US - Market Direction 39 (Oct 16 - May 17)

Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby winston » Mon Apr 24, 2017 11:22 am

MONDAY

Who will the French vote for? If the 'wrong' people get clear majorities world markets could sell, giving something of a 'Trump election' opportunity? Perhaps. It will not be the end of the world, markets, or anything other than perhaps a bloated bureaucracy of control that is the EU.

Ok, off the soap box. The status quo won't like threats to the status quo so the reaction is initially negative but the markets figure out it won't be the end. Wasn't for the UK, wasn't for the US, won't be for France.

The issues are more with world economies and whether things are as rosy as we are told. I believe the US has negative growth right now and that Q1 was actually negative (as we will see when it is revised in the future). Fed surveys indicate Q2 has slowed even more than late Q1; that only bolsters my argument the US is likely in recession as a weaker Q2 would likely be a second of negative growth.

And why would things be improving? There was a lot of hope post-election and even in the weekly word from the administration that tax and healthcare reform are on their way. Yet, NO policies have been passed or implemented and it does not appear that any are close to being ready to implement.

Yes, there was a burst of post-election activity, but that has not carried over to 2017, and the longer it takes, the less people believe in it and the less they will go out on a limb ahead of actual policy passage and make
expenditures.

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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby winston » Mon Apr 24, 2017 11:30 am

CHARTS

SP500: Managed to close the week over the 50 day EMA and the March low as SP500 continues in a 2 month consolidation. The pattern is not bad at all, holding at the 78% Fibonacci retracement on the lows after the February rally, forming a pennant/triangle over that support. Sure is a lot of angst about the market for such a decent upside pattern.

DJ30: Similar to SP500 but the Dow had to overcome IBM and VZ earnings issues. It did, holding near the 61% Fibonacci retracement with that potential double bottom still intact. As noted early in the week, this is the same kind of consolidation shown in December to early January ahead of the February rally. It has now matched that consolidation in the number of weeks. As with SP500, a lot of angst over a not so terrible pattern with upside potential.

NASDAQ: Started the week at the 50 day MA after selling the prior Friday. NASDAQ rallied right back up to the top of its 9 week range and put in a new closing high Thursday. Decent volume Wednesday to Friday. NASDAQ is trying to provide the leadership higher, and it managed to hold SP500 and DJ30 at support, perhaps even helped SOX back over the 50 day MA.

RUTX: Very similar to SP400, rallying off the bottom of its range (and the range from December to early February) back up near the top of those ranges. Head and shoulders pattern, but those often form and never consummate. As with SOX, this index and the other indices have to show if they can continue after they saved themselves at support.

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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby winston » Mon Apr 24, 2017 7:51 pm

NEW HIGHS OF NOTE LAST WEEK

Cigna (CI)... health insurance
Align Technology (ALGN)... invisible orthodontics
LabCorp (LH)... medical testing
Quest Diagnostics (DGX)... medical testing
Becton Dickinson (BDX)... medical equipment
Canon (CAJ)... medical imaging, printers, cameras
T-Mobile (TMUS)... wireless telecom
Yahoo (YHOO)... Internet pioneer
Facebook (FB)... social media
Shopify (SHOP)... e-commerce powerhouse
Alibaba (BABA)... world's largest retailer
Best Buy (BBY)... TVs, computers, appliances
Take-Two Interactive (TTWO)... Grand Theft Auto, NBA 2K
Time Warner (TWX)... media and entertainment
Live Nation Entertainment (LYV)... live events
Dave & Buster's Entertainment (PLAY)... arcades
PepsiCo (PEP)... soft drinks
Dr Pepper Snapple (DPS)... soft drinks, juices, flavored beverages
SodaStream (SODA)... do-it-yourself soda
Whole Foods Market (WFM)... natural and organic foods
Chipotle Mexican Grill (CMG)... burritos
Bob Evans Farms (BOBE)... sausage, bacon, mashed potatoes
McDonald's (MCD)... burgers, fries, chicken nuggets
Philip Morris (PM)... Marlboro, Parliament, Virginia Slims
Reynolds American (RAI)... Newport, Camel
Spectrum Brands (SPB)... Remington, George Foreman
PulteGroup (PHM)... homebuilder
Lennar (LEN)... homebuilder
Two Harbors Investment (TWO)... "virtual bank"
Annaly Capital Management (NLY)... "virtual bank"

NEW LOWS OF NOTE LAST WEEK

ExxonMobil (XOM)... Big Oil
Calpine (CPN)... natural gas power plants
W.W. Grainger (GWW)... safety gloves, ladders, motors, and more
Tempur Sealy International (TPX)... mattresses
Revlon (REV)... makeup, perfume, lipstick
Rite Aid (RAD)... drugstores

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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby behappyalways » Tue Apr 25, 2017 4:30 pm

The Truth About Earnings and Stock Valuations
https://www.bloomberg.com/gadfly/articl ... valuations
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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby winston » Sat Apr 29, 2017 7:53 pm

Nasdaq's Valuation

The companies in the [Nasdaq Composite Index] collectively [trade] at 27.5 times their last 12 months of earnings, according to Thomson DataStream.

While that's the highest such reading for the multiple since 2004, it just barely eclipses levels seen in early 2010. And it's only a fraction of the peak of 72.2 seen in March 2000, when euphoria over tech stocks crested.

The current valuations, though high relative to much of the post-crisis economic recovery, suggest that the recent climb in share prices hasn't gotten out-of-whack with recent earnings.

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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby behappyalways » Sun Apr 30, 2017 4:13 pm

Just how overvalued are stocks? Depends on whether you ask Jeremy Siegel or Robert Shiller
http://www.cnbc.com/2017/04/29/robert-s ... tions.html
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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby winston » Mon May 01, 2017 11:09 am

MONDAY

A renewed upside last week followed by a test has the stock indices in position to rally to higher highs, with the start of a new month. New months often bring some new money to the market, and with the new break higher and test, there may be some that are eager to put that money to work.

Thus far this weekend, no new wars have started. North Korea launched another missile that again blew up before leaving its airspace, kind of the status quo of late. China's economic data was less than exciting, however, as manufacturing and services new orders hit six month lows. But all is well here.

Earnings season marches on. Some big names are already out and numbers are not that bad on the marquis companies; a few are making all the money. AAPL and FB are still to come (5/2 and 5/3, respectively) along with a lot of others in May; earnings is now a 2-month event, seemingly unending, much like the baseball and basketball seasons.

There is still a lot of news flow, economic, political, and geopolitical, but the market has weathered it all, made a good upside move, is testing it, and is in position to move higher. We will see if the new money helps push it to those higher highs.

Last week we banked gain ahead of some earnings but also left money on the table to work for the after earnings action. The reason is the market setup: the rebound that was set up but no one believed would happen, the test to end the week that really didn't give much back, the reception of earnings, the continued numbers of good patterns in the market.

Now we will see if that pays off and look at picking up more positions on a renewed breakout effort by the indices.

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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby winston » Mon May 01, 2017 11:27 am

CHARTS

SP500: After double gaps higher Monday and Tuesday, SP500 moved into the weekend with a lateral move, holding the gains. SP500 has advanced to the early March 2017 highs with a nice breakout from its 8 week pennant. It is resting with a lateral 1-2-3 move, and if the bullish sentiment remains, it should make a new break higher to a new high.

DJ30: Very similar action to SP500, double gapping off the 78% Fibonacci retracement of the February move then testing into Friday with a 1-2-3 lateral move. Excellent action setting DJ30 for a new break higher and a
new high as well.

NASDAQ: Not really a test here. NASDAQ gapped out of its 9 week lateral range on Monday and continued upside into Thursday. Friday NASDAQ gapped higher again, but faded to a modest loss. New highs, good volume on the move.

RUTX: From way down in the range to a new high breakout Wednesday. Flat Thursday then down Friday but holding over the 10 day EMA. A test to measure is fine, then want to see RUTX bounce back up off a 10 day EMA test.

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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby winston » Mon May 01, 2017 8:22 pm

NEW HIGHS OF NOTE LAST WEEK

iShares U.S. Aerospace & Defense Fund (ITA)... aircraft and missiles
Materials Select Sector SPDR Fund (XLB)... construction materials
iShares U.S. Home Construction Fund (ITB)... homebuilders
Consumer Discretionary Select Sector SPDR Fund (XLY)... leisure
PureFunds ISE Mobile Payments Fund (IPAY)... digital payments
Technology Select Sector SPDR Fund (XLK)... electronics, computers
VanEck Vectors Semiconductor Fund (SMH)... semiconductors
KraneShares CSI China Internet Fund (KWEB)... Chinese Internet firms
iShares MSCI Emerging Markets Fund (EEM)... emerging markets
Vanguard FTSE Developed Markets Fund (VEA)... developed markets
Vanguard Dividend Appreciation Fund (VIG)... dividend powerhouses
BlackRock Corporate High Yield Fund (HYT)... high-yield securities
Nuveen Preferred Securities Income Fund (JPS)... preferred securities
iShares Core S&P Small-Cap Fund (IJR)... small-cap stocks
PowerShares S&P 500 BuyWrite Fund (PBP)... covered-call strategy
SPDR Euro STOXX 50 Fund (FEZ)... European blue chips
iShares MSCI United Kingdom Fund (EWU)... British stocks
iShares MSCI France Fund (EWQ)... French stocks
iShares MSCI Germany Fund (EWG)... German stocks
iShares MSCI Italy Capped Fund (EWI)... Italian stocks
iShares MSCI Spain Capped Fund (EWP)... Spanish stocks
iShares MSCI Hong Kong Fund (EWH)... Hong Kong stocks

NEW LOWS OF NOTE LAST WEEK

ProShares Short S&P 500 (SH)... betting against the S&P 500
iPath S&P 500 VIX ST Futures Fund (VXX)... short-term volatility
iPath Bloomberg Coffee Subindex Total Return Fund (JO)... coffee
iPath Bloomberg Sugar Subindex Total Return Fund (SGG)... sugar
PowerShares DB Agriculture Fund (DBA)... live cattle, corn, soybeans


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Re: US - Market Direction 39 (Oct 16 - Jun 17)

Postby behappyalways » Tue May 02, 2017 10:25 am

Top investor bets against 'dizzying' American stocks
http://www.telegraph.co.uk/investing/fu ... an-stocks/
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