Category Archives: Stock Market

Euro Junk, Perfect Backtest

[edit, 8.1.14] SPY short covered, EWP short ongoing.  [edit 2] FAZ sold.  EWP still ongoing, probably for a longer hold.

How perfectly did this crap rise to test the breakdown and then drop?  My stop as noted last week was a rise above 43, so I still hold Spain (Europe’s version of junk bonds) short, along with the chunk of SPY also noted.  No leverage, just short.  I am leveraged short against the Financials however, with FAZ, bought yesterday (conveniently noted today, so distrustful sorts feel free to discount it) on its chart pattern.  This is starting to feel sooooo January 2014.  :-)

ewp

Back on EWP, it (along with Italy’s iShares EWI) was an indicator to the speculative potential (i.e. manic excess) over there in Europe since the middle of last year.  The target was in the low-mid 40′s and damned if it did not get there off its lows below 20.

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S&P 500; Bye Bye Wedge

SPX breaks down from the rising wedge, loses RSI 50 and threatens support.  Of course, this is just one lagging headline index.  The damage elsewhere in indicators and leading markets is excellent.  All according to the preferred NFTRH operating plan I might add.  And that goes for the precious metals too.

spx

SPX daily from NFTRH 300

What’s the Canary Doing?

Last week the Canary in the coal mine had a hiccup.

sox

SOX daily, from NFTRH 300

Further, the Canary’s Canary, the Semi equipment stocks took a hard hit.  The equipment stocks like AMAT, LRCX, KLAC, etc. were the ones whose ramp up we used to gauge coming economic (esp. manufacturing) strength [note: AMAT is making a Hammer candle at S/T support today].  Sooner or later the SOX’ big picture, massive breakout around 560 may get tested and that test would mean only everything for the broad markets.

Meanwhile, the S&P 500 ambles along…

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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.