Market Timing Brief for the 11-14-2014 Close – UPDATED 11-23-2014: SP500 Index NOW AT NEW All Time High. Small Caps Failing to Rally. Gold Looking for a Bottom as Rates Ready Their Collapse.

A Market Timing Report based on the 11-14-2014 Close, published Sunday November 16, 2014

Updated on 11-23-2014: New charts are posted below each chart below for comparison.  The SPX is at new highs and has room to move up further based on Bollinger bands, but is a bit stretched on the basis of RSI.  Realize that rallies can occur even when RSI has peaked.  When RSI falls as the market rises, it is much more telling.  Note the upper yellow channel line on the chart below as well.  The SPX could rise all the way to the top of the channel from here without pausing.

Small cap stocks issued another note of caution this week, failing to make new highs with the SPX.  That shows that small cap stocks are out of balance with large cap stocks, and if they were to make a higher high now above the two lower highs shown in the chart below, that would signal more gains for the SPX as well.

Gold is back above critical support.  At times, these sorts of tests fail, so we’ll have to wait for further upside confirmation.  Attempting to predict whether inflation or deflation will occur over the next few years is a tough exercise. It is probably a better idea to follow the price of gold.

Rates have been moving sideways, and my guess is that they will retest the prior low in yield.  The impact of Central Bank action won’t be immediate, which should keep rates low for a while.  But the market needs to verify this impression.  Yields now need to fall below 2.305% for a retest lower to occur.

The SP500 Index rally to new highs has not been accompanied by an equal rally in the small cap stocks.  This is called “bad breadth.”  The market is being powered forward by just a few stocks like Apple (AAPL) compared to the entire universe of stocks that could be rallying together and have not continued to do so.  In addition, what goes up very fast often needs to correct, and I believe that about to happen.  It would be extremely unusual to get a V bottom after a sell-off of the magnitude we had in mid-October.  Bulls argue that the market, even though richer than it was last year, is still the only game in town for investors.  The risk has gone up on that bet however.  Risk rises whenever markets get ahead of themselves and then seek to revert to the mean.  Note the top being formed after two decelerations.

SP500 Index (SPX, SPY; click the chart to enlarge it): 

sp500-index-market-timing-chart-2014-11-14-close

A Stretched Market Just Made a New High

NEW CHART:

sp500-index-market-timing-chart-2014-11-21-close

SP500 Index making new highs still.

This week was marked by about the same spread between Bulls minus Bears with Bears increasing while Bulls increased just slightly more than the Bears.  There are still a lot of Bulls at the moment, despite those converts, so my prior take on sentiment still holds: AAII Survey Says!

To find out what I’m going, including buys and sells, please follow me here: Follow Me on Twitter®.   Follow Me on StockTwits®   You don’t have to make comments yourself to read my messages.

The U.S. Small Caps (RUT, IWM):  Russell 2000 U.S. Small Cap Chart (click the chart to enlarge it): Just as last week, the small caps are lagging despite a bit more progress this week as the chart shows below.  They have formed what is called a double two wave up, which can lead to an even bigger third wave down in Fibonacci terms.  Alternatively, they could simply float down into the prior range without taking out the prior lows.   Remember that the last low was in fact a lower low, so there is room to form a still lower low that would correspond to that 3rd wave down.

rut-small-cap-russell-2000-index-market-timing-chart-2014-11-14-close

Small Caps Still Lagging, Not Reaching New Highs

NEW CHART:

rut-small-cap-russell-2000-index-market-timing-chart-2014-11-21-close

Small caps failed again.

Gold failed at support and started a bounce and then decided to backtest in a very harsh way, but it survived and bounced even more.  GLD is now above the 10-03-2014 low of 114.42, closing at 144.47 on Friday.  This may inspire the gold Bulls to buy even more this week.  The dollar index failed a breakout last Friday and if it continues to correct, gold will fly UPWARD.

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

gld-gold-etf-market-timing-chart-2014-11-14-close

Gold finding a bottom?

NEW CHART:

gld-gold-etf-market-timing-chart-2014-11-21-close

Gold is now back above previously broken support.

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish [note that it’s a 2X ETF while TLT is 1X]): The 10 Year Yield has been trading at what looks like a temporary high and is primed to retest that prior low shown in the chart.  If it doesn’t, it must break above around 2.400%, which should not happen given the slowing around the world.  Remember that falling oil prices are partially supply related but are also demand related due to the slowdown in the world’s economies.  Both are deflationary pressures in economic terms.

Please Click the TNX Chart to enlarge it:

tnx-10-year-treasury-note-market-timing-chart-2014-11-14-close

Time to Add to Bonds and Treasuries Again?

NEW CHART:

tnx-10-year-treasury-note-market-timing-chart-2014-11-21-close

Are rates about to head down for a retest of the prior yield low?

In summary, I favor a corrective move lower in U.S. stocks that may have already begun for U.S. small caps.  If small caps make news highs above current overhead resistance (see chart above), that scenario will be voided for now, and we’ll see big caps continue upward as well.  You cannot have a game plan that only considers one possible direction.  That’s called being a “perma-whatever,” and we are not that around here. Gold looks primed to rally further, and is supported by low to negative real interest rates around the world.  The risk from the way we’ve seen gold trade of late is that it has fallen in the face of rising deflationary pressure.  If those pressures persist, despite central bank action, gold prices could fall.  Rates look ready to move lower now, which is why I loaded up more TLT last week, which rallies when Treasury yields fall.

Be sure to visit the website at: Sun and Storm Investing™

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.

Note that the newsletter is now closed to new subscriptions, but may be re-opened in the future.  Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links 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, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , , , , , | Leave a comment

Market Timing Brief for the 11-07-2014 Close: SP500 Index Testing Brand New Highs. Gold Bounces After Serious Break. Rates Top Out for Now?

A Market Timing Report based on the 11-07-2014 Close, published Sunday November 9th, 2014

The SP500 Index has blasted upward from the prior low, a bit too quickly perhaps, but the Republican win of the Senate just made the market go up a little bit more.  You’ll note in the chart below that the rate of upward movement has decelerated however, and I believe a pullback could be imminent.  IF on the other hand the market keeps moving up, we’ll be adding to positions.  Why?  There are a lot of Bulls at the moment, and here is what investor sentiment is saying about that: : AAII Survey Says!

To find out what I’m going, including buys and sells, please follow me here: Follow Me on Twitter®.   Follow Me on StockTwits®   You don’t have to make comments yourself to read my messages.

SP500 Index (SPX, SPY; click the chart to enlarge it): 

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

SP500 rate of rise is slowing.

The U.S. Small Caps (RUT, IWM):  Russell 2000 U.S. Small Cap Chart (click the chart to enlarge it): The small caps are NOT coming along for the ride to new highs.  They are stuck, as shown below.  This is what we call a negative divergence.

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

U.S. Small Caps are NOT Coming Along for the Ride to New Highs

Gold failed at support and started a bounce back on Friday most of which happened after I pointed it out on StockTwits® and Twitter® (see links above).  The bounce was up to a prior resistance level, so more is needed or the shorts could just drive down gold again this week.  If stocks sell off and rates fall this week, gold could move up past this block.

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

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

Gold is bouncing from a dangerous break on the chart.

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish): Rates look like they may have peaked again.  I believe they could retest the prior lows if not exceed them to the downside (remember when rates fall, TNX falls and Treasuries rally in price).

Please Click the TNX Chart to enlarge it:

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

Rates hit the 50 day moving average and declined. More to come?

In summary, I suspect we may see a pullback in the SP500 soon along with a fall in the already stalling small cap stocks.  Gold may rise further as interest rates fall from their recent high.  Rates cannot be going up in the context of a deflating world.  That would work against the Fed Reserve’s mandate and drive the U.S. economy into a recession.

Be sure to visit the website at: Sun and Storm Investing™

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.

Note that the newsletter is now closed to new subscriptions, but may be re-opened in the future.  Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links 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, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , | Leave a comment

Market Timing Brief for the 10-31-2014 Close: Markets Get Latest Monetary Cocaine Fix via Japan. The U.S. Will Now Import Deflation.

A Market Timing Report based on the 10-31-2014 Close, published Sunday November 2, 2014

The SP500 Index has risen off a V bottom and has yet to retest lower.
This week it was Japan that provided the funny money for the worldwide rally to continue by pursuing an easy money policy.  At least until the economic recovery falters.  We are invested 95% long but are watching the exit.  Remember as I Tweeted this week, cheap Japanese goods are NOT good for U.S. multinationals.  That makes us less competitive, which means lower sales and even lower profits due to the need to lower pricing in U.S. dollar terms to keep up with the Japanese devaluation.  When Japan prints money, the U.S. imports DEFLATION, which means falling U.S. corporate earnings.  It helps U.S. consumers, but hurts pricing and profits.

To find out what I’m going, including buys and sells, please follow me here: Follow Me on Twitter®.   Follow Me on StockTwits®   You don’t have to make comments yourself to read my messages.

SP500 Index (SPX, SPY; click the chart to enlarge it): We’re back to the top!  Things are stretched for sure and even a mild pullback would be healthy even if it’s just to the 50 day moving average (or just below to scare out a few more weak hands).  ISM manufacturing index is out tomorrow at 10 am ET.  That could motivate the market to choose its next move.  There is plenty of room for a pullback now.  Even if we get yet another high, we may see a retest after that.

sp500-index-market-timing-chart-2014-10-31-close

Will the V bottom be tested?

Sentiment stayed at a persistently positive moving from a Bull minus Bear percentage spread of 27.2% to 28.3%. See the NEW UPDATE HERE: AAII Survey Says!  (IT WAS UPDATED again on 11-06-2014!)

The U.S. Small Caps (RUT, IWM):  Russell 2000 U.S. Small Cap Chart (click the chart to enlarge it): See the potential island reversal set-up in the chart below?  An island reversal means there is a gap up, then a gap down, so a price “island” is left hanging in the “air.”

rut-small-cap-russell-2000-index-market-timing-chart-2014-10-31-close

Above the down trend line, but a bit too much too soon.

Gold failed at support and is in danger of a further drop.  Because there is rising deflation now, real interest rates are rising, not falling and that hurts gold.  Money printing should help it, but only in the currencies being printed.  If the Fed does not rejoin the money printing game along with the ECB, Japan, and China, gold will go up in terms of each of those currencies and by the sheer demand increase gold prices could be somewhat supported.  But a stronger dollar brings gold prices down in the U.S. and leads to more selling here.  That is the balance being struck and the result is the spot price.  For now, dollar strength is winning over gold purchases in the rest of the world.  (see my website for a further explanation of gold pricing in various currencies here: Gold Priced in Currencies).

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

gld-gold-etf-market-timing-chart-2014-10-31-close

Gold broke major support.

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish): rates are testing above what was resistance.  Rates cannot rise too high when the rest of the world is printing money.  If they do, the dollar will crush U.S. corporate earnings. 

Please Click the TNX Chart to enlarge it:

tnx-10-year-treasury-note-market-timing-chart-2014-10-31-close

The 10 Year Treasury Yield rose above nearby resistance after the Fed statement.

What would be the perfect Bearish scenario?  If gold reverses UP hard with a falling U.S. dollar and falling Treasury yields, and the stock market falls from Friday’s highs.  That would produce island reversals in many indices simultaneously and be very Bearish short term.

Be sure to visit the website at: Sun and Storm Investing™

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.

Note that the newsletter is now closed to new subscriptions, but may be re-opened in the future.  Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links 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, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , | Leave a comment

Market Timing Brief for the 10-24-2014 Close: Market Stories. Will the Rally Continue or Was That It? Gold Eases. Rates Back Up a Bit.

A Market Timing Report based on the 10-24-2014 Close, published Sunday October 26th, 2014

The SP500 Index bottomed and came up to form what is called a V bottom.  Now there are many stories that will be told about how “We must retest the low!” and “That was it!  We’re home free through next April!” and on and on.  We conscious investors do not care what “they think.”  We see what we see now and in the past and act on it as best we can.  I can say there is a risk of a retest based on general market dynamics.   Yes, that is one of those stories!  The story goes that a certain level of healing is needed after a period of volatility.  Retests are simply the market building its confidence in the general level of stocks we are at.  When retests occur and hold the base, markets like that, and prices rise again.  But this requires lower prices unfortunately!

There is still another Bearish story: The markets are rising on declining volume.  See the chart below to appreciate this for the SP500.  But do note that the volume is higher now than during the rise from the August low.  Volatility is higher too, which could explain some or all of that however, so the decline in volume should be respected.

Is it advisable to have ANY cash at this point?  That is a matter of your own risk management process.  Our conservative portfolio has more and our aggressive portfolio less (85% vs. 95% invested in equities worldwide, respectively).  I added back several individual stocks, which lower my risk over buying the entire market in my opinion, because I buy the companies that are still performing well and are likely to do so for months to come at a minimum.  Can you really see farther ahead than that, other than having a certain confidence that a company’s management has a system and plan for making progress going forward?

Do NOT hold cash if you believe: 1. The worldwide economy has bottomed and will heal steadily now.  Europe and China will not drag us down, because they are going to ease too.  2. All the risks are taken care of now, including ISIL, Ukraine, Eurobanking system, and Ebola.  3. The elections won’t shift the power balance in Washington and make it lopsided.

To find out what I’m going, including buys and sells, please follow me here: Follow Me on Twitter®.   Follow Me on StockTwits®   You don’t have to make comments yourself to read my messages.

SP500 Index (SPX, SPY; click the chart to enlarge it):

sp500-index-market-timing-chart-2014-10-24-close

SP500 Index Rising from a V Bottom

The week before this past week I discovered that the rise in sentiment was actually Bullish as I wrote here: AAII Survey Says!  This week the spread moved up from 9.0% to 27.2%, which is quite high.  If this sentiment shift is like the last two similar ones in June and August, we are due for a higher high either now (as in June) or after a mild easing back of the market (as in Aug.) followed by a pullback that then wipes out all the gains and then some.  The biggest Bull trap would be to rise quickly to 1985 or a bit higher and then wipe out ALL the gains from the prior low.  I am not saying that is what will happen.  I am saying that from the standpoint of sentiment, we should have SOME cash on hand to take advantage of lower prices.  Should you hold some cash?  That you’ll have to decide for yourself.  

Remember that this is just ONE parameter and sentiment is sometimes dead wrong, especially with the Fed and ECB splashing more money onto the fireThe Fed meeting is this Weds. and if they indicate more dovishness, it could be a very merry Christmas for Wall Street.  On the other hand, if they are as hawkish as they’ve been, watch out below. 

The U.S. Small Caps (RUT, IWM):  They are bouncing, yes, but toward what’s called a “Death Cross,” where the 50 day moving average slices down through the 200 day moving average.  Small cap stocks sell off harder in a correction or Bear market because they are less liquid (not to mention, more overvalued still), and they come down faster as investors decide they should not buy any more of them and then the few sellers have smaller and smaller numbers of investors to sell to.  That is how any market can drop even 7.5% in a day as happened even with the SP500 back in 2008.  With the RUT, the losses were up to 9.47% in a single day.

When there are NO buyers, stocks can drop precipitously as was demonstrated during the Flash Crash back on 5-06-2010.  That has supposedly been fixed, but it’s why putting a stop loss sell order into the market can result in major losses.  I use stop limit orders, not sell stop orders, when I need to protect gains, even though some advisors will say you should not use them either.  I disagree even though stop limit orders are not perfect either.  Gaps down can prevent your shares from being sold if news suddenly hits the market.

What we don’t want to see is the small caps dropping right from the 50 day moving average.  And we don’t want to see it for the large caps either and we are even closer to the 50 day mav for the SPX.

Russell 2000 U.S. Small Cap Chart (click the chart to enlarge it):

rut-small-cap-russell-2000-index-market-timing-chart-2014-10-24-close

U.S. Small Caps Bounce Toward the “Death Cross”

Gold has eased back as rates backed up a bit (oddly enough from the 50 day moving average!), but the drop is not sustainable in my opinion.  Why?  Because the Fed is going to get on the case and delay raising rates even longer.  There could even be QE4.  That’s not clear yet.  The economy is not in recession by any means, but growth has slowed and even more so in the European economy.  Russia has just made it all that much worse.  ISIL fears don’t help either.  Ebola is another issue that certainly does not instill confidence.  Since rates will stay low for a long time, gold will do fine.  It should at least retain its value.  If the market shows us otherwise, it will sink much farther below 1200 than it did during the last drop.  For now, I believe you can buy the gold pullbacks. 

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

gld-gold-etf-market-timing-chart-2014-10-24-close

Gold Eases as SP500 Rises

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) has run up a bit, but I believe that should be about it.  I think our entry point on Twitter/StockTwits was a day or two early, which is fine.  We cannot expect to take positions at the exact bottoms or leave them at the exact tops.  Want to know a secret?  When a market dives to a certain level and then rebounds rapidly a retest is even more likely than if it takes a long time to recover.  A slow recovery is much more healthy than what we’ve seen.  That’s why the stock market gains are at risk and why U.S. Treasuries could be just what the doctor ordered for a hedge against stocks.  The Fed will command the markets next Wednesday with their FOMC announcement.

Please Click the TNX Chart to enlarge it:

tnx-10-year-treasury-note-market-timing-chart-2014-10-24-close

Rates Rise a Bit But Not for Long

Be sure to visit the website at: Sun and Storm Investing™

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.

Note that the newsletter is now closed to new subscriptions, but may be re-opened in the future.  Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links 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, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , | Leave a comment

Market Timing Brief for the 10-17-2014 Close: Did Stocks Bottom? Could Rates Go Lower? Will Gold Keep Rising?

A Market Timing Report based on the 10-17-2014 Close, published Sunday October 19th, 2014

The SP500 Index took another dive this past week, but seems to have found more significant support after the Fed and ECB came to the rescue.  Dr. Draghi, the leader of the ECB, who has been draggy and NOT leading well, finally decided to buy the ABS that he promised to buy.  The way he has rolled out this program is a stunning example of how NOT to lead.  If you are going to do something, do it!  Don’t simply yap about it.  Bullard gave some added help to the markets by suggesting that the Fed might need to reverse the decision to end QE.  The current QE is likely to end this month as planned, but QE4 could appear.

Before that extra help, the SPX slipped to the next lower level of support and bounced.  As I pointed out real time on Twitter, the small caps led the way up.  They provided the clue that a turn was imminent.  You see, the indices don’t all bottom at the same time during a pullback.  The Russell 2000 small caps held the level they hit on the 13th, while the large caps continued to test lower.  My suspicion was that the SPX would recover rather than break to a still lower low, because the small caps had held the previous low.  I’ve been right so far.

Realize that once a major low forms, it can be tested more than once, even if it holds.  We are still at risk for that sort of move.  So the people who are benefitting most are those who trade the volatility up and down.  The same opportunity occurred in 2011, when I was able to trade Bershire Hathaway (BRKA/BRKB) stock up and down a few times.  But it’s when you stick with a stock off a low that counts.  Those decisions yield the big gains if you give them room.  Not re-buying when a stock truly has re-bottomed is a big mistake.  Luckily I was conscious around my Berkshire Hathaway trades and therefore own it from around the 68ish level since 2011.

I have a stop in mind if it breaks down too much.  I will NOT ride that pony back to 68 from 137.09.  You shouldn’t do that either.  Set up all your stops now mentally (so the market makers don’t know them).  And if you are wrong?  Get back in if the story is still good for the company.  Admit when you are wrong and move on. Sometimes moving on means buying the stock back.

To find out what I’m going, including buys and sells, please follow me here: Follow Me on Twitter®.   Follow Me on StockTwits®   You don’t have to make comments yourself to read my messages.

SP500 Index (SPX, SPY; click the chart to enlarge it):

sp500-index-market-timing-chart-2014-10-17-close

A bottom in place for another rally or more volatility ahead?

Meanwhile, this week investors did not run for the exits into the Weds. night AAII survey close (moving up to a spread of percent Bulls minus Bears of 9.0% up from 8.9% last week), which I discovered can actually be Bullish as explained here: AAII Survey Says!

The U.S. Small Cap Chart (RUT, IWM): The small caps bounced from the low this week up to just below the 2-5-14 low of 1082.72.  Initially, they led the large cap stocks up, but then lagged on Friday.  If the RUT drops to a new low, the SPX will likely follow.  A deep retest will occur in both in my opinion if one breaks down.

Russell 2000 U.S. Small Caps (click the chart to enlarge it):

rut-small-cap-russell-2000-index-market-timing-chart-2014-10-17-close

Small caps rebound. Just a bounce?

Gold continued to hold up as the stock markets fell apart last week.  Yields tested very low levels as the second chart below shows and that should help support gold.  Low rates will prevail due to a Fed that remains dovish against the backdrop of a weakening world economy.  That pressures the US dollar and supports gold.  Keep your gold for now.

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

gld-gold-etf-market-timing-chart-2014-10-17-close

Gold bottomed and is holding up in the recent rally.

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) was swooning profoundly in what looked like a capitulation move to me.  Rates could continue to move down lower after the bump up after stocks recovered.  Why?  Because the Fed will have to keep rates low to support our economy as the entire world is showing signs of slowing.  For that reason, I chose to start a TLT position on Friday.  It goes up if yields fall further.  I am contending by taking this position that both stocks and bonds can do well over the next several months.

Please Click the TNX Chart to enlarge it:

tnx-10-year-treasury-note-market-timing-chart-2014-10-17-close

Rates should stay low and could move lower still as the Fed gets back to work

Be sure to visit the website at: Sun and Storm Investing™

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.

Note that the newsletter is now closed to new subscriptions, but may be re-opened in the future.  Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links 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, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , | Leave a comment

Market Timing Brief for the 10-10-2014 Close: Stocks and Rates Both Hit Bottom as Gold Rises from a Major Low!

A Market Timing Report based on the 10-10-2014 Close, published Sunday October 12th, 2014

The SP500 Index fell to my 1905ish target on Friday.  That COULD be it for this swoon.  The script is that bounces occur even during the beginning of a Bear market. Is this a Bear?  No one can tell you except after the fact, so don’t concern yourself with that speculation.  Protect profits where you have them (unless we do in fact bounce Monday) and protect capital by removing some from the markets ONLY if you are willing to rebuy higher if you are dead wrong and end up selling at a low.  I would buy this level only if I were willing to sell it below the next level of support shown on the chart below.  Otherwise why bother?

If you believe the U.S. economy is on the mend still, then this is a buying opportunity and you should be adding more exposure as we head lower.  If you followed my advice throughout this year, you have stayed out of small cap stocks and have stayed in large cap stocks until now.  But now our allocation even to large cap U.S. stocks is now lower as I said on Twitter (see links just below here). We may add back exposure soon however.

To find out what I’m going, including buys and sells, please follow me here: Follow Me on Twitter®.   Follow Me on StockTwits®   You don’t have to make comments yourself to read my messages.

SP500 Index (SPX, SPY; click the chart to enlarge it):

sp500-index-market-timing-chart-2014-10-10-close

SP500 Index Hits Bottom

Meanwhile, this week investors became more Bullish into the Weds. night AAII survey close (moving up to a spread of percent Bulls minus Bears of 8.9% up from 4.5% last week), because the market went UP on the news that there was no Fed news.  Yes, it was just about that stupid.  What the non-thinking crowd did not get was that the Fed not doing anything special as QE ends this month is a negative.  The Fed saying that it’s still waiting to raise interest rates is not enough when the economy is visibly slowing worldwide.  Take a look at the IMF’s dim forecasts for Russia, Brazil and Italy for example: IMF Forecasts for the World’s Economies

The U.S. Small Cap Chart (RUT, IWM): The small caps broke down further and if you did nothing but listen to my warnings through this year on staying in larger stocks and out of small caps indices, you did much better.

Russell 2000 U.S. Small Caps (click the chart to enlarge it):

rut-small-cap-russell-2000-index-market-timing-chart-2014-10-10-close

Small Caps break to new lows. Watch out below!

Gold:  GLD, the gold ETF, held at the massive low we’ve been watching.  Whew!  Gold investors breathed a collective sigh of relief.  That does not mean gold will keep holding if the world’s stock markets keep falling however, so we’ll be vigilant. The U.S. dollar came down a bit but needs to keep falling or gold will suffer further.  There is room for gold to rally from here still.

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

gld-gold-etf-market-timing-chart-2014-10-10-close

Gold Survives at Major Support

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) was back testing a major low on Friday.  If rates don’t hold at that low, stocks will head lower still.  So keep a keen eye on interest rates this week!

Please Click the Chart to enlarge it:

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

Rates are falling but on support.

Be sure to visit the website at: Sun and Storm Investing™

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.

Note that the newsletter is now closed to new subscriptions, but may be re-opened in the future.  Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links 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, small cap stocks, Treasuries | Tagged , , , , , , , , , , , | Leave a comment

Market Timing Brief for the 10-03-2014 Close: Stocks Hit a Bottom. Gold AT the Bottom. Rates Still Low.

A Market Timing Report based on the 10-03-2014 Close, published Sunday October 5th, 2014

The SP500 Index slipped to what I shared on StockTwits® and Twitter® (see links just below) was support at about 1928 and bounced.  The actual low was 1926.03.  We bought back part of what we sold there, thereby doing exactly what I claim is possible, which is buying low and selling highHaving some cash on declines can make you money, but only if you are willing to get back in.

Bearish advisors often tell you to “GET OUT!”  Unfortunately they stink at telling you to “GET BACK IN!”  So discriminate when you listen to the broken clocks of the world.  It is known that the most Bearish advisors are the worst, as the world never seems to go to hell and stay in hell!  The Universe naturally and sometimes unnaturally repairs itself from its wounds.  The Fed would be an example of unnatural healing!

How do you keep your cool when stocks are plummeting as they were last week and buy when others are scrambling to sell?  I’ll be sharing more on how that can be done in the coming weeks, so stay tuned.

We added back to our model portfolio at 1930.46.  I personally added by purchasing puts below the lows of the week, so I’m sure to get a discount if put the shares of SPY and will make a 12.4% simple annualized gain on the puts otherwise.

To find out what I’m going, including buys and sells, please follow me here: Follow Me on Twitter®.   Follow Me on StockTwits®   You don’t have to make comments yourself to read my messages.

SP500 Index (SPX, SPY; click the chart to enlarge it):

sp500-index-market-timing-chart-2014-10-03-close

SP500 hits support and bounces.

Meanwhile, this is what this week’s investor sentiment survey at AAII says this about the bounce:  Survey Says! What About Investor Sentiment?

The U.S. Small Cap Chart (RUT, IWM):

U.S. Small Caps are bouncing with the SPX despite valuation concerns (click the chart to enlarge it).

rut-small-cap-russell-2000-index-market-timing-chart-2014-10-03

Small caps lead the bounce.

Gold:  GLD, the gold ETF, is testing the massive lows we’ve been watching.  The lows were: GLD 114.46 on 1-3-14, gold near month futures 1179.40 low on 6-28-2013, and spot gold’s low of 1192 on 6-28-2014.  The spot gold price is JUST BELOW support at 1190.70, but we can consider that a retest so far.  If we do not bounce quickly, gold could see far more damage. The other two lows mentioned have held thus far.

Gold will turn up or not.  If not, watch out below.  Low rates should have helped gold and are not.  Gold has been beaten lower even with lower rates.  The main driver has been the U.S. dollar strength DESPITE falling rates.  Investors are hiding in the U.S. dollars.  Fear is rising worldwide it seems.  This can reverse, but that is what has been happening.  The dollar’s advance is not sustainable as our economy is going to take a currency exchange hit in the coming quarters as it is.  That will make the Fed sit back and take it’s time in raising rates, which should pressure the US dollar.

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

gld-gold-etf-market-timing-chart-2014-10-03-close

Gold needs to hold the lows.

The 10 Year Treasury interest rate (TNX, tracked by TLT if Bullish; TBT if Bearish) could be forming a reverse head and shoulders and continue its bounce.  That means rates rising with a recovering economy.  If you believe the opposite, you should buy bonds and Treasuries on every rally.  2.471% was resistance on Friday (bottom yellow line in chart below).

Please Click the Chart to enlarge it:

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

Rates forming a reverse head and shoulders.

Be sure to visit the website at: Sun and Storm Investing™

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.

Note that the newsletter is now closed to new subscriptions, but may be re-opened in the future.  Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links 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, small cap stocks, Treasuries | Tagged , , , , , , , , , , , | Leave a comment