Market Timing Brief™ for the 5-05-2017 Close: Macron Wins in France. All Signals GREEN for Trump Rally Resumption.

A Market Timing Report based on the 5-05-2017 Close, published Sunday, May  7, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

1.  SP500 Index: The French election came out as a big win for Macron (received >65% of the vote), who now needs to find legislators to support his new party.  The French Parliamentary elections are in June.  Our markets may rally a bit more given this result, although it was widely anticipated.  In fact, I saw it as a plus for US markets had the radical (read that racist) candidate won.  It would have destroyed the EU as a trading block.  Yes, it would have also created a near term mess, but the U.S. would have benefited.  Of course, it’s better for European unity that he won.

US Employment was stronger than expected for April at 211,000 vs. the 185,000 consensus (@Bloomberg).  This is enough for the Bulls to move forward with the expected acceleration in GDP through the end of 2017.  In fact, for Q2, the Atlanta Fed expects 4.2% GDP growth (seasonally adjusted Q/Q annualized growth rate, also adjusted for inflation) vs. a puny 1.8% for the Federal Reserve Bank of New York.  This is absurd isn’t it?  That two Federal Reserve Banks can differ so much in their estimates of GDP is remarkable.  In any case, it will be a big acceleration from Q1 GDP which was at just 0.7%.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,922 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

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

sp500-index-spx-market-timing-chart-2017-05-05-close

Up against the resistance of the prior high.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +8.12% vs. +6.34% last week.  This is a joke in terms of Bullishness!   The reluctance of investors to embrace the stock market near all time highs is remarkable and says there is more ahead for the Bulls.

Thurs. 12 am close to poll Bulls               38.07% Neutrals 31.98% Bears      29.95%

2.  U.S. Small Caps: My latest small cap trade is back to green.  It was a fairly shallow fall as you see on the chart below.  The small cap stock signal is also back to GREEN (see below for the other 2 signals). 

Remember that if you have a long term outlook, it’s important to keep your long exposure long enough to avoid taxes if that is an issue.  It’s also important to avoid being out of the market when it’s rising rapidly, as if you miss those gains, being in the market late raises the risk level of holding stocks.  At the same time, I like to trade out of part of my long equity exposure near highs and go back in near lows, generally when the near-term outlook is cloudy.  This is why I coined the term “Passive Shorting” HERE.

I added back my recent small cap trading position (IWM) and also added more exposure to my midcap position (IJH; which accrue about the same gains as small caps over time with lower risk since they are larger companies).  See the social media links for my current exposure to equities.

Note that being just above the 138.82 signal means the signal COULD reverse.  Climbing back above that level is just the first step in proving the market believes in “Trump Growth.”

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

iwm-russell-2000-etf-market-timing-chart-2017-05-05-close

Small cap signal for a further stock market rally back to ON.

3. Gold: This is a continuation of the prior selling.  I’ve explained why this is happening, so go to prior issues to review the situation.  For now, growth wins over gold.  The markets are expecting further economic expansion.

Gold ETF (click chart to enlarge the chart; GLD): Chart is of the 5-05-2017 CLOSE NOT 5-7 obviously…

gld-gold-etf-market-timing-chart-2017-05-05-close

4. U.S. 10 Year Treasury Note Yield (TNX): Short of further fears based on North Korean craziness from Kim or a Russian US confrontation in Syria, or as we’ve been hearing, along the Alaskan border, I expect the current up trend to continue.  Please note the trigger number in the chart.  Below that line, the “Trump Rally” comes back into question. 

MY SIGNAL SUMMARY for a Further Trump Stock Market Rally is:

Stock Signal ON, Gold signal ON, Rate Signal ON.

Again, these signals are close to their switch points and this means the rally must be born out, by having stocks, gold, and interest rates all continue to trend in their current respective directions.  All three must be confirmed.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-05-07-close

Rates climb further – note it’s back above the white (upper) trend line.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until late this year.  I’ll let you know here if and when it reopens.

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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , , | Leave a comment

Market Timing Brief™ for the 4-28-2017 Close: Stocks Barely Holding Onto Breakouts. Gold and Treasuries Ease.

A Market Timing Report based on the 4-28-2017 Close, published Sunday April 30, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

Signal Update 4-30-2017: The Stock Signal is still ON but barely after the pullback on Friday. Gold and 10 Year Treasury Yield Market Timing Signals are also ON provided they don’t break through specified levels to the upside and downside, respectively.  Remember that a gold rally or interest rate decline is a NEGATIVE market timing signal for a further Trump stock market rally, which is the point of the “Three Signals” I am following.  Please see the revisions to Gold and Bond/Treasury Signals (blue paragraphs near top): HERE 

1.  SP500 Index: Consensus for US GDP (quarter over quarter growth seaonally adjusted and projected forward 1 year) per Bloomberg was 1.1% with a range of 0.7 -1.7%. The actual number was 0.7% though the year over year growth was better at 1.9%.  The number was not seen as a disaster, because the markets believe things will improve into the second quarter and beyond into year end.  They see the softness projected forward by the Q1 data as temporary.  You can review the data for GDP headline results HERE.

In the meantime, the SP500 Index market timing breakout is still intact as the chart below shows.  Small caps had a harder day on Friday, during which I took profits out early on.  Yet, the stock market timing signal remains, just barely, in the ON position.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,733 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

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

sp500-index-spx-market-timing-chart-2017-04-28-close

Prior breakout still intact despite slight dip…so far.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +6.34% vs -12.99% last week.  Still, this is very weak net Bullish sentiment near market highs and suggests there is more to come in this rally. 

Thurs. 12 am close to poll Bulls               38.05% Neutrals 33.24% Bears      31.71%

2.  U.S. Small Caps: I was early buying back the small caps after taking a prior trading profit, but it turned into a profit anyway (see social media for actual results).  You don’t always have to pick the exactly perfect entry point to make a profitable trade.  I’ll wait now to add further exposure in either 1. A deeper pullback OR 2. A run higher and buy on the first pullback in that run.

In other words, I don’t in general like to “chase” and instead look for the market direction and then buy the pullbacks to get on board or expand exposure.  Sure there is a risk of “missing” a few percentage points, but remember that my exposure is already high, and I’m simply trading around it to pick up some additional profits and lowering risk a bit when I drop my exposure level.

If that sort of trading at the margin doesn’t suit you, don’t do it!  Find a plan that works for you and then STICK TO IT!  If you freeze when you PLAN to sell, you have no plan.  If you don’t have a plan, you’ll never improve your investing and trading except by bumbling into success.  I choose and teach a conscious investing and trading path…

The small cap market timing signal is still ON for a “further Trump Rally” as long as it’s above the key level noted on the chart in the upper left (top red line). The failure to achieve a brand new high above 140.86 is already a sign of some weakness however temporary.

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

iwm-russell-2000-etf-market-timing-chart-2017-04-28-close

Small caps backtesting the prior breakout (note white number to far left at top of chart!  That is the breakout level.).

3. Gold: Gold pulled back as rates rose and stocks broke out.  The market timing dance is working as advertised.  Gold can rise either because Trump’s tax “reform” giveaways cause inflation that exceeds the Fed’s efforts to contain it OR because growth is lousy and real returns in the stock market go flat with mild inflation.  The latter combo still gives you negative real rates, which gold LOVES.  If real rates of return in either stocks or bonds are high, gold tends to do relatively badly, sometimes over very extended periods of time (e.g., 1990’s).

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

gld-gold-etf-market-timing-chart-2017-04-28-close

Gold eases as stocks rise.

4. U.S. 10 Year Treasury Note Yield (TNX): Rates rose as stocks rose, which is the expected market timing dance around another successful UP leg in the Trump rally, but at the end of the week, rates slipped and gold caught a bid with small caps retesting their key breakout…so the Trump Rally market timing signals are right on the edge…  There is more information about the economy due out this week (ISM manufacturing and services as well as the “Employment Situation” jobs numbers on Friday May 5th) and a Fed meeting ending Wednesday May 3rd (statement release only after the meeting; no dog and pony show until June meeting; no rate hike expected by the market per the CME Group). Nevertheless, the Fed Statement or the data could push the market into its next significant move.  Stay tuned on social media at the links above…

Finally, remember geopolitical risk is not gone yet.  North Korea tried to launch another missile which failed, but called into question China President Xi’s ability to twist Kim’s arm.  Trump seems to enjoy saber rattling, although I’m sure the troops on the DMZ and the South Koreans don’t appreciate it much.  They are on the line here if there is any crazy military action taken.  As I laid out in prior issues, there are NO military options because they all end in human disasters.

If the North Koreans were to misfire a missile into Japan (they hit the Sea of Japan not long ago) or fire a rocket into South Korea, the 10 Year Treasury will rally hard, stocks will plunge (5-10% in days) and gold will fly.  There is always a risk, although close to zero, of “totally crazy” manifesting.  The lifting of this cloud should help the markets as will a defeat of the right wing candidate (it does not deserve to have its name mentioned – too lacking in humanity for that)  in the French election next Sunday. 

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-04-28-close

Rates must rise with economic expansion. The decline in rates is a negative for further progress.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until late this year.  I’ll let you know here if and when it reopens.

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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , , | 4 Comments

Market Timing Brief™ for the 4-21-2017 Close (Updated 4-24-2017 AND 4-26-2017 for Small Caps and Gold/Treasury Signal Revisions): 100 Days and Counting In a Sideways Market. Gold Still a Bull. Rates Say No to Growth.

A Market Timing Report based on the 4-21-2017 Close, published Sunday April 23, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

UPDATE 4-26-2017: Stock Signal ON. Revision to Gold and Bond/Treasury Signals

Small cap stocks (IWM) have given the market timing “all clear” for a big, new leg UP in the Trump Rally.  We are above my breakout number (see chart below for the number).

But what about the gold and interest rate signals that are also keys to a new rally?  Market timing signals need to be grown organically through observation.  Since gold and Treasuries/Bonds overshot to the upside, it would not be reasonable to use the prior markers as the trigger points.  The initiation of a step-wise DECLINE even on short term charts in gold (GLD) and a RALLY in rates (TNX; remember, rates up = Treasuries and bonds down) can be taken in my view as a confirmation of the market timing breakout of small caps (see IWM chart if you don’t know what that is or yesterday’s Tweets/Twits on social media!  I try to not make it too easy for crawlers to find my breakout numbers.). 

NEW Gold and Treasury Signals: First, note that “ON” for each signal means it is confirming a further RALLY IN STOCKS.  I am using short term market timing chart trends to say the recent trends in gold/Treasuries are reversing: for GLD we’ll use 122.61.  A move above there means gold has recovered into possible Bull mode and the signal is OFF (remember, gold tends to do poorly when real returns above inflation are HIGH, so economic growth and gold go in opposite directions as long as inflation stays subdued.  One can argue the latter with rising deficits under an aggressive Trump tax cut plan.) 

The 10 Year Treasury Yield Signal will be considered OFF if it sinks below 2.209%.  Below there the prior trend may be reasserting itself. 

Given the above definitions I am considering all three market timing signals as ON, meaning there is another leg to this Trump Rally ahead of us.  I remain overexposed (see Twitter/StockTwits for numbers – I print them generally after each trade.) to the market vs. my “usual exposure.”  I will talk about this over the weekend in my next post, but I believe that however misguided the Trump Tax Plan is fiscally (will heap LOADS of debt on our children), it will fuel a major leg in the stock market rally.

Remember that market timing signals do not mean once ON they have to stay ON.  Sometimes they are triggered, and we see reversals in the same day or week.  A test of a breakout is just that.  It must be verified by continued buying and a continued uptrend after the breakout despite any normal backtesting that may occur. 

A Warning: We generally DO NOT buy breakouts (unless for a single company with fantastic news that will drive earnings for many quarters to come for ex.), but instead we buy the pullbacks in index ETFs BEFORE the breakout as we just did with IWM.  If you buy a breakout, wait for the first pullback after the breakout (unless things have changed in a big way economically etc. to explain the pullback, in which case you may choose to pass on buying), and you’ll often get a better entry point.

UPDATE 4-24-2017: Le Pen to Lose French Election on March 7th per Markets and World Markets Rally

We will have a GREEN Stock signal in my three signal predictor of a “further Trump Rally” if small caps can close above the critical level shown in the chart below (Green Line at top).  The gold and 10 Year Treasury Yield signals will take a while to turn positive again, but if they are trending down with an IWM win, I’ll take that as a sign that the markets are ready for more gains in stocks.   Once again, the market “has my number,” which simply means the number marking that green line is what the market is now trading around, currently at 138.83 having moved to a high of 139.34 earlier.  Watch that number (testing back BELOW the breakout to 138.70 as I type this).  A close back below the key level will be a negative in at least short term trading. 

The GDP number on Friday is still extremely important to the market.  A number that is too weak will be evidence that the market is more overvalued than investors currently believe.  To be clear, I still believe there is another big push up left in the markets based on further Trump wins, like him or not.  That’s why I remain long with overexposure vs. the usual maximum exposure level (follow social media links for my actual exposure level).

iwm-russell-2000-etf-market-timing-chart-2017-04-23-1024am

Small caps break out…if the gains hold into the close.

And now back to this week’s issue. Read it to understand the set-up for the U.S. GDP release on Friday…

1.  SP500 Index: Gold and bonds/Treasuries have direction, but stocks still do not. The big number out this week, really big, is the U.S. GDP report on Friday at 8:30 am ET.  Market timing mavens need to wake up for this.  The Atlanta Fed expects almost no growth with their seasonally adjusted annualized rate of GDP growth at just 0.5%.  On the other hand, the New York Fed predicts much stronger growth at 2.7% for Q1 2017 and 2.1% for Q2 2017. Consensus per Bloomberg is 1.1% with a range of 0.7 -1.7%.

That tells you pretty much how well these numbers are predicted!  And those are their predictions just 4 working days ahead of the number’s release.

A strong GDP number could help the market extend the current rally to a new leg up.  A very weak number could cause a further dip/correction, as most feel the market is somewhat overvalued.

If we are in the late innings of an economic expansion, we should expect one more push up by the economy and the markets in my view.  Market timing based on valuation is notoriously faulty.  Valuations can certainly help you rebalance your porfolios to a lower equity exposure, but I’m not doing that at this point in the cycle.  My working hypothesis is that Trump Growth will occur due to fiscal policy changes (however delayed) and push this market up one more time prior to a more significant correction. 

Remember that the market doesn’t like uncertainty, so the French election of Marie Le Pen, an anti-immigrant racist (“they’ll steal the wallpaper off your walls” and “rape your wife.”)  would upset the markets temporarily, but remember that as with Brexit, a Frexit would help the U.S. by dissolving the EU Trading block.  The EU cannot survive without France.  It would have no credibility with the UK now also gone.  That would destroy the European currency.  I think the entire experiment was dumb.  Our country is one in which states that are incredibly different are now stuck together.  Texas and California would not agree to be a part of the same country in a 2017 referendum.  There is no unified fiscal discipline in Europe and given that, there can be no viable European Union.  Security issues are also a problem across nations in the EU.

If our markets were to go down on a Frexit from the EU, it would be a buying opportunity.

We’ll continue to follow my 3 signals defined in early February HERE.

As of today the signals are still ALL off for a continued Trump Rally: STOCK SIGNAL: OFF.  GOLD SIGNAL: OFF ( means gold is rallying).  INTEREST RATE SIGNAL: OFF (means Treasuries/bonds are rallying).

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,570 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

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

sp500-index-spx-market-timing-chart-2017-04-21-close

A strong GDP number will push the market to new highs.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -12.99% down a bit more from last week’s -8.41%.  These numbers confirm our strategy to buy the dips given investor sentiment is this bad near all time highs in stocks.

Thurs. 12 am close to poll Bulls               25.71% Neutrals 35.59% Bears      38.70%

2.  U.S. Small Caps: I’m now in the green in my “early” buy in IWM.  Buying at the low end of the range is a routine market timing maneuver.  Even if you don’t trade, I recommend you time your new buys using new capital in this way.

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

iwm-russell-2000-etf-market-timing-chart-2017-04-21-close

Small caps bounce off the prior lows.

3. Gold: Gold is still happy with crashing rates and geopolitical nonsense going on including a French election that could destroy the European Union.

Europeans hiding in gold of late could come OUT of hiding if Le Pen loses and sell.  A Le Pen victory on Sunday, May 7th could add some fire to the gold rally.  Gold has entered a consolidation over the past few days.

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

gld-gold-etf-market-timing-chart-2017-04-21-close

The destruction of the Euro on a Le Pen victory would drive gold up further.

4. U.S. 10 Year Treasury Note Yield (TNX): The financials are testing the January lows still, based on the dive in interest rates in March.  If the GDP number is “hot,” yields will shoot up quickly.  If very cold, the 10 Year Treasury Yield could easily revisit the Election Day levels.  Remember too that US Treasuries see a market timing rally if the Euro is doomed by a Le Pen win on May 7th – a flight to safety rally away from the Euro.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-04-21-close

Rates showing no signs of a rally. GDP could change that.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until late this year.  I’ll let you know here if and when it reopens.

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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , , , , | 2 Comments

Market Timing Brief™ for the 4-18-2017 Close: Stocks Pumped Up by Trump, Now Sagging. Gold and Treasuries In Big Rallies, Are Not Waiting.

A Market Timing Report based on the 4-18-2017 Close, published Tuesday April 18, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

1.  SP500 Index: The index is sagging but not broken on a market timing basis.  The market ran up fast after the election.  I anticipated that and added exposure prior to the election in order to be fully invested.  My theory was that the market just wanted the uncertainty to end, and it would end either way.  President Trump’s entry was more exciting with the election evening dive, but the recovery was swift.  I’ve continued to add exposure slowly on pullbacks, most recently adding some small cap exposure.

If Q1 GDP is as bad as the Atlanta Fed is guesstimating (0.5%!), the market could sink further prior to the actual enactment or visibility thereof of Trump economic policies, both tax reform for companies and for individuals.  If GDP surprises to the upside by a big degree, the buying opportunity of today will be in the rear view mirror very quickly. We’ll be finding out the answer on GDP at the end of the month.

There is another looming set of issues…geopolitical.  Any threat of war such as we are hearing about with North Korea gives the market gitters.  Nuclear weapons are being discussed as an option by the insane Kim, who knows how to manipulate people.  President Trump is not helping either by saying the prior tolerance of misbehavior won’t be his course.  But what does that actually mean practically speaking?

President Trump has two options, both horrible really: conventional attack which will immediately imperil millions of South Koreans and 28,500 US troops at the DMZ.  The second option is nuclear war which would only be started by Kim, but it’s obviously a horrible idea for both sides.  I don’t believe either option is realistic and therefore my sense is that Trump is bluffing.  If so, he’s trying to get leverage for negotiation via China to settle the whole thing down and contain North Korea’s aspiration to build an ICBM that can level Los Angeles with a nuclear weapon attached.  But in the meantime, markets HATE uncertainty and the situation with North Korean needs to be overcome for the markets to be at ease. 

Dropping the “Mother of all Bombs” on ISIS tunnel systems in Afghanistan actually named for real the “Massive Ordinance Air Blast,” also made the world a bit more on edge about the war with ISIS.  The ISIS war is a chronic issue that the market has been willing to ignore. That would change if Trump puts American soldiers in harm’s way in large numbers.  The markets would react negatively to a major new war effort in the Middle East involving our troops. 

sp500-index-spx-market-timing-chart-2017-04-18-close

Off a retest low, but still waiting for Trump to succeed in enacting his plans.

We’ll continue to follow my 3 signals defined in early February HERE.

As of today the signals are still ALL off for a continued Trump Rally: STOCK SIGNAL: OFF.  GOLD SIGNAL: OFF ( means gold is rallying).  INTEREST RATE SIGNAL: OFF (means Treasuries/bonds are rallying).

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,202 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

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

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -8.41%, just a bit more Bullish than last week’s -11.32%.  Buy the dips as long as investors are squeamish about stocks near the all time highs!

Thurs. 12 am close to poll Bulls               28.97% Neutrals 33.64% Bears      37.38%

2.  U.S. Small Caps: I bought a bit ahead of the retest, but the low has held.  Buy low when you can.  Obviously a breach of the top red line might lead to a bigger dip/correction.  That would be an even better buying opportunity barring some sort of international disaster (a conventional war against North Korea for ex.).

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

iwm-russell-2000-etf-market-timing-chart-2017-04-18-close

Also waiting! Buy the dips IMO.

3. Gold: Finally, gold was able to break out to a brand new recent high.  That is impressive and says that investors are very hesitant, both about Trump’s prospects (I believe they are underestimating what he’ll be able to do – speaking without reference to politics!) as well as his handling of the geopolitical scene. 

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

gld-gold-etf-market-timing-chart-2017-04-18-close

Another breakout amidst uncertainty at home and abroad.

4. U.S. 10 Year Treasury Note Yield (TNX): That white triangle we’ve been watching is a goner!  Left behind as rates plunged!  Notice election day on the chart below?  We’re time traveling back to November 8th in market timing terms below the bottom white trend line.  It is not what economic Bulls want to be seeing.  Financial stocks don’t like this at all.  You can look at any of the financials since the election or look at XLF (the financial sector of the SP500 Index) and see that it is testing the January 2017 low.  The current breakdown in yields is a major disappointment for growth Bulls.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-04-18-close

Treasuries predicting a very slow economy.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until late this year.  I’ll let you know here if it reopens.

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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , , | 2 Comments

Market Timing Brief™ for the 4-07-2017 Close: Stocks, Gold and Rates Stuck.

A Market Timing Report based on the 4-07-2017 Open, published Sunday April 9, 2017 (well OK, 12:58 am Monday the 10th!)

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

This is a tax time special…long on charts, but short on words.  The set-up is the same as last week, given the assumption that the low employment growth in March was a “one off” weak data point.  The market is waiting for signs that Trump’s economic growth plans are going to manifest. We’ll continue to track the 3 market timing signals we’ve been watching since early February to show us the way.

1.  SP500 Index: Off the all time high, but not by much.

sp500-index-spx-market-timing-chart-2017-04-07

Stuck in a trading range.

Continue to follow my 3 signals defined in early February HERE.

As of today: STOCK SIGNAL: OFF.  GOLD SIGNAL: OFF.  INTEREST RATE SIGNAL: OFF.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,202 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

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

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -11.32% vs -7.16% last week.  Once again, this is NOT what we expect to see at all time highs in the markets, at which point investors should be excited to own stocks, so despite any dip or correction that may occur, the Bull run is not over.

Thurs. 12 am close to poll Bulls               28.30% Neutrals 32.08% Bears      39.62%

2.  U.S. Small Caps: I re-entered a small cap position last week, a bit early in market timing terms. The small caps bounced off the top red line in the chart below.  We will continue to look for opportunities to “buy low” as this Bull market continues. 

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

iwm-russell-2000-etf-market-timing-chart-2017-04-07-close

Small caps stuck too, more so than large caps.

3. Gold: Gold failed another market timing test of the February high.  It will likely be “interest rates up and gold down” if Trump succeeds, but if he doesn’t OR if the Fed falls behind on inflation, gold can do well.

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

gld-gold-etf-market-timing-chart-2017-04-07

Gold fails another breakout.

4. U.S. 10 Year Treasury Note Yield (TNX): We are testing the lower white line in the market timing triangle yet again.  The behavior of the 10 Year Treasury is probably our best “tell” on whether the market believes in “Trump Growth” or not.  So far, it’s a big fat “maybe!”  “No” would be a market timing move below the magenta line and “Yes” would be a move above the green line.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-04-07

Rates also stuck in a range and the move out will be telling.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or you should also feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until Dec 2017.  If all goes as planned, I will reopen the wait list for the end of December/January Issue in December.

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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , | Leave a comment

Market Timing Brief™ for the 4-03-2017 Close: Market Looking for “Trump Growth.” SP500 Index and Small Caps Bouncing Toward Prior Highs. Gold Stuck at Resistance with Interest Rates Bouncing.

A Market Timing Report based on the 4-03-2017 Open, published Monday April 3, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

1.  SP500 Index: The market wants to know:

1) Trump can lead.  This means he must get Judge Gorsuch appointed to the Supreme Court.  He’s already lost on his travel ban and the Obamacare replacement bill known as AHCA. 

2) The market will continue to bounce to lower market timing highs and languish in a range until it is convinced that “Trump means MORE business” for the U.S.  The market is not broken yet, just tentative about whether Trump will come through on his promises.  I remain long (you can see my exposure level posted on social media – links below).

sp500-index-spx-market-timing-chart-2017-04-03

Bouncing toward retest, but could fall short.

Continue to follow my 3 signals defined in early February HERE.

As of today: STOCK SIGNAL: OFF.  GOLD SIGNAL: OFF.  INTEREST RATE SIGNAL: OFF.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 26,031 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

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

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -7.16% vs +4.78% last week.  This is NOT what we expect to see at all time highs in the markets, at which point investors should be frantic to own stocks, so despite any dip that may occur, the Bull run is not over.

Thurs. 12 am close to poll Bulls               30.22% Neutrals 32.40% Bears      37.38%

2.  U.S. Small Caps: I sold my small cap position for a quick 3.2% market timing profit when the index reached an overbought level on Friday.  It could move higher to test the key 138.82 number or the prior all time high, but this felt like a good place to trade out of a bit of exposure.

I’m not making radical market timing moves, because my longer term view is that the markets move higher as stated.

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

iwm-russell-2000-etf-market-timing-chart-2017-04-03

Rebounded enough for a sale last Friday.

3. Gold: Gold is levitating near a prior market timing high because rates are falling again, but we have to watch that “white triangle” on the rate chart (see below) to know how things will work out for gold.  This may seem dull, but if you want to make money with gold, YOU MUST UNDERSTAND these driving factors.

Interest rates are tied into growth expectations, which are falling of late based on a dovish Federal Reserve during the past FOMC meeting.  They are raising rates but are skeptical of the “Trump Growth” phenomenon.  This could ironically drive long rates DOWN, not up if they raise rates into slow growth -meaning if they are right and President Trump is wrong.  They think the economy can withstand higher rates at this point, although we just came out of a profits recession.

Gold needs negative real rates to thrive.  Rising rates (ahead of inflation) in a super strong economy are like kryptonite for gold.  If you are not up on “What Makes Gold Shine and Decline..” review it HERE.

Other projections of GDP are much higher than say that of the Atlanta Federal Reserve Bank, back down at about 1.0% GDP last I checked.  That is far too weak to support current market levels and profit projections.  We’ll find out at 8:30 am ET on April 28th with the first estimate of Q1 GDP.

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

gld-gold-etf-market-timing-chart-2017-04-03

Gold depends on Trump’s failure to thrive. Strong economic growth is like kryptonite for gold.

4. U.S. 10 Year Treasury Note Yield (TNX): We are testing the lower white line in the market timing triangle.  That must hold.  Below there, we will know that the market believes “Trump Growth” is in trouble.  It’s what the MARKET believes that needs to be determined, not what you or I feel politically.  I’m an independent, so I evaluate each of the Trump policies one by one without glorification or demonization of the man himself.  Nothing great and enduring will be done over the next four years without some measure of compromise.

The 10 Year Yield is at 2.339% as I type this, which is a test BELOW the lower white trend line that forms the base of the triangle shown.  The last support levels would be the prior lows shown going back to January.  Just breaking the triangle on a closing basis could mean trouble for growth Bulls.

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-04-03

10 Year Yield now testing base of the triangle.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or you should also feel free to ask a question…

Note: My monthly newsletter is now CLOSED to new subscriptions until Dec 2017.  If all goes as planned, I will reopen the wait list for the end of December/January Issue in December.

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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , | 1 Comment

Market Timing Brief™ for the 3-24-2017 Close (UPDATE for Small Caps 3-30-2017): Big League Failure by Trump Administration on Health Care and Stock Market Doesn’t Care (so far). Trump to “Pivot.” Gold and Rates Both Leaning Toward Failure of Trump Growth Plans.

A Market Timing Report based on the 3-24-2017 Close, published Sunday March 26, 2017

I deliver focused comments on market timing once or twice a week.  These are supplemented with daily “Tweets/StockTwits” (see links below).

UPDATE 3-30-17: Small Caps In Up Trend

Small cap stocks held market timing support at the bottom of the range just as suspected (we bought very near the low as documented on StockTwits/Twitter – links below).  We’ll have to see how they behave as we approach that top.  Stay tuned on social media for further trades. Remember that small cap stocks are generally not as exposed to the border tax issue unless they import a lot of their products/inputs from abroad of course.  Look at all your stocks from big to small and consider selling them if they are overly exposed to Trump policies and consider moving the funds to a broad index instead.  I’m staying long this market until things say otherwise, but no need to have the wrong exposures.   

iwm-russell-2000-etf-market-timing-chart-2017-03-30-1015am-close

Making progress, moving toward top of recent range.

1.  SP500 Index: Trump’s AHCA Health Care Plan blew up along with Speaker Ryan’s leadership resume on Friday, when the Republicans could not herd their cats to pass a bill to kill Obamacare, something they had already passed many times over seven years.  It was a colossal defeat and may make the market nervous about tax relief and other Trump plans.  He will have to develop more consensus on tax cuts or he can forget passing much of anything going forward. 

Democrats found themselves backed by of all things “the People,” who called in massive numbers to express their opinions and jeered at town halls to push back on AHCA.  They won…big league.  The People have spoken.  They want other Americans to have health care coverage, even when they cannot afford it, in greater numbers than those who think “you should take care of yourself” whether you can or can’t.  There were only – get this – 17% of people who wanted the AHCA bill to pass.  Need more polls?  It was a horrible bill no one liked, not compassionate conservative Republicans and not Freedom Caucus members who want to throw medical care issues back to the states (which would make some states targets for migration. It’s an impractical idea in the national context). 

The GOP is fractured and the Democrats are unified.  That does not add up to progress unless Trump works with Democrats, which I predict he will now do.  He’s going to pivot to win again.  After all, consider his history and you’ll realize that beyond gun control and military expansion, he’s more of a “Bloomberg-type Republican.”  He has said he is for providing “health care for everybody.”

Trump also claims he will help the middle class more than the rich, although that remains to be proven, considering the huge $883 Billion of savings for the rich in the now failed ACHA Health Bill.  But Trump is all about winning, and Republicans burned him, so here comes the big pivot in my view.  He will leave the Freedom Caucus in the dust and work with moderate Republicans and Democrats to get things done.  Remember even the Freedom Caucus will love his military plans.  He’ll pass infrastructure plans with Democrats and moderate Republicans.  Get the picture?  It’s a whole new equation.

In the meantime, where are my “market timing signals”?  The stock signal is OFF, the gold signal is OFF, and signalling slow growth, and the rate signal is OFF signalling slow growth.  Why not cut and run?  Because these pullbacks based on a pessimistic Fed view of economic growth have not yet been deadly.  Neither stocks nor rates have totally broken down and are in a place where they could bounce.  Furthermore, gold has TWO ways to flourish as I outlined last week HERE.

Continue to follow my 3 signals defined in early February HERE.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 25,786 people are joining in…

Twitter® Follow Me on Twitter®.  Follow Me on StockTwits®.

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

sp500-index-spx-market-timing-chart-2017-03-24-close

Testing 50 day moving average and deciding on the economy’s prospects.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +4.78% up from -7.53% the prior week.  Market timing believers should still be long, as we’re near the highs and optimism is FAR from it. 

Thurs. 12 am close to poll Bulls               35.28% Neutrals 34.22% Bears      30.50%

2.  U.S. Small Caps: I opened a position in small caps for the first time in a while based on the belief that the market had reached an inflection point.  At such a point the higher the “beta” you own, the better the market timing bounce on the turn.  I’ve previously shared why I favor midcap stocks over longer periods of time.

I may reduce exposure by dropping small caps at an upcoming high. This all assumes that the market still finds some belief in the near to intermediate term prospects of the economy, which I currently favor.

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

iwm-russell-2000-etf-market-timing-chart-2017-03-24-close

Coming off bottom of the range.

3. Gold: Gold has bounced from a retest of the 115.00-115.20 target range, which means it’s forming a reverse head and shoulders, a Bullish market timing signal.  Gold believes “Trump Growth” is in trouble and rates will stay low, and rates have in fact moved lower.

This correlation will stand on it’s head and wake up market timing experts if and when it ever buys “Trump Growth” again.  Why?  Because rates rise when growth is robust, not when it’s marginal.  Does this mean that the Fed cannot raise rates a bit more?  No.  They can hike rates as long as doing so does not slow the economy to a crawl.  Stay tuned to this battle of rising rates vs. growth, because it will be with us for many months.

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

gld-gold-etf-market-timing-chart-2017-03-24-close

Gold in reverse head and shoulders. Points to inflation.

4. U.S. 10 Year Treasury Note Yield (TNX): We had a test of the 2.621% high and of the 2.489% breakout.  We’re now below both.  “Trump Growth” that goes beyond the already established growth trajectory (even with its bumps of falling earnings this past year), of about 2% a year is what rates need in order to rise.  Two percent growth is all the Fed sees as it gives no credit to Trump for “possible growth.”  The Federal Reserve’s public messages have been clear: “Show us the growth.”

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF):

tnx-10-year-treasury-note-market-timing-chart-2017-03-24-close

Rates are down wondering about “Trump Growth.”

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or you should also feel free to ask a question…

P.S. I am closing subscriptions to my private, now monthly, no cost newsletter on March 31st, and may not reopen it until the end of the year for the January 1st issue.  If you want to become a “loyal reader,” this will be your last chance for a long while… Click the link below if you are interested.

Note that ALTHOUGH my newsletter is now CLOSED to new subscriptions… you can Join the Wait List to Receive the Newsletter as a Loyal Subscriber, Opening temporarily for the April 30th issue (LAST DAY TO SIGN UP is March 31, 2017.  The newsletter won’t reopen until end of December at earliest) 

Click HERE to Sign UpNote however that 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.

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.

Copyright © 2017 By Wall Street Sun and Storm Report, LLC All rights reserved.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, mid-cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , | 2 Comments