Market Timing Brief™ for the 4-18-2017 Close: Stocks Pumped Up by Trump, Now Sagging. Gold and Treasuries In Big Rallies, Are Not Waiting.

A Market Timing Report based on the 4-18-2017 Close, published Tuesday April 18, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

1.  SP500 Index: The index is sagging but not broken on a market timing basis.  The market ran up fast after the election.  I anticipated that and added exposure prior to the election in order to be fully invested.  My theory was that the market just wanted the uncertainty to end, and it would end either way.  President Trump’s entry was more exciting with the election evening dive, but the recovery was swift.  I’ve continued to add exposure slowly on pullbacks, most recently adding some small cap exposure.

If Q1 GDP is as bad as the Atlanta Fed is guesstimating (0.5%!), the market could sink further prior to the actual enactment or visibility thereof of Trump economic policies, both tax reform for companies and for individuals.  If GDP surprises to the upside by a big degree, the buying opportunity of today will be in the rear view mirror very quickly. We’ll be finding out the answer on GDP at the end of the month.

There is another looming set of issues…geopolitical.  Any threat of war such as we are hearing about with North Korea gives the market gitters.  Nuclear weapons are being discussed as an option by the insane Kim, who knows how to manipulate people.  President Trump is not helping either by saying the prior tolerance of misbehavior won’t be his course.  But what does that actually mean practically speaking?

President Trump has two options, both horrible really: conventional attack which will immediately imperil millions of South Koreans and 28,500 US troops at the DMZ.  The second option is nuclear war which would only be started by Kim, but it’s obviously a horrible idea for both sides.  I don’t believe either option is realistic and therefore my sense is that Trump is bluffing.  If so, he’s trying to get leverage for negotiation via China to settle the whole thing down and contain North Korea’s aspiration to build an ICBM that can level Los Angeles with a nuclear weapon attached.  But in the meantime, markets HATE uncertainty and the situation with North Korean needs to be overcome for the markets to be at ease. 

Dropping the “Mother of all Bombs” on ISIS tunnel systems in Afghanistan actually named for real the “Massive Ordinance Air Blast,” also made the world a bit more on edge about the war with ISIS.  The ISIS war is a chronic issue that the market has been willing to ignore. That would change if Trump puts American soldiers in harm’s way in large numbers.  The markets would react negatively to a major new war effort in the Middle East involving our troops. 

sp500-index-spx-market-timing-chart-2017-04-18-close

Off a retest low, but still waiting for Trump to succeed in enacting his plans.

We’ll continue to follow my 3 signals defined in early February HERE.

As of today the signals are still ALL off for a continued Trump Rally: STOCK SIGNAL: OFF.  GOLD SIGNAL: OFF ( means gold is rallying).  INTEREST RATE SIGNAL: OFF (means Treasuries/bonds are rallying).

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,202 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

SP500 Large Cap Index (click chart to enlarge; SPX, SPY):

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -8.41%, just a bit more Bullish than last week’s -11.32%.  Buy the dips as long as investors are squeamish about stocks near the all time highs!

Thurs. 12 am close to poll Bulls               28.97% Neutrals 33.64% Bears      37.38%

2.  U.S. Small Caps: I bought a bit ahead of the retest, but the low has held.  Buy low when you can.  Obviously a breach of the top red line might lead to a bigger dip/correction.  That would be an even better buying opportunity barring some sort of international disaster (a conventional war against North Korea for ex.).

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; IWM, RUT):

iwm-russell-2000-etf-market-timing-chart-2017-04-18-close

Also waiting! Buy the dips IMO.

3. Gold: Finally, gold was able to break out to a brand new recent high.  That is impressive and says that investors are very hesitant, both about Trump’s prospects (I believe they are underestimating what he’ll be able to do – speaking without reference to politics!) as well as his handling of the geopolitical scene. 

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

gld-gold-etf-market-timing-chart-2017-04-18-close

Another breakout amidst uncertainty at home and abroad.

4. U.S. 10 Year Treasury Note Yield (TNX): That white triangle we’ve been watching is a goner!  Left behind as rates plunged!  Notice election day on the chart below?  We’re time traveling back to November 8th in market timing terms below the bottom white trend line.  It is not what economic Bulls want to be seeing.  Financial stocks don’t like this at all.  You can look at any of the financials since the election or look at XLF (the financial sector of the SP500 Index) and see that it is testing the January 2017 low.  The current breakdown in yields is a major disappointment for growth Bulls.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-04-18-close

Treasuries predicting a very slow economy.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until late this year.  I’ll let you know here if it reopens.

Be sure to visit the website for more general investing knowledge 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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , , | 2 Comments

Market Timing Brief™ for the 4-07-2017 Close: Stocks, Gold and Rates Stuck.

A Market Timing Report based on the 4-07-2017 Open, published Sunday April 9, 2017 (well OK, 12:58 am Monday the 10th!)

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

This is a tax time special…long on charts, but short on words.  The set-up is the same as last week, given the assumption that the low employment growth in March was a “one off” weak data point.  The market is waiting for signs that Trump’s economic growth plans are going to manifest. We’ll continue to track the 3 market timing signals we’ve been watching since early February to show us the way.

1.  SP500 Index: Off the all time high, but not by much.

sp500-index-spx-market-timing-chart-2017-04-07

Stuck in a trading range.

Continue to follow my 3 signals defined in early February HERE.

As of today: STOCK SIGNAL: OFF.  GOLD SIGNAL: OFF.  INTEREST RATE SIGNAL: OFF.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,202 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

SP500 Large Cap Index (click chart to enlarge; SPX, SPY):

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -11.32% vs -7.16% last week.  Once again, this is NOT what we expect to see at all time highs in the markets, at which point investors should be excited to own stocks, so despite any dip or correction that may occur, the Bull run is not over.

Thurs. 12 am close to poll Bulls               28.30% Neutrals 32.08% Bears      39.62%

2.  U.S. Small Caps: I re-entered a small cap position last week, a bit early in market timing terms. The small caps bounced off the top red line in the chart below.  We will continue to look for opportunities to “buy low” as this Bull market continues. 

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; IWM, RUT):

iwm-russell-2000-etf-market-timing-chart-2017-04-07-close

Small caps stuck too, more so than large caps.

3. Gold: Gold failed another market timing test of the February high.  It will likely be “interest rates up and gold down” if Trump succeeds, but if he doesn’t OR if the Fed falls behind on inflation, gold can do well.

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

gld-gold-etf-market-timing-chart-2017-04-07

Gold fails another breakout.

4. U.S. 10 Year Treasury Note Yield (TNX): We are testing the lower white line in the market timing triangle yet again.  The behavior of the 10 Year Treasury is probably our best “tell” on whether the market believes in “Trump Growth” or not.  So far, it’s a big fat “maybe!”  “No” would be a market timing move below the magenta line and “Yes” would be a move above the green line.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-04-07

Rates also stuck in a range and the move out will be telling.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or you should also feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until Dec 2017.  If all goes as planned, I will reopen the wait list for the end of December/January Issue in December.

Be sure to visit the website for more general investing knowledge 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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , | Leave a comment

Market Timing Brief™ for the 4-03-2017 Close: Market Looking for “Trump Growth.” SP500 Index and Small Caps Bouncing Toward Prior Highs. Gold Stuck at Resistance with Interest Rates Bouncing.

A Market Timing Report based on the 4-03-2017 Open, published Monday April 3, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

1.  SP500 Index: The market wants to know:

1) Trump can lead.  This means he must get Judge Gorsuch appointed to the Supreme Court.  He’s already lost on his travel ban and the Obamacare replacement bill known as AHCA. 

2) The market will continue to bounce to lower market timing highs and languish in a range until it is convinced that “Trump means MORE business” for the U.S.  The market is not broken yet, just tentative about whether Trump will come through on his promises.  I remain long (you can see my exposure level posted on social media – links below).

sp500-index-spx-market-timing-chart-2017-04-03

Bouncing toward retest, but could fall short.

Continue to follow my 3 signals defined in early February HERE.

As of today: STOCK SIGNAL: OFF.  GOLD SIGNAL: OFF.  INTEREST RATE SIGNAL: OFF.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,031 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

SP500 Large Cap Index (click chart to enlarge; SPX, SPY):

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -7.16% vs +4.78% last week.  This is NOT what we expect to see at all time highs in the markets, at which point investors should be frantic to own stocks, so despite any dip that may occur, the Bull run is not over.

Thurs. 12 am close to poll Bulls               30.22% Neutrals 32.40% Bears      37.38%

2.  U.S. Small Caps: I sold my small cap position for a quick 3.2% market timing profit when the index reached an overbought level on Friday.  It could move higher to test the key 138.82 number or the prior all time high, but this felt like a good place to trade out of a bit of exposure.

I’m not making radical market timing moves, because my longer term view is that the markets move higher as stated.

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; IWM, RUT):

iwm-russell-2000-etf-market-timing-chart-2017-04-03

Rebounded enough for a sale last Friday.

3. Gold: Gold is levitating near a prior market timing high because rates are falling again, but we have to watch that “white triangle” on the rate chart (see below) to know how things will work out for gold.  This may seem dull, but if you want to make money with gold, YOU MUST UNDERSTAND these driving factors.

Interest rates are tied into growth expectations, which are falling of late based on a dovish Federal Reserve during the past FOMC meeting.  They are raising rates but are skeptical of the “Trump Growth” phenomenon.  This could ironically drive long rates DOWN, not up if they raise rates into slow growth -meaning if they are right and President Trump is wrong.  They think the economy can withstand higher rates at this point, although we just came out of a profits recession.

Gold needs negative real rates to thrive.  Rising rates (ahead of inflation) in a super strong economy are like kryptonite for gold.  If you are not up on “What Makes Gold Shine and Decline..” review it HERE.

Other projections of GDP are much higher than say that of the Atlanta Federal Reserve Bank, back down at about 1.0% GDP last I checked.  That is far too weak to support current market levels and profit projections.  We’ll find out at 8:30 am ET on April 28th with the first estimate of Q1 GDP.

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

gld-gold-etf-market-timing-chart-2017-04-03

Gold depends on Trump’s failure to thrive. Strong economic growth is like kryptonite for gold.

4. U.S. 10 Year Treasury Note Yield (TNX): We are testing the lower white line in the market timing triangle.  That must hold.  Below there, we will know that the market believes “Trump Growth” is in trouble.  It’s what the MARKET believes that needs to be determined, not what you or I feel politically.  I’m an independent, so I evaluate each of the Trump policies one by one without glorification or demonization of the man himself.  Nothing great and enduring will be done over the next four years without some measure of compromise.

The 10 Year Yield is at 2.339% as I type this, which is a test BELOW the lower white trend line that forms the base of the triangle shown.  The last support levels would be the prior lows shown going back to January.  Just breaking the triangle on a closing basis could mean trouble for growth Bulls.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-04-03

10 Year Yield now testing base of the triangle.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or you should also feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until Dec 2017.  If all goes as planned, I will reopen the wait list for the end of December/January Issue in December.

Be sure to visit the website for more general investing knowledge 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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , | 1 Comment

Market Timing Brief™ for the 3-24-2017 Close (UPDATE for Small Caps 3-30-2017): Big League Failure by Trump Administration on Health Care and Stock Market Doesn’t Care (so far). Trump to “Pivot.” Gold and Rates Both Leaning Toward Failure of Trump Growth Plans.

A Market Timing Report based on the 3-24-2017 Close, published Sunday March 26, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

UPDATE 3-30-17: Small Caps In Up Trend

Small cap stocks held market timing support at the bottom of the range just as suspected (we bought very near the low as documented on StockTwits/Twitter – links below).  We’ll have to see how they behave as we approach that top.  Stay tuned on social media for further trades. Remember that small cap stocks are generally not as exposed to the border tax issue unless they import a lot of their products/inputs from abroad of course.  Look at all your stocks from big to small and consider selling them if they are overly exposed to Trump policies and consider moving the funds to a broad index instead.  I’m staying long this market until things say otherwise, but no need to have the wrong exposures.   

iwm-russell-2000-etf-market-timing-chart-2017-03-30-1015am-close

Making progress, moving toward top of recent range.

1.  SP500 Index: Trump’s AHCA Health Care Plan blew up along with Speaker Ryan’s leadership resume on Friday, when the Republicans could not herd their cats to pass a bill to kill Obamacare, something they had already passed many times over seven years.  It was a colossal defeat and may make the market nervous about tax relief and other Trump plans.  He will have to develop more consensus on tax cuts or he can forget passing much of anything going forward. 

Democrats found themselves backed by of all things “the People,” who called in massive numbers to express their opinions and jeered at town halls to push back on AHCA.  They won…big league.  The People have spoken.  They want other Americans to have health care coverage, even when they cannot afford it, in greater numbers than those who think “you should take care of yourself” whether you can or can’t.  There were only – get this – 17% of people who wanted the AHCA bill to pass.  Need more polls?  It was a horrible bill no one liked, not compassionate conservative Republicans and not Freedom Caucus members who want to throw medical care issues back to the states (which would make some states targets for migration. It’s an impractical idea in the national context). 

The GOP is fractured and the Democrats are unified.  That does not add up to progress unless Trump works with Democrats, which I predict he will now do.  He’s going to pivot to win again.  After all, consider his history and you’ll realize that beyond gun control and military expansion, he’s more of a “Bloomberg-type Republican.”  He has said he is for providing “health care for everybody.”

Trump also claims he will help the middle class more than the rich, although that remains to be proven, considering the huge $883 Billion of savings for the rich in the now failed ACHA Health Bill.  But Trump is all about winning, and Republicans burned him, so here comes the big pivot in my view.  He will leave the Freedom Caucus in the dust and work with moderate Republicans and Democrats to get things done.  Remember even the Freedom Caucus will love his military plans.  He’ll pass infrastructure plans with Democrats and moderate Republicans.  Get the picture?  It’s a whole new equation.

In the meantime, where are my “market timing signals”?  The stock signal is OFF, the gold signal is OFF, and signalling slow growth, and the rate signal is OFF signalling slow growth.  Why not cut and run?  Because these pullbacks based on a pessimistic Fed view of economic growth have not yet been deadly.  Neither stocks nor rates have totally broken down and are in a place where they could bounce.  Furthermore, gold has TWO ways to flourish as I outlined last week HERE.

Continue to follow my 3 signals defined in early February HERE.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 25,786 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

SP500 Large Cap Index (click chart to enlarge; SPX, SPY):

sp500-index-spx-market-timing-chart-2017-03-24-close

Testing 50 day moving average and deciding on the economy’s prospects.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +4.78% up from -7.53% the prior week.  Market timing believers should still be long, as we’re near the highs and optimism is FAR from it. 

Thurs. 12 am close to poll Bulls               35.28% Neutrals 34.22% Bears      30.50%

2.  U.S. Small Caps: I opened a position in small caps for the first time in a while based on the belief that the market had reached an inflection point.  At such a point the higher the “beta” you own, the better the market timing bounce on the turn.  I’ve previously shared why I favor midcap stocks over longer periods of time.

I may reduce exposure by dropping small caps at an upcoming high. This all assumes that the market still finds some belief in the near to intermediate term prospects of the economy, which I currently favor.

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; IWM, RUT):

iwm-russell-2000-etf-market-timing-chart-2017-03-24-close

Coming off bottom of the range.

3. Gold: Gold has bounced from a retest of the 115.00-115.20 target range, which means it’s forming a reverse head and shoulders, a Bullish market timing signal.  Gold believes “Trump Growth” is in trouble and rates will stay low, and rates have in fact moved lower.

This correlation will stand on it’s head and wake up market timing experts if and when it ever buys “Trump Growth” again.  Why?  Because rates rise when growth is robust, not when it’s marginal.  Does this mean that the Fed cannot raise rates a bit more?  No.  They can hike rates as long as doing so does not slow the economy to a crawl.  Stay tuned to this battle of rising rates vs. growth, because it will be with us for many months.

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

gld-gold-etf-market-timing-chart-2017-03-24-close

Gold in reverse head and shoulders. Points to inflation.

4. U.S. 10 Year Treasury Note Yield (TNX): We had a test of the 2.621% high and of the 2.489% breakout.  We’re now below both.  “Trump Growth” that goes beyond the already established growth trajectory (even with its bumps of falling earnings this past year), of about 2% a year is what rates need in order to rise.  Two percent growth is all the Fed sees as it gives no credit to Trump for “possible growth.”  The Federal Reserve’s public messages have been clear: “Show us the growth.”

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-03-24-close

Rates are down wondering about “Trump Growth.”

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or you should also feel free to ask a question…

P.S. I am closing subscriptions to my private, now monthly, no cost newsletter on March 31st, and may not reopen it until the end of the year for the January 1st issue.  If you want to become a “loyal reader,” this will be your last chance for a long while… Click the link below if you are interested.

Note that ALTHOUGH my newsletter is now CLOSED to new subscriptions… you can Join the Wait List to Receive the Newsletter as a Loyal Subscriber, Opening temporarily for the April 30th issue (LAST DAY TO SIGN UP is March 31, 2017.  The newsletter won’t reopen until end of December at earliest) 

Click HERE to Sign UpNote however that if you join and don’t read the newsletter, you will be deleted. Why? I don’t publish to non-readers as other newsletters do. I surround myself with committed people who value what we are doing. Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links above.

Be sure to visit the website for more general investing knowledge 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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , | 2 Comments

Market Timing Brief™ for the 3-17-2017 Close: Epic Battle of Trump Big League Growth vs. Low Growth. Gold Rallies On Dovish Fed Despite Hike. Rates Signal Low Growth (so far).

A Market Timing Report based on the 3-17-2017 Close, published Sunday March 19, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

1.  SP500 Index: The Federal Reserve did indeed raise rates at their FOMC meeting by 0.25% on Wednesday.  They expect to raise rates at least 2 more times in 2017 (probably June and December) and 3 times in 2018 according to their current anemic growth projections of about 2%. How did the markets react?  Stocks were up, though large caps fell over the last two trading days of the week, while small caps started to catch up to large caps, but did NOT make it over my trigger threshold that will tell me the market is certain that Trump policy stimulated growth will show up any time soon.  Market timing signals are at a crossroads now as I’ll explain, but be sure to read to the end or you’ll be unprepared for the next big pivot in the markets, up or down.

Continue to follow my 3 signals defined in early February HERE.  Don’t bother investing more near the top of the current trading range.  Either 1) Buy more at the lower end of the range if we get a pullback next week OR 2) Buy more on pullbacks from a breakout.

You can use market timing to buy some ON a breakout just in case the market does not come back to you, but don’t add too much on any “chase purchase.”  Chasing costs more than buying pullbacks in a Bull market.  Buying pullbacks and selling some when the market is stretched (and/or writing call options against parts of positions) is how I manage to beat the SP500 Index. 

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 24,533 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

SP500 Large Cap Index (click chart to enlarge; SPX, SPY):

sp500-index-spx-market-timing-chart-2017-03-17-close

Market is ahead since Fed decision, but not !00% convinced of Trump Growth prospects.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -7.53% up from -16.5% the prior week.  Bearishness is still inappropriately high for a stock market near its all time highs. There is plenty of room for further Bullishness to develop.

My view is that even if growth remains at 2% as the Federal Reserve expects, the stock market will move still higher.  Being underweight stocks here is a market timing mistake in my opinion.

Thurs. 12 am close to poll Bulls               31.17% Neutrals 30.13% Bears      38.70%

2.  U.S. Small Caps: We’re getting close to a stock signal conversion to the UPSIDE, but the other two signals are not cooperating yet.  Realize that these market timing parameters are not fixed tools I use over and over.  These are tools intuited  by me that will predict the market’s belief in the “Trump Growth with Inflation” thesis, and the next leg up in the Trump Rally, or lack thereof.

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; IWM, RUT):

iwm-russell-2000-etf-market-timing-chart-2017-03-17-close

Small caps on the verge of triggering the stock component of the three signal system to a BUY.

3. Gold:  If you read the blog last week, as a market timing trader you knew to buy gold the minute rates plunged (see extra chart in last week’s gold post if you have not seen it…).  At least that was the trade, if you buy into the rising inflation hypothesis.  I personally prefer to own stocks as long as the Trump Growth thesis remains intact. 

I believe the Fed will be on the case of inflation, despite their marginal dovishness this past week, while still raising rates.  Dovishness in their terms means they expect the same slow growth under Trump as we saw under Obama.  If growth wins without sparking inflation the Fed does not handle, gold cannot rally. 

The action post Fed says our economy is going to slow down further and negative rates are going to be the concern. 

Any other way out for gold?  Yes, if there is inflation that far exceeds the Fed’s ability to control it.  Then gold shoots up, because it’s a good inflation hedge.  Take your pick.  If you don’t believe in “Trump Growth,” stick with gold.  Or if you believe that Trump Growth comes with the cost of inflation the Fed cannot tame, then stick with your gold trade. 

Until the Trump Growth thesis is disproven, we continue to hold gold as a hedge against Central Banking lunacy worldwide and currently remain OUT of any gold market timing trade.  I typically hold 5% of total investable assets in gold (excluding any real estate) when I’m just using it for insurance against fiat currencies. When I enter a market timing trade of gold on top of that, I have added up to about 5-7% more exposure.

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

4. U.S. 10 Year Treasury Note Yield (TNX): We have a test of the prior 2.489% breakout going on.  A move below there is a strong vote by the debt markets against “Trump Growth with Inflation.”  A bounce above 2.621% is a solid vote for “Trump Growth with Inflation.”  Or call it “Trump GrowFlation.”

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

Rates say “low growth” especially if they cut decisively below 2.489% again.

Thanks for reading.  Please leave your comments below where it says “Leave a Reply”… just scroll down and comment or ask a question…

Note that ALTHOUGH my newsletter is now CLOSED to new subscriptions: You can Join the Wait List to Receive the Newsletter as a Loyal Subscriber, Opening again for the April 2nd issueNote that if you join and don’t read the newsletter, you will be deleted. Why? I don’t publish to non-readers as other newsletters do. I surround myself with committed people who value what we are doing. Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links above.

Be sure to visit the website for more general investing knowledge 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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , | Leave a comment

Market Timing Brief™ for the 3-10-2017 Close: Stock Signal OFF. Gold and Rate Signals ON.

A Market Timing Report based on the 3-10-2017 Close, published Sunday March 12, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

1.  SP500 Index: The coming rate hike this week (at the Tues-Weds. Federal Reserve FOMC Meeting) is a bigger “lock” than last week, with the CME Group odds at 88.6%.  For that reason and the strong employment report on Friday, the Federal Reserve can easily justify hiking rates.  The 10 Year Treasury broke above my trigger point and it now testing around the next higher trigger.  I’ll reveal below what will happen to interest rates if that target is exceeded.  It will send ripples through the markets if it does.  It will wake up a lot of market timing folks for sure!

However, the promised Trump growth has to show up within a reasonable period of time to make the recent gains stick.  The Atlanta Fed lowered their estimate of Q1 GDP to just 1.2% which is far below their guesstimate of 2.7% on Feb. 1oth.  If growth disappoints sufficiently particularly by Q2, the market will correct to compensate for that.  So far the data has been strong enough in both manufacturing and services to allow the market to be patient.

Growth must continue to compensate investors for owning stocks.  Growth, cash used to buy back shares and debt, and cash dividends are the only 3 ways investors are compensated for ownership.  A company’s value must increase over time through growth of the business for it to be worth more.  There you have “Stock Investing 101” in a nutshell.

If a company’s growth slows too much, all that is left is positive cash flow to pay out through stock and debt buybacks and in the form of dividends, which without growth, cannot rise.  That means that a non-growing business will be valued on a now stagnant sale price and the “Shareholder yield” on the stock (based on cash flow).    A stock is judged very harshly vs. corporate and government bonds at that point.

If rates are going up, which they have, bonds become a better value than stocks if their yield is better and the companies behind the stocks are not growing at all.  This is why rising interest rates ONLY work when there is economic growth, which means both revenue and earnings growth! 

If the Federal Reserve raises rates against slow growth that could slow even further, they could kill the Bull market.  Yes, there are risks in market timing from the long side!  Weakness of that sort is not in the data now, but that is the scenario under which Bears would be right.  Without data to confirm their view other than “high valuation,” I intent to stay long until the data change.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 24,533 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

I remain long (with more exposure than usual; access my exposure numbers via the social media links), although I did trim a few percentage points of my equity exposure (see the links above to see what I did). 

This week the stock signal is OFF, the gold and interest rate signals are ON (signals that I believe will determine whether another leg up will occur in the stock market).  Review the “Three Signals” that will mean another big stock market up leg: HERE

SP500 Large Cap Index (click chart to enlarge; SPX, SPY):

sp500-index-spx-market-timing-chart-2017-03-10-close

So far, just a minor dip.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -16.5% way down from +2.29%Bearishness is not at an extreme, but still a bit high given that small to large caps are pretty close to their all time highs.

Humans by nature like a “deal,” and they don’t believe the stock market is a deal right now.  But that has not been proven out historically; instead, Bull markets tend to extend much farther than investors expect and the pullbacks along the way just make room for more powerful rallies to follow.

Could we see a few percent dip or a 7-10% correction in the SP500 Index?  Of course, but market timing traders should be ready to buy any such dip or correction in my view.  Growth may not be rip roaring going forward, but this long and very slow recovery from the 2009 bottom has room to continue.

Thurs. 12 am close to poll Bulls               30.00% Neutrals 23.50% Bears      46.50%

2.  U.S. Small Caps: The performance of small caps determines the “Stock Signal” I started looking for weeks ago.  It has not confirmed, but then there is Monday!  If the small caps continue upward, we’ll know that the market is expecting growth.  If not, “not so much…”  Watch for this key market timing signal in the coming week.

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; IWM, RUT):

iwm-russell-2000-etf-market-timing-chart-2017-03-10-close

Small caps pulled off the signal and will likely determine the fate of the overall market.

3. Gold:  I told you what to look for last week. Review it HERE.  I outlined the intimate relationship gold is currently having with interest rates.  Market timing aficionados should know about this negative correlation.  If small caps take off this week, which remains to be seen and rates continue to rise, gold will sell off further.  The range you see highlighted in the chart below is in play.  This could just be a test below support, but the Bulls have lost a significant landmark by falling below it.

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

gld-gold-etf-vs-tnx-10-Year-Treasury-Yield-market-timing-chart-2017-03-10-close

Gold fell below the prior breakout area on rising rates.

4. U.S. 10 Year Treasury Note Yield (TNX): Game on for “TrumpFlation” with or without growth.  Rates have risen past my target to the upside.  I currently favor continued growth based on the economic numbers.  When they change, so does my opinion!  If you plan to trade on “But what if the Trump Growth doesn’t come through” then go right ahead, but I think it’s foolish unless you have access to data that I don’t. 

Do you see the top yellow line?  That represents a yield of 3.036%.  That will be the next target for the market above this level.  It first needs to make it through 2.621% and then on to 3%ish.  If this happens very fast, it could spook the markets, particularly the interest rate sensitive ones!

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-03-10-close

Rates still above that 2.489% line but need to challenge the 2.621% line to get to 3%.

Thanks for reading.  Please leave your comments below where it says “Leave a Reply”… just scroll down and comment or ask a question…

Note that ALTHOUGH my newsletter is now CLOSED to new subscriptions: You can Join the Wait List to Receive the Newsletter as a Loyal Subscriber, Opening again for the April 2nd issueNote that if you join and don’t read the newsletter, you will be deleted. Why? I don’t publish to non-readers as other newsletters do. I surround myself with committed people who value what we are doing. Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links above.

Be sure to visit the website for more general investing knowledge 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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , | Leave a comment

Market Timing Brief™ for the 3-03-2017 Close: Stock and Gold Signals OFF. Rate Signal Barely ON.

A Market Timing Report based on the 3-03-2017 Close, published Sunday March 5, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

1.  SP500 Index: Federal Reserve speakers have repeatedly said it’s time to raise rates, so a March hike is a lock in my view and the CME says it’s a 79.7% probability.  This is OK because both ISM manufacturing and services were strong this week.  This says further economic growth under Trump is very possible.  It’s happening in fact.  Rates can climb along with the stock market as long as growth is accelerating.

My sense is this will resolve to the upside, rather than in a correction.  For that reason I added more midcap exposure on Friday (IJH).  IJH has outperformed IWM small caps since the 2009 low and the SP500 Index  by much more.  (see social media links for more)

SP500 Large Cap Index (click chart to enlarge; SPX, SPY):

sp500-index-spx-market-timing-chart-2017-03-03-close

Edging up despite small cap lag.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of +2.29% down a bit from +6.15% last week.

Thurs. 12 am close to poll Bulls               37.91% Neutrals 26.47% Bears      35.62%

Still holds from last couple of weeks: “There’s still not enough Bullishness among individual investors to call this a top.”

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 24,533 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

2.  U.S. Small Caps:  Back below target  this week, but barely (top green line in market timing chart below).  The market will only have another leg up if and when it believes Trump policies are going to incite stronger growth.  Otherwise we may see a dip or correction soon.  Pay attention to this signal as well as gold and rates below. Review the “Three Signals” that will mean another big stock market up leg: HERE

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; IWM, RUT):

iwm-russell-2000-etf-market-timing-chart-2017-03-03-close

Small caps slip again below target.

3. Gold:  Rates bounced and gold fell.  That equation rules the gold market right now.  Look at the second market timing chart to see how interest rates are negatively correlated with the price of gold.  (The green lines highlight the peaks and valleys in yields and the corresponding gold lows and highs, respectively.)

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

gld-gold-etf-market-timing-chart-2017-03-03-close

Gold eases as rates rise.

gld-gold-etf-vs-tnx-10-year-treasury-yield-market-timing-chart-2017-03-03-close

Rates down, gold UP. Rates up, gold DOWN.

4. U.S. 10 Year Treasury Note Yield (TNX): We’re now just barely above the 2.489% market timing resistance level I noted weeks ago.  I said two weeks ago, “The trade is in the direction of resolution of this [white] triangle.”  Follow that this week!  A break of rates above that upper white line means Trump’s growth with inflation game is ON, and the stock market will likely be rallying.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-03-03-close

Rates just over target.

Now please leave your comments below where it says “Leave a Reply”… just scroll down and comment or ask a question…

Note that ALTHOUGH my newsletter is now CLOSED to new subscriptions: You can Join the Wait List to Receive the Newsletter as a Loyal Subscriber, Opening again for the April 2nd issueNote that if you join and don’t read the newsletter, you will be deleted. Why? I don’t publish to non-readers as other newsletters do. I surround myself with committed people who value what we are doing. Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links above.

Be sure to visit the website for more general investing knowledge 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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , | Leave a comment