Market Timing Brief™ for the 6-30-2017 Close: Stocks Consolidating. Gold Hesitating. Rates Rallying.

A Market Timing Report based on the 6-30-2017 Close, published Sunday,  July 2nd, 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 economic data continue to be good and stocks are consolidating in a range.  Follow the bouncing ball.  If the SP500 breaks down below the lower yellow line (see chart below), the odds are good in my view that the green line will be broken in the market timing chart below.  As said previously, if that is broken, we’ll be heading to the red line at a minimum.   Earnings will have to bear out the guesses at GDP that say we’ll see a fairly strong number in the July 28th report roughly in the range of 2.5-3.0%.  The New York Fed only sees 1.9% while the Atlanta Fed’s guess is 2.7%.  They are often wildly wrong, but it gives us a rough guide.  The Fed is likely to hike rates slowly if growth is in fact below 2%.  Earnings will be starting with Pepsi (PEP) on July 11th, which will provide more data on the economy’s performance in Q2.

It’s interesting that the Federal Reserve is not expected to raise rates, even in September with the CME saying the odds are just 12.8% that rates will be bumped up to a 1.25-1.50% target in September 2017 from the current 1.00-1.25% target range.  I believe the Federal Reserve WILL raise rates in September if GDP turns out to be in excess of 2.5% for the second quarter.  Why?  Because it gives them an excuse to normalize rates, which is their intention.  If the economy is booming, rates should gradually increase to match the increase in inflation, and the Fed is supposed to stay ahead of that curve to prevent dislocations in the economy.

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Review the chart…

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

sp500-index-spx-market-timing-chart-2017-06-30-close

Stocks hesitating in a range.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +2.85% vs. +3.74% last week.  Note the surge in “Neutrals” by about 5% in a week, which means there is a high likelihood of higher SP500 Index prices in 6 months.  This is the strongest predictor of market performance that AAII has.  It could be many months before the Bears score a win, short of an outside event such as a Trump impeachment (not likely based on current information).

Thurs. 12 am close to poll Bulls               29.71% Neutrals 43.43% Bears      26.86%

2.  U.S. Small Caps: Our market timing “Stock Signal” is still on as you can see. The small caps remain above the orange trigger line shown in the chart below.  This is the time for them to prove that strength is real by taking out the prior all time market timing high of 142.90.

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

iwm-russell-2000-etf-market-timing-chart-2017-06-30-close

Small caps holding up well despite the tech swoon.

3. Gold: The gold market timing signal is ON, and gold is headed down to test an up trend line. Note that the prior up trend became a possible top with the double top forming at about 123.07.

Still, as long as gold can maintain higher lows, that double top is not insurmountable.  The sticking point for gold will likely be strength in the economy accompanied by slowly rising rates.  This provides competition for gold.  The prime driver for gold is the real rate of return available in other competing assets like stocks and bonds.  Review the factors driving gold up and crushing it: “When Does Gold Shine and When Does it Decline?”

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

gld-vs-tnx-market-timing-chart-2017-06-30-close

Gold has been weak with rates now rising.

4. U.S. 10 Year Treasury Note Yield (TNX): One week changed things.  Rates have shot up past that market timing trigger line (orange line in chart below).  Banks responded by immediately rallying.  XLF was up 2.71% in just the 4 days since rates started rising again.  There will be more gains, IF rates continue climbing.  Some say inflation will be tame, so rates will collapse again.  Others say inflation will pick up with the economy.  Take your pick.  Or just follow the charts.

Note that rates are testing about the same area vs. the 50 day moving average back in May and then fell.  If rates continue upward from here, that would define “a new behavior” for rates, meaning expectations have shifted.  If the Fed keeps raising the Fed Funds rate gradually, they may be able to sustain the recovery for many more months however.  Then you will see rates stay in a reasonably low range (below 3% longer term).  If tax cuts and other fiscal stimulus creates too much inflation in the economy, the 10 year rate will move much higher than 3% (up to 4 or 5% or more; in the mid 1990’s rates spiked above 8% for comparison), and we’ll head into the next recession as the corporate debt overhang comes knocking. A recession is an event worth selling for…

Now let’s review the three market timing signals together….

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally is:

Stock Signal ON, Gold signal ON (good for stocks, not gold), Rate Signal ON (good for stocks, not bonds).

U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX, IEF, TYX,TLT,TBF): (ignore the SP500 label)

tnx-10-year-treasury-note-market-timing-chart-2017-06-30-close

Rates shoot up and drive banks up.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…  Pay it forward too by sending the link to MarketTiming.Blog to a relative or friend.  Thank you.

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, S&P 500 Index, small cap stocks, Treasuries | Tagged , , , , , , , , , , , , , , , | 2 Comments

Market Timing Brief™ for the 6-23-2017 Close (Update 6-26-2017): There’s Room for a 5.4% Stock Market Correction. Gold Bounces. Rates Stay Low.

A Market Timing Report based on the 6-23-2017 Close, published Sunday,  June 25, 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: After the Federal Reserve raised the Fed Funds rate by 0.25% on June 14th, we’ve had a failed market timing breakout to new highs, and the index is back to where it was at the close just after the Fed statement. Employment is improving steadily, inflation as the Fed measures it is below 2% and they see it a bit lower for the year vs. their prior assessment, and the economy is chugging along at around 2% growth, but far below the 3-4% growth the Trump administration has said is their target.

What about valuation?  You can look up the Shiller PE Ratio (CAPE) HERE and see at 29.87 we’re back at the 1987 peak level and above the valuations seen in 2007 before the Great Recession, but still well below the 2000 peak of around 44.  This means that the market is already expensive, but could become more so if interest rates stay low enough AND if economic growth continues.  Remember, over the short run, which can be several years, PE ratios can be way out of whack, but over the longer term, stock prices follow earnings, whether up or down.  The current earnings momentum for the overall economy is UP.  For this reason, I am remaining long with more exposure than I usually have.

The healthcare system is still not working for a lot of people and it’s a very mixed picture.  For example, I know “wealthy people” who cannot get a policy covering basic care without paying a fortune. Oddly enough, one can honestly say unfortunately AND fortunately for those who need affordable healthcare, it appears the Republicans will after a period of haggling with holdouts, eventually be able to move forward the healthcare bill, now being offered up in the Senate as the “Better Care Reconciliation Act.”  As it stands, both the House and Senate bills will drive up the independent market cost of healthcare for people ages 50-64 by 4-8 times current pricing depending on the source you review.  There are groups who are being hurt pre-legislation and others who will be hurt post-legislation.

Many current Medicaid patients will be displaced into the private insurance sector supported by tax credits.  What they will end up with is up for debate.  Insurers are likely to limit the coverage of “essentials” for these patients to lower costs of coverage.  Remember that our system creates a good deal of waste because of the insurance company middleman which takes its cut.  Without real competition to drive down costs of providing care, the net effect is that our country delivers less care for more money.  The net effect on the healthcare system could be pronounced for the healthcare legislation losers, which will likely include the hospitals, so I would decide NOW what level of profits you want to maintain on our XLV Healthcare ETF and IBB Biotech trades.  Don’t give it all back.  It’s very hard to predict what this moving target of a healthcare bill will mean in the end for the net healthcare provided.  Follow the market timing signals in the market, rather than the news.

There are other landmines ahead for healthcare.   Trump is supposed to deliver on his promise of cutting drug prices in the near future.  This could slash our gains as the impact sets in, despite the recent big run up in drug and biotech company prices.  The rise has been almost straight up for a few days in a row, as though investors believe Trump’s words and actions will be relatively inconsequential.  If not, watch out below.

What about the current SP500 market timing chart?  If the lower yellow line in the chart below is broken, it is possible that we’ll only backtest the 2400.98 breakout, but that is not likely in my view.  Then IF we break the green line, the target becomes the red line, which would mean a 5.4% correction from the intraday all time high on 6-19-2017.   The highest fliers would be hit by deeper corrections unless their fundamentals are clearly superior to the market.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 28,080 people are joining in…

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Review the chart below…

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

sp500-index-spx-market-timing-chart-2017-06-23-close

Failed breakout.

 

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +3.74% vs +2.79% last week.  The numbers barely budged vs. last week, so please review the comments via the link to the upper right for the issue on the 6-16-2017 close.

Thurs. 12 am close to poll Bulls               32.65% Neutrals 38.44% Bears      28.91%

2.  U.S. Small Caps: Our market timing “Stock Signal” is still on, despite the recent “Tech Swoon,” and Fed meeting.  The ETF is still above the orange trigger line shown in the chart below.  I believe a reversal of this signal could mean a full correction in the stock market to that “red line” discussed above.  

Small Cap Update 6-26-2017: Note the distinct difference in behavior during the last retest of the “orange trigger line” vs. the prior retests that failed.  There were two prior breakouts above the line that failed.  This one did not.  That is very positive for a continued rally in small caps.  The index needs to keep marching to a new high to verify this of course, but the odds have changed for more upside. Today the index is lagging the SP500 Index as I post this comment, but still +0.31%, but we’ll have to watch this trade.  Another failure and we’ll be headed at least back to that lower red line or worse.  This does set up a decent trade.  If you enter around here, you could cut your losses on a close below or on a decisive move through the orange line to the downside.

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

iwm-russell-2000-etf-market-timing-chart-2017-06-23-close

Small caps holding above the prior breakout, but barely above the May high.

3. Gold: The gold market timing signal is ON, which is technically bad for gold and good for stocks.  That said, gold is in a bit of a bounce.  I’m interested in seeing if the bounce can take us above the horizontal orange and aqua lines on the chart below, because if it can, the Bulls will be back in charge.  If the economy keeps improving with low inflation, gold will tend to lag. 

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

gld-vs-tnx-market-timing-chart-2017-06-23-close

Attempting a bounce from a higher low?

4. U.S. 10 Year Treasury Note Yield (TNX): Rates remain low following the Fed’s increase in the Fed Funds Rate by 0.25% on June 14th.  The Fed’s own inflation estimate for 2017 was DECREASED at the meeting, and if inflation holds steady, rates may not need to rise much.  This should result in delays for further Fed rate increases.  This would mean the returns on bonds may not lose much due to loss of principle value.  Now let’s review the three market timing signals together….

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally is:

Stock Signal ON, Gold signal ON (good for stocks, not gold), Rate Signal OFF (good for bonds).

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

tnx-10-year-treasury-note-market-timing-chart-2017-06-23-close

Notice how rates are still staying low after the Fed hike?

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…  Pay it forward too by sending the link to MarketTiming.Blog to a relative or friend.  Thank you.

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 6-16-2017 Close: Bulls Still In Charge Despite Tech Dip. Large Value Leads with Small Growth in Rear Since Fed. Gold eases. Rates Still Tame.

A Market Timing Report based on the 6-16-2017 Close, published Sunday,  June 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: What did the Fed do?  They raised rates 0.25% as expected, but took a hawkish stance according to some, but in fact the Fed lowered their median PCE Core inflation expectation for 2017 from 1.9 to 1.7% and left 2018 and 2019 unchanged at 2.0%.  So maybe they are not so hawkish after all.  Read the dot plot info at this PDF Link from the FOMC).  They currently expect very little additional growth in 2017 over 2016 and a slight DECLINE in real GDP growth going into 2018-2019.  I guess they don’t believe in the power behind Trump’s policies yet, but that could change.

What I observed after the Weds. 2 pm Federal Reserve statement release was a market timing outperformance of value over growth in both the small and large cap ETFs as well as an initial outperformance of small over large caps.  The latter has since reversed as the following chart shows. Note also small growth is now at the bottom (from Fed Statement Weds. up to 6-16-2017 close):

sp500-index-vs-iwf-iwd-iwm-iwo-iwn-market-timing-chart-2016-06-16-close

Value beats growth since the Fed statement was released.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 27,838 people are joining in…

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Now let’s take a longer market timing point of view.  Look at what the small caps (IWM, IWO, IWN), midcaps (IJH), and large caps (IWF, SP500, IWD) have done since the February 11, 2016 low. The small caps are all bunched up near the top of the chart, large growth (yellow) beat large value which tracked with the SP500 Index.  IJH, the midcaps (purple line) performed at a level between large and small caps.  Large growth IWF (yellow line) somewhat bettered the large value stocks. 

sp500-index-vs-iwf-iwd-iwm-iwo-iwn-since-2016-02-11-low-market-timing-chart-2016-06-16-close

Longer term winners are the small caps.

Now let’s look at the SP500 Index chart and see where we are after the large tech swoon of the past several trading days.  Large caps vibrated in a range ABOVE the last breakout.  That is very positive.  This further proves my point last week that there was a rotation going on between large cap tech and large cap value stocks.  Whether this persists at all is unclear.

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

sp500-index-spx-market-timing-chart-2017-06-16-close

Still above last breakout.

If growth continues as the Federal Reserve believes it will, growth stocks should not simply collapse from here.  Amazon buying out Whole Foods suggests that the biggest winners are not done continuing to win.  Often when a company buys out another company the buyer’s stock falls, but not so with Amazon which was the best performing of the FAANGM stocks (FB, AMZN, AAPL, NFLX, GOOGL, MFST) stocks as shown on this chart I posted HERE.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +2.79% vs. +5.90% last week.  It’s remarkable that the percentage of Bears did not increase (they actually fell very small amount) after the techs swooned on the prior Friday.  Investors have been piling into bond funds and ETFs near stock market highs.  That is NOT how a Bull market ends, so that would indicate more upside before the Bull fades from sight.  We could have a correction given negative news flow from the Trump administration.  Go back and review my comparison to the Clinton impeachment period if you believe there is zero short term risk to the market. Note that I have not brought down my exposure level, because I still feel with a Republican controlled House, it would require a high burden of proof to impeach the president. 

I don’t like the way the President is handling the investigation.  Instead of cheering on the investigators to clean house for him, President Trump is locking horns with the entire intelligence community and criticizing Special Prosecutor Mueller.  He would get far more done if he were to get out of his own way.  If he is not guilty, he should do a purge of his administration of any involved in Russian collusion and be done with it, so the Congress can focus on the business of the people. Let’s get on with tax and healthcare reform.

Thurs. 12 am close to poll Bulls               32.27% Neutrals 38.25% Bears      29.48%

2.  U.S. Small Caps: Small caps triggered the “Stock Market Timing Signal” to ON, and it remains on despite the Big Tech swoon, which is impressive.  We can still test the orange line and survive (see chart), but we should not break it again, or we may be retesting the bottom of the previous range (133.12ish) or worse.

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

iwm-russell-2000-etf-market-timing-chart-2017-06-16-close

Small caps hold onto breakout.

3. Gold: The “Rate Signal” is OFF, and despite that, gold is selling off.  Gold initially rallied right after the Fed statement, but then when it became clear the Fed was leaning hawkish, gold fell a bit.  If rates stay as low as they are now (below the orange line in the rate chart below), or head lower, gold could well rise again.  Gold should not fall apart while rates are falling, because negative real interest rates are what gold loves. 

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

gld-vs-tnx-market-timing-chart-2017-06-16-close

Gold slipping despite rate signal being OFF.

4. U.S. 10 Year Treasury Note Yield (TNX): Rates did NOT spike much after the Federal Reserve FOMC Statement was released.  They raised the Fed Funds rate by 0.25% as expected, but continued to believe that more rate hikes are necessary than the market foresees for 2017.  Remember the 10 Year Yield fell after each of the prior two Fed hikes.  This time, as mentioned above, they lowered their median inflation expectations.  Review the data for yourself via the PDF link I posted above.

The Fed has started talking about rolling off their $4.5 Trillion balance sheet.  If the Fed does start reducing its purchases of US long dated Treasuries, I expect rates at the long end to creep up as they also continue slowly raising the short end via the Fed Funds rate.

Overall, significant inflation is not rearing its ugly head in a big way, despite the fact that some costs like rent have jumped quite a bit over the past few years. 

What if inflation remains as subdued as it is now?  Bonds and Treasuries could trade sideways and if the economy does pick up steam as expected, the stock market will do very well and gold will suffer to the extent that real returns are better elsewhere.  Gold remains a form of currency insurance for me and I have no gold trade on at this time.

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally is:

Stock Signal ON, Gold signal ON (good for stocks, not gold), Rate Signal OFF (good for bonds).

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

tnx-10-year-treasury-note-market-timing-chart-2017-06-16-close

Rates stay below trigger post-Fed statement.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…  Pay it forward too by sending the link to MarketTiming.Blog to a relative or friend.  Thank you.

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 6-09-2017 Close: Rotate! Big Cap Tech Sells Off with Rotation into Mid to Small Caps and from Growth to Value. Gold Sinks As Rates Rise.

A Market Timing Report based on the 6-09-2017 Close, published Sunday,  June 11, 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: A “Bearish engulfing pattern” is a market timing pattern in which the price on a given day makes a higher high and a lower low and closes near the low.  The pattern on Friday in the midst of strong profit taking in Big Tech names did NOT qualify as such a pattern, as the SP500 Index was nearly unchanged for the day.  There was a higher high and a lower low, but the close was at 0.08% for the day. 

Rallies in energy (XLE), financials (XLF), materials (XLB), healthcare (XLV), and industrials (XLI) balanced out the losses in other sectors, but primarily in tech (XLK) at -2.47% vs. the next poorest performer, consumer discretionary (XLY) at -0.44%.  Consumer staples (XLP) were -0.12% and utilities (XLU) -0.09%.

Was that it for the tech sell-off?  The technicals suggest there is room for a bounce early next week ahead of the Fed’s action on Wednesday, which will be to raise rates by another 0.25% to a target range of 1.00-1.25% per CME stats that say the odds are 99.6%.

It’s what the Federal Reserve says in its FOMC statement out at 2:00 pm this Weds. about future rate hikes that could make a difference to the markets, along with the dog and pony show at 2:30 pm ET.  Current projections are for stronger GDP numbers over the current and subsequent quarter or two.  The thing that could hold this back is that businesses had been counting on a successful tax cut package to stimulate growth, but with President Trump mired in trouble over the Russian investigation, visibility has shrunk.  The market does not appreciate political fog, and may this may raise the risk for more than a quick dip in the market.  At the same time, I still expect higher highs in the market before this Bull run is over.  Sentiment is too “mildly Bullish” as you’ll see below to make this a top…

What I observed Friday morning which continued to the close was that money was rotating from Big Tech Growth (QQQ) at – 2.50% for the day to midcaps (IJH) +0.37% and small caps (IWM) +0.52%.  As said, the SP500 Index was only -0.08% for the day.

There was also a rotation from growth to value across the board, even among the large caps.  There could be some further rotation from large cap tech growth stocks into small and midcap stocks and even to large caps with better value.  On Friday SCHG (Schwab Large Cap Growth) was -0.89%, while SCHV (Schwab Large Cap Value) was +0.54%.  This was also true among small caps with IWO (Small Growth) DOWN 0.43% and IWN (Small Value) UP a big 1.38%. 

Again, that’s not a “market sell-off”; it’s a market timing rotation from Big to Mid and Small and from Growth to Value. 

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 27,674 people are joining in…

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

sp500-index-spx-market-timing-chart-2017-06-09-close

SP500 still near all time high.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +5.90% vs -4.62% vs last week.  Tops don’t look like this!  There’s more Bull Market to come, even if we see a Trump-based correction.  I personally sense that it will be hard to prove anything against Trump if there are no recordings as it’s simply Comey’s word against his.  Furthermore, the Republicans control the House, which would have to impeach Trump to kick him out, as a sitting President cannot be indicted by a prosecutor, as indictment was felt by the founders to be an easy way to disrupt and destabilize the government.  There would have to be incontrovertible evidence of obstruction of justice for impeachment by the House and then trial by the Republican Senate to convict.

The only pause I have is that the former Federal prosecutor from New York, Preet Bharara said on MSNBC today that no one can conclude yet whether there IS or IS NOT sufficient evidence for obstruction of justice by Trump.  We’ll have to wait and see.  Waiting is NOT something the market enjoys…

Thurs. 12 am close to poll Bulls               35.43% Neutrals 35.04% Bears      29.53%

2.  U.S. Small Caps: Small caps triggered the “Stock Market Timing Signal” to ON, but will have to quickly make a brand new high above the green line in the chart below to confirm the “rotation” was more than a one day thought.  Remember too that in a healthy rally, all indices tend to rise together, even if some under-perform others.

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

iwm-russell-2000-etf-market-timing-chart-2017-06-09-close

Small caps win in the rotation from large to smaller (IJH and IWM) on Friday.

3. Gold: The “Rate Signal” (see TNX below) started to flicker at the end of the week.  So did the GLD market timing signal as it was OFF (above trigger) on Tuesday and off by the next day after a failed breakout.  The reaction to the Federal Reserve’s rate hike will depend on the extent of their perceived hawkishness.  What we know regardless is gold sold off after just ONE DAY above my trigger line.  It was a market timing fake-out.  This happened because rates were UP for three days in a row.  Guess what?  Gold was down three days in a row.  If you follow gold, you must follow interest rates!

If we have a tax reform package by August (looking bleaker), rates could continue higher, which generally is bad for gold which yields zero.  A freeze in DC won’t be liked by the stock market, but gold would appreciate it.  DC stagnation could send rates even lower and gold could benefit.  If things work out for Trump, in the short term you’ll see gold move lower, but long term we’ll have TrumpFlation and gold will respond by rallying.  I see gold as currency insurance still for the Trump “giveaway” plan, creating tax cuts we cannot afford.  He’s no fiscal conservative.  He himself says “I love debt!”  It will be tricky to trade gold in the near term, unless you stick very diligently to buying only the oversold levels and then selling the overbought levels such as the one we just had.

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

gld-vs-tnx-market-timing-chart-2017-06-09-close

Gold fails a key breakout.

4. U.S. 10 Year Treasury Note Yield (TNX): As I detailed last week, the Fed’s hikes in December and March have led to LOWER 10 Year Treasury yields.  We can expect the same if the Fed raises rates again as expected by nearly every breathing human economist.  Rates will rise at the longer end if growth picks up and the Fed finds itself behind the curve or if the bond market sees that coming.  The market discounts the future whether it arrives or not!

The 10 Year Yield was “playing with my number,” last week flickering  from OFF to ON on both Thursday and Friday and then falling back below the trigger line (orange line on chart below) to OFF.  Long rates are EVENTUALLY likely to rise a bit as the Fed continues to raise short rates as long as growth continues and the Fed action does not shut growth down prematurely.  They won’t be able to roll off their huge balance sheet if they don’t raise rates.  If the Federal Reserve falls too far behind on rate increases when things are good, they won’t have as much room to act if things turn south in the economy.  It’s quite a balancing act and they actually have little visibility as to the impact of their policy moves.  Their GDP predictions are all over the place vs. reality, nearly worthless in the end.  That is why we follow market timing signals and try to avoid over-analyzing everything else.  Profits matter. Actual printed economic numbers matter, but projections don’t as much!  In the end the market price itself is the great truth teller!  They cannot hide price, volume, or volatility.  It’s all there for us to see.

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally is:

Stock Signal ON, Gold signal ON (good for stocks, not gold), Rate Signal OFF (good for bonds).

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

tnx-10-year-treasury-note-market-timing-chart-2017-06-09-close

Rate signal back OFF, but barely.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…  Pay it forward too by sending the link to MarketTiming.Blog to a relative or friend.  Thank you.

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 6-02-2017 Close: SP500 Index Breaks Out to All Time High. Gold Rallying as Rates Crash Through Support.

A Market Timing Report based on the 6-02-2017 Close, published Sunday,  June 4, 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: We will review sentiment in just a bit, but first let’s review where the markets are…

The large cap U.S. SP500 stock index hit an all time high, and managed to drag the small caps up with it to turn the “Stock Signal” back to ON, but now a new high is needed in the small caps.  As I show below in the small cap market timing chart, they were repelled from the 3-01-2017 high.

The economy continues to be healthy with ISM Manufacturing Index coming in at 54.9 with the prior reading at 54.8.  Click on the 6-02-12017 report HERE and you’ll see the rise in manufacturing activity from the January to February 2016 lows.

In contrast, employment came in weak at 138,000 new jobs created in the month of May with expectations at 185,000.  Some pointed out that employment was up year over year by a small fraction, but if you look at the chart on the prior link at Bloomberg, you can see there is a trend of lower highs since the Nov. 2014 high.  There are ALSO two higher lows that occurred in May 2016 and March 2017.  Making a lower low than the March 2017 low would be Bearish.  Exceeding Feb. 2017 employment would be Bullish.  The employment results reflect an economy that is recovering slowly, but is chugging along.  The market is still expecting eventual progress on the Trump agenda, especially tax reform and infrastructure spending, and there will be a penalty if it does not.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 27,492 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-2017-06-02-close

SP500 Index at ALL TIME HIGH.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -4.62% vs last week’s +2.86%.  This is astounding!  This is not the way Bull markets end as I love to point out.

The time we will be cutting back our market timing exposure levels in the U.S. is when sentiment is peaking at extreme highs.  Until then, the Bull is still apt to be strong.  Of course, I’ve pointed out that the small caps will need to participate if the market is to have serious gains from here.  Large caps can continue to rise alone, but only for so long.

The small cap based “Stock Signal” is ON, but there needs to be follow through to new highs.  By the way, the Neutrals above 40% is one of the most predictive findings of AAII data per their studies.  The likelihood is high that the SP500 Index will be higher 6 months from now, given that > 40% Neutral reading.

Thurs. 12 am close to poll Bulls               26.92% Neutrals 41.54% Bears      31.54%

2.  U.S. Small Caps: Small caps have been discussed and the chart below shows the next market timing “goal line.”  Notice how it pulled off of the green line shown?

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

iwm-russell-2000-etf-market-timing-chart-2017-06-02-close

Need an all time high soon.

3. Gold: Gold is still bouncing as rates plunge below my market timing trigger.  Gold above the trigger would “be OK” if inflation were high along with economic growth, but it’s not.  Remember that high inflation degrades real returns of all interest/earnings yield bearing assets.  The other way gold “works” is when real rates are negative because growth is too slow or falling to or below zero.  In that environment, stocks fall and the Fed has to lower rates to goose the economy back to life.

The PCE inflation indicator that Federal Reserve Chair Yellen likes is still slightly below target at 1.5% without food and energy that she considers volatile (with food and energy the number is 1.7%), still below the prior two months and falling since February as shown on the BEA site.  Gold does NOT do well in times of great prosperity because there are so many alternatives to making nothing on holding gold that has no earnings or dividends.  The rise of gold through market timing resistance this week (see chart below), is a negative sign for the thesis of rising rates with a robust continuation of the economic recovery.  AND YET, the economy IS improving slowly as discussed earlier, and we’ll follow the results, NOT the speculation. 

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

gld-vs-tnx-market-timing-chart-2017-06-02-close

Gold rally continues as rates FALL.

4. U.S. 10 Year Treasury Note Yield (TNX): I told you last week that below the orange line in the market timing chart below, the “Trump Rally” comes back into question.  The “Interest Rate Signal” is back to OFF (says further robust economic recovery is unlikely). 

We should not be seeing falling rates if inflation is a concern.  In fact, the 10 Year Treasury rate has fallen since the Fed raised rates twice, in December and again in March.  Despite the fall in the 10 Year Treasury Yield shown in the market timing chart below, the Federal Reserve is widely expected to raise rates another 0.25% to a target range of 1.00-1.25% on June 14 at the end of their FOMC meeting that starts on the 13th.  This could drive longer term rates down even further.  This is not what an economic recovery is supposed to look like.

MY SIGNAL SUMMARY for a Further U.S. Stock Market Rally is:

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

Once again this week, these signals are close to their switch points.  If 1. Small caps cannot make a brand new high, 2. Gold breaks up through the trigger point and 3. Rates continue to drop, the market message will be that little is expected from the economy or from Trump policy changes.

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

tnx-10-year-treasury-note-market-timing-chart-2017-06-02-close

Rate trigger switched back to OFF.

Thank you for reading.  Would you please leave your comments below where it says “Leave a Reply”… or feel free to ask a question…  Pay it forward too by sending the link to MarketTiming.Blog to a relative or friend.  Thank you.

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 5-26-2017 Close: SP500 Index Takes Off to New Highs. Gold Up and Rates Down.

A Market Timing Report based on the 5-26-2017 Close, published Monday, May  29, 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: My three signals for a further rally in the stock market are mixed with one signal, the stock signal, in the OFF position, and the gold and interest rate signals ON although nearing their respective switch points.  It’s not that the small caps are behind the large cap stocks since the election.  They are not (see chart below the SP500 Chart).  The issue is there has been no progress by the small caps since the intraday high of Dec. 9th.  Remember that given their higher risk vs. large cap stocks, the gains must be more over time.  They are ahead of large caps since the pre-election low as they should be, but the gap is closing.

The stock signal is OFF with the S&P making new highs, because it is based on the Russell 2000 making a new high above the trigger level (see chart for the number).  It is a measure of market breadth.  There have already been two failures to stay above that level, so it certainly is seen as an important market timing zone for the market.

The small caps are more sensitive market timing predictors and predictors of the health of the overall market than are the large-cap stocks, because when the small-cap stocks start to break down, there is a rotation into the larger names for a period before they also break down. Either that happens or new highs are achieved in all three groups of stocks, namely, small, mid, and large caps.

The tentative nature of trading in the small caps versus large-cap stocks, tells you that the market is not completely sure of the direction it is taking.  Of course, the stocks don’t know any thing of this but their owners do!  

One of the things that has been sustaining the rally is the LACK of overly exuberant sentiment. Despite the high prices in the market versus their relative pricing over time, there is still very little interest in the market given these high prices (see this weeks’ numbers below).  Normally near, or at in the case of the S&P 500, all-time highs, sentiment peaks. Instead it has been mediocre at best. 

In political terms, the market remains confused about whether Trump will be successful in instituting his policies, or whether he in fact will be thrown out for colluding with the Russians in the election. There is no proof that those things have happened despite his very public statements of encouragement to the Russians to interfere in the election by hacking the Democrats emails.  Those statements were wrong for sure, and he’s paying for them now.  No foreign government should be encouraged to hack our elections.  It’s not a joke, even if he meant it that way.

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 27,385 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-2017-05-26-close

New high.

IWM (small caps) have not made a new high since December 9th.   Both the midcaps and the large caps have made such gains, even though they trail the overall gains of the small caps since the pre-election low (the midcaps are winning since the 2009 low though, which is why I’ve favored them in setting my exposure levels).  The small caps need to continue their out-performance now as they are riskier.  If not, the entire market will be in danger of falling.     

iwm-russell-2000-etf-vs-spy-vs-ijh-market-timing-chart-2017-05-26-close

SP500 vs. small and mid caps.

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  +2.86% vs -10.40% last week.  Still not enough Bulls at brand new SP500 Index highs!  More gains are left.  Even if you miss selling before a market timing correction, you’ll be able to increase your exposure lower and sell at new highs in my opinion.  I’ve already told you how much the market would fall should there be an impeachment (see last week’s issue; link to upper right).

Thurs. 12 am close to poll Bulls               32.86% Neutrals 37.14% Bears      30.00%

2.  U.S. Small Caps: Small caps were discussed above.  As long as the economy continues to improve, they should finally make new highs above that Dec. 9th high.  If not, large caps will start reversing market timing breakout gains, and we’ll move into a correction.

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

iwm-russell-2000-etf-market-timing-chart-2017-05-26-close

Small caps still with no new high that has stuck since December.

3. Gold: Gold is bouncing as rates resumed their fall, and this week they were testing a new high above market timing resistance. The trigger point if breached to the upside means stocks are likely in trouble.  Remember the gold signal can trigger and indicate “growth with inflation” running ahead of Fed action, but rates MUST rise if the recovery is solid. 

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

gld-vs-tnx-market-timing-chart-2017-05-26-close

Gold testing a new level above market timing resistance.

4. U.S. 10 Year Treasury Note Yield (TNX): Below that orange line, the “Trump Rally” comes back into question.  We’re getting close!

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

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

Again, these signals are close to their switch points and all three must be confirmed to say the stock market rally is back ON.

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

tnx-10-year-treasury-note-market-timing-chart-2017-05-26-close

Rates are moving in the wrong direction for a strong continued recovery.

 

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 5-19-2017 Close (5-25-2017 China Update): What the Clinton Impeachment Did to the Stock Market in 1998. Market Timing the Mueller Russia Investigation.

A Market Timing Report based on the 5-12-2017 Close, published Sunday, May  21, 2017

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

UPDATE 5-25-17: Chinese Market Timing Chart Update

Chinese large cap stocks listed in Hong Kong (H Shares; FXI) were up nicely today and are about to test 2015 resistance at 40.59.  This progress is being made despite the downgrade of the Chinese credit status by Moody’s.  My contention as some of you know is that the Chinese economy must do well to support U.S. economic growth.  Chinese stocks are much cheaper still than U.S. stocks, so there’s more upside in valuation and the momentum appears to be building again.  The next test will be further proof for the China Bulls should FXI pass it.

fxi-china-etf-market-timing-chart-2017-05-25-close

Chinese stocks make further progress amid negative credit comments.

Now let’s get back to my previous comments on the U.S. markets, gold, etc…

1.  SP500 Index: Market timing is weak when it does not pay attention to economic correlates.  As mentioned on Friday, the NY Federal Reserve Bank’s estimate of Q2 GDP (NowCast™) is  at 2.3%, up 0.4% from their prior prediction, while the Atlanta Fed moved up from 3.6% on May 12th to 4.1% on May 16th.  Keep in mind these predictions are often wildly wrong, although the longer term trends are more reliable than the quarter to quarter estimates. 

The Bureau of Economic Analysis take one quarter and attempt to predict the entire year based on a seasonally adjusted look at GDP, a seasonally adjusted annualized rate (a.k.a. “SAAR”).  It is NOT reliable to do so.  For that reason, some look at annualized averages to smooth the data, while still attending to acceleration/deceleration in the supporting numbers.  There is a lot of guesswork in it, and I’ve seen very well-intentioned research groups fall flat on their faces in predicting the last recession that did not happen!

The key question to answer to determine what your equity exposure level should be and to engage in market timing is “Is the economy accelerating or decelerating?”  And if it is decelerating, it’s critical to get a sense of whether the deceleration is just a blip or a trend that will lead to recession.  Since the last recession, we have had decelerations that are evident in the GDP charts I’ve posted previously, but we never were tipped into a full recession, so the market simply marched higher, most recently based on expectations surrounding the fiscal policies of President Trump.

Here is where we are and then we’ll look at the Clinton impeachment stock market decline.  You can see we’ve bounced off a middle level of support within a trading range…

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

sp500-index-spx-market-timing-chart-2017-05-19-close-2

Bouncing in the vibrational range.

Only if the investigations of Trump cause businesses to scale back their plans and decelerate the economy do we have to be concerned about the longer term impact.

Now we need to prepare ourselves with the history of prior presidential impeachments (Bill Clinton was the only one impeached since Andrew Jackson, who was also acquitted by the Senate after impeachment by the House) and presidential resignations (Nixon was the only one to resign, who would have been both impeached by the House and convicted by the Senate had he stuck around for it!).

If you believe Trump’s headed to the exits (I don’t at this point, despite the risk), I would scale back to what would be somewhat lower exposure than you generally have with the idea of adding back after/if we get a 10-20% pullback or more.  Nixon left office, but at the time, the economy was a mess unlike now, so the Trump situation is more like Clinton’s than Nixon’s.  We saw a 22.45% pullback in the Bill Clinton impeachment as the monthly chart shows…

SP500-Invex-at-Clinton-Impeachment

President Bill Clinton impeachment impact on SP500 Index

Clinton was impeached on December 19th, 1998.  He then went to trial in the Senate in early 1999.  Note that the market anticipated President Bill Clinton’s acquittal by the Senate almost FOUR MONTHS BEFORE it happened on Feb. 12, 1999.  The impeachment of Clinton turned out to be a blip in a big uptrend.

There is a finite and incalculable risk that Trump will be impeached and/or removed from office.  My concern for the latter is that Trump is exhibiting behavior that smells a bit like a coverup (firing Comey for ex. and all his defensive Tweets) of what happened instead of stepping forward and cleaning up his administration.  That means he himself may have been involved in the collusion that is suspected but has not been proven.

The fact Trump publicly encouraged the Russians to hack the Clinton emails (it’s recorded on video!) certainly makes him suspect, though he could easily claim he was joking to egg the crowds on.  The best case is that he’s being defensive, because he’s protecting his guilty people without knowing who they are.  In other words, the best case is that he’s just blindly trying to shut down the investigations rather than doing so because evidence can be tracked back to his own involvement.

BOTTOM LINE: If Trump was NOT involved in the Russian interference with our 2016 Election, things will go far easier for the U.S. stock market.  There will likely be a few more bumps (dips) along the way and perhaps something a bit more serious such as a mild correction of 5-7%.  As we’ve never seen the removal of a President during good economic times, there’s no guidance from history to tell us how the economy would suffer or whether it could simply chug along.  

My guess is that either impeachment OR removal of Trump could result in a 20%+ correction/mini-Bear market.  Given the current economic picture, we should then recover once the market reassesses the future. 

Keep up-to-date during the week at Twitter and StockTwits (links below), where a combined 27,221 people are joining in…

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

Survey Says!  Sentiment of individual investors (AAII.com) showed a Bull minus Bear percentage spread of  -10.40 from +2.51% last week.  AAII has found that Neutrals being over 40% is a Bullish finding the vast majority of the time in predicting the level of the market 6 months out. It is one of the strongest predictors they have discovered.

Stay long despite the Trump investigations is my take on it.  By the way, a -10%ish Bull minus Bear spread is not that Bearish.  Typically moves to minus 20-30% or more mark temporary and important lows.  The most important lows have very extreme sentiment readings.  We have not seen that.  Dip buyers are stepping in on cue.

Thurs. 12 am close to poll Bulls               23.85% Neutrals 41.90% Bears      34.25%

2.  U.S. Small Caps (IWM,RUT): Small caps never kept their gains above the signal level (top red line) and came close to testing the March market timing low, but not quite.  We cannot know how the investigations will inflect the course of the market, but we’ll stick with trading the range at its extremes.  Right now, we’re in the middle of the range which is not the place to bite unless you are underexposed to equities.  If you are new to this Bull market, you may have to bite every dip you see to participate.

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

iwm-russell-2000-etf-market-timing-chart-2017-05-19-close

Still below signal level.

3. Gold (GLD): Gold is not a good bet in times of positive real interest rates that the markets saw coming after Trump was elected, but in times of turmoil, gold regains a bit of shine.  I believe this market timing move could be short lived, so trade accordingly and keep a good piece of your profits if you bought lower.  Even if gold does well in a period of turmoil leading up to a possible impeachment (not a given), it will have problems thereafter if the economy continues to grow.

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

gld-vs-tnx-market-timing-chart-2017-05-19-close

Gold bounced further on special prosecutor news.

4. U.S. 10 Year Treasury Note Yield (TNX): It’s fascinating that the 10 Year Treasury Yield tested the market timing “trigger line” I defined several weeks ago (orange line in the chart below)Of course, that line is fairly close to the 4-18-2017 low.  If the recovery is still the belief of the market, that trigger line should hold.  If not, beware, because the market may have decided that Trump’s agenda is in trouble…

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

tnx-10-year-treasury-note-market-timing-chart-2017-05-19-close

Rates test the trigger line but bounce.

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

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

Again, these signals are close to their switch points and all three must be confirmed to say the Trump Rally is back on track.

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