A Market Timing Report based on the 12-31-2015 Close, published Sunday January 3rd, 2016

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

Happy New Year to you all!  Let’s make this a great year whatever the market throws our way.

1.  SP500 Index: Last week I said: “Now would be a perfect time on the chart for the Bears to reassert themselves.”  It took a while, but finally on New Year’s Eve, the market marked a FOURTH failure vs. the top green line shown in the chart below.  The Bulls will have to come up with a solid employment report on January 8th and great fourth quarter earnings to follow that or this market will test still lower.  The next downside targets are marked on the chart.  I am expecting more downside.  Things change quickly, so please keep in touch via Twitter and/or StockTwits using the links just below… 

Keep up to date at Twitter and StockTwits: See my messages on Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

SP500 Index Chart (click to enlarge; SPX, SPY):

SP500 Fails for a Fourth Time

2. U.S. Small caps did in fact turn over as suspected last week.

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

Small caps slipping again.

3. Gold (once again!) is lingering BELOW prior major support.  With the Fed planning rate hikes into a deflationary environment, gold will likely continue to languish, short of a financial panic.  The dollar will continue to strengthen as long as the Fed stays on their current course.

Gold ETF (GLD; click to enlarge):

Gold consolidating below prior major support – STILL!

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): Also correct from last week: “Rates are about mid-range and are not likely to rise much while the Federal Reserve is raising rates, unless inflation does actually show up.” You can safely hold bonds and Treasuries for a while as long as the Fed remains relatively hawkish vs. the rest of the world.  Junk bonds are another story if the Fed succeeds in tipping the U.S. economy into a recession.  Rates have fallen from the initial spike when the Fed hiked the Fed Funds rate by 0.25%.  That’s what we expected.

If you see rates rise above that 12-16 level, start paying attention.  If the Federal Reserve keeps going with their current view/actions, long rates will continue to stay stable and will likely fall somewhat.  If they cause a recession, rates will fall harder.

Rates push down again with stocks selling off.

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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.

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