Farm Payroll
Lots of jobs! But this is a lagging indicator. The newest data was a small disappointment and it shows as the lines have slightly converged, this is not time to panic yet.  

107 Industrial Production
Not good. Watch this carefully, all recessions have falling industrial production, but this data is from the end of April. Notice a clear round top in the 12 period moving average. This is the sign of a recession looming.

115 Renko
Three white bricks, the trend is up.
!
203 OBV
CAUTION: OBV lags the market. Pros are not buying this could be a sucker run up – Caution could signal a pull back from this run up.

207 VIX
VIX is the fear gage ... 13.58 – Fear has ebbed to a low point. Notice the CCI in the top window.

209 VIX Evaluator
Nothing but strength.

211 S&P500 over 50 day
Last week 67% this week now 69% of stocks are above their 50day MA. Now gaining momentum.

213 Green Arrow
Only put new money to work when I draw a green arrow.
Recent New Green Arrow this is a GOOD TIME to go long the market.
TRIX is green over red, expect positive outcomes. ..


301 NASDAQ Summation
Nasdaq nothing but strength.
!
303 Aggressive Defensive
Still aggressive but late in the game, expect a defensive move in the next few weeks?
!
305 Consumer Bonds vs Equities
Consumer slowly fades (concerning). Bonds explode up. Experts are buying bonds to avoid a equity pull back?

307 Bond Direction
Short-term bonds are overbought -- long term up trend is up.

309 Sectors
Notice the defensives/utilities are rising fast, consumer is at bottom of normal range, financials are dropping and tech is sliding a bit.

311 Nations
Finally some interest in global markets as commodities ignite interest.

313 Major sectors
Some recent signs of life in commodities Canada does well.


! = Pay attention this chart is important this week.



What I Find Interesting
Venezuela continues to disintegrate loosing the ability to generate power from many major dams. This article on Bloombergs site details some of downward spiral.  

This is what $25 U.S. dollars looks like in Venezuelan Bolivars once peg to US dollars, now worth about 10 cents to the dollar. As reported in the New York Times it takes a purse full of cash just to buy 3 cups of coffee. 


This is what tap water looks like in Caracaus as government employees are unable to run treatment facilities. 




What Works Now
The theme now is things are good... it might not last. 

Commodities march ahead. If you haven't been following the breakouts week after week in commodities, it's time to check in and see what is going on. We continue to see new breakouts every week. We continue to see more commodities moving above the 200 DMA. The rally in oil, the rally in natural gas, and the breakouts in some agricultural commodities, are generating good results. 


Bonds
this is TLT 20 year US treasuries

Defensive stocks (not defense stocks) 


A Reader Writes
A reader of this blog wrote to me this week and asked about advice about if this is a good time to sell Canadian financial stocks. 

To answer this I took our standard Bull Bear chart and used it to chart the Bank of Nova Scotia and its recent performance. Other major Canadian banks should be similar (except Canadian Western Bank another animal altogether) 


First off I think Canadian banks are a license to print money. By law Canada only has a small handful of Charter A banks who work together to screw their clients. In the 2008 financial crises they held up far better than most other equities. For example two companies that weathered the storm well were Scotiabank and the Prudential Insurance company -- but look at the difference in how hard they were hit. This chart is the 2008 crash and Prudential is in red, Scotiabank is in blue.

So the answer is according to the Bull Bear lines it does look like Canadian Banks might have run too far too fast. Perhaps they will rest or pull back a bit but perhaps not. But this is for sure, if things go bad you will have more time to get out. I think as long as that dark green 50 day moving average is heading up I would not get spooked easily. 


What I Think
Its a bull market and you must in the long run expect bullish outcomes. That said if you look at the Bull Bear lines our light green 4 day ema is way above the 50 day average. Clearly we can see that the recent run up is a bit over done and a pull back would be in order. The recent moves in the graphs under What Works now show you that the market is long, but long safety.  The OBV chart is telling us that the volume is not coming from the big funds and that is always a sign of caution. 

Also the market has shrugged at the decrease in industrial production now going on a few months, but we also saw some concern in employment growth slowing. That may be the tip of a growing problem and might be the start of a recession, it bears watching.  Financials were doing great until that report, now they are selling off. 





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.