Market Timing Brief™ for the 2-16-2018 Close – Aftershocks to Come in the SP500 Index? Why a Retest is Still Likely. Will Falling Rates Lead to a Further Gold Rally?

A Market Timing Report based on the 2-16-2018 Close, published Sunday, February 18th, 2018…

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 Market Timing:  After a big storm, (and this is the Sun and Storm blog afterall!), there are usually more showers that pass through.  Just as with a volcanic eruption, once the top blows off the volatility volcano, there are often more eruptions that follow.  It’s the same idea with earthquakes and in fact volatility shares a lot in common with the vibration of the earth’s crust in that way. Once a market is shaken, it often goes through further gyrations after the first shock before equilibrating.  Often the process takes weeks to a few months.

As the time cycles are being compressed by machines these days, it could be faster than before.  The correction we saw off the Jan. 26th top was the fastest 10% or more correction in history, thanks very likely to both the rapid selling of long bond/Treasury positions as well as equity positions ensnared in the VIX products that blew up.  I’ve told you what the likely ACTUAL cause of the downturn was last week HERE .

If you don’t read my issue from last week, you won’t know what hit you this week, so please take the time.  In order to do the right thing in these market swings, you have to be oriented, or you’ll zig when you should zag.

Consumer Sentiment was reported as very strong on Friday (links to the data on my social media pages below), but despite that, XLY, the consumer discretionary ETF was weaker than the SP500 Index.  That’s not a good sign for action to come, as XLY is a necessary leader in this part of the recovery.  Even big tech with a 40% representation in QQQ was -0.45% vs. SPX +0.04%.  Tech in SPX represented by XLK is a purer tech play and was -0.15%.  Amazon played a role in the XLY performance of course as it was -0.89%, and it also impacts QQQ’s.  Amazon is NOT in the tech ETF XLK.

I fully exited my position in financials as I now expect interest rates to fall from here.  Even if there is a surprise rally from here, I expect 3% to contain the move in the 10 Year Treasury Yield.  If it does not, the entire market will be hurting.  This goes back to the reason for the downturn in the market in the first place – “Rate Shock,” as I explained in great detail last week ( and as you have read by now! ;)).

My conclusion is that the stock markets believe a TNX Yield (10 Year Treasury Yield) above 2.676% is deflationary, meaning rates that high vs. the rest of the world and current conditions in the U.S. would actually cause economic activity to contract.  Why would I say this?  Because the stock market began selling off when rates jumped above that pre-jump high.  Falling rates could actually help the NON-financial portion of the market – to a degree (they hurt when predicting outright DEflation as I’ve explained).  Remember IWM small cap ETF is 18.1% financials.

You could counter saying the market has recovered substantially and is now “used to the idea of these higher rates.”  If that were true, we would not pause at such an obvious spot on the chart.

Now I cannot say with complete confidence that this “Deflationary Rate Shock” fear will set in at this specific level in the stock market.   I have engineered my now slightly lowered exposure to take advantage of a recovery to the last high, but I don’t expect it.  That reduced exposure allows me to add back to the market on the next low.

I used this “Passive Shorting™” (a term I coined HERE) successfully in 2011, buying and selling Berkshire Hathaway stock several times before locking in a very low price off the final low that I rode to gains of well over 100%.  I kept it until Buffett himself said his company was not likely to beat the SP500 Index in the coming years due to its size.  Then I took his advice and moved my money to the SP500 Index.  I also used cash to buy SP500 Index exposure during the 2015, winter 2016, and pre-election 2016 pullbacks.  I bought SPY on 11-01-2016 when the market was afraid of a surprise Trump win and perhaps of a Clinton win that would be less friendly to markets.  Buy low, sell high!  You can do it using “Passive Shorting™.”

I expect there will be more downside work to be done with a test to anywhere between a slightly higher low, the same level, or as much as 10% below the last low on a flush in the market of weak hands.  What I do not believe is that we’ll go straight up, but I’m prepared for that too as described.

The US economy IS still strong at this time and this should last at least a few quarters; however, cracks are showing up in Europe, China, and Japan both in market timing terms as well as economic terms, so this could impact US markets eventually (several quarters from now).   What could help the U.S. markets?  IF further stimulus effects manifest including infrastructure spending, we could see a further delay of the next major economic recession and stock market downturn in the US.

Next (after reviewing the chart below), let’s look at investor sentiment, which provides a warning this week…

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 33,400+ people are joining in…

Followers know I regularly share my percentage exposure to equity markets vs. my “usual maximum exposure”  at the social media links below.  Few share this information…

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

sp500-index-spx-market-timing-chart-2018-02-16-close

SP500 Index is at a perfect place to fail.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +27.11% vs. +2.02% last week. 

That is a ridiculously Bullish number to see one week after the fastest 10% correction in stock market history.  It is not extreme, no, but it’s still too much optimism too fast.  Dumb can become dumber of course, hence the movie by that name.  This number does not preclude a re-topping of the market.  In fact, the ultimate fake-out WOULD be an immediate re-topping of the market.  This adds to my thesis that the correction will need to be retested to shake out more Bulls.  At this rate, we’ll be back to “uber-zealous” sentiment levels in another week!

AAII.Com Individual Investor Sentiment Poll
Bulls Neutrals Bears
48.52% 30.07% 21.41%
Thurs. 12 am CT close to poll

2.  U.S. Small Caps Market Timing: Small caps DID have a nice market timing bounce with large, so they were obviously “playable” off the bottom, BUT it was not actually worth the improvement in return, which (quick est.) was about 7.89% from the intraday low (recent lowest low!) to the Friday close for small caps and 7.63% for large.  That is simply not worth the added beta risk in small caps.

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

iwm-russell-2000-market-timing-chart-2018-02-16-close

Small caps bounced, but added risk was NOT worth it.

3. Gold Market Timing: The Gold VIX (Volatility Index for Gold) fell on Friday, while the US dollar rose a bit.  It should have increased as a higher US dollar is bad for gold.  As I explained last week, we are dealing with interest rates fluctuations at the same time.  The 10 Year Yield should fall from here, or close to here, which would pressure the U.S. dollar, as lower rates mean a lower return on our Treasuries and debt.  That would help gold.

As far as market timing gold goes, be sure to watch for the US dollar to SELL OFF from here  If the US Dollar moves up, nothing but all out financial panic will help gold, and even then, the price of gold may be reset along with stocks if they should begin to fall again in a big way.  Then gold could resume its rise as economic slowing and deflation hit significant portions of the world, initially outside the U.S., and then ultimately the U.S. 

I lean Bullish on gold, for this reason: Gold outperformed stocks on the decline, and I expect stocks to retest lower.

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

gld-gold-etf-market-timing-chart-2018-02-16-close

Gold will follow the dollar (but move in the opposite direction!).

4. Interest Rate Market Timing – U.S. 10 Year Treasury Note Yield (TNX): Rates will come down from here or from 3% as an outside possibility.   The chart shows a Bearish upward wedge forming in market timing terms, which should bring rates back down soon, if TNX breaks the lower line on the wedge.  Lower rates mean a weaker US dollar and stronger gold most likely.  The “Rate Shock” idea I wrote about last week tells you the media hype about inflation fears is NOT the central issue.  The main issue is DEFLATIONARY FEAR about overly tight monetary policy around the world and the associated “Rate Shock.”

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

tnx-10-year-treasury-note-market-timing-chart-2018-02-16-close

Rates should move down from here. If not, there will be even more trouble ahead for equities.

 Now let’s review the three market timing signals together…. 

Do not use these signals as a trading plan.  They are rough guidelines.  I currently share my signals on social media (links above).

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally with Low Inflation:

Stock Signal YELLOW with SP500 Index Neutral

I say Neutral because this is a natural place for a breakdown in the progress that has been made.

Note: I’ve updated my criteria for the equity signal for a further U.S. stock market rally to the following: GREEN = Bullish, YELLOW = Neutral, RED = Bearish. 

Explanation: Note that a RED signal does not mean we should not buy.  A GREEN signal does you cannot sell some exposure.  It depends on what is going on in the economy and how oversold/overbought the market is at a given point whether the Bearish signal is to be sold, sold on the next bounce, etc. and whether a Bullish signal is to be bought or profits should be taken.  YELLOW does not mean the end of the Bull or Bear. It means look for possible entry points within the existing trend, Bull or Bear, but preserve capital if the entry fails.  Our strong intention is to buy low and sell high.  By the way, I will keep showing the prior orange “Trigger lines” in the charts for now as reference points only; they have historical value for us from the post-election period.

Gold Signal YELLOW in a Bullish Trend

GLD came off a failed breakout, but is now retesting the prior high,which is Bullish.  If rates move down from here AND the dollar falls on that, then gold can move higher.  Follow the breakout either way. 

Rate Signal GREEN with 10 Year Yield in Bullish Trend (but it could soon turn neutral and fall due to the Bearish market timing Wedge [see above])

10 Year Yield ABOVE the “Trigger Line,” generally good for stocks, not bonds.

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Market Timing Brief™ for the 2-09-2018 Close: The Volatility Volcano. Why the Market Won’t Likely Go Straight Up. UPDATE 2-13-2018: Gold Will Rally if Rates Fall from Here. “Rate Shock” May Have Been the Cause of the Stock Market Correction. Deflation Ahead?

A Market Timing Report based on the 2-09-2018 Close, published Sunday, February 11th, 2018…

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

NOTE: My “Rate Shock Comments are in the 3rd and 4th sections below (under gold and interest rates)…they are a KEY to understanding the risks the markets are seeing now!  The Volatility Volcano will erupt again soon IMO.  I explain why in detail giving many historical examples. 

Be patient and read through them carefully and you will have a good feel for how to trade the coming swings UP and DOWN in the global stock markets. …

1.  SP500 Index Market Timing: What we’ve had is a major Volatility Spike in the markets, so I’m focusing this week first on the SP500 Index, and the volatility implications of the recent market action. 

Some say it’s the “damn VIX products blowing up” which it likely is in part, but others add that the market seems to be in fear of rising rates and Fed hikes.  I explain later why it was actually due to “Rate Shock” in the gold and interest rates sections below.   In any case, let’s look at the history of massive VIX Volatility spikes and see what we can learn…

Please read through these examples slowly as they could provide a great map for the next 5-8 weeks or more of market turmoil!

If you enjoy and/or appreciate it, please indicate that in your comments below the post.  I’d be very grateful for that.  Thanks!

Before the Great Recession Market Crash Period

8-16-07         37.50         Nailed the low.  Last rally still to come to 1576.09 on 10-11-07.  Intraday low 8-16-07 was 1370.60.  1411.27 close.  Run to next top from ID low was 15%.

POSSIBLE OUTCOME: If the current spike is also just a pre-cursor, we will see a marginal new high and then a slow market crash from the next major high. 

10-06-08       58.24         SPX 1056.89 close. There was no point in trading the market until the 3-09 low.  First time over 50 w eventual top at 89.53 10-24-08. Not a low!  Went on to massive Great Recession March 2009 low of 666.

                         POSSIBLE OUTCOME: Remember the financial system was extremely unstable at the time which is NOT occurring now.  I do not view this as the likely outcome.  That is, I don’t believe YET that this is the beginning of a new Bear market. It bears watching though.  I would expect the current low to hold within some tolerance as mentioned in another example below.

10-24-08       89.53         VIX Peak.  temp. floor on SPX price but then fell to new low less than 1 mo later 11-21-08.

After the Great Recession Market Crash Period

5-06-10         40.71         Flash Crash #1.  Closed at 1128.15. Temp. floor then bounce, and market fell back to July 1 lower low.  Not the end!  There was was a 17.13% drop from top to bottom. (see next)

                        POSSIBLE OUTCOME: To avoid the next big drop down, we cannot see the VIX rallying to a new high.  The current VIX high was 50.30, which should not be challenged or broken significantly or we may see another drop (see next).

5-21-10         48.20         VIX Peak.  Close at 1087.69 with final SP500 low -7.06% lower.  Note that the lower ID low on Friday was only 2% lower than the VIX Peak Day close.  After the May 2010 VIX Peak it took 2 more days to rally in a brief bounce that lasted a few days, fell back, rallied a small amount a second time in June, and fell back to a new low July 1 with 1010.91 low ID (intraday). Two failed bounces in other words until the final LOWER low.  Then from that bounce, there was one more sig. retest above the lowest low.

3-16-11         31.28         VIX Peak.  Nailed the low.   Bounce then to brand new high on 5-2-11.  Retest of  prior low  mid June.  Bounce to lower high 7-7-11. Then a huge fall to 1st low 8-09 11 with 3 failed bounces and a final low 10-04-11.

8-08-11         48.00         VIX Peak.  SPX Close at 1119.46 just 4% above the eventual low.  THREE very high LOWS in VIX ended with a VIX top of 46.88 on 10-04-11, which was the same day as the final low in SPX price of 1074.77 a total drop from the lower high of 1347 or 20.22%!  You could say there were 4 major price thrusts/bounces  each correlated with a drop in the VIX and then the final recovery occurred.  Only 3 of those 4 were significant bounces and each was associated with a VIX low.   Each low hit nearly the same spot on the VIX chart by the way.  After all that, there was STILL a greater than 50% (maybe 60%; you can calculate it) drop back toward the final low in November before the year end rally took hold!  What a summer fall that was!

                        COMPARISON: The SPX low of the current VIX Peak on 2-06 was already tested about 6% below the SPX low on the VIX high day (2-06-18). 

                        POSSIBLE OUTCOME: The current test level could behave as in 2011, with the current low being a retest point, although in 2011, the first low was pierced a bit by 2.44%.  Not enough to worry about.  This means the final low may have already been seen but is likely to be retested and slightly transgressed.

10-15-14       31.06         VIX Peak.  Nailed the SPX price low to the day!  The difference was 1st that the peak was much lower than what we just saw and 2nd that there was a precursor VIX shock to a lower level when price moved down quickly around end of July/beginning of August 2014. There was a 30-40% retracement of the gains after that VIX peak.

8-21-15         28.38         Precursor Shock VIX high.  SPX closed at 1970.89.  Prior high 2132.82.  Low to come was 1867.01.

8-24-15         53.79         VIX Peak.  The big one and the second Flash Crash.  SPX closed at 1893.21.  First major low was 1867.01.  Retest low 9-29-15 1871.91.  Note the retest process took about 5 weeks. There was then a massive rally to a slightly lower high than   the first run.  11-03-15 was the lower ID high of 2116.48. Then came the still lower early 2016 lows.

POSSIBLE OUTCOME: The final low was just 1.39% below the close of SPX on the VIX Peak day.  If there is a big rally from here and/or after a retest, we’ll want to lighten up at the tops and rebuy lower.

12-14-15       26.81         VIX Peak. Nailed the low.  Very minor low SPX after fall from 11-03 high.  Market went on to early 2016 lows as noted above.

1-11-16         27.39         1923.67 close of SPX.  Lows thereafter 1812.29 on 1-20-16 and 1810.10 on  2-11-16. Max drop of 5.91%.

1-20-16         32.09         VIX Peak.  Nailed one of the lows.  SPX 1859.33.  As said, lows thereafter 1812.29 on 1-20-16 and 1810.10 on 2-11-16.

2-6-18           50.30        VIX Peak.  Now we’ll see how this compares to history.

CONCLUSIONS:

  1. The current VIX peak is one of the off the wall peaks, not the “Nail the Low Peaks.” This is the equivalent of a Flash Crash type of VIX Peak.  This is not economically driven unless you believe the VIX products had nothing to do with this and I do not.  If you want to argue inflation is going to rise inexorably from here, then we’re in trouble.  I do not see that in the data I access from multiple sources.  If you do, act according to your beliefs.
  2. This could still be a warning shot, an omen to huge trouble ahead, but we cannot invest based on a “possibility” of disaster.  Left field event risk is always there.  We will have to follow the evolution of VIX, the SPX price and economic and political inputs.
  3. It is likely in my view that the recent ID low will be retested and may be somewhat pierced (based on both 2010 Flash Crash and 2011 mini-Bear market and the 8-24-15 VIX Peak; 3 of 3 cited).  For that reason I will keep a bit more cash on the side than usual, but not a lot. I would lower exposure even more if I thought the economy was breaking down soon.  You can see my actual exposure to stocks and my split in US/Non-US at the social media links.  Of course, adjust that to your taste and circumstances.  I would be selling some on rallies if you need college funds in a year.  Follow your own plan.
  4. It is possible a retest will hold w another -3-4% downside risk on an overshoot.  It could be a bit bigger based on the Flash Crash of 2010, which implies a possible additional 5% drop vs. the 2-09 ID low (above 8% lower than the Friday 2-09 close).
  5. If there is a big rally from here before and/or after a retest, we’ll want to lighten up at the tops and re-buy lower if possible or re-enter higher if that fails.  Trading this volatility over the next month or two could be lucrative for astute traders.
  6. If the current VIX spike is just a pre-cursor to a Bear Market, we could see a marginal new high with HIGHER retests just above the prior low and then a slow market crash from the next major high. That is what the 2007 data point says, but it’s just one point and there is not the same structural damage in the economy.  I don’t favor this outcome for that reason most of all.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 33,300+ people are joining in…

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

sp500-index-spx-market-timing-chart-2018-02-09-close

Volatility spike!

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +2.02% vs. +16.01% last week. 

This is in fact the correction I was expecting after the sentiment peak I went over in early January HERE.   Investors were not able to experience the big down draft on Thursday, which would have discouraged them or the reversal on Friday off the lows which would have encouraged them.  It may be a wash, and I believe sentiment has not turned Bearish enough to allow for a major rally off the Friday intraday low.  One more reason for a retest!

AAII.Com Individual Investor Sentiment Poll
Bulls Neutrals Bears
37.03% 27.96% 35.01%
Thurs. 12 am CT close to poll

2.  U.S. Small Caps Market Timing:  Short version: Stay out of small caps during these volatility swings if you agree we are headed to a retest unless you have tax issues to consider.  UPDATE Mon. 12-12-2018: Note the first level of support was broken in the decline, while the next lower level held.  This is why it has changed the equity signal to “Neutral to Bearish.”  If small caps break this level, I would consider it Bearish at least short term.  When the economy turns down, the market will head into what will be the next Bear market.

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

iwm-russell-2000-market-timing-chart-2018-02-12-1057am

Market timing sell signal on small caps. This lower support had better hold.

3. Gold Market Timing:

Update 2-12-2018: Gold moved up today as the dollar fell.  It’s still very dollar dependent.  That correlation has been nearly directly inverse since October 2016 – a long time.  Don’t expect that to change too quickly unless a worldwide financial panic takes hold.  Then the dollar and gold can move in tandem – UP.  I posted the new chart below Mon. night. 

MORE UPDATE BELOW – Keep reading because you MUST understand my hypothesis of how “Rate Shock” rather than inflation fear sent stocks down hard!

Interestingly, the Gold VIX (Volatility Index for Gold) has been rising since around the end of 2017 as this chart shows at Kitco HERE.  It was rising before GLD topped and then continued rising.  The up trend in volatility suggests gold may not yet have found a bottom.  If stocks continue to sell off, gold won’t likely do well unless inflation fears continue to rise at the  same time or if rates crash.  Right now rates are down a bit for reasons I explain below and the dollar has staged a 6 day counter rally (see UUP for ex.), which hurts gold.  Rising rates hurt gold usually, but not when the fear is the Fed falling behind inflation (this changed at the SP500 Index high as I explain below).  Some say these fears are not warranted as there is slowing in the cards outside the U.S. which then can drag the U.S. down.  Economic slowing usually does not correlate with rising interest rates as the Federal Reserve generally is lowering rates, not raising them.

The exception is when inflation is truly out of control, something I don’t see happening for a while.  There are still too many deflationary pressures.  There is a lot working against higher oil prices for example.  The rig count has shot up with the oil price and oil prices have eased a bit.  Yes, the trend is still up for now, but it will be vulnerable to world economic softness to come and further expansion of U.S. oil production.  Could oil go up more?  Yes. Will it stay there.  I highly doubt it.

Short version in view of the stock correction: Gold will correct further if stocks crash further.  Otherwise gold will trade with the US dollar (rising – meaning gold down) and interest rates (falling which can cause gold prices to rise), which provide opposing forces on the gold price.

I came to the conclusion on 2-13-18 that rates will move down not up from here.  If that is true, where does gold go from here?  Read the update…

Update 2-13-2018 12:27 pm:  Gold could continue its up trend since its December low, when I believe inflation fears began to rise (and then turned to deflation fears at the top of the stock market – see below). 

Why?  Gold will rally IF the 10 Year Yield comes down now from its recent high of around 2.9%, and I believe it will.  Falling rates mean lower real interest rate and a relatively weaker U.S. dollar on that basis.  This would hurt financials, but help gold.  It also ironically would hurt stocks in general too, as it would be a harbinger of disinflation and the subsequent risk of deflation. 

gld-gold-etf-vs-xly-spy-market-timing-chart-2018-02-13-close

Gold since it’s Dec. low has beaten even top performing XLY after the recent market correction.

Update 2-12-2018 11:32 pm: THIS IS A KEY HYPOTHESIS  I will be following with you…

I noticed a change in the relationship of gold to interest rates.  This is a clue regarding inflation fears I believe.  I’ll explain why I believe the downturn in stocks was due to a shift from inflation fears to deflation fears.

Until mid-December, gold fell when rates rose and vice versa and then in mid-Dec. gold suddenly started being positively correlated to rates, which indicates inflation fears.  When there is little inflation and rates rise, gold falls, but gold has in fact been rising.  Gold responds to “real interest rates,” so if rates rise and gold rises, it means real rates are FALLING – meaning rates are not keeping up with inflation.  When rates outpace inflation, gold suffers, because you don’t need it as a hedge against rising rates!

Then ON EXACTLY THE DAY THE STOCK MARKET PEAKED 1-26-2018, gold FELL as the dollar rose and rates continued to climb.  

IF the market believes inflation is NOT out of control, the dollar is supposed to rise on rising rates as it was, and gold should fall.   Gold would have continued to rise with rising rates if the precipitating fear had been “inflation.”  It wasn’t in my view.  It was “Rate Shock.”  Rates rising too fast ahead of inflation!

This means the actual driver behind the stock market sell-off was that RATES WERE RISING despite the decline of inflation fears. 

When rates rise and inflation does not warrant the rise, that implies tighter monetary conditions than the inflation rate warrants. 

That would produce economic slowing and deflationary pressure, which is what the markets fear most. 

My conclusion is the markets after the Jan. 26th peak, were beginning to handicap a resumption of economic slowing and deflation in the coming year, which is already showing up in some places like Europe despite the continued optimistic view of European stock valuations.  The valuations are probably generous considering the headwinds arising.  This EU slowing with China’s slowing economy could start to press on U.S. growth down the line.  This is what the markets may be anticipating.  We will have to continue to follow the world’s economies to see how the inflation/deflation balance shakes out, but right now I believe there is a new concern embedded in this data that says interest rates rose too fast!  It’s not the rate increase per se, as we know historically markets can continue to rally with rising interest rates, but the rate of increase in rates was the shock.  I’ll call it “Rate Shock.”

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

gld-gold-etf-market-timing-chart-2018-02-12-close

Gold picked up some relative strength in the recent stock market decline despite it’s fall and turned up a bit today as the dollar sold off. The forces of rising dollar and falling rates impact the gold price, generally in opposite directions.

4. Interest Rate Market Timing – U.S. 10 Year Treasury Note Yield (TNX): TrumpFlation was the risk the market took notice of over the past 10 days. I said last week that rates would move down off the high as a “Risk Off” trade out of stocks after the Friday 2-02 Volatility.  If stocks continue to climb the yield could start rising to 3% again.

UPDATE 2-12-2018:  Please read the above gold section, because I cover my “Rate Shock” hypothesis there, which is critical to this global stock market sell-off.  The eerie thing about the last couple days of the sell-off is that rates never came down much, despite some flight from risk.  Of course without any “risk off,” rates could have risen to 3% for the 10 Year Yield.

What this means is rates are likely STILL too high to sustain healthy economic growth despite what the pundits say.  Central Banks are taking away accommodation too quickly for the global stock markets and the markets do not like it! 

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

tnx-10-year-treasury-note-market-timing-chart-2018-02-12-close

The “Rate Shock” of rapidly rising rates may have precipitated the stock market decline. The timing works out to the day….

 

Now let’s review the three market timing signals together…. 

Do not use these signals as a trading plan.  They are rough guidelines.

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally with Low Inflation:

Stock Signal YELLOW with SP500 Index in Neutral to Bearish Trend

I say Neutral to Bearish because small caps broke the prior consolidation level but are testing the next level down which could hold.  It DOES say to stay out of small caps for now.

Note: I’ve updated my criteria for the equity signal for a further U.S. stock market rally to the following: GREEN = Bullish, YELLOW = Neutral, RED = Bearish. 

Explanation: Note that a RED signal does not mean we should not buy.  A GREEN signal does you cannot sell some exposure.  It depends on what is going on in the economy and how oversold/overbought the market is at a given point whether the Bearish signal is to be sold, sold on the next bounce, etc. and whether a Bullish signal is to be bought or profits should be taken.  YELLOW does not mean the end of the Bull or Bear. It means look for possible entry points within the existing trend, Bull or Bear, but preserve capital if the entry fails.  Our strong intention is to buy low and sell high.  By the way, I will keep showing the prior orange “Trigger lines” in the charts for now as reference points only; they have historical value for us from the post-election period.

Gold Signal YELLOW with Gold in a Neutral Trend.

GLD is coming off a failed breakout which makes it “Yellow” but ABOVE the “Trigger line” which is positive for gold, and usually worse for stocks at least on a relative basis, IF inflation is getting out of hand.  Then it’s gold up (based on negative real rates of return on debt), stocks down (again, eventually that is, if inflation becomes too “hot”).

Rate Signal GREEN with 10 Year Yield in Bullish Trend (but could soon turn neutral from this high)

10 Year Yield ABOVE the “Trigger Line,” good for stocks, not bonds.  I said last week: “Yet the trend is becoming too steep and a pullback in rates will likely start soon.”  It is too soon to know whether this is a temporary high or not.  Rates will move higher as the recovery progresses regardless of short term gyrations UNLESS we go back into recession, which would cause a big Treasury rally.   

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or ask a question…  Pay it forward too by sending the link to MarketTiming.Blog (that link will immediately connect them to this webpage) to a relative or friend.  Thanks for doing that.

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 © 2018 By Wall Street Sun and Storm Report, LLC All rights reserved.

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

Market Timing Brief™ for Bitcoin 2-11-2018 (2-14-2018 Update): Bitcoin Still Falling Inside a “Bullish Wedge.” No Reversal Yet.

A Market Timing Report based published Sunday, February 11th, 2018

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).  If you are not interested in bitcoin, see my latest post by scrolling down to the SP500 section HERE. Thank you.

UPDATE 2-14-2018: Bitcoin Testing the Upper Line of the Wedge

If it breaks UP, it can go much, much higher, but if the line holds, BTC can crash back to the lower market timing trend line or worse.  The last time it overshot at the low end.

BTC-bitcoin-market-timing-chart-2018-02-14-200pm

Must keep going up through that top line or else…

Back to the main issue….

Bitcoin is now once again going down, but could go straight up from here.   That is the uncomfortable truth about the chart, which is still in a market timing down trend despite what seems an enormous bounce from the recent low to around 9,000 (on Bittrex; prices vary across exchanges).  We are back down to 7911 as I type this.  The “positive” aspect of the recent crash in value (of which bitcoin has seen many) is that it’s in a downward wedge, which is normally Bullish.  But it’s also true that the base of the wedge should not be significantly violated, which it was about one week ago at the recent low.  So I would not count on the chart formation to prevent a further fall.  I would risk manage your position as I outlined last week HERE.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 33,300+ people are joining in…

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

My new post about the stock market, gold and interest rates will be out by Sunday at the latest.  It’s been a volatile week  to do market timing for bitcoin!

Before we get to the chart, I should mention the main impediments for recovery of bitcoin value that I see are problems with the “#SAUS Criteria  for Cryptocurrency Success” that I’ve outlined earlier. The four criteria are HEREThe story has been sub-optimal lately with various governments taking shots at bitcoin, especially notably, India, South Korea, and much earlier, China.

The US meeting by the SEC and interested parties this past week was seen as a big positive, but the impact on the chart has mostly washed out.  It was likely expected by all but gullible buyers, taking the bait in the down trend.  If that meeting were in fact a big game changer, the upper trend line shown would have been broken to the upside.  Instead, bitcoin is now falling to the lower trend line in the chart.

Otherwise, bitcoin has not quickly solved the problems with it’s use (I call that simply “Utility”), which include in large part the speed and ease of transactions.  You cannot wait an hour to have your bitcoin transfer cleared while buying a cup of coffee and you cannot put up with having to do tax calculations on every coffee purchase with bitcoin, which is the case now in the U.S.  Every sale for goods is a potentially taxable transaction.  Any gain must be reported to the IRS, although they are happy if you don’t file for the losses.

Now many call bitcoin “digital gold,” but the problem with this idea is that there is nothing backing it.  With gold, you have gold backing the GLD ETF for example (despite conspiracy theories).  Gold has fallen a great deal such as from the peak of around $850 in 1980 (time of Jimmy Carter hyperinflation) to the low near the time of the 2000 tech crash (Aug. 1999 to be exact; gold was $252.05) and then gold rose to $1920.80 in 2011 and is now 1315.70), but you always had gold backing gold.   Bitcoin is just an agreement by various parties to exchange it at a changing price.

Some may note gold can be volatile as well.  Yes, gold can be very volatile after a long run.  On 9-23-2011 after a massive multi-year Bull run, it fell 9.36%, and on 4-16-2013 it fell 11.34%, both in just one day.  Bitcoin has moved 20-30% in a day by contrast.  Something that has no real backing other than a mutual community agreement probably must be MORE stable in price than gold to work as “digital gold.”  It’s not exactly a “Risk Off” asset if it can fall 25% in one day. 

Bitcoin may not, but could easily fall through recent market timing support to a new low.  Yes, it’s anyone’s guess and that is what the statements are out there – big guesses!  Manage your bitcoin holdings accordingly and preserve your principle as best you can. 

You can lose money on speculations, but you cannot lose 50% very often and make it back easily, as that takes a 100% GAIN to get back to even!  Stop losses on cryptocurrencies are iffy because what would you do if bitcoin fell 50% while you were sleeping as it trades 24/7?    If you lose as much as 50%, you MUST have a relatively small position size.  For example, you could risk $500 perhaps and not have it be a difficulty for you.  Or maybe your number is only $100-200.  Invest and trade in any cryptocurrency according to what sort of loss you can sustain, and no more and never on margin or with credit card debt, in my opinion.

Right now the price is at 7,900 according to Siri and 7830 on Bittrex… (3:19 am ET). This chart I saved a few hours ago, but it gives you the layout…

BTC-bitcoin-market-timing-chart-2018-02-10-605pm

Bitcoin is still in a down trend.

 

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.

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 © 2018 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Cryptocurrency, investment, trading | Tagged , , , , , | 2 Comments

Market Timing Brief™ for the 2-02-2018 Close (Updated 2-08-2018): “The Memo Market Drop.” How Low is the Next Bottom? Rates Up, Gold Down. Dollar Turning Up?

A Market Timing Report based on the 2-02-2018 Close, published Sunday, February 4th, 2018…

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

If you are not interested in how to properly track the recovery of the market in accounting terms, skip this section and go to the SP500 Index market timing discussion below it.  Thanks!

UPDATE Thursday, 2-08-2018: A Strategy to Redeploy Cash and Account for Your Net Selling/Buying vs. Losses

I just ran through this process tonight and it will help you manage the recovery in the market and realize where you stand now  Specifically, you will know what money you have put into/taken out of the market as a net value and could then add back.  It will also tell you the gain you have to have to recoup your losses from the top.  If you’ve been invested long into the recent decline as I have, you have some losses for sure.  But some of you took some off the table on the way down or even near the top and have since added some back as I did.  That’s a mix of buying and selling.  I would suggest constructing an Excel spreadsheet in which you list your market timing buys and sells since the 1-26-2018 close (with sells as minuses and buys as pluses) and determine:

1. How much you have bought or sold NET vs. the closing value of your investable assets in stocks on 1-26-2018 – the top for the SP500 Index.  Say your net reduction of stock assets was $40000 to keep it simple.  That’s not a loss.  That is the amount of stock you simply let go of.  The number at the top of the spreadsheet should be the total value of all your stock assets at the 1-26-2018 close.  Then you list your buys/sells below as +’s and -‘s, respectively and have a total at the bottom.  That total will NOT take into account the gains/losses you have from the fall in the prices of the stocks in the list of buys/sells since 1-26.

2. Then determine what the actual complete reduction has been in your total stock allocation from 1-26-2018 to today, which would include losses as well as the net selling/buying you did in #1 above.  Say that total reduction with both selling and losses in asset value was $60000.

3. That allows you to know your total ACTUAL loss (excluding the reduction in stocks due to selling) and means your net loss was only $20000 and you can then determine the loss in investable net worth from the top. That’s all you need to make back on the way back to the 1-26-2018 valuation of your assets.

4. The key is to realize how much the market is likely going to add back to your net worth on the way back up and how much more exposure you could add to help get it there, but without (just as an ex.) increasing your total exposure to stocks vs. 1-26.  That $40,000 number (in the example above) is your target for “buying lower.”  You can add $40,000 in stock buys prior to the market’s recovery to try to capture some gains from what you have sold, and hopefully you add that closer to the eventual low.  You may pick several entry points about “here,” lower and higher as the sell-off then recovery progresses.   Yes, there is always a recovery.  The trick is “from which level”?  I’ll be discussing that in this weekend’s post…

5. If you feel the prospects for the economy are declining now (I don’t, but you may), then you may not want to add anything back and simply allow your current holdings to appreciate back to their prior value if things go well for the U.S. markets and give up some of the gains by holding more cash.  Or you may decide to use market timing to be more heavily invested on the way up than you were on the way down, even if you sold nothing near the top.  You can do that by deploying more cash if that makes sense and feels safe to you.  Use stops on new positions to protect newly deployed capital, but only if you intend to re-enter lower or higher if you are proven wrong!  Being out of the market has a cost too.

Now back to last Sunday’s issue…

1.  SP500 Index Market Timing: I preface my remarks by saying I do not use political information on this blog to make political points.  I use it to analyze the likely impact on markets – period.  I am in fact an independent in practice.  I vote for people who make sense and who are fiscally conservative.  Now back to the wood…

The release of the “Nunes Memo” was a partisan stunt, because it contained incomplete information.  That said, there are issues it raises that could be looked at objectively.  The crux of the memo in investment terms is this:

  1. If the #Memo leads to the firing of Rod Rosenstein, the Assistant District Attorney, which then leads to a stooge replacing him, who then replaces or fires Robert Mueller (a Republican) as Special Prosecutor on the Russia investigation, the SP500 Index will likely go into a deep dive resembling the impeachment of Clinton in magnitude, which I’ve already detailed in a chart HERE.  Go to that link to read the “drum-roll number.”  We’ll have that much of a drop very likely plus or minus 5% if the firing scenario occurs.
  2. If the Memo is used simply as pushback against the investigation and the key two players in the Russia investigation stay in place, the market will recover, unless more members of the Trump campaign and/or administration are implicated.
  3. There will be no Clinton-sized drop in the markets without a perceived direct legal threat to Trump.

Fortunately, on Friday night the Assistant Press Secretary told CNN’s John Berman there was no current discussion of firing either Rosenstein or Mueller.  However, the veiled threat to fire Rosenstein made by Trump to reporters on Friday could make things unstable until he himself recants the threat.  Until this tactic is further clarified by Trump himself, the market could go down another 2-4% from here, but I believe it will then rebound.  It may simply rebound off the Friday low without a further statement by Trump himself.  The clearer Trump is that he will NOT interfere, the better for the markets, which hate uncertainty, and the earlier they will rebound.   

Rising interest rates were also a factor on Friday, but rising rates don’t kill Bull markets.  Employment was stronger than expected, which is also fine during a recovery as long as wages don’t rise too fast. 

The Y/Y rise in U.S. wages at a rate of 2.9% when less was expected was a concern for the markets, though some said the number was in part due to an accounting anomaly.  We are not yet at the point of “out of control inflation” by any means, but we’ll keep an eye on it and on the Fed who has a new chair now by the name of Jerome Powell, and a potential tilt of the Fed given the new members toward higher rates and a more restrictive monetary policy.  This is only a concern if raising rates is overdone vs. what is needed to contain inflation.

I admit, overly aggressive Fed policy could reduce returns in the stock market over the next 5 years, which would mean lower returns and higher volatility.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 33,300+ people are joining in…

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

Note in the chart below, how the market is giving up some of the “excess gains” we accrued based on Tax Bill passage news.  Where will the drop stop?  The drop to date from the intraday high is 3.87%.  I discuss targets in the sentiment section below.

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

sp500-index-spx-market-timing-chart-2018-02-02-close

The “Memo” Correction should end soon unless the key players are fired.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +16.01% vs +21.42% last week.  The “Memo Threat” did not arise until the end of the week, and the market has taken a small dive of about 4%, so expect the spread to become more Bearish this week, unless there is a quick bounce in the markets.  I believe that this is in fact the 6-8% correction I was expecting after the sentiment peak I went over in early January HERE.  The SP500 Index will correct over 20% in my view, if the political situation goes downhill fast.

I also went over the timing of the correction last week HEREThe correction arrived just one week after the shortest interval mentioned last week – about 3 weeks.  The correction actually began just one day shy of 4 weeks from the sentiment peak.   We are down 3.87% off the intraday high.  Without an immediate bounce, we could dip to an S&P500 value of 2715 (-5.5%), the 50 day moving average, which is a very rough target, OR to the top line of the prior channel or 2677 (-6.8%).  I would expect a bounce at or before either of those two targets are reached, unless the political situation worsens as discussed.

AAII.Com Individual Investor Sentiment Poll
Bulls Neutrals Bears
44.77% 26.47% 24.03%
Thurs. 12 am CT close to poll

2.  U.S. Small Caps Market Timing:  The small caps have pulled back about 4.2% from the intraday high.  This probably would have been worse without higher rates, which benefit the financial component of the small cap index (25% as of 12-31-2018 per Vanguard as noted HEREThe drop to the next breakout point would be a 6.20% correction.  The yellow line shown could interrupt the fall as well.  These are just guidelines and possible entry points.  I look at the data behind the price at the time I buy ETFs or stocks.  It is possible the fall we’ve had could be enough unless, as said, the political climate worsens.

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

iwm-russell-2000-market-timing-chart-2018-02-02-close

Another drop in store?

3. Gold Market Timing: Gold is falling now on dollar stabilization.  Europe cannot take much more in the way of Euro strength as their economy is showing signs of cracking.  Rates have moved up in a big way and are headed to 3% perhaps on this move, which will hurt gold.  Preserve profits on trades at a level that suits you.  You can see the failed attempt to break out above the Sept. high (green line).

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

gld-gold-etf-market-timing-chart-2018-02-02-close

, Gold down on stabilizing dollar and rising rates.

4. Interest Rate Market Timing – U.S. 10 Year Treasury Note Yield (TNX): TrumpFlation is intact as a theme of this recovery process, and rates are headed to 3%, perhaps during this move.  If stocks sell off more, rates could stabilize and inflect downward, because money will move into Treasuries as a risk off position. Notice the exponential move starting?  This means exhaustion is ahead and will happen soon, between here and 3% perhaps, meaning rates may moderate vs. current levels for a bit. 

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

tnx-10-year-treasury-note-market-timing-chart-2018-02-02-close

Rates rising.

We need to review our three market timing signals (below the Bitcoin comments)…

5. Bitcoin Market Timing: See my update HERE (which will be posted separately from now on…).

Now let’s review the three market timing signals together….

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally with Low Inflation:

Stock Signal YELLOW with SP500 Index in Bullish Trend

Do not use these signals as a trading plan.  They are rough guidelines.

Note: I’ve updated my criteria for the equity signal for a further U.S. stock market rally to the following: GREEN = Bullish, YELLOW = Neutral, RED = Bearish. 

Explanation: Note that a RED signal does not mean we should not buy.  A GREEN signal does you cannot sell some exposure.  It depends on what is going on in the economy and how oversold/overbought the market is at a given point whether the Bearish signal is to be sold, sold on the next bounce, etc. and whether a Bullish signal is to be bought or profits should be taken.  YELLOW does not mean the end of the Bull or Bear. It means look for possible entry points within the existing trend, Bull or Bear, but preserve capital if the entry fails.  Our strong intention is to buy low and sell high.  By the way, I will keep showing the prior orange “Trigger lines” in the charts for now as reference points only; they have historical value for us from the post-election period.

Gold Signal YELLOW with Gold in Bullish Trend.

GLD is coming off a failed breakout which makes it “Yellow” but ABOVE the “Trigger line” which is positive for gold, and usually worse for stocks at least on a relative basis, IF inflation is getting out of hand.  Then it’s gold up (based on negative real rates of return on debt), stocks down (again, eventually that is, if inflation becomes too “hot”).

Rate Signal GREEN with 10 Year Yield in Bullish Trend

10 Year Yield ABOVE the “Trigger Line,” good for stocks, not bonds.  Yet the trend is becoming too steep and a pullback in rates will likely start soon. 

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or ask a question…  Pay it forward too by sending the link to MarketTiming.Blog (that link will immediately connect them to this webpage) to a relative or friend.  Thanks for doing that.

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 © 2018 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, Consumer Discretionary Stocks, Cryptocurrency, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , | Leave a comment

Market Timing Brief™ for Bitcoin 2-03-2018 (2-07-2018 Update): Bitcoin On the Line (update) and How to Risk Manage Your Cryptocurrency Holdings.

A Market Timing Report based published Saturday, February 3rd, 2018

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).  If you are not interested in Bitcoin, please see the prior post and scroll through the Bitcoin charts to the SP500 section HERE. Thank you.

Bitcoin Update 2-04-2018 at 8:11 pm : Bitcoin is right on the edge.  It must hold this level or it will drop to about that horizontal line at about 5321.  Look over the prior comments to understand what the implication of the market timing wedge is!  Bitcoin is now at the bottom of that wedge.  I believe it’s more likely to AT LEAST form a double bottom or descend to the next level of support and do so, than go straight back up due to the severe technical damage we’ve seen.

Also realize the support line is just the next market timing target, not a definite braking point for a fall.  We’ll have to see what the charts look like when and if Bitcoin reaches the support line to know whether it’s worth a shot.  I do think it’s possible that it could flush out a lot of speculators however.  Stay tuned.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 33,300+ people are joining in…

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

BTC-bitcoin-market-timing-chart-2018-02-07-752pm

Bitcoin is literally on the line.

 

Bitcoin Update 2-04-2018 at 12:37 pm : Bitcoin has failed to reverse and stay above the 9025 1-16-2018 market timing low on Bittrex (this low will vary by exchange).  That’s a negative I see today with the price at 12:38 pm ET at 8451 on Bittrex.  The next minor support is 7900, yesterday’s low on Bittrex and then the lower line of the market timing wedge in the chart below which today is at 7854.

Remember that numbers that are based on trendlines will change from one day to the next and prices will vary across exchanges.  Exchange prices are about the same if volatility is low, but when it rises, generally you will see prices varying greatly across exchanges.

Breaking both of those market timing support lines could lead to further significant damage to Bitcoin’s chart/price.  Remember also, however that markets can swoon below obvious support lines, shake out some traders and investors and then zoom back up, so you need to have a trading/investing plan around your cryptocurrency holdings, such as “I’ll take an X% loss, but below there, I am OUT.”

Taking Profits on Speculations After Large Gains

You also need to learn how to take profits on speculations like cryptocurrencies or small or microcap tech companies.  Selling your entire principle after the price has gone up in big way is something I just did with Ripple recently when its price went up to over 14 times my initial investment.  That’s the minimum you should take out of your speculation.  In fact, I took out the principle PLUS 100% profit and will ride the rest of my Ripple unless the story falls apart.  I still have a 100% profit regardless of whether the rest goes to zero.  This is a luxury I realize, but when it happens, don’t fall asleep!  At least take out principle on speculations with huge profits!  If the story keeps improving and the price keeps rising, you may want to wait for the first increase in volatility to take this kind of profit.  Above all, have a plan that works for you.  This is simply one idea about how to manage speculations.

Risk Management of Speculations

Going back to the risk side of the equation, if you have no “get out point,” which should recognize the degree of volatility of cryptocurrencies, you are not a serious investor.  If a coin can vary by 20% in a day, you don’t want to use a 5% stop.  You simply should not invest in it in the first place (or alternatively you should invest far less) if you cannot take a certain level of loss.  Position sizing relative to your entire portfolio is something you must learn about and practice, or you are simply not serious as an investor or trader.  Google it and read Van Tharp’s book (not light reading, but covers the concept well) “Trade Your Way to Financial Freedom.”  Position size properly and protect your principle and large profits with trailing stops (Google it!) and you will be ahead of the majority of “fly by the seat of the pants” investors.

I’ll give you one example of risk assessment and management related to Bitcoin: GBTC, the Bitcoin Investment Trust, which has fallen 66.4% from its all time high of 38.71 and is still 40.5% overvalued vs. the net asset value of the Bitcoin it holds as shown by Morningstar HERE You are paying a huge premium for it, which could go to zero on any single day. 

If you own GBTC (which you shouldn’t in my opinion), and you’re not willing to hold through a decline of about 75% (which may or may not occur from this point on), you should not buy it in the first place.  That number takes into account the inherent volatility of the shares. You should not own ANYTHING with that amount of volatility unless you are willing to lose most or all of your money.  Invest accordingly and please, buy Bitcoin if you want to “own Bitcoin,” don’t buy an ETF/trust that sells at a massive premium to what it owns!

Stay tuned on social media at the links below during the week to stay up to date. Posting here is more time intensive for me and slower, so social media is a key way I can stay connected with you quickly throughout the week.

Follow me on BOTH networks, as each of them sometimes runs into traffic or technical issues.

Be sure to review the charts below to add clarity to the above text….

Bitcoin Update 2-03-2018 at 9:10 am: Bitcoin survived a market timing test of the lower line forming the normally Bullish downward wedge shown in the chart below. Please read the prior post HERE to catch up (3 charts and comments on what can “save Bitcoin”).  The second phase of recovery, if this recovery is in fact real, is the upside reversal above the horizontal line shown in the chart.  These are psychological levels that can trigger buying,  although they are not volatility based levels.  Look at them as checkpoints of technical chart healing.  The next step would be breaking that Bullish market timing wedge to the upside which would cause a major swing UP in my view.  If BTC merely rises to the upper wedge line and fails, the prospects of a real “recovery” would be greatly diminished.   

BTC-bitcoin-market-timing-chart-2018-02-03-906am

BTC is attempting a recovery after a crash or “huge decline” if you prefer.

My new post about the stock market, gold and interest rates will be out by Sunday at the latest.  It’s been a fast paced week!

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 © 2018 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Cryptocurrency, investment, trading | Tagged , , , , , | Leave a comment

Market Timing Brief™ for the 1-26-2018 Close (2-02-2018 Update on Bitcoin): The “Tax Plan Reset.” Up Trend After Reset Continues in Large Caps. Gold Up On Dollar Down, Interest Rates Up.

A Market Timing Report based on the 1-26-2018 Close, published Sunday, January 28th, 2018…

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

NOTE: If you are uninterested in Bitcoin, scroll down past the first three charts…

2-03-2018: Latest Bitcoin Update was published HERE.  From this point on, all Bitcoin updates will appear as separate posts or separate threads of updates on the same post focused on Bitcoin.

2-02-2018 Bitcoin Update: Crash mode, but with some support lines. What can save Bitcoin?

The chart is below, but first, let’s go over what is driving things short term…

#SAUS:

Story: The story with India is definitely a big negative.  The government has banned all transactions with Bitcoin to defend its currency.  After all, why use the rupee if you can use BTC to buy your coffee?  They are NOT yet banning it as a store of wealth, but this definitely decreases the UTILITY of Bitcoin as India is seen as a huge market, and a market that could provide leadership to other nations in restricting transactions.

Access: Bittrex is a popular exchange that has not allowed US dollar trades directly into BTC, but says it will do so now.  Today would be a good time to do it; however, there is no intraday fix for access and this crash is happening now, not next week.

Utility: Big hit on utility as noted in the story section above. What BTC really needs is a big POSITIVE story to counteract the negative India story.

Safety: Tether is in the news as a possible fraud for being tethered to nothing vs. dollars, which was stated by them.  They are being investigated.  This does not impact BTC, Etheruem and other coins.  So safety is not an issue here.  The feeling of safety vs. a crashing BTC is an issue however and could scare a number of new investors off as they “freeze in the lights.”  That impact further reduces demand on the way down.

What we saw in the chart previously was a pullback.  What we have now is a crash with POSSIBLE support points that actually mean little until the market takes note of them and moves up.  Several support lines worked for a day or two and were then broken.  Understand this: Technicals will not likely save BTC.  It will have to be fundamentals in my view especially if the above two lines are broken.  You can always see a bounce to lower highs in a crash, so be careful what you bite on.

Now for the chart…  The up trend line hits at about 7,500.  Below there it’s all guess work.  Right now Coinbase is quoting 7,907 as the price, a bit above there.  Bittrex, which tends to be lower except during these big downdrafts is at 8,377.

You can also see that the down trend channel had support at about 8,000, so those are your final two support numbers.  The upside on a bounce is that upper down trend line which is now at 11,100-11,200 as I view it in the browser.  Price must rise above the top down trend line convincingly and move up for a recovery of the up trend to occur.

The downward wedge formed by the trend lines shown is bullish technically, but not a guarantee.  It means that volatility is FALLING on the way down.  Rising volatility in a down move would suggest a bottomless pit falling back to zero, but a wedge does not; however, no single technical factor is a guarantee, because the trend is still down for now.  Beyond that, you can look at volatility ranges, but those were broken badly last night and provide only a very short term idea of the active price range of trading.  Bottom line?  Decide what you can afford to lose if you are under water and stick to your plan.  No one can tell you what BTC is worth today other than what people are paying for it.

BTC-bitcoin-market-timing-chart-2018-02-02-744am

Support levels have not held.

1-31-2018 Bitcoin Update: Triangle Broken but Holding Support at a Lower Low

That’s not a good thing.  We’re seeing lower highs and lower lows.  Price has broken through the top slanted line, which is the long term trend line for 2017 into 2018.  It has also broken the triangle in the prior chart (below) to the downside.  The only thing left is a couple of support levels around 9000 and 10000.  It must hold one of these to avoid serious further damage. 

Bitcoin could really use a UTILITY boost like the lightening project increasing transaction speed.  Without that, traders will decide the price.  Demand tends to be tentative after a fall like this. The STORY has been under pressure with detractors falling over themselves to say it’s going to zero.

Increased ACCESS at Robinhood (cheap trading site) could help boost demand as they roll out that access to more and more states.  SAFETY will improve with enhanced regulation.  Remember unless you are criminal or a crook who does not pay taxes on gains, you should be happy cryptocurrencies are being regulated, because otherwise, they will be ELIMINATED for all but thieves trading between each other, which will be outside the developed world.  Better to have regulation than lose everything.

Remember my cryptovaluation scheme: #SAUS.  Story, access, utility and safety.

BTC-bitcoin-market-timing-chart-2018-01-31-1104am

Bitcoin has to make a stand.

UPDATE 1-29-2018 Bitcoin Update: Triangulating.

Bitcoin will likely move in the direction of the break of the market timing triangle.  Traders no doubt have an eye on this, as valuing Bitcoin is difficult.  Lately it’s worth from $9,000 -$20,000!  Staying above the horizontal line would be a plus.  Breaking out above the top line of the triangle, better!

BTC-bitcoin-market-timing-chart-2018-01-29-244pm

Triangulating. Follow the direction of the next break, up or down if you are trading.

Back to this week’s issue on the big reset in the markets…

1.  SP500 Index Market Timing: The market has continued higher, despite market timing signals that say it is a stretched.  I’ve explained recently, and I think it’s important to repeat, this is in part due to what I call the “Tax Plan Reset” (#TaxPlanReset on social media). 

Before the Tax Plan bill was passed by the GOP and the President, the market had certain expectations, but after passage, expectations are much higher.  There are provisions in the tax plan that allow capital expenditures to be expensed in the first year rather than depreciating them over multiple years.  This will add fuel to small business creation, which is where the majority of new jobs comes from.  This means more business for the larger businesses serving them and those larger businesses also have the same new tax advantage.  Lower tax rates for many companies (watch out for the losers!), will add fuel to the economy.  We are spending money that should normally be saved against our debts in good times and spending it on growth.  We will have to pay for this later, or rather our children will have to pay.

But for now, this means we can spiral up.  Party on Garth!  (anyone get that reference?)  Remember the tax changes on depreciation make earnings look better in the short term and worse in the longer term, but it is still a boost to business, because capital NOW invested intelligently is worth far more than capital 5 years from now.

The other side of that coin is that businesses overpaying for other businesses with tax break money or repatriated money will be punished for using capital poorly.  Repatriated money only has value if it is used well, which for shareholders means being properly invested or returned to them through increased dividends and buybacks.

There will be new businesses created through the new money available to the U.S. economy, but a good deal of it will enrich shareholders.  This money in turn will be reinvested in the same or different stocks by many and some will be spent, fueling the economy, and driven stocks up in price.

This means we need to be patient in seeing the impact of the Tax Plan unfold, and that the market may go far higher than anyone expected, not just on the optimism investors have, but also on the magnitude of the fiscal stimulus.

The catch?  The catch is that after the degree of optimism we saw among investors just a few weeks ago, there is invariably a correction in the market.  It could be a modest correction (4-8% from closing high to closing low of the dip that follows) or more than modest (over 20%), but in my view it won’t be the end of the run for the Bull.

For anyone new to my thoughts, review this on the upcoming market correction: HERE (under sentiment).

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 33,300+ people are joining in…

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

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

sp500-index-spx-market-timing-chart-2018-01-26-close

Increased expectations led to the Tax Plan Reset.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +21.42 vs +32.72% last week.   After the extreme Bullishness reported on 1-04-2018, we can expect sentiment to bob up and down at a higher level, before easing.  How much time do we have to the next correction?  If it’s a smaller one after massively high sentiment, as in the three sentiment peaks occurring from 2004-2006, it will be in about 3-23 weeks from 1-03-2018.  That’s simply historical data, not a crystal ball.

If it’s a larger drop as in 2011 (19.4% from closing high to closing low) after peak sentiment, it COULD be 18 weeks from 1-04 as an example.

To summarize, based on the prior experience with these massive sentiment peaks, the lag to correction big or small is from NOW (3 wks from 1-04 is now!) to 20 weeks from now.

These are just examples and the actual timing could be entirely event driven by an event we are not expecting. 

AAII.Com Individual Investor Sentiment Poll
Bulls Neutrals Bears
45.45% 30.52% 24.03%
Thurs. 12 am CT close to poll

2.  U.S. Small Caps Market Timing:  Small caps under-performed large caps this week as they have since 1-16-2018 (take a look at last week’s comparison chart; link to upper right). This is a sign that investors are trimming their risk appetite, and we’ll need to keep a close eye on it, and do our best to use market timing to protect profits.  It could admittedly simply be a pause to be followed by another move up.  My main exposure to higher risk US stocks is in mid caps as I’ve said.

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

iwm-russell-2000-market-timing-chart-2018-01-26-close

Small caps lag large.

3. Gold Market Timing: Gold is now testing the 2017 high.  The U.S. Dollar trend was your friend in gold this week as the administration tried to back out of comments made by Sec. Mnuchin about the joy of having a weak dollar in the short term (see my social media comments). Watch the dollar this week and protect gold profits in trading positions.  TrumpFlation is here and may sustain the rise in interest rates. See the next section on that. 

Gold ETF (click chart to enlarge the chart; GLD): (CORRECT DATE IS 1-26-2018 Close)

gld-gold-etf-market-timing-chart-2018-01-26-close

Testing 2017 high. Follow the dollar!

4. Interest Rate Market Timing – U.S. 10 Year Treasury Note Yield (TNX): The 10 Year Yield is currently levitating above the green line shown in the market timing chart below.  It must hold that level and then rally or financials (and perhaps the entire market) will correct at least a bit. If it breaks out again to the upside, we’ll know the TrumpFlation thesis is still intact.

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

tnx-10-year-treasury-note-market-timing-chart-2018-01-26-close

Must continue rising to support further financial stock gains and perhaps SPY/SPX gains.

We need to review our three market timing signals (below the Bitcoin comments)…

5. Bitcoin Market Timing:  A quick note.  Bitcoin has been holding above the support I outlined last week.  I hope you’ve adjusted your position size to remain a Bitcoin millionaire if you became one during the rise of Bitcoin.  I brought this up on January 7th just after a big bounce in Bitcoin.  If you haven’t, you really don’t know what you are doing.

If you “have” wealth, you know the rules.  If you “want” wealth, you don’t have any rules and you eventually lose most of, too much of, or all of what you have gained, whether in bitcoin or in risky stocks.  Even Berkshire Hathaway has fallen 50% multiple times from pricey market tops.  “Having wealth” doesn’t mean you need to be a millionaire yet, but you are on your way if that is the state of your consciousness, or “mind” if you prefer.  Even “safe stocks” like GE can become risky.  Or remember Enron?  WorldCom? Follow the guidelines of investing that are meant to prevent greed and large losses, or be prepared for huge disappointments ahead. Learn about position sizing and trailing stop losses and use them.  They can protect any investor from huge market declines.

Now let’s review the three market timing signals together….

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally with Low Inflation:

Stock Signal GREEN

Staying long for now. 

Note: I’ve changed my criteria for the equity signal for a further U.S. stock market rally to the following: Green = Bullish, Yellow = Neutral, Red = Bearish.  Note that a Bearish signal does not mean we should not buy.  It depends on what is going on in the economy and how oversold the market is at a given point whether the Bearish signal is to be sold, sold on the next bounce, etc.   I will keep showing the prior orange “Trigger lines” in the charts for now as reference points only.

Gold Signal RED

GLD is ABOVE the “Trigger line” which is positive for gold, and usually worse for stocks at least on a relative basis, IF inflation is getting out of hand.  Then it’s gold up (based on negative real rates of return on debt), stocks down (again, eventually that is, if inflation becomes too “hot”). Lately, it’s been dollar down, gold up, and stocks up.  The dollar is playing a role against the backdrop of rising rates.  Down dollar with rising rates and falling bonds, means investors are losing in longer term debt.  Gold looks great compared to that.

Rate Signal GREEN

10 Year Yield ABOVE the “Trigger Line,” good for stocks, not bonds.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or ask a question…  Pay it forward too by sending the link to MarketTiming.Blog (that link will immediately connect them to this webpage) to a relative or friend.  Thanks for doing that.

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 © 2018 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, Consumer Discretionary Stocks, Cryptocurrency, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , | 2 Comments

Market Timing Brief™ for the 1-19-2018 Close (1-23-2018 Bitcoin Update): Stock Market “Pause” Ahead, but When? Gold Rising on Rising Rates and Falling Dollar: A Prescription for Second Fiddle Currency Status.

A Market Timing Report based on the 1-19-2018 Close, published Sunday, January 21, 2018…

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

UPDATE 1-23-2018: Bitcoin is Holding the Line…Two Lines…

Bitcoin is holding two major market timing support lines after two successful tests below both (see chart below).  Remember, the precise value (even rough value!) of Bitcoin is an unknown, so it will tend to trade technically to an extent. 

Predictions of bitcoin rising to 100,000 are not too helpful to those watching these recent highly volatile swings.  Do not invest anything you cannot afford to lose. Recently central bank/government regulation efforts are popping up around the world as they begin to wake up to the potential of bitcoin to displace their currencies. 

Regulation is therefore DESIRABLE, because without it, all cryptocurrency trading will be banned. Pay your taxes on all transactions (when you buy a house with BTC, that is a taxable event if you have a gain from the time you bought the BTC with US dollars for example and you can declare losses against gains).  The revenue the government gets from cryptocurrency trading will please them and regulation will bring in more investors and drive out the criminal types  and force them to hide under new rocks.

A further decline of BTC below the two market timing lines shown would cause a serious further decline in my view.   This could be triggered by ANY move below the lower of the two recent lows shown in the chart.  And it could happen at 3 am ET.  That is why you must control your risk through proper position sizing.

BTC-bitcoin-market-timing-chart-2018-01-23-1156am

Holding major support lines after two tests below.

Back to this week’s issue, including thoughts on when the first major correction will begin….

1.  SP500 Index Market Timing: Both parties and our President decided to shut the government down this past Friday at 12 midnight.  How much market reaction there is depends on how long it continues.  It does not help to reduce the productivity of the nation, and such a situation was entirely avoidable in the first place.  Government is not getting all that you want.  It’s about compromise, like it or not.  The truth will be told here.  They ALL could have made a deal, as deals are not just what ONE side wants.

The Democrats were asking for a bone on DACA in the funding resolution, and the GOP decided to force them to the table on ALL of immigration to get their DACA deal.  Now President Trump has dug his heels in and says the government must be reopened for him to consider DACA.  And on it goes.  In the end, both sides will have to compromise, the impact of this will be limited and we will move on, so I’m staying invested, but watching stops on profits of as well as principle in all trading positions.

At the moment, we can guess that the markets will not behave horribly on Monday, as there was no deal in sight well before the market closed on Friday.  The S&P500 closed at a brand new closing high on Friday.  The situation must be resolved within a reasonable period of time.  If it is, this will have been just one more blip in a Bull market, one that is likely going to hit pause in the coming months.

When will the “pause” occur?  I favor between now and “go away” time in May.   It’s possible though that the “pause” will be in the summer or fall instead, but regardless, all of the gains going forward will be wiped out, before the Bull market resumes.  That’s my view based on sentiment.

As I’ve told you, I’m concerned about the recent sentiment peak as outlined 2 weeks ago HERE.  More on sentiment, just below the chart…

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 33,300+ people are joining in…

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

SP500 Large Cap Index (click chart to enlarge; SPX, SPY): The new high was not that much higher than the prior four closes, so some deceleration is apparent.

sp500-index-spx-market-timing-chart-2018-01-19-close

Brand new high vs. recent off the wall sentiment.

Survey Says!  Bullish sentiment rose somewhat this week as I expected, given the last extreme.  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +32.72% vs. +23.60%  last week.  The same sort of pattern occurred back in early 2011 during the ramp up to the final high preceding a large correction/Bear (>20% drop).  This does not mean we’re going to jump out of the market entirely.  We’ll be preserving profits and watching stops on excess exposure though to provide some cash to buy back exposure at lower prices.

AAII.Com Individual Investor Sentiment Poll
Bulls Neutrals Bears
54.11% 24.50% 21.39%
Thurs. 12 am CT close to poll

2.  U.S. Small Caps Market Timing:  Small caps have been underperforming large caps since the November low as seen on the chart.  The rising yellow line is SPY, the S&P500 Index ETF.  Small caps are still ahead since the 2016 election, but the recent lag fits the picture of a market bracing for a drawdown.  It’s harder to get out of small caps as it gets later at the party.  Still, there has been a recent breakout and as long as the gains can be held, small caps can continue to move up.  A reversal below the green line would result in further significant further losses.

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

iwm-russell-2000-etf-vs-spy-market-timing-chart-2018-01-19-close

Small caps have been lagging large caps recently.

3. Gold Market Timing: Gold has been doing well, but now faces resistance levels just overhead, not to mention elevated interest rates which are a bit stretched, though rising.  From the post-election low, GLD has not returned as much as the SP500 (and dividends are not included; SPY is in yellow on the chart below).  Gold typically does poorly in times of economic strength with low inflation.  Since mid-November, gold has been rising with rates, but that slowed a bit last week as rates went up to even higher highs.  As discussed last week, gold can only work in a setting of rising rates if the Federal Reserve falls behind in raising rates ahead of inflation. 

A factor that has been helping gold is the falling dollar.  As the dollar would be expected to rise with rising rates and a robust economy, the fact that it has been falling is of concern.  I believe the crux of this is TrumpFlation concerns.  Trump is no fiscal conservative, and his tax cuts just make the entire fiscal picture worse despite the strength we’ve had in the economy.  To the world, that means trouble for US debt repayment down the line, so rates rise and the dollar falls. 

China is in the beginning stages of a “War on the U.S. Dollar.”  They want the yuan to rule the world.  They are currently making a move on the use of U.S. dollars to settle oil transactions in petrodollars.  If U.S. leadership continues on the current path, the U.S. dollar will take a seat next to the British pound, the currency of a former empire. The dollar will still significant on the world stage, but will play second fiddle to China.  The U.S. needs to wake up now, or it will lose the long game!

Gold ETF (click chart to enlarge the chart; GLD): Gold lagging the SP500 Index (yellow line)…

gld-gold-etf-vs-spy-market-timing-chart-2018-01-19-close

The rise with rates has slowed.

4. Interest Rate Market Timing – U.S. 10 Year Treasury Note Yield (TNX):

There was in fact an impressive move in Treasuries this week.  It led me to max out my exposure to financials once again.  The bond gurus, Bill Gross and Jeff Gundlach (former drummer now billionaire bond investing guru) say the Bear market in bonds is now upon us.  This will mean further rotation of assets from bonds into stocks, which could help fuel the final rise of the markets and lead us to a Bear market.

But don’t despair because you can always find an ultra-Bull somewhere, this time appearing as Tom Lee, who has returned to being highly Bullish, predicting ELEVEN more years of a rising stock market with a wild ranging prediction for the top of 6,000 to 15,000 for the SP500 Index.  This year, his target is 3025.  Or you may find the less sanguine outlook of Morgan Stanley to be more on the mark.  Listen HERE…

I would say that it’s not wrong to look at the big macro picture, but making numerical market predictions beyond the immediate few weeks or quarter is nonsense.

We’ll follow the technical market timing data as well as the fundamentals, and follow good position sizing and manage our exposures, and leave the wild guesses to the overpaid gurus.

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

tnx-10-year-treasury-note-market-timing-chart-2018-01-19-close

Rates up with dollar down means trouble.

Now, as usual, we need to review our three market timing signals (below the chart after you review it…)

Let’s review the three market timing signals together….

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally with Low Inflation:

Stock Signal GREEN

Staying long for now. 

Note: I’ve changed my criteria for the equity signal for a further U.S. stock market rally to the following: Green = Bullish, Yellow = Neutral, Red = Bearish.  Note that a Bearish signal does not mean we should not buy.  It depends on what is going on in the economy and how oversold the market is at a given point whether the Bearish signal is to be sold, sold on the next bounce, etc.   I will keep showing the prior orange line for now as a reference point.

Gold Signal RED

GLD is ABOVE the “Trigger line” which is positive for gold, and usually worse for stocks unless there is inflation moving faster than the Federal Reserve response to it.  Then it’s gold up, stocks down. The dollar is playing a role against the backdrop of rising rates as discussed above!

Rate Signal GREEN

10 Year Yield ABOVE the “Trigger Line,” good for stocks, not bonds.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or ask a question…  Pay it forward too by sending the link to MarketTiming.Blog (that link will immediately connect them to this webpage) to a relative or friend.  Thanks for doing that.

Note: My monthly newsletter is now CLOSED to new subscriptions.

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 © 2018 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, Consumer Discretionary Stocks, Cryptocurrency, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , , , , | Leave a comment