US - Market Direction 35 (Aug 13 - Oct 14)

[profittaker]

Mon 22/9 SPY Market Update:
1. Last Friday I wrote that SPY is bullish as its movement follow the extended Upper Orange perimeter. Checking the chart again shows that SPY was actually flat and still constrain at 202. The SPY bullishness didn't really materialise. SPY failed to follow the extended Upper Orange Perimeter.

2. SPY move and touch the Red Upper perimeter. There is likelihood of retracement towards lower red perimeter 197/196. It should be good setup to sell PUT. However, the huge gap between lower Orange and Blue Perimeter makes me think twice. I should watch how volatility play out before deciding entering PUT position.

Conclusion
Bullish prognosis didn't materialise. Sell CALL buy PUT.

Continues here for Chart

[winston]

NEW HIGHS OF NOTE LAST WEEK

Berkshire Hathaway (BRK-A)... Warren Buffett's holding company
Moody's (MCO)... ratings agency
Allstate (ALL)... insurance
Morgan Stanley (MS)... financial services
M&T Bank (MTB)... bank
Wells Fargo (WFC)... bank
Discover Financial (DFS)... credit cards
Yahoo! (YHOO)... search engine
Comcast (CMCSA)... cable TV
Time Warner Cable (TWC)... cable TV
Southwest Airlines (LUV)... airlines
Marriott International (MAR)... hotels
Hyatt Hotels (H)... hotels
Medtronic (MDT)... medical devices
CVS Health (CVS)... drug store
Abbott Laboratories (ABT)... Big Pharma
Johnson & Johnson (JNJ)... Big Pharma
Eli Lilly (LLY)... Big Pharma
Amgen (AMGN)... biotech
Lockheed Martin (LMT)... "offense" contractors
Northrop Grumman (NOC)... "offense" contractors
Raytheon (RTN)... "offense" contractors
Altria (MO)... cigarettes
Kohl's (KSS)... department stores
Molson Coors Brewing (TAP)... beer
Energizer Holdings (ENR)... batteries
U.S. Steel (X)... steel production
Lowe's (LOW)... home improvement
FedEx (FDX)... shipping
Sherwin-Williams (SHW)... paint
Stanley Black & Decker (SWJ)... tools
Keurig Green Mountain (GMCR)... expensive coffee machines


NEW LOWS OF NOTE LAST WEEK

Not many... it's a bull market!

Source: Daily Wealth

[winston]

MONDAY

Next week sees the stock indexes trying to keep alive a bounce from support at various levels. The buyers are trying to move in, coming back after the Wednesday attempt was sold hard Thursday. That they came back at all suggests they will attempt to push it higher again.

Whether they succeed is another story and our working thesis, whether it works or not, is that the market bounces in relief but the move fails to deliver any new highs or a lasting upside move.

With some newer areas trying to move higher and some other groups testing and setting up decent patterns, e.g. oil and gas services, the bounce strength looks better and we will still look at and pursue some upside positions that are again in good risk/reward position.

With the fall earnings season here and stocks oversold near term, there is a natural opportunity for some upside as stocks recover some ground in anticipation of results. The 'warnings' season is thus far quiet with those saying anything being mostly positive in their comments/guidance. A bit more of that and the bounce can gel.

Overall any upside move is still viewed as a bounce and current upside that is struggling or lagging can be pared as the move continues. Then we see how good the move is. Of course if the Wednesday and Friday was just a head fake and the market starts the week weak, that says a lot and we will need to move into downside plays.

Source: Investment House

[winston]

NEW HIGHS OF NOTE LAST WEEK

GoPro (GPRO)... personal cameras
Facebook (FB)... social media
EMC (EMC)... Big Data
Skyworks Solutions (SWKS)... semiconductors
Clorox (CLX)... consumer products
Altria (MO)... cigarettes
Carnival (CCL)... cruises
Celgene (CELG)... biotech
Johnson & Johnson (JNJ)... Big Pharma
Legg Mason (LM)... asset management

NEW LOWS OF NOTE LAST WEEK

It's a bear market in resource stocks...

Alpha Natural Resources (ANR)... coal stock
Arch Coal (ACI)... coal stock
Peabody Energy (BTU)... coal stock
Walter Energy (WLT)... coal stock
Barrick Gold (ABX)... gold stock
Iamgold (IAG)... gold stock
Kinross Gold (KGC)... gold stock
Yamana Gold (AUY)... gold stock
Cliffs Natural Resources (CLF)... iron-ore stock
Vale (VALE)... iron-ore stock

Source: Daily Wealth

[winston]

NEW HIGHS OF NOTE LAST WEEK

GoPro (GPRO)... personal cameras
Facebook (FB)... social media
EMC (EMC)... Big Data
Skyworks Solutions (SWKS)... semiconductors
Clorox (CLX)... consumer products
Altria (MO)... cigarettes
Carnival (CCL)... cruises
Celgene (CELG)... biotech
Johnson & Johnson (JNJ)... Big Pharma
Legg Mason (LM)... asset management

NEW LOWS OF NOTE LAST WEEK

It's a bear market in resource stocks...

Alpha Natural Resources (ANR)... coal stock
Arch Coal (ACI)... coal stock
Peabody Energy (BTU)... coal stock
Walter Energy (WLT)... coal stock
Barrick Gold (ABX)... gold stock
Iamgold (IAG)... gold stock
Kinross Gold (KGC)... gold stock
Yamana Gold (AUY)... gold stock
Cliffs Natural Resources (CLF)... iron-ore stock
Vale (VALE)... iron-ore stock

Source: Daily Wealth

[winston]

CHARTS

SP500: Gapped modestly higher and ran well to close at the lower trendline of the 11/12 channel.

That also leaves SP500 just below the 50 day EMA.

Good recovery, but after such a selloff of course there is important resistance to take on.

Source: Investment House

[winston]

MONDAY

Jobs are out of the way, some new money finally came in after a delaying entry Wednesday and part of Thursday. Earnings are starting up this week along with likely some more pre-announcement warnings.

The market is definitely set up to rally into earnings, and we have some plays from last week and this week that can take advantage of that move,

More upside from here is a definite possibility as the indices rebound from an oversold condition, very oversold on RUTX and SP400. I guess that is part of the irony: they are so much more oversold than the other indices, but their bounces lagged. That simply shows how they are still very much underperforming the rest of the market.

Thus while there can be more upside from here, the gains are likely limited with the indices bouncing, hitting resistance, then fading again to test the recent lows or more. There they put in some type of bottom for a move higher into year end.

That is the typical scenario during these fall selloffs and that is why we like to play the downside when it presents because the moves can be quite deep if a bit fast. That is also why we look at upside plays that hold the line, holding support and building good patterns to use for a run toward year end when the selling relents.


Source: Investent House

[behappyalways]

US: S&P500 appears to be heading to test support at 1905 - 1910. If it turns there we can expect an end to the current bearish trend that is affecting much of the world. If it falls through the neckline, expect more downside.
https://www.facebook.com/bartonsglobal

[behappyalways]

(Any brave souls??? )
http://finance.yahoo.com/;_ylt=AgIMvmdh ... IzcMXUzbIF


US: VTI, Vanguard's total market etf, double top breakout. Target suggests downside of another 6%. But it's quite likely that the US markets will continue lower to good support. Expect the S&P500 to follow next week.
https://www.facebook.com/bartonsglobal

US: S&P500 appears to be heading to test support at 1905 - 1910. If it turns there we can expect an end to the current bearish trend that is affecting much of the world. If it falls through the neckline, expect more downside.
https://www.facebook.com/bartonsglobal

[winston]

MONDAY

Friday stocks continued to sell across the board with indices again popping next support. SP500 managed to hold the 200 day SMA, something unique in this market.

Another thing to watch is leadership. As noted, most stocks are down. Of course not all, but most sectors are down. One of the most prominent holdouts is the biotech sector and some other related healthcare groups. Thus far they have used the selling to set up nice patterns.

There will be bounces, but will there be leadership? A market without leadership cannot sustain bounces. They fizzle and roll back over, sell again, try to rally again, and if there is no leadership, they fall once more. Finally you get enough leaders and the move sticks.

There could be further downside to start the week. Typically in these October selloffs there is serious selling in a week and then really ugly downside on a Monday and/or Tuesday the week following. Often that marks the bottom and stocks turn. Maybe that shows up next week with a hard selloff to shake out and provide the recovery that sets the bottom. Certainly the timing is better as the market moves into mid-October, the time of bottoms.

Nonetheless the market is sold enough for a rebound after some more early week downside. If we get more downside early in the week we will be patient, let the downside plays work, and when it looks as if a reversal is showing up maybe Tuesday, we bank gain and see what we can pick for the upside rebound to make us money.

We have some upside plays this weekend that are in great shape. If they weather any early week selling, holding their patterns, they will be great plays to the upside and we will look at playing some. It is also earnings season and we need to factor that in; look at upside plays to make runs ahead of results and taking gain ahead of results.

The selling is priming stocks to run upside into results as some shorts cover just in case. We don't anticipate holding the upside positions through earnings, however, as the results may be somewhat disappointing given the tone of the warnings.

Source: Investment House