Market Timing Brief™ for the 1-15-2016 Close: Stocks On the Brink. Gold Teetering. Rates Solidly DOWN.

A Market Timing Report based on the 1-15-2016 Close, published Monday January 18th, 2016

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

1.  SP500 Index: I said “We’ll be back at the Sept. 2015 low if not the Oct. 2014 low fairly soon.”  We hit the Sept. low on Friday and bounced. Will that level hold or will we descend to either the August intraday low or the Oct. 2014 low? No one can claim to know, unless they know that the U.S. is undoubtedly going into a recession.  Maybe a few are fairly certain of that despite others being as firm in the opposite direction.   However, I’ve noticed that some die-hard Bulls are admitting that the market may still weaken a bit more, even if it does not reach the -20% level (which as I said last week does not actually define a Bear market for me).

Stay up to date via the social media links below, because regardless of the outcome, big money is going to be made or lost in a short period of time.  Rising volatility is seeing to that.  The VIX did collapse fairly hard into the close on Friday, but remains above the prior high of 26.81.  If it collapses below that on Tuesday, we could see a VIX reversal and a healing market into this week.

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-index-market-timing-chart-2016-01-15-close

Full retest of August low.

2. U.S. Small caps are crashing much faster (higher beta) than the SP500 Index.  Stay away.  Stick with safer large caps with growth prospects and financial stability.  I warned you to stay out of them, although I did take an early bite on Thursday of mid-caps.  That position could work out early this week however.

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

rut-small cap-index-market-timing-chart-2016-01-15-close

Bad break of support.

3. Gold is barely above the prior breakout.  If stocks recover from here, which is not a given, gold may go sideways to down.  I believe it has been a “risk on” trade with the expectation of rising Fed dovishness and a weaker dollar.  That said, I am not impressed with gold’s action of late and have no trading position in GLD, just a long term position for diversification out of currencies.

Gold ETF (GLD; click to enlarge):

gld-gold-etf-market-timing-chart-2016-01-15-close

Gold is barely hanging on above support.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): I said rates would likely continue to fall. They did and are likely to hit the bottom of the range soon at 1.905%.  I sold a bit of exposure at the end of the week as Treasuries (TLT) became a bit overbought.

tnx-10-year-treasury-note-market-timing-chart-2016-01-15-close

Rates still falling toward support.

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.

I thank Worden Brothers for the charting system I use to post these charts.  If you want to know more about the charting system I use every day, go to my “Other Resources” page here:  Other Resources   It makes it much easier to follow along with me if you can see the charts and manipulate them on your own computer.  It’s a great investment to have an excellent charting system.  Check it out with a free trial at the link above.

Note that the newsletter is now CLOSED to new subscriptions: Join the Wait List to Join the Newsletter as a Loyal Subscriber, Opening again for the April 3rd issue. If you join and don’t read the newsletter, you will be deleted. Why? I don’t publish to non-readers as other newsletters do. I surround myself with committed people who value what we are doing. Stay tuned here in the meantime and follow all the action via the Twitter® and StockTwits® links above.

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

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