Market Timing Brief for the 7-25-2014 Close: Stay Out of Stocks with Ridiculous Valuations as the Market Dips. Gold Looks OK Here.

A Market Timing Report based on the 7-25-2014 Close, published Saturday July 26, 2014

The SP500 Index has failed a breakout.  I suspect it will test the red line shown or the 50 day moving average or thereabouts.  Sometimes markets overshoot support levels.  That’s the way they test them.  Reactions to current earnings seem to be positive overall.  Being in the wrong individual stocks has been punished (e.g. AMZN down 9.65% on 7-25.  Stay in the winners and cut losses in the losers or stocks like AMZN that are being valued at still ridiculous levels.  We continue to be relatively underweight the U.S. except for the individual stock positions mentioned on Twitter (they are not part of our “model portfolio”).

Here’s the SP500 Index Chart (click to enlarge):

sp500-index-market-timing-chart-2014-07-25-close

SP500 Index is faltering and has failed a breakout.

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Gold (GLD) failed a breakout above the top red line shown in the chart below.  I hesitated to re-add a trading gold position on Friday.  The reaction to international turmoil has been lacking.  We will hold our long term position (riding profits only) as gold seems to be finding  buyers above the prior low and there are good reasons to suspect that even as interest rates rise, the real interest rate will remain negative.  That’s good for gold.

The Gold ETF Chart (GLD; click to enlarge the chart):

gld-gold-etf-market-timing-chart-2014-07-25-close

Gold is still below a breakdown level despite the bounce on 7-25..

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) remains at rise of rising from the current low yields.  As mentioned,, does not help the Fed to keep interest rates this low when somewhat higher rates would be tolerated.

Here’s the chart (click to enlarge):

tnx-10-year-treasury-note-market-timing-chart-2014-07-25-close

Rates remain low but are at base of a recent trading range.

CONCLUSION: Stocks should continue to pull back a bit over the next week.  “Dips” to date have been shallow and brief.  We are due for a full three wave correction by now (down, up, down in waves).  Gold seems to be holding up at a higher low, but is not as strong as it “should” be considering the backdrop internationally.  So we’re staying out of our trading position and keeping our long term position.  If you hold cash, you should also hold some gold in my opinion (5% of investable assets is recommended by many advisors).  And hold gold miner shares (a basket of them or ETF, not one) if you expect more from gold than we’ve seen.

Don’t miss out on my comments on Twitter® or StockTwits® where my buys and sells are posted.  You can read my Tweets whether you have a Twitter account or not: Follow Me on Twitter®.   Follow Me on StockTwits®.

Standard Disclaimer: It’s your money and your decision as to how to invest it.

I thank Worden Brothers for the charting system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer.  It’s a great investment to have an excellent charting system.  Check it out with a free trial at the link above.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, gold, investment, large cap stocks, S&P 500 Index, Treasuries | Tagged , , , , , , , , , , | Leave a comment

Market Timing Brief for the 7-18-2014 Close: Stocks Testing Lower High. Gold Faltering.

A Market Timing Report based on the 7-18-2014 Close, published Sunday July 20, 2014

The SP500 Index was repelled from the upper yellow channel line and is currently above the lower channel line shown.  The Bulls have a shot to achieve more gains, but must now push the index to a brand new high in the midst of wars in the Ukraine and the Middle East and earnings both good and not so good and a housing slow down that is now well documented.

Here’s the SP500 Index Chart (click to enlarge):

sp500-index-market-timing-chart-2014-07-18-close

SP500 Index forming a lower high. A new high is needed by the Bulls.

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Gold (GLD) attempted a breakout the other day and failed and is still below the prior breakdown point.  As tweeted earlier this week, I believe that the weakness in the face of the Ukrainian plane downing is negative for the near term.  We still hold our long term GLD exposure, but have no trading position currently (to access all of our market allocations, please click the link above).

The Gold ETF Chart (GLD; click to enlarge the chart):

gld-gold-etf-market-timing-chart-2014-07-18-close

GLD is still below the prior breakdown point.

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) would seem to be low enough for the Federal Reserve to be happy.  The fact that they simply keep pushing them lower is absurd and irresponsible.  As Stanely Druckenmiller pointed out last week at the CNBC conference, the Fed’s actions could turn out to be benign,, but since there is a risk of unintended consequences, there is reason to suspect more harm than good may come from continuing to support the current artificially low interest rates.

Here’s the chart (click to enlarge):

tnx-10-year-treasury-note-market-timing-chart-2014-07-18-close

10 Year Treasury on support. Can rates go still lower?

CONCLUSION: Stocks have some work to prove themselves having recently failed at the upper channel line, but the trend for now is UP.  The gold rally faces the possibility of rising rates which will drive a U.S. dollar rally thereby pressuring gold.

Don’t miss out on my comments on Twitter® or StockTwits® where my buys and sells are posted.  You can read my Tweets whether you have a Twitter account or not: Follow Me on Twitter®.   Follow Me on StockTwits®.

Standard Disclaimer: It’s your money and your decision as to how to invest it.

I thank Worden Brothers for the charting system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer.  It’s a great investment to have an excellent charting system.  Check it out with a free trial at the link above.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, gold, investment, large cap stocks, S&P 500 Index, Treasuries | Tagged , , , , , , , , , , | Leave a comment

Market Timing Brief for the 7-11-2014 Close: Will Stocks Hold the Trend Line? Will Gold Just Keep Moving Up?

A Market Timing Report based on the 7-11-2014 Close, published Saturday July 12, 2014

The SP500 Index pulled back below the prior breakout above 1968.17, but it has held above the daily trend line shown the chart below.  A higher low has been created.  The question is whether the pullback is complete.  You can also see that the pullbacks to the yellow up trend line each brought the same degree of retreat in the RSI index (Relative Strength Index).  This indicates that the pullback may have been “sufficient.”  But maybe not as we must look to see if this rally is a broad one that also extends to the small caps.

Here’s the SP500 Index Chart (click to enlarge):

sp500-index-market-timing-chart-2014-07-11-close

SP500 Index is holding its daily trend line

If you look at the small caps, the picture is not as strong, and it appears that there could be another big leg down.  See how the RSI index has not completed it’s move to the prior lows?

rut-small-cap-russell-2000-index-market-timing-chart-2014-07-11-close

The Small Caps look like they have room to fall still.

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Gold (GLD) has been making new highs as stocks have pulled back.  This is a positive sign.  The RSI appears to have topped out, but note that the Money Flow Index (yellow line in bottom part of the chart) has not and is making a new high.   This could allow gold to keep moving higher.

The Gold ETF Chart (GLD; click to enlarge the chart):

gld-gold-etf-market-timing-chart-2014-07-11-close

GLD has remained strong as stocks have weakened.

Remember that gold often does NOT hold up if the stock market sells off hard.  Investors start raising cash wherever they can find it.  I don’t expect that sort of stock market sell off at this point.

The 10 Year Treasury Interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) has been falling this week within the channel it’s been in , despite the strengthening belief that the Fed will raise rates in 2015.  Even in the face of QE, the Fed continues to have the benefit of low rates, which is helpful to gold.  The weak US Dollar is a great help to gold as well.

Here’s the chart (click to enlarge):

tnx-10-year-treasury-note-market-timing-chart-2014-07-11-close

10 Year Treasury Index still tame. The Fed is winning the bond war still.

CONCLUSION: Stocks could fall further, especially the small caps.  Gold probably has another leg up to go (subscribe to the newsletter via the above link to find out what % we have in our gold trade now).

Don’t miss out on my comments on Twitter® or StockTwits® where my buys and sells are posted.  You can read my Tweets whether you have a Twitter account or not: Follow Me on Twitter®.   Follow Me on StockTwits®.

Standard Disclaimer: It’s your money and your decision as to how to invest it.

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, gold, investment, large cap stocks, S&P 500 Index, Treasuries | Tagged , , , , , , , , , , | Leave a comment

Market Timing Brief for the SP500 Index, Gold and Treasury Yield Closes on 7-03-2014: Fed Chair Says Stocks Not In a Bubble. Meanwhile, Stocks Stretched, Gold On Pause and Rates Rising Again.

A Market Timing Report based on the 7-03-2014 Close, published Sunday July 6, 2014

The SP500 Index has hit and, although it’s difficult to see, it has slightly exceeded its upper channel.  The last bump up occurred after Federal Reserve Chair Janet Yellen said she did not believe stocks were in a bubble.  Although investors may continue to bid shares higher, earnings reports for Q2 are about to begin and could provide the impetus for lower stock prices.  One can argue that adding to your U.S. stock positions here may not prove to be the best entry point.  What could change this?  If earnings are strong and forecasts are also strong in the upcoming earnings reports, stocks could grind higher.  Employment is improving, and although the quality of jobs is somewhat limited, this does help consumer spending to improve and may provide enough growth to allow the market to at least go sideways for a while.

To get my weekly report (this week it’s a monthly addition along with all of my market allocations by percentage), subscribe here for free: Free Subscription to My Newsletter and access to My Latest Comments/Strategy.

Here’s the SP500 Index Chart (click to enlarge):

sp500-index-market-timing-chart-2014-07-03-close

SP500 Index stretched above channel line.

Gold (GLD) is holding up well, but could still correct.  The last small breakout was lost this past week, but the pullback has been minimal thus far.  We are still in our trading GLD position of the size given on the “WSSSR™ Access” page  (see link above).

The Gold ETF Chart (GLD; click to enlarge the chart):

gld-gold-etf-market-timing-chart-2014-07-03-close

Gold is holding up fairly well, but has lost some momentum.

The 10 Year Treasury Interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) is rising at the moment within the channel it’s been in The Fed has every intention of keeping it there for the foreseeable future, but eventually the bond market will lead the Fed.  It always has eventually done so, and it will this time.

Here’s the chart (click to enlarge):

tnx-10-year-treasury-note-market-timing-chart-2014-07-03-close

10 Year Treasury Yield is rising again.

CONCLUSION:  Stocks are stretched and overdue for a correction.  The gold trend is still up, and it’s early in the move.  Still, GLD could correct back to the top red line and still maintain an up trend.  Why should it pull back?  Because rates are rising and the dollar is strengthening, which is a headwind for gold.

Don’t miss out on my comments on Twitter® or StockTwits® where my buys and sells are posted.  You can read my Tweets whether you have a Twitter account or not: Follow Me on Twitter®.   Follow Me on StockTwits®.

Standard Disclaimer: It’s your money and your decision as to how to invest it.

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, gold, investment, large cap stocks, S&P 500 Index, Treasuries | Tagged , , , , , , , , , , | Leave a comment

Market Timing Brief for the SP500 Index, Gold and Treasury Yield Closes on 6-27-2014: U.S. Stocks and Gold in Consolidation. Rates Down.

A Market Timing Report based on the 6-27-2014 Close, published Sunday June 29, 2014

The SP500 Index has recovered from a recent swoon, but has been consolidating for eight market days.  The Bulls will need a brand new high to keep this market moving to our current target of 1993 at the upper trend line.  The Bears remain frustrated as even the previously overvalued small caps have regained much of what was lost from the March highs.  This makes zero sense, so I suspect that the re-inflation of small cap stock prices (RUT, IWM) is marking the approximate end of this move.

We’ve been raising some cash and have sold entire index allocations in some cases.  To see my allocations by percentage and pending SELLs, simply subscribe here for free: Free Subscription to My Newsletter and access to My Latest Comments/Strategy.

Here’s the SP500 Index Chart (click to enlarge):

sp500-index-market-timing-chart-2014-06-27-close

SP500 Consolidating Slightly Above Prior Breakout

Gold (GLD) is holding up well, but could be subject to correction.  Remember that when stocks correct strongly, which they will eventually, and probably sooner rather than later, metals often sell off too, particularly if they have run up with stocks.

The Gold ETF Chart (GLD; click to enlarge the chart):

gld-gold-etf-market-timing-chart-2014-06-27-close

Gold holding its gains, but is not invulnerable to correction.

The 10 Year Treasury Interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) is falling again, which is a negative sign for the SP500 Index (click to enlarge):

tnx-10-year-treasury-note-market-timing-chart-2014-06-27-close

Rates are falling again.

Why is this a poor prognostic sign?  Because rates are falling due to a very weak GDP report in the first quarter and the belief that the Federal Reserve will slow down their time table of QE reduction and the raising of rates so as to help stimulate a faltering economy that could otherwise deliver poor earnings and raise PE’s even further.  Valuations then come down as the markets sell off a bit. 

Since the Fed is going to likely remain supportive, a huge drop as we saw in 2011 is probably not likely, but we won’t make assumptions, and we’ll have our exits planned.

Have a wonderful July 4th Week if you are from the United States and celebrate freedom wherever you are!  The desire for freedom is shared by the entire world.

But don’t miss out on my comments on Twitter® or StockTwits® where my buys and sells are posted.  You can read my Tweets whether you have a Twitter account or not: Follow Me on Twitter®.   Follow Me on StockTwits®.

Standard Disclaimer: It’s your money and your decision as to how to invest it.

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, gold, investment, large cap stocks, S&P 500 Index, Treasuries | Tagged , , , , , , , , , , , , | Leave a comment

Market Timing Brief for the SP500 Index, Gold and Treasury Yield Closes on 6-20-2014: Stocks Break Out Again. Gold Rallying. Rates Sideways.

A Market Timing Report based on the 6-20-2014 Close, published Saturday June 21, 2014

The SP500 Index has established a brand new breakout above the prior breakout high.  The Bulls have the ball.  The upside to next resistance is at about 1985 (not the year of course, the number).  Markets tend to move in waves making higher lows and higher highs in a Bull market.  Sometimes they just keep gradually going up, but that is fairly uncommon.  What this means is that we must tolerate some volatility to make money in stocks.  We are now fully invested, but have more foreign market exposure than U.S. exposure at the moment due to the lower valuations abroad.  To see our allocations by percentage, simply subscribe for free here: Free Subscription to My Newsletter and access to My Latest Comments/Strategy.

Here’s the SP500 Index Chart (click to enlarge):

sp500-index-market-timing-chart-2014-06-20-close

SP500 Index: The Bulls have more upside

Gold (GLD) rallied strongly after the Fed FOMC announcement this past week (they lowered QE by 10 billion in total), so our recent entry is working (click to enlarge the chart):

gld-gold-etf-market-timing-chart-2014-06-20-close

Gold is making more progress since the Fed reassured the markets.

The 10 Year Treasury Interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish)  (click to enlarge):

tnx-10-year-treasury-note-market-timing-chart-2014-06-20-close

Rates go sideways after the Fed statement.

There were no rate fireworks post-Fed announcement.  The market seems satisfied that the Fed will control the range of rates within reason.  But the real issue is what will happen when the Fed is no longer buying more Treasuries back than are being issued by the Treasury Department.  That inflection point may drive rates up at least moderately, and as QE will end in October, the inflection point could occur before then.

That said, some seasoned investors who have been correct about interest rates for many years now, contend that the decline in rates is not yet over.  One prominent voice in that direction is Gary Shilling.  Since he’s been right, we need to take note that he may continue to be correct.  If he’s right, both the bond and the stock market will continue to do fine.  Overvaluation will be dealt with along the way, but those companies who are rewarding investors with strong earnings, buybacks, dividends, and debt reduction will do well.

The other big wild card out there is Iraq.  The terrorists are advancing as our leadership says the Iraqis must step up and face ISIS or we can’t help them.  ISIS knows that Americans are weary of war.  Yet the trillions we spent and the sacrifices of the young men and women we’ve lost and who have been injured could be unraveled if we fail to act.  Unfortunately, more war spending would hardly help our Treasury balance, putting direct further financial strain on our system.  The markets could react negatively as things develop.  It would be great if the Iraqis could unite against this massive threat.  Risk rises if they don’t.

Don’t miss out on my comments on Twitter this week.  You can read my Tweets whether you have a Twitter account or not: Follow Me on Twitter

Standard Disclaimer: It’s your money and your decision as to how to invest it.

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, gold, investment, large cap stocks, S&P 500 Index, Treasuries | Tagged , , , , , , , , , , | Leave a comment

Market Timing Brief for the SP500 Index, Gold and Treasury Yield Closes on 6-13-2014: Stocks Fail a Breakout. Gold Rallies. Treasuries at a Pivot Point.

A Market Timing Report based on the 6-13-2014 Close, published Sunday June 15, 2014

The SP500 Index has finally failed to hold an important breakout above an upper channel line indicated by the second yellow line from the top on the chart below.

Here’s the SP500 Index Chart (click to enlarge):

sp500-index-market-timing-chart-2014-06-13-close

SP500 Index Fails a Breakout

Until the Bulls reclaim the yellow line we are just below now in the chart, the Bears have the ball and we could fall to any one of the targets marked by the aqua arrows in the chart.  The 50 day moving average is at the middle aqua arrow shown.  To find out about all of my market allocations at the moment, please subscribe here: Free Subscription to My Newsletter and access to My Latest Comments/Strategy  There is one market in particular that you don’t want to be a part of for the time being and the allocation list makes that clear!

If the Bulls do regain the last breakout, 1979 would be the next SP500 Index upside target.  It will be interesting to see if the Fed changes its policy direction or if it continues on its stated path of lowering QE and ignores the recent soft GDP and housing numbers.

Gold (GLD) has continued to rally after our recent buy (Tweeted), but has reached a resistance point as the chart shows (click to enlarge the chart):

gld-gold-etf-market-timing-chart-2014-06-13-close

Gold still in rally mode.

The 10 Year Treasury Interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) has stalled just below the 50 day moving average, which has now become a “pivot point” as the chart shows (click to enlarge):

tnx-10-year-treasury-note-market-timing-chart-2014-06-13-close

10 Year Treasury Note at a Pivot Point

Rates look like they have entered a pattern very similar to that appearing at the end of April.  The yield has stalled around the 50 day moving average.  The Fed could throw a big monetary monkey wrench into things this Wednesday with their meeting announcement on FOMC policy and also at the dog and pony show at 2:30 pm ET by Chair Janet Yellen.

The market will respond to anything substantive done by the Fed this Wednesday.  The ECB came up short recently with their policy announcements and disappointed the market.  Things are probably not dire enough for a big dovish shift in policy, but there are those betting on it with real money.   The Fed has been lowering QE and rates have FALLEN, not risen, because the Fed has continued to buy up even more of the debt that the Treasury has been issuing as explained last week, but the QE equilibrium could shift to a net tightening as the program is reduced even further.   If the Fed continues QE without hesitation this Weds. the market may start to sell off some bonds and drive rates up.  We may see the 10 Year rate go sideways until Wednesday as it waits for the Fed statement.

I don’t know about you, but I’m tired of having our government front the easy money for the rest of the world.  Are we going to allow the ECB sit back while we further destroy our currency?

Standard Disclaimer: It’s your money and your decision as to how to invest it.

You’ll miss out on some of my comments, but not if you follow me on Twitter where I comment regularly: Follow Me on Twitter

I thank Worden Brothers for the chart system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer, so it’s a great investment to have an excellent charting system.

Look for updates this week as needed via Twitter.

Copyright © 2014 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, gold, investment, large cap stocks, S&P 500 Index, Treasuries | Tagged , , , , , , , , , , | Leave a comment