By Jack ChanStock MarketsMay 25, 2015 06:44AM GMT Jack Chan My Homepage Our equity/bond model - This long term reliable investing model provides investors with simple decision making in the markets: When the model favors stocks, investors should overweigh in equities for maximum growth. When the model favors bonds, investors should overweigh in bonds for safety. SPX:USB Monthly Chart S&P 500 Large Cap Index Monthly Chart Our benchmark S&P 500 is on a major buy signal since early 2012. OSX Monthly Chart Oil sector is on a major sell signal since September. Investors should be out of this sector. Summary Current investing model favors bonds over equities, therefore, investors should overweigh their portfolios with bonds over stocks for safety. Cash is also a position for those who are un-invested or under invested until this model favors equities again. Disclaimer: We do not offer predictions or forecasts for the markets. What you see here is our simple investing model which provides us with simple investing decision making. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets.
Stocks Rebound, But Don’t Rule Out a Breakdown Yet Greece headlines helped drive markets higher, but Tuesday's breakdown still lingers as a negative omen May 27, 2015, 5:45 pm EDT | By Anthony Mirhaydari, InvestorPlace Market Strategist Stocks posted a rebound on Wednesday to erase Tuesday’s losses, sparked by a batch of unconfirmed, mixed headlines out of Europe that Greece could be inching towards a new bailout agreement with creditors — something German officials have said isn’t reflective of the action situation. Watch for more of this as the June 5 deadline for a $1.8 billion payment to the IMF approaches. One real sign that the situation is nearing a climax was a decision by the European Central Bank to hold its lending limit to Greek banks steady for the first time since February following reports of increased deposit outflows and rising fears over the specter of capital controls. The chatter is that ECB officials are getting nervous about their exposure to Greece. In the end, the Dow Jones Industrial Average gained 0.7%, the S&P 500 gained 0.9%, the Nasdaq Composite gained 1.5%, and the Russell 2000 gained 1.3%. Tech stocks led the way with a 1.8% gain thanks to a 21.8% rise in Broadcom Corporation (NASDAQ:BRCM) after the Wall Street Journal reported the company is in advanced-stage talks to be acquired by Avago Technologies Ltd (NASDAQ:AVGO). 5 Stocks at Risk From a Stronger U.S. Dollar Tiffany & Co. (NYSE:TIF) rose 10.5% on solid Q1 earnings and sales on better U.S. comp-store sales. Michael Kors Holdings Ltd (NYSE:KORS) was slammed 24.2% after missing on fiscal Q4 comp-store sales and missing earnings per share estimates by a penny. Nike Inc (NYSE:NKE) lost 0.6% on reports the company appears to be entangled in the FIFA corruption probe with allegations of bribery in the company’s deal with the Brazilian Federation. Crude oil again moved lower, with West Texas Intermediate losing 0.7% to close at $57.64. The selling continued after the close after the API inventory report showed a build of 1.3 million barrels — following three weeks of drawdowns. Prices moved down to test intraday lows near $57.40. This was good news for the new ProShares UltraShort Crude Oil (NYSEARCA:SCO) position recommended to Edge subscribers, which gained 1.7%, as well as the June $20 put options against the United States Oil Fund LP (ETF) (NYSEARCA:USO) recommended to Edge Pro subscribers, up 10.5% since Tuesday. Technically, Tuesday’s breakdown remains in play. The folks at SentimenTrader note that similar breakdowns — the S&P 500 falling down out of a tight trading range near a 52-week high — have consistently led to weak returns over the month that followed looking back at 50 years of market history. More narrowly, the S&P 500 traded at a 52-week high within the prior two trading days, then on Tuesday, we saw the most 52-week lows among components of the index in more than two months. Of the nine other times this has happened during the current bull market, the S&P 500 was higher only two times, and returned -0.6% on average. The Dow Jones, as shown above, remains in stasis while breath continues to disappoint and options traders prepare for a disorderly selloff.
Brief summary of the S&P 500 chart below: 1. The DJU is in strong correction while the S&P 500 is still at the top 2. S&P 500 volume is steady, so far no panic selling and no greedy buying, just quiet slide without increase in volume activity. 3. Money Flow is negative on the S&P 500 index 4. Number of the S&P 500 index stocks making new 52-week highs is dropping while the number of stocks making 52-week lows is on the rise. 5. Volatility is still at low level - current small slide did not brought an increase in volatility. 6. Number of declining S&P 500 stocks is bigger than the number of advancing stocks - declines beat advances. 7. Summary volume in the group of the declining S&P 500 stocks s bigger than summary volume of advancing stocks chart courtesy of www.marketvolume.com
The Case For The Bears In 2 Very Important S&P 500 Charts June 13, 2015 Chartology, Investing Research Jonathan Beck 0 I suspect that some chatter among the technical crowd may begin to develop about the potentially bearish pattern that appears to be developing on the S&P 500 Index (SPX). This pattern is commonly known as a head and shoulders top and it seems to me that a neckline support has been firmed up earlier this week as the S&P 500 landed support near the 5/6/15 low of 2067.93. See the S&P 500 chart below for reference. There are two things to keep in mind about these patterns, which add to their predictive value: 1) The height of the pattern, in this case 66.79 points, helps determine downside projections, and 2) The width of the pattern assists in timing the call as a symmetrical pattern suggests that the right shoulder may still need another 3-4 weeks to develop. A violation of neckline support projects downside targets into the 2000 range. Should this occur, the implications may be bigger than initially realized as it could signal that a deeper correction is in store, or worse, the end of the 2009 bull market? Why? S&P 500 Chart – Head And Shoulders Pattern? The longer-term monthly S&P 500 chart below gives a good indication of the dominant trend during the span of this 6+ year bull market. One can see that there is a well-defined 2009 rising wedge pattern on the logarithmic chart and it is likely being watched very closely by the Bears. Key support resides in the 2060 range, which coincides with the bottom of the wedge as well as the 10-month moving average. A convincing violation of support suggests a potential change in the longer-term direction of the S&P 500 and it could bring the Bears out of the woods, leading to some chatter as to the end of the bull market. This could also mean that we may not be in store for a slow summer. S&P 500 Chart – Rising Wedge Pattern? Thanks for reading and have a great weekend. As a personal disclosure, I do not own or have a direct financial interest in any security mentioned. Although I am affiliated with T3 Trading Group LLC, opinions reflected are my own and should not be considered as investment advice.
CFTC - Commitments of Traders: speculators more bearish on JPY, S&P 500 ForexJun 13, 2015 02:50PM GMT Add a Comment CFTC - Commitments of Traders: speculators more bearish on JPY, S&P 500, CAD; less bearish on EUR Investing.com - The Commodity Futures Trading Commission released its weekly Commitments of Traders report for the week ending June 9 on Friday. Speculative positioning in the CME currency, commodity and index futures: Long Short Net Prior Change Gross Change Gross Change EUR -138.0k -165.5k 27.5k 52.6k 3.2k 190.6k -24.4k GBP -28.3k -25.7k -2.6k 31.0k -1.8k 59.3k 0.9k JPY -116.3k -85.7k -30.6k 42.4k -4.2k 158.7k 26.4k CHF 10.1k 8.4k 1.8k 13.5k 1.0k 3.4k -0.8k CAD -13.7k -1.0k -12.7k 21.0k -9.1k 34.7k 3.6k AUD -14.0k -13.3k -0.8k 65.2k 1.8k 79.2k 2.6k NZD -11.8k -10.5k -1.3k 11.1k 1.7k 22.9k 2.9k MXN -51.1k -45.1k -6.0k 28.6k -5.4k 79.7k 0.6k S&P -92.8k -24.8k -68.0k 351.6k -10.7k 444.4k 57.3k Gold 75.1k 104.4k -29.3k 186.8k -7.5k 111.7k 21.8k Silver 22.5k 46.8k -24.3k 65.9k 2.3k 43.3k 26.6k Copper -13.4k -8.7k -4.6k 50.7k 0.0k 64.1k 4.6k RUB 1.1k 2.1k -1.0k 5.7k -1.3k 4.6k -0.3k
The Rotation Report: Stock Market On Rinse And Repeat June 14, 2015 Investing Research Aaron Jackson 0 Not much has changed in the markets over the past several weeks. Stock market bulls continue to make money, while the S&P 500 continues to hold above 2100 and just under a major Fibonacci resistance level around 2140. Janet Yellen is on tap Wednesday as the Fed lays their cards on the table and highlights their economic projections. Market sentiment around the Fed is bifurcated and bulls and bears have dug in. There are brilliant market minds convinced the Fed won’t back down from their easy money stance and similar brilliant minds on the other side of the fence that are sure that the writing is on the wall for a rate hike. Yellen appears to understand that they need to raise rates while they can..Draghi and Abe on the other hand… Check out my favorite reads of the week in my “Top Trading Links” post this week. MACRO VIEW Investors could make an argument that resistance is strengthening in the S&P 500, as the ease of movement index is tracking lower. Also, the 4 month rising support line has been tested and should be a good “tell” for traders (and the broader stock market) over the near-term. S&P 500 ETF (SPY) Chart The Volatility Index (VIX) ended the week by testing the 10 day moving average from below – next week’s action could be telling.. Volatility Index (VIX) Chart Market breadth is still disgusting, even within the S&P 500 (SPX). Check out the Equal-Weighted Index relative to the SPX. MARKET SECTORS The Advance/Decline line for the Energy Sector ETF (XLE) hit new lows. The best way to describe this action is that price is masking the underlying damage. Energy Sector ETF (XLE) “Breadth” Chart The SPDR Biotech Sector ETF (XBI) continues to trade in a tight range. It looks like a “rollover” type of setup to me. Biotech Sector ETF (XBI) Chart It’s worth repeating that Utilities Sector (XLU) has broken its long term trend line. Utilities ETF (XLU) Chart Cyber Security stocks (via the ETF – HACK) flashed major relative strength on Friday. This sector has been a beautiful group in 2015. Cyber Security ETF (HACK) Chart Despite the lackluster price action on the major stock market indices (and weakening market breadth), there are good setups in select stocks and sectors. Sometimes you just have to work a little harder to find them! Thanks for reading and trade em well next week.