Market Timing Brief™ for the 3-04-2016 Close: Bear In Hiding for Now. Gold Rally Solid Despite Rising Rates.

A Market Timing Report based on the 3-4-2016 Close, published Sunday March 6th, 2016

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

1.  SP500 Index: The overall US stock market is now OUT of Bear market territory by the criterion I am using (see prior issues), but if we are headed into a recession as I went over last week OR if earnings continue to fall in Q1 as many expect, these recent gains will not survive.  There is no particular reason why the SP500 cannot move higher before earnings warnings strike.  SPX 2019.39 is the next upside goal for the Bulls.  I believe earnings will be the impetus to drive the markets up or down, and my suspicion is that we move down again.

Sentiment is about split among individual investors (AAII.com) with the Bull minus Bear spread at about 0 this week (+2.8%).  We’ve only had the single “Sentiment Shock” I pointed out weeks ago.

sp500-index-market-timing-chart-2016-03-04-close

Stocks are out of Bear market territory…for now.

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

2. U.S. Small caps are above the Oct. 2014 low, but are now testing just above another major low (see below).  A reversal here could induce strong selling.  There has been an approximate 50% retracement from the recent low from the prior all time high.  That is not atypical after a decline of the magnitude seen.

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

rut-small cap-index-market-timing-chart-2016-03-04-close

Small caps are above my Bear market trigger number.

3. Gold: The gold rally is solid, but it’s extended, so buy pullbacks, not the “rips” UP.  Gold has rallied hard on every U.S. dollar decline of significance as the second chart below shows.  Follow the U.S. dollar to follow where to enter this gold rally.

Gold ETF (click chart to enlarge; GLD):

gld-gold-etf-market-timing-chart-2016-03-04-close

Gold is stretched now.

Relationship of Gold Rally to Dollar Weakness:

gld-gold-etf-market-timing-chart-2016-03-04-close-vs-UUP

When the US dollar falls, gold rises!

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): We hit the 1.902% yield level, and the yield fell. Rates must decline further or the Fed will be raising rates very soon.  Read my Twitter/StockTwits feeds from this week.  There is a risk that IS NOT in the market that the Fed raises rates again.  Perhaps they won’t do it in March due to fears in the markets, but oil is rising and core inflation is up 2.2% year over year and that is what the Fed follows.  Those two facts may end up driving a Fed rate hike.

tnx-10-year-treasury-note-market-timing-chart-2016-03-04-close

Rates tested 1.905%. Need to hold below there or it’s bad news on Fed rate hikes (they will occur!).

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

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

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