Market Timing Brief™ for the 8-19-2016 Close: SP500 Index in Holding Pattern. Gold Stagnation Continues. Rates About to Make a Move.

A Market Timing Report based on the 8-19-2016 Close, published Sunday August 21st, 2016

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

1.  SP500 Index: The market seems to be waiting for Dr. Yellen’s statement at Jackson Hole. In the meantime, the same questions remain that we’ve discussed over the prior 3 weeks, so I’ll direct you there to review them (links to upper right).  The NEW news is sentiment, which I’ll discuss after you look at the chart…

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

sp500-index-spx-market-timing-chart-2016-08-19-close

On a plateau…waiting for a move.

Survey Says!  Sentiment this week among retail investors (AAII.com) showed a Bull minus Bear percentage spread of +9.20% that FINALLY moved vs. last week.  Last week the Bull minus Bear spread was 4.5% and the prior week it was 3.0%.  This gives the market a Bullish tilt, because that sentiment spread is not extreme, yet Bulls are coming on board.  There is room to at least a spread of 20-30ish. A big Bull run could bring the sentiment spread to the mid-30’s.

8-17-16 close to poll Bulls               35.56% Neutrals 38.08% Bears      26.36%

Keep up to date at Twitter and StockTwits where a combined 18,321 people are joining in. Thank you for your interest!  Twitter® Follow Me on Twitter®.   Follow Me on StockTwits®).

2.  U.S. Small Caps: Waiting as well.  All depends on the economy, which is projected to improve in GDP terms this quarter.  The U.S. remains stronger than much of the rest of the world, hence the stretched valuation.  This all falls apart should U.S. GDP slow again.  Those that say the latest rise in GDP was a blip up in a down trend are waiting for just that.  Meanwhile, be sure to pick a side and adjust your portfolio accordingly.

Russell 2000 U.S. Small Cap Index  (click chart to enlarge; RUT, IWM): For the 8-19-2016 Close

rut-small cap-index-market-timing-chart-2016-08-19-close

Small caps also waiting.

3. Gold: Gold is struggling against the impression that the economy is improving.  Please look at prior issues if you are not clear on this. It is being held up by the impression that ALL major governments intend to demolish their own currencies to maintain economic market share.

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

gld-etf-market-timing-chart-2016-08-19-close

Gold has a bit of a limp and looks more like it could test lower.

4. U.S. 10 Year Treasury Note Yield (TNX):

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): This triangle will be resolved soon.  The move in the direction of the break out from this triangle (yellow lines), could be substantial.

tnx-10-year-treasury-note-market-timing-chart-2016-08-19-close

Rates are about to make a move. Follow that move.

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

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.

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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.

2 Responses to Market Timing Brief™ for the 8-19-2016 Close: SP500 Index in Holding Pattern. Gold Stagnation Continues. Rates About to Make a Move.

  1. Charles says:

    Hi David,

    Hope you are well! Over the past few trading sessions it appears that each down day is bought. What’s your take?

    • David Durand says:

      Sorry I did not get an email notifying me of your comment. As you’ve seen, we’re in a tight trading range. This would tend to favor higher prices, as investors are not that Bullish as I’ve pointed out. That means more fearful investors can be converted into Bulls. We have not run out of buyers.

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