Market Timing Brief™ for the 9-23-2016 Close: Stocks Testing Top of Recent “Vibrational Range.” Gold Bounces to Mid-Range as Rates Fall.

A Market Timing Report based on the 9-23-2016 Close, published Sunday September 25th, 2016

I deliver focused comments on the markets.  These are supplemented with “Tweets/StockTwits” (see links below).

1.  SP500 Index: Stocks liked the Fed FOMC meeting statement (See my messages at StockTwits/Twitter via link below.  I won’t repeat them here.)  The Fed is keeping rates constant due to uncertainty that is showing up in economies worldwide and our weakness at home. 

Earnings season is the next challenge.  Some recent estimates say that SP500 Index profits for Q3 could come in at -2% while revenues will rise 2.6%  (there are typos in the article as you will see, but the same earnings number was quoted elsewhere).  Companies are selling a bit more, but at lower prices or with increased costs.

(NOTE: GDP Number out this week is the 3rd estimate of SECOND QUARTER GDP, not the Q3 number!  It should not change that much.  1.3% expected per Bloomberg News.  Q3 GDP comes out on Oct. 28th at 8:30 am )

In any case, the economy is still too weak for the Fed to raise interest rates despite the improvement in the employment figures.  Dr. Yellen mentioned in the “dog and pony show” at 2:30 pm Weds. that workers were being recruited from the “discouraged/not previously looking” pool, which provides some slack, although wages are finally rising, which could eventually trigger inflation.  The Fed will watch, but likely resist raising rates until corporate profits and revenues improve further.

The chart shows that we rose to the top of the prior “Vibrational Range.”  When investors become fearful, volatility spikes and then has to calm down.   The SPY closed within this range, while as you see, the SP500 Index itself closed right at the top of the “Vibrational Range” that was set up on Sept. 12th (aqua lines; see also the last issue to upper right!).  We bought near the bottom of this “Vibrational Range.”  Buy lower, not higher is our motto. 

I actually like this statement of one of our guiding principles best:

“Buy fear, not greed.”

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

sp500-index-spx-market-timing-chart-2016-09-23-close

Backtesting the top of the prior “Vibrational Range.”

Survey Says!  Sentiment this week among individual investors (AAII.com) showed a Bull minus Bear percentage spread that was -13.45%, in other words tilted toward Bearishness.  The percentage of “Neutrals” is AGAIN under 40% (above 40% Neutrals is Bullish on a market timing basis for higher prices out 6 months from today per AAII studies of their statistics).

This is again not an extreme. Extremes occur at spreads of 20-30% toward Bearishness or more. Stay flexible, but above all, buy low, NOT high. 

9-22-16 12 am close to poll Bulls               24.83% Neutrals 36.89% Bears      38.28%

Keep up to date at Twitter and StockTwits where a combined 20,094 people are joining in. Thank you for your interest! 

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

2.  U.S. Small Caps: Small caps recovered strongly from their dip prior to the Fed, but have yet to reach their prior high (green line).  There is further risk to small cap earnings for Q3 that is about to end (Sept. 30 for most companies), so let go of your dogs before they bite you with their “beta.” 

“Beta” is a measure of risk usually measured in the U.S. vs. the volatility of the SP500 Index.  A Beta of 2.0 means the stock or index is twice as volatile as the SP500 Index, for example.

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

rut-small-cap-index-market-timing-chart-2016-09-23-close

Small caps pull back off of new breakout.

3. Gold:  Gold made some gains off the lows…where we bought.  Stick to the discipline of buying low, and you’ll do it when others are in fear, rather than overthinking it.  There are times to step aside, and it’s not possible to get every move right, but remember that Bull markets tend to continue longer than investors expect.  Trends, when they are strong, and backed by macroeconomic arguments, tend to persist.

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

gld-etf-market-timing-chart-2016-09-23-close

Gold bounces from support post-Fed.

Before we get to Interest Rates and how they reacted to the Fed statement…

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 October 2nd issue.  Note 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.

4. U.S. 10 Year Treasury Note Yield (TNX): Rates fell through key support AFTER the FOMC Federal Reserve statement. There’s still room to fall (meaning we make money on bonds/Treasuries), although the strongly Bullish investors out there expect the Fed to move as early as November.  I doubt the economic numbers will support that move.  I am following the break lower shown in the chart below.  I bought municipal bonds before the Fed announcement, anticipating dovish talk from Dr. Yellen, despite all the grandstanding of other FOMC board members.

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

tnx-10-year-treasury-note-market-timing-chart-2016-09-23-close

Treasuries rally after the Fed (meaning interest rates FELL).

Stay with me throughout the week for the LATEST via the links to Twitter/StockTwits above.  Feel free to ask me questions, comment, retweet etc.

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 © 2016 By Wall Street Sun and Storm Report, LLC All rights reserved.

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

Market Timing Brief™ for the 9-16-2016 Close (9-21-2016 Post-Fed Update!): Stocks, Gold and Treasuries all Whip Around as Volatility Spikes Then Calms Slightly.

A Market Timing Report based on the 9-16-2016 Close, published Sunday September 18th, 2016

I deliver focused comments on the markets.  These are supplemented with “Tweets/StockTwits” (see links below).

UPDATE for 9-21-2016: After the Fed Decision to Hold Rates Constant

The move today was positive, but we need even more from the Bulls to make this an important move.  The red line you see right above today’s close is the next challenge for the Bulls.  Will the markets wait for the 1st debate to make that move?

spy-sp500-etf-market-timing-chart-2016-09-21-close

SP500 Index rose within the vibrational range discussed below. Positive shift, but more is needed.

1.  SP500 Index: The U.S. markets initially reacted positively to Fed Governor Brainard’s comments on Monday, which leaned dovish, and then the Federal Reserve went into a quiet period ahead of their two day meeting for Tuesday and Wednesday. At that point market timing traders were frustrated as the market then decided it did not actually know what the Fed will do Wednesday and vibrated up and down wildly within a consolidation range.  No progress has been made except that we’re off the 9-9-2016 low. 

By Friday, volatility had calmed down a bit, but the catch is that volatility is still in an up trend.  We are clearly waiting for the final decision of the Federal Reserve.  Set your market timing clock to 2 pm Weds. and hang on until then!   Oddly and VERY unusually my “number of the day” which I called “the number of the afternoon” due the big spike in volatility, became the number of the day for FOUR days in a row, something that we rarely see.  The SPY “number of the week” was 213.25 by the way.

Be alert on Wednesday.  I’ll be live-Tweeting the Fed event starting at 2 pm on Weds.

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

sp500-index-spx-market-timing-chart-2016-09-16-close

SP500 Index vibrating with higher volatility within a range.

Survey Says!  Sentiment this week among individual investors (AAII.com) showed a Bull minus Bear percentage spread that was barely tilted toward the BEARS at -7.98%.  The percentage of “Neutrals” is back under 40% (above 40% Neutrals is Bullish on a market timing basis for higher prices out 6 months from today per AAII studies of their statistics).

This is still not an extreme.  Extreme Bearishness usually results in spreads of up to 20-30 or more in extreme circumstances and there is room for sentiment to move in either direction from here, so beyond knowing that, it’s not helpful at the moment. Recognizing that the selling may not be over is useful.  Stay flexible.

9-07-16 close to poll Bulls               27.94% Neutrals 36.14% Bears      35.92%

Keep up to date at Twitter and StockTwits where a combined 19.272 people are joining in. Thank you for your interest!  Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

2.  U.S. Small Caps: Small caps rose to resistance after Federal Reserve Governor Brainard’s comments.  It is likely that stocks will be aimless, but possibly still volatile, prior to their final decision Weds. and what Dr. Yellen says in the 2:30 pm ET televised “dog and pony show” will also be important should there be any surprises. 

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

rut-small-cap-index-market-timing-chart-2016-09-16-close

Small Caps rose to resistance.

3. Gold:  Gold is under pressure due to the fear that the Federal Reserve could make a mistake (vs. their working belief system!) and hike rates into a slowing economy worldwide.  This is a good buying point if you believe the Fed will have to stand pat on rates.  If the Federal Reserve raises rates, the economy will slow further and gold will do even better though initially gold could take a further hit, so consider averaging into it here and be prepared to buy more if the Fed makes its second mistake.

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

gld-etf-market-timing-chart-2016-09-16-close

Gold under pressure due to belief that Fed could hike rates.

4. U.S. 10 Year Treasury Note Yield (TNX): Interest rates rose just a bit over the past 5 trading days within the same triangle I pointed out last week.  This may be a good point to ADD Treasuries, although there are plenty of investors betting against them, which has stretched them in their trading range to the upside.  The Federal Reserve decision will determine the next move in ALL the markets discussed.

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

tnx-10-year-treasury-note-market-timing-chart-2016-09-16-close

Rates rise in the 2nd triangle. Interest rates should fall if the Fed does not raise rates Wednesday.

Stay with me throughout the week for the LATEST via the links to Twitter/StockTwits above.  Feel free to ask me questions, comment, retweet etc.

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.

Note that the newsletter is now CLOSED to new subscriptions: Join the Wait List to Join the Newsletter as a Loyal Subscriber, Opening again for the October 2nd issue. 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.

Copyright © 2016 By Wall Street Sun and Storm Report, LLC All rights reserved.

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

Market Timing Brief™ for the 9-09-2016 Close: Further US Economic Weakness, Lack of ECB Certainty and Rosengren’s Hawkishess Push Down Stocks, Gold and Treasuries.

A Market Timing Report based on the 9-09-2016 Close, published Monday September 11th, 2016

I deliver focused comments on the markets.  These are supplemented with “Tweets/StockTwits” (see links below).

Ground Zero Memorial

Ground Zero Memorial, Worth A Visit

First, let’s pause and remember the many, including scores of financial workers at Cantor Fitzgerald who were above the area of the North Tower hit directly by the first plane. The company lost 658 of 960 employees working in the North Tower of the World Trade Center. 

They were on the 101-105th floors, 2-6 floors above where the first plane hit.  The fire that resulted was so large that fire fighters were unable to put it out.  Everyone above the spot the plane hit died that morning according to the Commissioner of the NYC Fire Department at the time (FoxNews.com)

More were murdered by the terrorists at Cantor Fitzgerald than NYC firefighters who died by running into the towers to save lives, many never getting out after their last trip back into the building. 

There was true valor at Ground Zero.  One court security officer who volunteered to help in the crisis was told by his boss to get out of the building, and he said “I can’t. There are more people who need help.”  The 20-something young man died in the building trying to save more lives.  RIP.  (from an interview of his uncle on Fox News).  Pay a visit to the site if you have a chance.  The views from the new tower are spectacular and seeing the thousands of names around the huge fountain is very moving. 

Now back to the markets….

1.  SP500 Index: The U.S. markets reacted negatively to three things this past week.  First, the ISM Non-manufacturing number was a big miss at only 51.4 vs. a consensus of 55.0 per Bloomberg.com.  Secondly, Dr. Draghi indicated he was not going to do anything more in the monetary realm to push toward the 2% inflation target of the ECB and told Germany to get off it’s duff and engage in fiscal stimulus, because it was in the position to do so.  So much for being a sovereign nation!  

This means “market timing wise” that the U.S. Federal Reserve is being given more room to hike if they get nervous about inflation.  With a slowing economy (which the market liked seeing with the release of the weak ISM Non-manufacturing number noted), they would be hard pressed to raise rates in September, but they seem to see more growth in the U.S. economy than some other observers do. 

The third tremor came on Friday with Fed President Rosengren’s comments about a possible Sept. rate hike as I noted: HERE.  He said that if the Fed waits too long, they may have to raise rates quickly which could then push the economy into a recession.

In support of the idea that the Federal Reserve is more Bullish than some other economists, the Atlanta Fed still expects 3.3% for Q3 GDP growth as of Sept. 9th.  If that number is attained, the Fed could well consider it sufficient to allow another rate hike.  A further tantrum in the markets could lead to a full market timing correction (7-10%), but growth at that level likely won’t lead to a recession any time soon.  We bought a bit on Friday into the huge rise in volatility (the VIX volatility index was up 39.9% in just one day).  Sometimes we will be a day or two early or late and some buys will even sit at losses for weeks, which is why we always buy in increments.  

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

sp500-index-spx-market-timing-chart-2016-09-09-close

Big spike in volatility.

Survey Says!  Sentiment this week among individual investors (AAII.com) showed a Bull minus Bear percentage spread that was barely tilted toward the Bulls at +1.27%.  The percentage of “Neutrals” is back over 40% (above 40% Neutrals is Bullish for higher prices out 6 months from today per AAII studies of their statistics).  The poll closes at midnight on Weds. night, so it did not take Friday’s swoon into account.

9-07-16 close to poll Bulls               29.75% Neutrals 41.77% Bears      28.48%

Keep up to date at Twitter and StockTwits where a combined 19.272 people are joining in. Thank you for your interest!  Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

2.  U.S. Small Caps: Small caps were down disproportionately vs. large as they should have been.  That’s called “beta.”  If you want to do market timing on your “beta exposure” and diminish your risk and not be “out of the market,” then shift a bit between large caps and small caps, selling some of the former and buying some of the latter at the bottoms and selling some large caps and buying some small caps at the tops when the market looks stretched. 

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

rut-small-cap-index-market-timing-chart-2016-09-09-close

Small Caps swoon on Friday.

3. Gold:  Gold pulled back due to Federal Reserve rate hike fears and the lack of added monetary stimulus coming from the ECB (see above).  Read my post on when gold does well and when it suffers called “When Does Gold Shine and When Does It Decline?”: CLICK HERE   So far though, we still have a gold bounce.  If the Fed raises rates into a slowdown, the economy could go into recession and then the steep decline in rates will help gold once again.

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

gld-etf-market-timing-chart-2016-09-09-close

Fear of rate hike pushes back on the gold rally a bit.

4. U.S. 10 Year Treasury Note Yield (TNX): The Rosengren comments seemed to rule the markets on Friday (see above).  The next Treasury triangle “lid” will now be challenged (upper downward slanting yellow line).

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

tnx-10-year-treasury-note-market-timing-chart-2016-09-09-close

Rates spike on Fed’s Rosengren’s comments.

Stay with me throughout the week for the LATEST via the links to Twitter/StockTwits above.  Feel free to ask me questions, comment, retweet etc.

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.

Note that the newsletter is now CLOSED to new subscriptions: Join the Wait List to Join the Newsletter as a Loyal Subscriber, Opening again for the October 2nd issue. 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.

Copyright © 2016 By Wall Street Sun and Storm Report, LLC All rights reserved.

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

Market Timing Brief™ for the 9-02-2016 Close: U.S. Employment Bounces Stocks Higher. Gold Bounces On Cue Too. Rates Reverse Prior Move.

A Market Timing Report based on the 9-02-2016 Close, published Monday September 5th, 2016

I deliver focused comments on the markets.  These are supplemented with “Tweets/StockTwits” (see links below).

1.  SP500 Index:  The highlight for the week was the sufficient employment number on Friday.  U.S. jobs for the prior month came in at 151,000. The expected number was higher at 175,000, which means the market believes, or at least half believes, that the Federal Reserve may not move to raise the Fed Funds rate as early as September.  The chance of a rate hike is considered to be below 50% until December, 2016 when it is 50.6% per the CME Group

Remember that rising rates are OK only if the economy is strengthening, not weakening, so the low employment figures could be pointing to a further slowing of the economy in turn indicating that the Fed should lay off the hikes for now despite their recently expressed eagerness to hike.  Weak jobs could also be a sign that we will see further slowing if we don’t get additional fiscal stimulus or other governmental manipulation, perhaps eventually leading to a market killing recession.  Still, recession does not appear imminent, one reason being investor sentiment, which I update below the chart…

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

sp500-index-spx-market-timing-chart-2016-09-02-close

Back above the high of the previous consolidation.

Survey Says!  Sentiment this week among individual investors (AAII.com) showed a Bull minus Bear percentage spread of -2.92% after being near flat last week as well.  Despite the bump up in the SP500 Index on Friday, sentiment remains weak, which is Bullish as is the percentage of “Neutrals,” which is nearly 40% (above 40% Neutrals is Bullish for higher prices out 6 months from today per AAII studies of their statistics). 

8-31-16 close to poll Bulls               28.60% Neutrals 39.87% Bears      31.52%

Keep up to date at Twitter and StockTwits where a combined 19.272 people are joining in. Thank you for your interest!  Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

2.  U.S. Small Caps: Small caps are testing a new breakout, but closed just 0.5 points above the prior high.  This occurred despite negative GAAP earnings over a 12 month period, referred to as “nil” by the WSJ.  Don’t believe it?  Have a look: HERE (WSJ Site)

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

rut-small cap-index-market-timing-chart-2016-09-02-close

Small caps are trying to break out to new recent highs.

3. Gold: Gold finally bounced on cue off the up trend line shown below after investors felt better about “low rates for longer.”  We were buying more GLD near the low (see my social media links above).  Negative real rates are the friend of gold.  If you don’t understand what makes gold move up and down, have a look at my: Primer On When Gold Shines

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

gld-etf-market-timing-chart-2016-09-02-close

Gold Bounces Off of Support on Weak Jobs.

4. U.S. 10 Year Treasury Note Yield (TNX): The break of the prior triangle was initially to the upside after  Dr. Yellen’s speech at Jackson Hole.  But now, that jump has been reversed.  Follow the market, not the Fedspeak that may turn out simply to be a “jawboning” exercise in market manipulation. Markets speak louder than words.

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

tnx-10-year-treasury-note-market-timing-chart-2016-09-02-close

Rates back down on weak jobs.

Stay with me throughout the week for the LATEST via the links to Twitter/StockTwits above.  Feel free to ask me questions, comment, retweet etc.

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.

Note that the newsletter is now CLOSED to new subscriptions: Join the Wait List to Join the Newsletter as a Loyal Subscriber, Opening again for the October 2nd issue. 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.

Copyright © 2016 By Wall Street Sun and Storm Report, LLC All rights reserved.

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

Market Timing Brief™ for the 8-26-2016 Close: What Happened After the Yellen Speech to the SP500 Index, Gold and Interest Rates?

A Market Timing Report based on the 8-26-2016 Close, published Sunday August 28th, 2016

I deliver focused comments on the markets.  These are supplemented with “Tweets/StockTwits” (see links below).

UPDATE 8-29-2016: Gold Holding Weekly Up Trend

Market timing gold?  Well, it’s still holding onto its weekly up trend and I noted on Twitter/StockTwits (links below) today that TLT (Treasury ETF) is holding a breakout.  I think these two are closely linked.  The fact that Yellen’s hawkish talk could not wreck these two charts is significant.  The short term trend line was broken as I suspected it would be, but now may be one point at which to add more exposure with a stop. 

What’s the risk?  That the economy will improve dramatically with rising interest rates that ALSO stay ahead of inflation, making the stock market a more attractive place than gold.  If the two trends being testing (GLD and TLT) both break down from here, it will be a negative intermediate prognostic sign.

gld-etf-market-timing-chart-2016-08-29-weekly chart

Weekly Trend Still Holding Up for Gold

1.  SP500 Index: The market is done waiting for Dr. Yellen.  She said that the Federal Reserve is about ready to move interest rates up.  The key line from her speech was: ” I believe the case for an increase in the federal funds rate has strengthened in recent months.”  Here is the Entire Text.

The box the Fed is in has to do with the fact that the economy is still sluggish at best despite the prediction by the Atlanta Fed for a 3rd Quarter real GDP of 3.6%.  Remember that real GDP is a seasonally adjusted annualized rate of growth of the economy.  That number, if attained, is far too strong for interest rates to remain as low as they are.  Inflation would result, and the Fed wants to be ahead of that curve.  There are those who are predicting a much softer number for Q3 GDP and raising rates ahead of that weakness would be an error.  The Federal Reserve clearly has no clue, no visibility beyond a few weeks.  

Remember that the real market timing killer is recession and that won’t be happening, even if GDP comes in soft next quarter.  So for now, we’ll stay long, not leveraged long, but long.  The SP500 is testing the base of a range, and yes, it can correct from here, but the Bull is not dead.  We have cash to deploy and will buy the next time fear rises and investors are again uncomfortable.  Check the sentiment numbers below and you’ll see what kind of room is left for the Bulls…

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

sp500-index-spx-market-timing-chart-2016-08-26-close

SP500 Index backtests the recent range.

Survey Says!  Sentiment this week among individual investors (AAII.com) showed a Bull minus Bear percentage spread of -0.22% after bumping up a bit last week.  That means the Bulls have pulled back from a relatively weak rally up to a 9.2% sentiment spread back down to zero.  Markets don’t end this way classically.  Investors are hyper-Bullish at big tops.

8-24-16 close to poll Bulls               29.42% Neutrals 40.94% Bears      29.64%

Keep up to date at Twitter and StockTwits where a combined 18,321 people are joining in. Thank you for your interest!  Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

2.  U.S. Small Caps: Same position as large caps, testing back a bit within the latest consolidation, but with higher risk.  If you are market timing, be sure to take beta (greater movement up and down vs. the SP500) into account.  Lower your beta (risk) exposure at highs and increase it when investors are foolishly fearful.

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

rut-small cap-index-market-timing-chart-2016-08-26-close

Small caps dip slightly post-Yellen.

3. Gold: “It’s still the economy stupid.”  The line happens to apply here.  Gold does not do well in an “improving economy rising rate environment.”  However, my belief is that the economy, while better than some were expecting, is still running on the soft side requiring dovish Federal Reserve policy for a while.  Given that view, we’ll keep some healthy exposure to gold, but watch our profits to date.  We took some trading profits higher.

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

gld-etf-market-timing-chart-2016-08-26-close

Gold fails a rally post-Yellen. May drop yet another notch.

4. U.S. 10 Year Treasury Note Yield (TNX): The break of the prior triangle was to the upside.  The market believes the Federal Reserve’s story for now.  If they are right, rates will rise from here.

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

tnx-10-year-treasury-note-market-timing-chart-2016-08-26-close

Rates rise post-Yellen speech.

Stay with me throughout the week for the LATEST via the links to Twitter/StockTwits above.  Feel free to ask me questions, comment, retweet etc.

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.

Note that the newsletter is now CLOSED to new subscriptions: Join the Wait List to Join the Newsletter as a Loyal Subscriber, Opening again for the October 2nd issue. 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.

Copyright © 2016 By Wall Street Sun and Storm Report, LLC All rights reserved.

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

Market Timing Brief™ for the 8-19-2016 Close: SP500 Index in Holding Pattern. Gold Stagnation Continues. Rates About to Make a Move.

A Market Timing Report based on the 8-19-2016 Close, published Sunday August 21st, 2016

I deliver focused comments on the markets.  These are supplemented with “Tweets/StockTwits” (see links below).

1.  SP500 Index: The market seems to be waiting for Dr. Yellen’s statement at Jackson Hole. In the meantime, the same questions remain that we’ve discussed over the prior 3 weeks, so I’ll direct you there to review them (links to upper right).  The NEW news is sentiment, which I’ll discuss after you look at the chart…

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

sp500-index-spx-market-timing-chart-2016-08-19-close

On a plateau…waiting for a move.

Survey Says!  Sentiment this week among retail investors (AAII.com) showed a Bull minus Bear percentage spread of +9.20% that FINALLY moved vs. last week.  Last week the Bull minus Bear spread was 4.5% and the prior week it was 3.0%.  This gives the market a Bullish tilt, because that sentiment spread is not extreme, yet Bulls are coming on board.  There is room to at least a spread of 20-30ish. A big Bull run could bring the sentiment spread to the mid-30’s.

8-17-16 close to poll Bulls               35.56% Neutrals 38.08% Bears      26.36%

Keep up to date at Twitter and StockTwits where a combined 18,321 people are joining in. Thank you for your interest!  Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

2.  U.S. Small Caps: Waiting as well.  All depends on the economy, which is projected to improve in GDP terms this quarter.  The U.S. remains stronger than much of the rest of the world, hence the stretched valuation.  This all falls apart should U.S. GDP slow again.  Those that say the latest rise in GDP was a blip up in a down trend are waiting for just that.  Meanwhile, be sure to pick a side and adjust your portfolio accordingly.

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; RUT, IWM): For the 8-19-2016 Close

rut-small cap-index-market-timing-chart-2016-08-19-close

Small caps also waiting.

3. Gold: Gold is struggling against the impression that the economy is improving.  Please look at prior issues if you are not clear on this. It is being held up by the impression that ALL major governments intend to demolish their own currencies to maintain economic market share.

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

gld-etf-market-timing-chart-2016-08-19-close

Gold has a bit of a limp and looks more like it could test lower.

4. U.S. 10 Year Treasury Note Yield (TNX):

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): This triangle will be resolved soon.  The move in the direction of the break out from this triangle (yellow lines), could be substantial.

tnx-10-year-treasury-note-market-timing-chart-2016-08-19-close

Rates are about to make a move. Follow that move.

Stay with me throughout the week for the LATEST via the links to Twitter/StockTwits above.  Feel free to ask me questions, comment, retweet etc.

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.

Note that the newsletter is now CLOSED to new subscriptions: Join the Wait List to Join the Newsletter as a Loyal Subscriber, Opening again for the October 2nd issue. 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.

Copyright © 2016 By Wall Street Sun and Storm Report, LLC All rights reserved.

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

Market Timing Brief™ for the 8-12-2016 Close (Updates 8-15-2016 and 8-16-2016*New Charts): SP500 Index Holds Marginal New High. Gold Stalls. Rates Ease Again.

A Market Timing Report based on the 8-12-2016 Close, published Sunday August 14th, 2016

I deliver focused comments on the markets.  These are supplemented with “Tweets/StockTwits” (see links below).

UPDATE 8-16-2016: Market timing the China ETF vs. other BRIC Members

FXI is the (Hong Kong listed Shares) FXI, which I’ve plotted vs. rest of BRIC (Brazil EWZ, Russia RSX, India EPI) and overall emerging market index (VWO) since the 2011 low (dividends not accounted for).  Although Brazil (EWZ) has rapidly reversed toward the mean from a huge fall, it is still trailing the other three ETFs.

fxi-vs-epi-vwo-rsx-ewz-market-timing-chart-2016-08-16-since-2011-low

India and China are on top since the 2011 low in FXI.

UPDATE 8-15-2016: SPY vs. the World since Brexit: I examined the market timing of numerous markets since Brexit (just after the fall; chart starts on 6-27-2016) and here are the results: China wins (H shares, FXI). Gold loses in relative terms for this period (ignore that green arrow ;)).

spy-vs-fxi-dxps-vgk-hedj-ewu-iwm-vpl-dxj-ijh-gld-market-timing-chart-2016-08-15-141pm

Market timing SPY (plus IWM (US small caps) and IJH (US mid caps) vs. the World

1.  SP500 Index: The index is holding onto a new high despite falling corporate profits.  Of course, if the Atlanta Fed’s very large 3.5% GDP number holds up for Q3, profits may rise and drive down PE’s.   At the moment the U.S. definitely remains a favored market for investors, which is likely why Brexit was such a short lived event.  Compare that to the Japanese tsunami HERE. In that case, selling made sense if you were willing to buy back lower, our process of “passive shorting.”

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

sp500-index-spx-market-timing-chart-2016-08-12-close

SP500 Index Holds Marginal New High

Survey Says!  Sentiment this week among retail investors (AAII.com) showed a Bull minus Bear percentage spread of +4.53% that once again barely moved vs. last week [over 40% Neutrals is Bullish for market timing 6 months out]). Last week the Bull minus Bear spread was 3.0% and the prior week it was 2.8%.  This is despite the achievement of all time highs.  That is Bullish!  Typically at tops everyone is Bullish and the Uber driver is talking about his last stock trade (it used to be cab drivers!).

8-10-16 close to poll Bulls               31.29% Neutrals 41.95% Bears      26.76%

Keep up to date at Twitter and StockTwits where a combined 18,321 people are joining in. Thank you for your interest!  Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

2.  U.S. Small Caps: Small caps are holding up well despite the failure of corporate profits to materialize in this group.  The Wall Street Journal still reports the PE ratio of the small caps to be “nil,” even after most of earnings season has passed us by.  We will continue to favor mid caps to small caps until this turns around.

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

rut-small cap-index-market-timing-chart-2016-08-12-close-v2

Small caps slip and recover.

3. Gold: Gold will continue to be under pressure if the Fed is seen as getting closer to raise rates.  With Atlanta Fed GDP estimates of 3.5% for Q3, the Fed won’t be able to hold off forever on raising rates if it chooses to believe its own data.  That it may not do, given the fact that the chair is a devout Democrat.  Not a political comment, just a factual point that will likely keep rates steady until the December meeting or later.

If you are in the “GDP-slowing camp,” then you are raising cash right now in anticipation of another market decline.  You can see how invested I am via the social media links above.  My view is that the stock market finds the current “Muddle Along Economy” adequate.  I suspect the market also likes the prospects of Trump losing the election, so world trade is not disrupted.  Again, not a judgment of policy choice, just the facts!

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

gld-etf-market-timing-chart-2016-08-12-close

Gold stalls as the economy grows slowly.

4. U.S. 10 Year Treasury Note Yield (TNX): Rates are still staying low as growth is not spectacular.  Corporate profits were down about 5% this past quarter despite “beating expectations.”  This allows the Fed to keep rates low in the context of low rates around the world.

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

tnx-10-year-treasury-note-market-timing-chart-2016-08-12-close-v2

Rates ease.

Stay with me throughout the week for the LATEST via the links to Twitter/StockTwits above.  Feel free to ask me questions, comment, retweet etc.

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.

Note that the newsletter is now CLOSED to new subscriptions: Join the Wait List to Join the Newsletter as a Loyal Subscriber, Opening again for the October 2nd issue. 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.

Copyright © 2016 By Wall Street Sun and Storm Report, LLC All rights reserved.

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