Category Archives: Stock Market

2 Market Leaders

By Biiwii

Market leader #1, the Biotech index is anything but broken as we noted for the oh, 100th time a couple days ago after many drums were beating for an end to BTK’s rally.  When it ends it ends, and the trends (esp. by the NFTRH weekly chart and its upward Arc) will instruct on that.  Meanwhile, the daily did not even test the channel line, instead it’s bouncing at the 50 day averages.

btk

Market leader #2, the Semiconductor index was suspect under the 50 day averages.  Now?  Not so much (though in this market, one day popping up or down needs confirmation).  SOX is 100% intact above the support level around 650.  It’s got some pretty gaudy upside targets by longer-term charts.  Above 650, bulls have the benefit of the doubt.

Continue reading 2 Market Leaders

Earnings ‘Outside Surprise’?

By Biiwii

Here is one way to put a happy spin on things.  Wall Street is increasingly aware of the deceleration in corporate profits and a potential for the upcoming earnings season to be a rough one.  This CNBC article dutifully notes these things, but the highlight is one sun shiny optimist who apparently thinks it may already be baked in.

Earnings season could bring an ‘outside surprise’

“Obviously there’s a ton of concern… but my view is that expectations have come down rapidly, and there’s a clear understanding that we’re looking at a real weak environment right now from an earnings perspective,” said David Seaburg, head of equity sales trading with Cowen & Co.

“I think there could be an outside surprise that could carry this market higher, especially given that you have every central bank working to inflate asset prices.”

There you have it, “expectations have come down rapidly”.  Surely this optimistic view that the worst may be behind us includes stock market valuations and prices that have adjusted…

dow.spx.ndx

Oh wait, never mind.  ‘The worst’ never even got started.

So let’s keep it real and simply realize stocks have been bullish, the trends are up and there has been no discounting of decelerating corporate profits in stock prices.  The market now decides between manic bubble making (defined here as an irrational separation from fundamentals, cooked up by policy though they have been) or a correction to get in line with said fundamentals.

Again, the theme has been that the US market was not over valued into 2nd half 2014 if one is willing to wear blinders to its dependence upon unconventional monetary policy.  But if those fundamentals continue to degrade, the market will look conspicuous even to the densest, most conventional of the herd.

Biotech Updated

By Biiwii

A trend is not over until the trend is over. Lately there have been many posts, research and articles discussing the end of the Biotech rally.  Okay fine, but the charts at least, have not indicated that yet.

While the Biotech sector has not resumed its short-term uptrend after the mini blow off, it is holding the 50 day moving averages and has not even touched the lower channel yet.

ibb

Weekly BTK never hit the Arc line.  From NFTRH 337:

Market leader  Biotech has dropped, but is not broken yet.  Certainly not by the weekly chart we usually review, but also the daily has not lost the 50 day averages or its uptrend.  AROON (trend) has ticked negative, but it has done that several times during the ongoing bull trend.  Looking through the ‘Jobs’ report, if the market’s reaction is negative we should watch BTK and other leading items like the Russell 2000 and Semiconductor Index for negative technical indications.  RUT is stable and the SOX looks suspect.

Here is the standard NFTRH weekly chart of BTK.  As for the other indexes mentioned, the situation as it was last weekend; RUT is stable and SOX is still suspect (below its 50 day averages).

btk.wk

As for personal positioning, Biotech and/or Specialty Pharma were my only stock market positions as of last weekend because the charts of the ones I held told me not to stop holding them.  Hence, I got rewarded with some nice news on one of them today and a chart pop to go with it.

Yesterday OMED dropped below the 50 day averages, just in time to get some Eli Lilly collaboration news.  I ignored yesterday’s drop below the 50’s because one day does not make a breakdown (or a break up, like today, for that matter).  That is day trader stuff.

omed

This thing has been up trending since I bought it (trading several times in the interim) for a year end tax loss play back in Q4 2014.  So I have remained constructive on it, as with the sector itself.

All of this said, I am going to do what the market says and if Biotech breaks down I’ll be fine moving on from it.  If not, I’ll hold some or all of what I hold (a couple others have better looking charts than the sloppy thing OMED’s has become).

This year the theme is definitely not to put ego or emotion into things.  Whatever the market says will go, and that includes the precious metals.  There are predictions, warnings and touts of all kinds flying around today.  Throw in the Fed’s clown show and you should definitely have the b/s detector set on its most sensitive level.

Stock Market: This Again?

By Biiwii

Back in the December to February time frame we had been noting a ‘swing’ market (swing baby, swing!) AKA a Whipsaw market AKA a market for nimble swing traders.  There is no trend (on the daily time frame).  What there was a few months ago was an extended period of fleeting hard ups and commensurate hard downs.  So swing baby, swing!… but stay nimble.  Today looks like one of those after the hard drop last week.

Market participants seem to literally be jerking to every piece of data or information that comes out.  Strong Jobs = panic drop, FOMC lameness = rally, some middle east noise last week and mixed econ. data = drop, some China easing hype today = rally.

dow

NFTRH’s latest US stock market rundown is posted at NFTRH.com if you want to check it out.  Besides this fairly normal run through of important US markets, #336 had a lot to say about keeping perspective on the whole ball of wax.

I really feel like we have got our shit together, to put it as a I would put it in real life if you and I were just sitting and talking. And I’ve got all the patience in the world to boot.  Not only for playing US stocks, but the precious metals (which I feel we have managed pretty close to flawlessly thus far, and much of  the rest of the whole ball of wax).

Hint:  Use real data and objectivity and keep ego and bias contained, tune out useless hype and it’ all going to work out just fine.

Googling Ruth Porat

By Biiwii

Sometimes we don’t know why a chart is doing what it is doing.  All I knew was that GOOGL was making a nice chart pattern, so it was noted as an NFTRH+ trade setup.

Having sold the initial run, I bought it back on the drop to a secondary buying area, as noted in NFTRH.  Today we are treated to some hype about Morgan Stanley’s high powered CFO trading her Manhattan view for Mountain View.  Ruth Porat joins the team.

Not to make light of it.  It’s probably a nice move for Google.  But the stock is moving on it and in that regard it is hype.  So I may decide to sell.  Since you don’t pay me to make decisions for you I’ll not publicly make that decision.  NFTRH subscribers who may have taken these trades are profitable and they are grown men and women who can make their own decisions as to what profit is acceptable as well.

The target of 590 remains, but I often sell below targets.  It’s just how I do it.

googl

Biotech ETF IBB

By Biiwii

[edit]  Make post, sector reverses on cue.  Manias include volatility.

Biotech ETF IBB is now taking on the look of… anyone?  Bueller?

ibb

Euro STOXX 50: Me Too!

By Biiwii

Since Mr. Draghi Jawboned the ECB’s coming QE actions we have had Europe on a ‘me too’ QE play to the US (asset price appreciation Über Alles).  While I took my marbles and small profit and went home on the European index ETFs, the big picture view of the Euro 50 continues to be a good one after holding lateral support and breaking above key lateral resistance.  The downtrend line could be another matter, however (but it’s popping through that too, as of now).

stox

Continue reading Euro STOXX 50: Me Too!

Attn: Momo’s & Party Like it’s 1999’ers

By Biiwii

Biotech, a sector who’s bullish upward arc we have been tracking for about a year, is still going up.  Here is today’s momo, Amgen (AMGN).  I don’t own it and have no plans to, but I thought the chart was pretty cool.  There’s the S/T target if the break holds.

amgn

Hedge Fund Trend Follower

By Biiwii

Aren’t these the guys (that is, ‘Hedge Funders’) that as an industry were negative in their returns in 2014?  In Q4 2014 we began a thesis that would see European stock market out performance (vs. the US) as the Euro is leveraged for asset market appreciation, USA style.  Well now some “hedge funder” on CNBC lets the world in on the play…

Hedge Funder: I like European stocks more than US

It is no coincidence that I am now becoming cautious on the European stock play (pending a potential, even likely test of major support we noted in an NFTRH update this morning).  Why?  Because these guys seem to be a herd like no other.  They are called Hedge Funds and people think ‘ooohhh, they must know what they are doing’.

But what they actually seem to do is momo trends and drive them too far, eventually not being smart enough to get out of the way of the fallout.

Listen to this guy.  He basically states ‘I am a trend follower’ for viewers of CNBC.  If my analysis is correct, he may be right about the longer-term trend but it does nobody any good to get in front of a camera and tell millions about the trend you are following when things (USD, Euro) are at extremes and other things (European stock indexes) are at resistance points.

[edit] ha ha ha… she mentioned Alice in Wonderland. i love it

Your Turn Bulls

By Biiwii

Now it is the bulls’ turn to prove something.  In disclosure, aside from two small gold miners I took a try on into the close I am only long one thing, India and short one thing, S&P 500.  The rest is as NFTRH had been advising going into Friday’s kickoff, heavy cash and short-term Treasury equivalents.  [edit] plus a couple other things, Thing 1 and Thing 2 that I decided to hold on to.  Thing 2 is so small as to be irrelevant.  Thing 1 is a Canadian listed gold stock I decided not to take profit on, and instead ride to a paper loss; ah the pleasures of commitment]

I have no real horse in the race other than a non-leveraged short against SPY.  With that disclaimer to my stance, it is now a burden upon stock market bulls to prove their case because this market got perversely over bullish and was ripe for a real kick in the pants.  The technicals are now breaking down to add to the sentiment case.

So it’s as simple as perma-bulls (the ‘its’ a new secular bull market’ crowd) mustering up some bravado to back up their resolute bullish view.  Come guys ‘n girls, buy ’em up!  Get on CNBC and talk in your usual conventional tones and discuss conventional strategies as if this is a conventional market.

Pay no attention to my favorite chart showing a policy-driven wealth effect vehicle utterly dependent upon a certain kind of interest rate policy and unconventional bond-based market manipulation tools.

sp500

How long before the next insecure Jawbone hits the mic to firm up the bulls’ backbones?

williams
David Paul Morris | Bloomberg | Getty Images (not including mark-up)

SPY 210

By Biiwii

Don’t interpret this as a bravado fueled chest thumping post.  A measured target on a monthly chart can be plotted by a Chimp with a calculator. That said, here is a chart of SPY created shortly after it made the big break to all time highs.  Doink… it would be cool if this is the top, but it’s just one down week and the market needed a correction badly.  So no reading more into it than that.

spy

I have been seeing the markets as well as I ever have (which is far away from perfectly) coming out of 2014 and into 2015.  For some reason charts are working.  By that I am talking mostly about daily charts and in many cases daily stock charts.

It may have something to do with the droves of dumb money that have been piling in and forcing individual stocks to act in a more linear fashion (ex: Google paints a nice short-term pattern, tests and finds support and expresses the pattern bullishly as hoped), maybe wresting some of the action away from those erratic black boxes.  Dumb money would force that linear action upon downside action as well, as they puke back out.

Patterns have been playing out as expected and beneath the surface I have a weird feeling that some heavy hand has backed off the markets or that the shear noise created by too many algos and too many jawbones has itself been drowned out in favor of more traditional market action.  Again, this could be a sign that the public came in big with the latest extreme over bullish sentiment.

I am heavy in cash (per recent NFTRH), short a little (per an admittedly timid NFTRH+ SPY update yesterday) and thoroughly going to enjoy this.  Patience, as always, will work well.