Control Top

By Tim Knight

Before I get started, I wanted to mention that I just received the full-color version of Silicon Valley Babble On, and it is just gorgeous. If you’re one of the well-to-do Slopers out there, you might want to spring for this luxury item, because it looks absolutely fantastic. It’s not cheap at 79.95, but here’s a link if you’re interested.

Now I’d like to share with you three charts of the S&P 500 cash index. I have deliberately left off the axis labels, so you’ll know neither the times nor the prices.

Continue reading Control Top

Is This Really the Longest Bull Market Ever?

By Charlie Bilello

They say it’s the longest bull market ever.

Certainly makes for a good headline, but what does “bull market” mean? And is determining its length of any value for investors? Let’s take a look…

Defining the “Bull”

There is no standard definition for “bull market.” If you ask 10 different market participants you could easily get 10 different answers.

Continue reading Is This Really the Longest Bull Market Ever?

Harder Markets Are Typically Followed By Easier Markets

By Chris Ciovacco

S&P 500’S BREAKOUT ATTEMPT

The S&P 500 closed above 2532 on October 3, 2017, and eventually rallied to 2872 on January 26, 2018. The S&P revisited 2532 on February 9, 2018.  Last Friday, the S&P 500 closed above 2872.  Therefore, price stayed inside the orange box for 325 calendar days.

short-takes-ciovacco-aug-27-218.png

The S&P 500 broke above the March 2018 highs in July.  The same “it is important not to overthink singular outcomes” concepts apply to the present breakout attempt:
Continue reading Harder Markets Are Typically Followed By Easier Markets

Psychological Overhang: Full Week Ahead Preview

By Heisenberg

U.S. politics and trade are likely to dominate the headlines this week, which means market participants will yet again be forced to cope with the psychological overhang from Donald Trump’s ongoing legal trials and tribulations (and “trials” can now be taken quite literally) and the threat of another escalation on the tariff front.

Last week was easily the worst week of Trump’s presidency. In addition to Michael Cohen pleading guilty and implicating the President in open court, Paul Manafort was convicted on eight counts and Trump Organization CFO Allen Weisselberg was granted immunity by federal prosecutors, a development that bodes particularly ill given how much he likely knows. It also seems likely that Trump will move against Jeff Sessions sooner rather than later.

On trade, there’s progress on the NAFTA front as Robert Lighthizer appears to be closing in on a deal with Mexico, but low-level talks between the U.S. and a Chinese delegation went nowhere last week, setting the stage for Trump to move ahead with duties on an additional $200 billion in Chinese imports. Here’s BNP with a bit of color:

Continue reading Psychological Overhang: Full Week Ahead Preview

New Highs on Low Volume During August

By Rob Hanna

SPX closed at a new all-time high on Friday. But NYSE volume came in at the lowest level since mid-July. Low volume at new highs can sometimes be a negative. Of course August frequently has low volume as many market participants are on vacation and not trading as actively. So I decided to look back at other times the SPX made a long-term high on light volume during the month of August. Results were bearish from 1-15 days out. The downside was generally realized over the next 3 days, though. Below is the list of instances along with their 3-day results.

2018-08-24

It appears these low-volume August moves to new highs have not seen short-term follow-through momentum in the past. The number of instances is low, but all 6 saw the market lower 3 days later. So perhaps it is worth some consideration when determining your market bias over the next few days.

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Money Show

By Tim Knight

I’m on my way to the San Francisco Money Show right now, where I hope to spend a little time with my Tastytrade colleagues (which only happens about once a year). I’m bouncing along a train right now trying to hack together something resembling a post, so I’ll share a few thoughts on some ETF charts I find more interesting than the others.

First up is the commodity ETF symbol DBC, which is forming a beautiful top; it looks like the pattern is about 90% done. Here’s hoping for a break beneath that horizontal.

I realize EUR/USD isn’t an ETF, but I wanted to use it to mentioned something else: I believe the Euro is going to start pushing lower, and that’s going to drag emerging markets with it (as if they needed any other anchor this year).

Continue reading Money Show

Momentum Paints A Clear Picture For Stocks

By Chris Ciovacco

BULL MARKETS BEND BUT DON’T BREAK

Bull markets are ultimately about the ability to sustain long-term momentum during inevitable corrections and pullbacks.  Stockcharts.com describes MACD as “one of the simplest and most effective momentum indicators available”.  Monthly MACD helps us monitor long-term bullish momentum.  In the 2007-2008 case, after the market’s bullish momentum had been bending for some time, it eventually broke after the S&P 500 peaked in October 2007.  Notice how price made a series of lower monthly lows and MACD experienced a bearish cross (red arrow below).  The chart below is what the early stages of a bear market looks like; the S&P 500 did not find a bottom until March 2009.

short-takes-chris-ciovacco-spx-2008-macd.png

1995-1996 CASE

The bend but don’t break concept applied to the pullback and consolidation that occurred in 1996 following a strong rally in 1995.   The monthly chart stayed inside the orange box for seven months (consolidation) and eventually made a new monthly closing high.  Notice how monthly MACD stumbled a bit, but never experienced a bearish cross (green arrow below).  The 1996 case was cited in March of this year in an effort to make the try to be patient case.

Continue reading Momentum Paints A Clear Picture For Stocks

Creep

By Tim Knight

Before I begin, I want to mention we’ve substantially improved the quality and speed of our real-time index data, so you SlopeCharts users will immediately start enjoying the improvement.

I promise to only mention it a few thousand more times, but please note my new book has out (which just got its first review!) so please check it out.

As for the markets, it’s pretty much what I predicted/dreaded last Friday, which is a continuation of the “melt up”. Barring some shock event (e.g. China announces the U.S. can go screw itself, and the trade war is back on) it seems the natural path of the market is simply going to be higher – – – which, let’s face it, makes sense, since it has only been going continuously up for the past nine years. Volatility is, once again, completely dead, which makes for a market more boring than words can describe:

The Dow Jones Composite shows, via that green tint, how swiftly the Turkish debacle was dispatched. We are just one decent day to new LIFETIME highs.

Continue reading Creep

Weekly S&P 500 #ChartStorm

By Callum Thomas

Those that follow my personal account on Twitter will be familiar with my weekly S&P 500 #ChartStorm in which I pick out 10 charts on the S&P 500 to tweet. Typically I’ll pick a couple of themes and hammer them home with the charts, but sometimes it’s just a selection of charts that will add to your perspective and help inform your own view – whether its bearish, bullish, or something else!

The purpose of this note is to add some extra context beyond the 140 characters of Twitter. It’s worth noting that the aim of the #ChartStorm isn’t necessarily to arrive at a certain view but to highlight charts and themes worth paying attention to.

So here’s the another S&P 500 #ChartStorm write-up!

1. S&P500 Long Term Earnings Growth Estimates: First up is a look at a peculiar yet astonishing indicator, the Thomson Reuters IBES consensus estimate of long term earnings growth for the S&P500.  The main point here is that it’s at the highest level since the dot com boom.  Back then it was euphoria about the new economy, now it’s the tax cut extension from the previous reflation turnaround.  I would say it shows a certain element of euphoria on the earnings outlook, and the question is how long this higher level of expected growth can hold up? (and how much higher can it get from here?).

Bottom line: Long term earnings growth estimates are at the highest point since the dot com bubble.

Continue reading Weekly S&P 500 #ChartStorm

Pullbacks Heading Into Opex Week

By Rob Hanna

Opex week often carries some bullish seasonality. Pullbacks into strong seasonal periods will often offer substantial edges. The study below utilizes this concept and examines pullbacks of at least 3 days just prior to opex week.

2018-08-12-1

Numbers here are strong, and suggest a possible upside edge. Of course, August opex week has NOT been great. (Click here to see opex week broken down by month.) So that generates the question of whether the above study would be effective in August. Below are the instances that have previously occurred during August.

Continue reading Pullbacks Heading Into Opex Week

Dreaming of a “Comfortable Retirement” on a Public Pension?

By Elliott Wave International

A 9-year bull market fails to close the pension gap

Did you realize that many U.S. pension funds are in trouble even though stocks have been rising since 2009?

Even so, many retirees expect a comfortable retirement.


Jump on once-in-a-lifetime opportunities and avoid dangerous pitfalls that no one else sees coming. We can help you prepare for opportunities and side step risks that will surprise most investors. You can get deeper insights in Elliott Wave International’s new free report: 5 “Tells” that the Markets Are About to Reverse. The insights that you’ll gain are especially applicable to the price patterns of key financial markets, including the stock market, now. Read the free report now.


Our March 2018 Elliott Wave Financial Forecast showed this chart and said:

WouldBeRetirees

Continue reading Dreaming of a “Comfortable Retirement” on a Public Pension?

Gloria All-Red

By Tim Knight

It’s been a very long time since I’ve woken up to a screen entirely red. Everything is down – – ES, NQ, crude oil, bonds. Of course, these aren’t huge drops, but at least the color is right.

I guess the inspiration is the tit-for-tat trade war going on between the US and China. One wonders just how much hundreds of billions of dollars in goods need to be subjected to these tariffs before the market really feels it. For our only family, we bought a new washer/dryer combination before these surcharges were slapped on.

Taking a look at the longer view of the ES, we are terribly close to the lifetime high set in late January. It’s pointless to speculate about a possible double top. The screen could be solid green in an hour, knowing this fickle market.

Continue reading Gloria All-Red