Sun and Storm Investing Market Timing Blog™

Market Timing Brief™ for the 4-15-2016 Close: Stocks Begin Earnings Season With a Rally. Gold Still a Buy On Pullbacks. Rates Will Go Lower.

Posted on April 17, 2016 by David Durand

A Market Timing Report based on the 4-15-2016 Close, published Sunday April 17th, 2016

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

1. SP500 Index: The stock market bounce continued up above the down trend line I pointed out last week with an earnings season that started by meeting lowered expectations this past week. Alcoa (AA), which leads the official earnings season, is up since its so-so report. Earnings were 0.07 vs. the 0.02 expected. The game seems to still be the Fed regardless of the fact that the other countries engaging in monetary easing are not getting great results. Japan, in fact, is in recession. The results in Europe are mediocre.

Tonight with failure of OPEC et. al. to secure a production agreement has oil down 4.62% with SPX futures falling 0.5%. This could be an inflection point and turn out to be a false test above the trend line rather than a confirmed breakout. Markets tend to disappoint the largest number of investors possible, and at these levels, the Bulls are more vulnerable. Another higher high for the SPX would mean we’ll likely re-top however. That’s not my position on the market, but you must be aware of the upside potential even when the downside potential is there.

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

sp500-index-market-timing-chart-2016-04-15-close

Breaking up and out or just a tease?

Sentiment fell this week among individual investors (AAII.com) AS the market RALLIED with the Bull minus Bear spread at +2.96% this week (Bulls 27.85% and Bears 24.89% with Neutrals a Bullish 47.26%). See comments from four weeks ago on why that Neutral number is Bullish.

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

2. U.S. Small caps are STILL above the 1040.47 level that for me defines a Bear market transition point, but small caps could top out right at the yellow down trend line.

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

rut-small cap-index-market-timing-chart-2016-04-15-close

Testing the 200 day moving average. End of the Bear or the Resumption?

3. Gold: GLD fell back and tested the 50 day moving average yet again and has held up well following a powerful rally in February as mentioned last week. STILL TRUE: “The main threat to further progress is the U.S. dollar rallying from here. Typically gold only rallies with the dollar in times of panic.”

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

gld-gold-etf-market-timing-chart-2016-04-15-close

Gold can still be bought on these pullbacks. The dollar is my concern.

4. U.S. 10 Year Treasury Note Yield (TNX): Rates should head lower and could drive down the U.S. dollar unless we enter an international financial panic. In a panic, gold and the dollar go up and rates go down (bonds/Treasuries UP in value) as investors flee to U.S. Treasuries.

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

tnx-10-year-treasury-note-market-timing-chart-2016-04-15-close

Yields should fall further.

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

Be sure to visit the website 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.

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

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, fed rate hike, federal reserve, gld, gold etf, investor sentiment, iwm, market timing, rate hikes, rut, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, tyx | Leave a comment

Market Timing Brief™ for the 4-08-2016 Close: Market Seeks Fed MISguidance! Stocks Face Earnings Season. Gold Is Strong. Rates Collapse.

Posted on April 11, 2016 by David Durand

A Market Timing Report based on the 4-08-2016 Close, published Saturday April 10th, 2016

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

1. SP500 Index: We are falling back from the yellow down trend line. If that trend is violated to the upside, we will likely see a Bull run back to the prior top or beyond. Earnings should be in the Bulls’ way this quarter. If they are not, we will re-top quickly. The punchline is that real GDP growth is supposed to be near zero in Q1, which I detail a bit further in my interest rate comments below.

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

sp500-index-market-timing-chart-2016-04-08-close

Stocks are vulnerable to a pullback.

Sentiment is somewhat more Bullish this week among individual investors (AAII.com), though definitely still not at an extreme, with the Bull minus Bear spread at 10.7% this week (Bulls 32.2% and Bears 21.5% with Neutrals a Bullish 46.3%). See comments from three weeks ago on why that Neutral number is Bullish.

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

2. U.S. Small caps are STILL above the 1040.47 level that for me defines a Bear market transition point, but small caps appear to be rolling over ahead of earnings. A break back below 1040.47 will indicate a resumption of the prior Bear market in small caps and would be a very negative sign for the entire U.S. market. GAAP earnings of small caps are negative for the trailing 12 months. Breaking above the yellow line instead would be a very Bullish sign. I doubt that it will happen prior to a move to the downside.

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

rut-small cap-index-market-timing-chart-2016-04-08-close

Small caps turning over.

3. Gold: GLD fell back and tested the 50 day moving average, and has held up well following a powerful rally in February. The main threat to further progress is the U.S. dollar rallying from here. Typically gold only rallies with the dollar in times of panic. The dollar is back testing prior lows and could bounce. A dovish Fed could keep the slide going however. The hesitation in gold is likely due the market believing that the Fed will become even more dovish.

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

gld-gold-etf-market-timing-chart-2016-04-08-close

Gold rally holding up well after a high volume advance.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): The failure of the Federal Reserve is seen on the chart below. They hiked rates and longer rates FELL. The opposite is supposed to happen in an expanding economy. This picture fits the revision of the Atlanta Fed of Q1 GDP down to 0.1% on Friday the 8th! It was 2.6% a few weeks ago, which shows the inability of the Fed to predict our economy’s future. The funniest thing about this is that the market is keying OFF OF FEDERAL RESERVE STATEMENTS!!! What a joke! The Fed has NO CLUE about what is happening, and yet the market seeks the Fed’s guidance.

tnx-10-year-treasury-note-market-timing-chart-2016-04-08-close

Rates lead the Fed.

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

Be sure to visit the website 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.

Market Timing Brief™ for the 4-01-2016 Close: Stocks Rallying Ahead of Dicey Earnings Season. Gold Slips A Bit. Rates Continue Downtrend.

Posted on April 2, 2016 by David Durand

A Market Timing Report based on the 4-01-2016 Close, published Saturday April 2nd, 2016

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

1. SP500 Index: Dr. Yellen was hyper-dovish on rate hikes in her speech this week, suggesting the Fed can wait, just after some Fed governors said the opposite. The stock markets liked that. However, the Atlanta Fed lowered their GDP estimate for the first quarter from 1.4% to 0.6% on March 28th and then to 0.7% on Friday. The data is HERE. What good is that sort of information? Their numbers are too erratic to be of use. I believe it’s misleading to investors and they should not bother publishing it!

The market did not seem to mind that the U.S.employment numbers met the consensus, beating it by only 5,000 jobs at 215,000 jobs for March. The number is not too hot and not to cold for the stock market.

On a technical basis, the market could go as far as making a new marginal high without a correction, but my opinion is that the earnings season may stop the fun. If you disagree with me, stay fully invested in stocks, whatever that means to you and your risk parameters.

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

sp500-index-market-timing-chart-2016-04-01-close

Stocks continue their rally ahead of Q1 earnings that could be a challenge.

Sentiment is slightly LESS Bullish this week among individual investors (AAII.com), though definitely STILL not at an extreme, with the Bull minus Bear spread at 1.4% this week (Bulls 27.2% and Bears 25.8% with Neutrals a Bullish 47.1%). See comments from two weeks ago on why that Neutral number is Bullish.

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

2. U.S. Small caps are STILL both above the 1040.47 level that for me defines a Bear market transition point, AND after this week’s enthusiasm about Fed Chair Yellen’s comments are now back ABOVE 1080.61. But get this: the trailing one year GAAP earnings of the Russell 2000 are NOT “Nil” but instead are actually negative! They are negative because of all the special charges that must be taken when reporting GAAP earnings results. Non-GAAP earnings are a big cheating opportunity that companies love. “We would have had great earnings, except Da-da-da-da-da.” Sounds like “My dog ate my homework” to me. I am staying clear of small caps for this reason.

See “Nil” in the PE Ratio table HERE and note the verbiage just above the table with the PE ratios!

Russell 2000 U.S. Small Cap Index Going Up on “Nothing” (no earnings) (click chart to enlarge; RUT, IWM):

rut-small cap-index-market-timing-chart-2016-04-01-close

Small Caps regain some ground despite lack of earnings.

3. Gold: Last week I said US Dollar strength could be a problem for gold. “I’d say GLD has downside risk to at least 113.99 as a test of both the prior breakout conviction as well as the 50 day moving average for technical traders.” GLD tested the 50 day moving average (curved aqua line) and could go lower if the US dollar firms.

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

gld-gold-etf-market-timing-chart-2016-04-01-close

Gold eases back to test the 50 day moving average.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): Rates keep grinding down lower and lower on predictions of worldwide economic slowing. The Fed members can’t have it both ways. One side is right, the other wrong, and given the results (a dive in GDP and hurting earnings), I expect rates to ease further. A yield of 1.651% should hold this move for at least a small bounce. Consider where rates are elsewhere in the world and you’ll understand why they could move still lower!

tnx-10-year-treasury-note-market-timing-chart-2016-04-01-close

Rates keep sliding with a slowing economy.

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

Be sure to visit the website 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.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, Dr. Janet Yellen, federal reserve, gld, gold etf, investor sentiment, iwm, market timing, raising rates, rate hikes, rut, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, tyx, Yellen Speech | 2 Comments

Market Timing Brief™ for the 3-24-2016 Close: Atlanta Fed Lowers Q1 GDP Estimate. Gold Weaker On Dollar Strength As Predicted Last Week. Rates Headed Lower.

Posted on March 27, 2016 by David Durand

A Market Timing Report based on the 3-24-2016 Close, published Sunday March 27th, 2016

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

1. SP500 Index: The Atlanta Fed lowered their GDP estimate for the first quarter to 1.4% from 2.3% shown on their Excel file and from 2.6% if you read their graph HERE. Makes you wonder about their methodology doesn’t it? I believe the market will have to adjust lower, even if it does not crash from these levels. How do we go higher on a “growth slowing” basis? If we make even more money on our existing long exposure, it’s not likely going to be warranted by the earnings season just around the corner in early April.

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

sp500-index-market-timing-chart-2016-03-24-close

Going down? Chart-wise it could just be another pullback on the way higher. Earnings-wise, it could be the end of a run.

Sentiment is slightly more Bullish this week among individual investors (AAII.com), though definitely not at an extreme, with the Bull minus Bear spread at 10.1% this week (Bulls 33.8% and Bears 23.7% with Neutrals a Bullish 42.5%). See comments from last week on why that’s Bullish.

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

2. U.S. Small caps are STILL both above the 1040.47 level that for me defines a Bear market transition point, but now back below 1080.61. Weakness is rising. AND AGAIN: My working hypothesis is that the economic slowing process has not yet reversed and that a retest of the prior lows (or worse) will occur by the end of June.

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

https://market-timing-blog.sunandstorminvesting.com/wp-content/uploads/2016/03/rut-russell-2000-us-small-cap-index-market-timing-chart-2016-03-24-close

Small caps have now given up two support levels. More downside to go?

3. Gold: Last week I told you to “follow the dollar… The risk now is that the US dollar actually starts to rise as Draghi and other currency warriors print their own currencies. “Dollar up” would cause gold to pause at best or fall for a while until the Euro, yen and yuan lose enough value to satisfy those in the devaluation war.” In short, the dollar rallied off of support, but as I said, the rest of the world won’t stand for too much dollar strength and our Fed won’t either with our economy slowing. I’d say GLD has downside risk to at least 113.99 as a test of both the prior breakout conviction as well as the 50 day moving average for technical traders.

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

https://market-timing-blog.sunandstorminvesting.com/wp-content/uploads/2016/03/gld-gold-etf-market-timing-chart-2016-03-24-close

Gold slipping on US dollar strength as predicted. There’s a limit to this though as the Fed will act if needed to keep the dollar in a range.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): Despite the dollar strength that drove the 10 Year yield up to just below the 1.905% resistance point, as said above, there is a limit to how much dollar strength will occur in a backdrop of a slowing US economy.

tnx-us-10-year-index-market-timing-chart-2016-03-24-close

Close was at 1.900% just below that key 1.905% level.

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

Be sure to visit the website 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.

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

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, federal reserve, Federal Reserve FOMC statement, gld, gold etf, investor sentiment, iwm, market timing, raising rates, rate hikes, rut, sentiment shock, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, tyx, US dollar vs gold | Leave a comment

Market Timing Brief™ for the 3-18-2016 Close: Fed Says Economic Growth Is Slowing and Market Likes It? Gold Still Strong. Rates Fall.

Posted on March 20, 2016 by David Durand

A Market Timing Report based on the 3-18-2016 Close, published Sunday March 20th, 2016

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

1. SP500 Index: On Wednesday the Federal Reserve FOMC statement and projections said that the number of rate hikes the Fed sees for the next year is down to 2 from 4. That means they see less growth, because rate hikes and economic growth go together. Based on SLOWER GROWTH of the economy and LOWER EARNINGS, the stock markets rallied. This will catch up with the markets soon, in the next earnings season come April. If you look at the chart below, you can see how rapid this rally back up above numerous resistance levels has been. Easy come, easy go in my view.

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

sp500-index-market-timing-chart-2016-03-18-close

Still going up…but how will earnings season look?

NOW if YOU believe that the market is RIGHT and the Fed is wrong about “growth slowing,” then you should remain 100% invested in the stock market. If you believe the Fed becoming more dovish by lowering the number of interest rate increases for the next year is enough to support the stock market, despite weaker earnings ahead, stay 100% invested.

I personally have lowered my exposure as detailed on Twitter/StockTwits (See links below). I was willing to give up some upside gain, right or wrong, because I believe the recent gains are an illusion created by a market temporarily hooked on central bank cocaine. By not selling everything, I still benefit from the rally, should stocks never fall back. Despite my selling of some exposure, I have correctly told you that the market could rally further on a technical basis (see Twitter/StockTwits feeds).

Sentiment is leaning less Bullish this week among individual investors (AAII.com) with the Bull minus Bear spread at 3.1% this week (Bulls 30.0% and Bears 26.9% with neutrals a Bullish 43.2%). We are a long % distance from the next “Sentiment Shock” as I defined it HERE. Having greater than 40% Neutrals is Bullish (the sentiment position reference point is always 6 months out from the judgment of the survey members) per AAII.com archived research on the subject that I have provided the links to previously. When investors are “confused” meaning “neutral”, the market tends to go up within the following 6 months. This would generally contradict the idea of selling stocks here, unless they first dive and then recover by September.

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

2. U.S. Small caps are both above the 1040.47 level that for me defines a Bear market transition point, but also above 1080.61, and this week are pressing against the 1102.58 mark. AGAIN: My working hypothesis is that the slowing process has not yet reversed and that a retest of the prior lows (or worse) will occur by the end of June.

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

rut-small cap-index-market-timing-chart-2016-03-18-close

Small caps hitting next resistance level.

3. Gold: I told you to follow the dollar and right after the Fed delayed and reduced the number of hikes, the dollar crashed to the bottom of its channel (chart posted to social media links above). The risk now is that the US dollar actually starts to rise as Draghi and other currency warriors print their own currencies. “Dollar up” would cause gold to pause at best or fall for a while until the Euro, yen and yuan lose enough value to satisfy those in the devaluation war. Panic out of the financial markets on further economic slowing could do the same as rates head still lower in the U.S. In the short term, dollar strength is a threat.

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

gld-gold-etf-market-timing-chart-2016-03-18-close

Gold hands on, but dollar is now stretched to downside adding some immediate risk.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): Rates fell back below the 1.90%ish level and headed back down following the FOMC statement this Weds. They should head still lower as the slowing of the U.S. economy begins to sink in during the next earnings season.

tnx-10-year-treasury-note-market-timing-chart-2016-03-18-close

Rates reverse back down into the range.

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

Be sure to visit the website 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.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, federal reserve, Federal Reserve FOMC statement, gld, gold etf, investor sentiment, iwm, market timing, raising rates, rate hikes, rut, sentiment shock, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, tyx, US dollar vs gold | 1 Comment

Market Timing Brief™ for the 3-11-2016 Close: Bulls Had Better Have Profits to Show in April. Gold Rally Still Showing Bullish Volume Pattern. Rates Zip Up Pre-Fed FOMC Meeting.

Posted on March 13, 2016 by David Durand

A Market Timing Report based on the 3-11-2016 Close, published Sunday March 13th, 2016

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

1. SP500 Index: I said last week that the Bulls could bring the market up to 2020ish and it did, with a close Friday in SPX of 2022.19. Earnings are likely to come in light this next quarter and bring stocks down if they are not already hit by a Fed rate hike this next Weds. (unlikely as it would shock the markets) or more likely if they telegraph via their “dot plots” that a June hike is likely, now considered by the futures markets to be at a 43% probability.

Sentiment is leaning somewhat Bullish among individual investors (AAII.com) with the Bull minus Bear spread at about 0 this week (+13.0%). We’ve only had the single “Sentiment Shock” I pointed out weeks ago. In terms of the timing of the next Sentiment Shock, we are 51 days from the last one in January as I discussed HERE. A delay between Sentiment Shocks, a term I recently coined, is not unusual as the data at the prior link prove.

sp500-index-market-timing-chart-2016-03-11-close

Bulls still in charge, but market is stretched now.

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

2. U.S. Small caps are both above the 1040.47 level that for me defines a Bear market transition point, but also above 1080.61. Bear market rallies can be incredibly strong, but violating the prior break points must be respected for now. A reversal back below these two levels will induce big downside moves in my opinion. My working hypothesis is that the slowing process has not yet reversed and that a retest of the prior lows (or worse) will occur by the end of June.

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

rut-small cap-index-market-timing-chart-2016-03-11-close

Small caps are above Bear market territory, but any reversal will be deadly.

3. Gold: The same advice applies as last week: “The gold rally is solid, but it’s extended, so buy pullbacks, not the “rips” UP.” The dollar moved down this week post-Draghi, supposedly because he told the markets that he would not move rates lower any further after this (see last week’s dollar vs. gold chart).

Note the moves UP in GLD have been accompanied by increased volume and the dips by falling volume. This is a perfect pattern for a continued rally in gold. Preserve profits if that is wrong! If the economy DOES recover sooner rather than later, gold will likely suffer. Be prepared with a plan for where you will preserve profits.

Gold ETF (click chart to enlarge; GLD):

gld-gold-etf-market-timing-chart-2016-03-11-close

Gold rally still strong.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): Rates are moving up, and, in fact, went right past significant resistance at 1.90%ish and have retraced about 50% of the range from the lows. This magnitude of a rate spike must be accompanied by a resurgence in corporate profits, or we’ll have stagflation on our hands. The Fed concludes a meeting this Weds. where they will likely point to further hikes by June at the latest. This Wednesday the Federal Reserve will update their infamously (wrong) dot plots, which nevertheless indicate how many times they foresee hiking rates this year. Potential danger is just a couple of days away.

tnx-10-year-treasury-note-market-timing-chart-2016-03-11-close

Rates are about mid-range now with the Fed FOMC meeting ending Weds.

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

Be sure to visit the website at: Sun and Storm Investing™

Standard Disclaimer: It’s your money and your decision as to how to invest it.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, Draghi, ECB, gld, gold etf, investor sentiment, iwm, market timing, raising rates, rut, sentiment shock, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, tyx, US dollar vs gold | Leave a comment

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

Posted on March 6, 2016 by David Durand

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

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

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

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

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

Stocks are out of Bear market territory…for now.

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

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

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

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

Small caps are above my Bear market trigger number.

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

Gold ETF (click chart to enlarge; GLD):

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

Gold is stretched now.

Relationship of Gold Rally to Dollar Weakness:

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

When the US dollar falls, gold rises!

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

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

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

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

Be sure to visit the website at: Sun and Storm Investing™

Standard Disclaimer: It’s your money and your decision as to how to invest it.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, gld, gold etf, investor sentiment, iwm, market timing, raising rates, rut, sentiment shock, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, trade the range, tyx, US dollar vs gold | Leave a comment

Market Timing Brief™ for the 2-26-2016 Close (GLD Update 2-29-2016): What Will Decide the Next Big Move in Stocks? Gold Holds Gains as Rates Rise a Bit on “Risk On” Trade.

Posted on February 28, 2016 by David Durand

A Market Timing Report based on the 2-26-2016 Close, published Sunday February 28th, 2016

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

2-29-1016 GLD UPDATE: Gold does fine with the dollar either flat to falling. The only time the dollar and gold tend to move up together is when there is financial panic. That is not happening right now. With the Fed off the rate hike pedal, the dollar should stay flat or fall a bit. If it falls too much, the Fed will have stagflation on its hands in the near term. IF we see the U.S. economy strengthen, the dollar will strengthen and Federal Reserve rate hikes come back on the table, and gold is likely to fall unless there is growth WITH high inflation (negative real interest rates).

gld-gold-etf-market-timing-chart-2016-02-29-951am

Gold does fine with dollar flat to falling.

1. SP500 Index: The stock market bounce went a bit further this week, scaling the prior lower daily high, though it is not much above it. This week the negative spread of the Bull% – Bear% of AAII.com Individual Investor Sentiment rose to -0.2%, so that the second “Sentiment Shock” that I defined here: “SENTIMENT SHOCK™” has yet to occur. We are now still waiting to see whether the shock that hit the market during the two week period beginning with 1-13-2016 will give rise to yet another shock. If you are Bullish, you don’t believe that there will be a second shock. If we see another, the odds are that this is a Bear that will take down the large caps along with the small caps that still remain in a Bear market.

What it hinges upon is simple and I said everything on Twitter at the end of the week, so you can read about it there (link below). In brief, if some are right that we are headed into a recession, the losses in the SP500 Index will steepen to exceed 20%. The recent low of 1810.01 was already 14.8% from the all time high of 2134.71. If you believe we are NOT headed into a recession and that the dip in GDP is just a hesitation in the recovery, stay fully invested. If you believe otherwise, consider cutting your exposure at a certain level of loss from the close Friday. I believe that the economy will slow further regardless of whether the U.S. enters a full recession or not, so I want to have some cash to buy stocks lower; however, I’m willing to change my mind.

Currently I’m at 70% of my maximum worldwide equity exposure. If you are in your 20’s and have an 80% exposure to stocks, your exposure would now be down to 56% as an example IF you decided to mirror my exposure level. I held up to a maximum 135% of my usual maximum equity exposure using excess cash when the market was behaving better. Not any longer.

I report my equity exposure level regularly on Twitter each time I make a move. You must make your own decisions and be willing to change your mind if you are wrong. Missing a big fall in the market is a good thing, but so is participating in a big rally. Manage your risk and live with your results.

sp500-index-market-timing-chart-2016-02-26-close

SP500 Index rally: Is it durable?

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

2. “U.S. Small caps failed to scale 1040 at the end of January, and remain in a Bear market.” We’re still waiting for the small caps to rise above that 1040 level. If they do, it would be Bullish for the entire market, so pay attention to their performance this week.

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

rut-small cap-index-market-timing-chart-2016-02-26-close

Small caps still in a Bear market state.

3. Gold: Although the rally is OK so far despite the slight pullback, gold needs another boost soon to maintain momentum. Preserve at least half of your profits if you bought when I said “buy some damn gold if you have none.” You can always rebuy it. If you see the gold rally sputter quickly, get ready for more Federal Reserve rate hikes.

Gold ETF (click chart to enlarge; GLD):

gld-gold-etf-market-timing-chart-2016-02-26-close

Gold hesitating in a rally.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): Treasuries came off a bit this week as the “risk-on” traders were at work. I would still expect rates to stay low to lower for the rest of 2016 until U.S. GDP turns around (see caption of chart below).

tnx-10-year-treasury-note-market-timing-chart-2016-02-26-close

10 Year Treasury Note Yield should stay below 1.845% (Spring 2015 low) or it means the market sees a stronger economy.

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

Be sure to visit the website at: Sun and Storm Investing™

Standard Disclaimer: It’s your money and your decision as to how to invest it.

Posted in Bonds, federal reserve, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, gld, gold etf, investor sentiment, iwm, market timing, raising rates, rut, sentiment shock, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, trade the range, tyx | Leave a comment

Market Timing Brief™ for the 2-19-2016 Close: Currency War: New Round Begins Now. Stocks Falter After Weak Bounce. Gold Hesitates in Rally After Strong Bounce. Rates Stay Low..

Posted on February 21, 2016 by David Durand

A Market Timing Report based on the 2-19-2016 Close, published Sunday February 21st, 2016

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

1. SP500 Index: This week the negative spread of the Bull% – Bear% of AAII.com Individual Investor Sentiment fell below the -25% level that would have been required to create the second “Sentiment Shock” that I defined here: “SENTIMENT SHOCK™”. The spread was only -10.2% to be exact. We are now waiting to see whether the shock that hit the market during the two week period beginning with 1-13-2016 will give rise to yet another shock.

sp500-index-market-timing-chart-2016-02-19-close

The last bounce has been weak.

The bounce off the lows has been weak, and I’ve taken some exposure off, right or wrong. I suspect there needs to be more retesting of the prior lows at the minimum. In the meantime, please keep up to date at Twitter and StockTwits: See my messages on Twitter® Follow Me on Twitter®. Follow Me on StockTwits®).

2. “U.S. Small caps failed to scale 1040 at the end of January, and remain in a Bear market.” Still true today. Stay away.

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

rut-small cap-index-market-timing-chart-2016-02-19-close

Small caps hesitate along with large caps.

3. Gold: Rally still continues. I bought some more gold, adding a trading position to my long term buy and hold position. Entering here is a bit risky (I hope you entered lower when I said to “buy some damn gold”) as the rise of gold has been rapid and is subject to a greater pullback; however, I believe the rally will be sustained based on US dollar weakness to come. I believe that the only way out of the U.S. profit recession is to have the US dollar come down and it will, because it must (per the Fed’s goals in life). Dollar down, gold up. If that does NOT occur, don’t expect much from gold unless there is financial panic in which case both tend to rally.

Gold ETF (click chart to enlarge; GLD):

gld-gold-etf-market-timing-chart-2016-02-19-close

Gold rally is stretched, but dollar looks like it’s peaked.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): Rates are moving back down due to the impending round in the currency war that is about to start. The Fed will have to back off from hiking rates and let the US dollar weaken once again to cause U.S. sales abroad to rise, earnings to rise and GDP to perk back up. If the Fed raises rates, they will drive the dollar up and commit U.S. economic suicide if they do not then relent.

tnx-10-year-treasury-note-market-timing-chart-2016-02-19-close

Rates drift back down.

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

Be sure to visit the website at: Sun and Storm Investing™

Standard Disclaimer: It’s your money and your decision as to how to invest it.

Posted in Bonds, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, federal reserve, gld, gold etf, investor sentiment, iwm, market timing, raising rates, rut, sentiment shock, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, trade the range, tyx | Leave a comment

Market Timing Brief™ for the 2-12-2016 Close: Stock Market Bounces But Danger Lurks! Gold Rally Strong But Stretched. Rates Bounce from Major Low.

Posted on February 14, 2016 by David Durand

A Market Timing Report based on the 2-12-2016 Close, published Sunday February 14th, 2016

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

1. SP500 Index: Despite the holiday, there’s no love in the air this weekend for Fed Chair Janet Yellen. She had the nerve to suggest they might look at NEGATIVE interest rates, which caused the market to sell off initially. She was admittedly baited by a Congressman to discuss it. Then the market apparently decided that at least the Fed was not going to hike any time soon and rallied. The rally may be short lived. We will follow it day by day rather than guess as to where it will lose steam. If we end up with negative rates, I expect the U.S. stock markets to be down as much as 50% from the all time highs. There is risk when you have unelected officials (the Fed) deciding the future of our nation. They have tried to single-handedly engineer an economic recovery using interest rates and QE.

In addition, there was trouble brewing this week in investor sentiment. Two week’s ago I defined a new term, namely “SENTIMENT SHOCK” HERE.

You can read predictions from last week: “I don’t run this market, so I cannot tell you if the selling has a chance to stop at the now obvious support range of 1867-1871.91. If it fails there, the further damage to the market could be extensive. The market COULD retest the October low and then resume a bounce, but I would not be overly optimistic if the 1867-1872 level does not hold. For now, we’re in this for a bounce, and I will change my view when the market does. We observe and respond to the market; we don’t argue with the market. I will drop my exposure level if the market breaks down again.”

The 1867-1871 support levels shown on the chart below failed and are now resistance levels for the SP500 Index. The index closed just below that resistance level on Friday.

Unfortunately, after the first sentiment shock just over two weeks ago, the Bull – Bear percentage spread per AAII.com was MINUS 29.5%. That means that if this Wednesday shows similar sentiment spread of > or equal to 25%, we will have had two Sentiment Shocks just a couple of weeks apart (Remember that each Sentiment Shock consists of two back to back weeks of abnormally negative sentiment). And that finding means we are likely to see even more sentiment shocks as we did in 2007-2009 during the last Bear market. That would suggest that the SP500 Index could sell off another 10-15% or more. Targets beyond the near term are the province of fools. My sense is that things are not as bad now, but if we head to negative interest rates, all bets are off. If you want a sense of how the Bulls could turn this around, read to the end of this post…

sp500-index-market-timing-chart-sentiment-shocks-2016-02-12-close

A second “Sentiment Shock” as I’ve defined it may hit this week.

Trading has beaten buy and hold substantially, since August as I’ve proven. This will continue to be the case up until the election. In the meantime, please keep up to date at Twitter and StockTwits: See my messages on Twitter® Follow Me on Twitter®. Follow Me on StockTwits®).

2. U.S. Small caps failed to scale 1040 at the end of January, and remain in a Bear market. Even with the rally Friday they are barely off their low. I am trading midcaps for this bounce, but will continue to avoid small caps.

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

rut-small cap-index-market-timing-chart-2016-02-12-close

Small caps are still in a Bear market.

3. Gold: Rally continues. My advice from last week still holds, though you are late to enter. Risk has risen due to gold’s recent exponential rise, and it’s important to preserve profits and principle if the rally fails. I said, “Buy the dips rather than chase the rallies if you are not yet invested in gold, but set a mental stop and cut your losses should the trend change. Go back to the gold charts in 2001-2004 to see how erratically the gold price can move during a large Bullish overall move. There are a lot of givebacks of each step up, some of at least 50% of the given step up.”

Gold ETF (click chart to enlarge; GLD):

gld-gold-etf-market-timing-chart-2016-02-12-close

Gold is exponential and subject to a sharp correction in the up trend.

4. U.S. 10 Year Treasury Note Yield (click chart to enlarge; TNX,TYX,TLT,TBF): I made it clear that a fall to the 1.651% level was possible, and it happened this past week with Dr. Yellen’s hinting that the Fed would take its time to raise rates further. I suspect rates will be limited toward the lower end of the range at least until U.S. GDP numbers improve. If the Atlanta Fed is right, that improvement will come in the Q1 data (see my Tweets this week; links above). U.S. Retail sales were a bit better than expected, which definitely helped the Bull argument on Friday.

tnx-10-year-treasury-note-market-timing-chart-2016-02-12-close

Treasuries hit important support in the range and bounce.

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

Be sure to visit the website at: Sun and Storm Investing™

Standard Disclaimer: It’s your money and your decision as to how to invest it.

Posted in Bonds, gold, investment, investor sentiment, large cap stocks, S&P 500 Index, small cap stocks, Treasuries | Tagged 10 year treasury, aaii sentiment survey, aaii survey, federal reserve, gld, gold etf, investor sentiment, iwm, market timing, raising rates, rut, sp500 index, spx, spy, stock market bounce, survey says, tbf, tlt, tnx, trade the range, tyx | Leave a comment

Sun and Storm Investing Market Timing Blog™

Market Timing Brief™ for the 4-15-2016 Close: Stocks Begin Earnings Season With a Rally. Gold Still a Buy On Pullbacks. Rates Will Go Lower.

Market Timing Brief™ for the 4-08-2016 Close: Market Seeks Fed MISguidance! Stocks Face Earnings Season. Gold Is Strong. Rates Collapse.

Market Timing Brief™ for the 4-01-2016 Close: Stocks Rallying Ahead of Dicey Earnings Season. Gold Slips A Bit. Rates Continue Downtrend.

Market Timing Brief™ for the 3-24-2016 Close: Atlanta Fed Lowers Q1 GDP Estimate. Gold Weaker On Dollar Strength As Predicted Last Week. Rates Headed Lower.

Market Timing Brief™ for the 3-18-2016 Close: Fed Says Economic Growth Is Slowing and Market Likes It? Gold Still Strong. Rates Fall.

Market Timing Brief™ for the 3-11-2016 Close: Bulls Had Better Have Profits to Show in April. Gold Rally Still Showing Bullish Volume Pattern. Rates Zip Up Pre-Fed FOMC Meeting.

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

Market Timing Brief™ for the 2-26-2016 Close (GLD Update 2-29-2016): What Will Decide the Next Big Move in Stocks? Gold Holds Gains as Rates Rise a Bit on “Risk On” Trade.

Market Timing Brief™ for the 2-19-2016 Close: Currency War: New Round Begins Now. Stocks Falter After Weak Bounce. Gold Hesitates in Rally After Strong Bounce. Rates Stay Low..

Market Timing Brief™ for the 2-12-2016 Close: Stock Market Bounces But Danger Lurks! Gold Rally Strong But Stretched. Rates Bounce from Major Low.

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