Market Timing Brief for the 7-31-2015 Close: Stocks Bouncing with Hesitation. Gold Found a Level, but no Bounce Yet. Treasuries Rally Further.

A Market Timing Report based on the 7-31-2015 Close, published Saturday August 1, 2015

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

1. The SP500 Index hesitated after the Fed FOMC statement that referred to “solid job gains” saying specifically, ” The labor market continued to improve, with solid job gains and declining unemployment. On balance, a range of labor market indicators suggests that underutilization of labor resources has diminished since early this year.”  This makes an earlier Fed move possible with a big “BUT.”  The “but” is that the worldwide economy is slowing in the face of deflation.  Added to that was the Employment Cost Index coming in at a very weak 0.2% month/month.  The lack of wage growth has been a likely drag on consumer confidence of late and could restrain retail sales.

sp500-market-timing-chart-vs-world-2015-07-31-close

Market pausing after the Fed and disappointing employment cost index.

(See my messages on Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

2. Small caps found support and as the second chart shows below, have been outperforming the large caps since the October low.  In fact, if you bought small caps at every large cap low, you would have done very well.  Perfect market timing is impossible to achieve, but reducing risk at highs and increasing it at lows (selling and then buying back higher beta) works.

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

rut-small-cap-index-market-timing-chart-2015-07-31-close

Small Caps Bounce from Nearby Support

3. Gold’s Bullish engulfing day from last week did not lead to a rally, at least not yet.  

Gold ETF (GLD):

gld-etf-market-timing-chart-2015-07-31-close

Gold has found a level, but no rally so far.

4. Treasury yields 

U.S. 10 Year Treasury Note (TNX,TYX,TLT,TBF): The 10 year Treasury has reached a support level, but with the economy cooling, yields have further to fall as the Fed steps back and reassesses their prior view on raising rates as early as September.

tnx-10-year-treasury-note-market-timing-chart-2015-07-31-close

Yields continue to fall. Bonds winning.

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

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

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 4th 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.

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 © 2015 By Wall Street Sun and Storm Report, LLC All rights reserved.

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This entry was posted in Bonds, gold, investment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries and tagged , , , , , , , , , , , , , , . Bookmark the permalink.

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