Category Archives: Stock Market

Short Spain iShares (EWP)

Spain iShares EWP was one of two (Italy being the other) Euro markets NFTRH has used over the last year to gauge speculation over in that bubble.  The target for this market that people were running away from in droves (including its bonds) as recently as 2012 has been 44.  Check.

ewp

The stop loss would be above 43.  Otherwise, if my macro view does not change this could be a good hold back down to 30 or so.  Again, like with SPY, it’s a straight short with no leverage.

NFTRH+; LSCC Blown Up on Earnings, Trade Off

The buy target per the original highlight was 7.  In after hours LSCC sheared right through that and is, much like fellow Semiconductor company SIMG a couple months ago, now hands off.  Trade idea is aborted.  It is now fodder for day traders I guess.

I am not liking what I am seeing in some of the Semi’s this earnings period outside of Intel and a few others.  Speaking of which, Intel may be sold as well if my market view firms to bearish for a correction.

Remember AMD’s earnings sucked too and that Intel’s performance has a lot to do with Intel and not a rising tide in the sector, in my opinion.

Remember also that the Semi’s are a leader, both ways.

Short SPY

Market godz help me, but I just shorted SPY.  No leveraged funds, no options, just a straight short that I hope to be strong enough to hold because we know how these things usually go.

It is not so much the nearby SPY target that I am looking at as it is a constellation of indicators that show market sponsorship eroding.  This joins my only other shorts, which are in the precious metals [edit: much less short the precious metals now :-) ] and are of a very different orientation than this one on SPY.

spy

Juniper Flops

A post yesterday promo’ing NFTRH+ said “JNPR has only just now started to do something after I’ve sat upon it for a couple weeks (with the SMA 200 roughly my tolerance point).”

Tolerance point is violated and a loss is forthcoming.  So if I am going to promo you the positives I am going to doubly promo the fact that losses will occur.  The JNPR trade was actually the product of a weekly chart, which was flagging down to support.  The chart is cooked today if this morning’s drop holds up.

Just an FYI since this is a place that is going to admit its mistakes even as it touts its positives.

Semiconductor Sector’s Excitement Continues

Dialing back to January of 2013, I am looking for clues about the coming phase for the economy, mostly as an input into whether or not I can think about turning bullish on gold again (here we remind you again of gold’s best investment case, which is counter not pro cyclical).

The answer, from a contact in the Semiconductor sector (AMAT, LRCX, MKSI, etc.) food chain was that the Semi equipment companies, which we called “canaries on the [economic] coal mine”, were ramping up and thus NFTRH’s view became bullish for the economy, at least short-term.

When this information was combined with the following chart of the Palladium-Gold ratio, which had proven a good economic backdrop indicator, the case for a firm economic phase was even stronger.  Then followed a string of strong ISM data, a stabilizing ‘jobs’ picture and voila, here we are in Bull Party Central with trend followers everywhere looking good and touting to cement their reputations.  But I digress…

pall.gold

Here is the monthly view of PALL-Gold showing that the economy may not be done yet, although the break above resistance (now support) is still very tentative…

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FXI, a Pre NFTRH+ Highlight

NFTRH+ is really nothing more than an effort to formalize a less important aspect of the entire NFTRH service, which is macro market management through a 25-35 page weekly report and in-week updates, along with individual equity highlights when I feel a good risk/reward setup and/or like what I see on a chart.

Before NFTRH+ and before the current crop of ‘Buy China! Buy Emerging’ callers emerged, there was the NFTRH highlight so many weeks ago in an ETF update showing what looked like an Inverted H&S bottoming pattern.  It’s target by the way and FYI, is 40.  I already took my profit on the vehicle I used (TDF), but the FXI target is alive and well; and it’s closing in.

Here’s the updated chart, untouched from that update.

fxi

One More Hump?

Last Friday after the geopolitical mini hysteria on Thursday I noted how I refused to buy any bearishness on the stock market during a negative flash point that had absolutely nothing to do with market fundamentals.  The charts had remained unbroken and sure enough Friday was positive, yesterday was nothing and today the US market is green pre-open.

All this with end of the world headlines cranked out by the MSM.  Today that changes a bit (clicking the graphic yields the article, which I have not read yet since the headline is what this post is concerned with)…

headline

7.22.14 pre-market headline from Market Watch

I’d be pissed had I shorted on Thursday.  Indeed, after starting out the year having my best gains come from the short side it has been a long stretch to the current moment where any shorting done has eroded overall gains.

Going forward NFTRH has two options going…

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Stock Market, Gold and Geopolitical Strife

Much like you do not buy gold on geopolitical flash points, you don’t short stocks either.  At least that is what I was telling myself all day yesterday as the news and the selling got worse but the market held unbroken status amidst the risk ‘OFF’ indicators.

‘At the least’ said I to myself, ‘wait until tomorrow’.

Now it is tomorrow, stocks are up (and surprise, gold is down) and I am in no hurry to do much of anything just yet.  We’ll see how things progress.

Just one little tale from one little lowly market participant.

Bearish Divergence

One reason I think that the next correction – if it’s not a bull killer – will be a big one is because of the bullish pressure building from the dumb money, while at the same time forensic indicators like junk bond to investment grade and T bond spreads show smarter money creeping out of the markets.

hyg

Nominal HYG is at a trend line, fine.  It’ll probably hold for a while.  But HYG vs. LQD and TLT has been declining all year.  This is a market sponsored by the dumbest of money.

Here is but one more view among many out there that I could post…

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DJIA: A Fata Mortgana

Guest Post by Wim Grommen

The Dow Jones Industrial Average (DJIA) Index is the only stock market index that covers both the second and the third industrial revolution. Calculating share indexes such as the Dow Jones Industrial Average and showing this index in a historical graph is a useful way to show which phase the industrial revolution is in. Changes in the DJIA shares basket, changes in the formula and stock splits during the take-off phase and acceleration phase of industrial revolutions are perfect transition-indicators. The similarities of these indicators during the last two revolutions are fascinating, but also a reason for concern. In fact the graph of the DJIA is a classic example of fictional truth, a fata morgana.

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Stock Market, 2 Hours In

Some thoughts nearly 2 hours into a fairly eventful day…

All of my regular stocks are green or flat.  That includes NFTRH+ standout Intel.  One that was red was Lattice Semi, a fellow NFTRH+ which was sold at a loss.  I personally jumped the gun on the buy but the actual ‘+’ buy target has not even been reached yet.  So it’s back on watch.  Also sold was the SOXS Semi sector short that was guarding LSCC.  It was sold for a profit, although it did not offset the LSCC loss.  That’s show biz.

I have by the way had more losses than gains trying to poke the market short lately.  I am currently holding one short, against big tech.  But that is because I hold big tech long.  If the market makes some more southerly hints, I’ll consider increasing shorts.

Here is a chart that people should pay attention to.  It is junk debt vs. supposed quality debt (HYG-TLT ratio).

hyg.tlt

Market players should not be chasing prices around (as in, is today’s Portugal inspired drop a shake out or something more; do I ba ba ba… buy or do I stand pat?).  Players should be looking at macro charts like the above and asking questions like ‘is that black arrow going to denote another bull trap and eventually turn red like the other 3 arrows or not?’