Tutor Your Trade

Tutoring for your Investment trading

Tutor Your Trade

Welcome to Tutor Your Trade

Tom Aspray is the driving force behind Tutor Your Trade.  Tom has been analyzing and advising institutions and investors on the financial markets since the early 1980’s.

From his extensive biochemistry research using computers in the late 70’s, Tom envisioned the potential for applying his research techniques to the financial markets.  Through rigorous and methodical analysis Tom developed his own unique methods of computerized technical analysis.  These methods have been taught to financial professionals around the world.

In 1982 Tom became the research director for a financial advisory firm and the early use of professional technical analysis software provided a platform for testing many of the analytical methods that are used by today’s traders and investors. Tom’s work has been highlighted in books by both John Murphy and Stanley Kroll and he is well respected in the financial community for his knowledge and approach to the markets.

For the past 8 years Tom has provided general market commentary through Forbes, Moneyshow and PA Stock Alerts. In Tutor Your Trade, his insights and techniques are available to a select group of traders and investors on a 1-1 basis or you can join in each day to his pre-market analysis session.

The Week Ahead: Risk Control In A Trump Market

Posted by on 12:13 pm in Uncategorized | Comments Off on The Week Ahead: Risk Control In A Trump Market

The Week Ahead: Risk Control In A Trump Market

As the euphoria in the stock market continues to build with each new high in the major averages .  The extent of the rally and the fund flows suggest that some investors are now  investing with little regard to risk. Some of the professional media analysts were not exhibiting much caution even though a guest analyst suggested waiting to buy the the financial stocks like the regional banks.  In the short period since the election it seems that many have thrown caution to the wind with a few analysts using those most dangerous words “this time is different.” The rally has focused on the Russell 2000 and the financial sector. The last fifteen-day winning streak in the Russell 2000 occurred in February 1996, According to the Wall Street Journal  the Russell 2000 was 2.4% higher after the long winning run in 1996 and was up 8.7% in the next three months. The gain in February 1996 was 6.1% much less than the current 12.7% gain. The starc band analysis has had a good record of alerting investors and traders to price extremes in stocks, ETFs and commodities. The bands were developed by the late Manning Stoller who was a colleague for many years and he had great market insights. These bands are based on adding or subtracting two times the average true range (ATR) from a moving average. Manning had determined that using 2 ATR would incorporate 92% of the price activity but if 3 ATR were used about 99% of the price activity would stay inside the bands. When prices are above the stac+ band prices are in a high-risk buy or a low risk sell area.  If prices are below the starc- band they are in a high-risk sell area or a low risk buy area. These bands are used extensively in both the Viper ETF Report and Viper Hot Stocks Report to indentify high or low risk buy or sell areas as well as to determine profit-taking levels. Three weeks ago the Russell 2000 Index closed at the weekly starc+ band and for the past two week’s it has closed well above the 2XATR band (point 3).  With Friday’s close at 1342 it is now just 1.3% below the 3XATR band (in blue) at 1360. Since 2001 the 2XATR starc+ band has only been tested and exceeded one other time which was in May through early June of 2003. After the 2XATR was first reached (point 1) it was tested for the next two weeks before a 3.7% correction that lasted one week. This was followed by a 14.7% rally that lasted three week as the 3XATR starc+ band was reached at point 2.   The Russell 2000 traded sideways to lower for the next four weeks as it corrected over 6% before the uptrend resumed. Clearly the Russell and the iShares Russell 2000 (IWM) are now in a high-risk buy area as using a stop under the 20 week EMA at $122.36 would mean a risk of 9%.   The current analysis indicates that a 3-5% correction is very likely before the end of the year but it still may come from higher levels. In the October 22nd column “Market Insights From Past Election Years”  I discussed the bullish action of the DJ US Financial Sector (DJUSFN) ...

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The Week Ahead: Buy, Sell Or Hold?

Posted by on 5:45 pm in Stock market strategies, Technical Analysis | Comments Off on The Week Ahead: Buy, Sell Or Hold?

The Week Ahead:  Buy, Sell Or Hold?

The summer ended with a long list of big name investors who shared their dire forecasts for the global stock markets. Some were looking for a 10-15% correction but others were looking for much more.  Individual investors were also skeptical about the stock market as according to AAII just 23.6% were bullish on November 3rd while over 42% were neutral. In last Thursday’s survey 46.65% are now bullish while the neutral camp has dropped to 26.77%. The bearish % is at 26.6% as it has only dropped 8% from before the election.  The bullish % reading is the highest since February 19th 2015. According to AAII  “There isn’t a clear trend as to how the market has performed following unusually large two-week increases in bullish sentiment. The median six-month gain for the 13 periods when there was a larger two-week increase in optimism was 5.9%. Though above the historical median for all periods, the number is skewed upwards by a 34.5% gain following the two-week, 26.1 percentage-point increase in optimism on March 19, 2009.” The bullish % is still well below extreme levels as the highest reading during this bull market was 63.3% on December 23, 2010 (point 1). The S&P 500 did see a 6% drop in February and then peaked in May which was a 9% gain from the December 23rd close. As the chart indicates the bullish % rose to 57.9% on November 13, 2014 (point 2) and then the S&P 500 continued to grind higher until May of 2015 as it gained 4.5%. In my experience a high reading in the bullish % is not a sell signal as the market rally can continue for some time. Maybe this is the start of the stock market’s euphoric stage that is typically the last stage of a bull market as was pointed out in the famous quote from John Templeton .  I commented in August (What’s Missing From This Bull Market?) that historically major tops such as those in 1929 and 2000 have been accompanied by more investor participation and euphoria. The public participation in the stock market is still quite low which is also not normal for a bull market top. Maybe this is starting to change as $44.6 billion has moved into equity ETFs since the election. A good part of the funding has likely come from the bond market as the dramatic rise in yield and drop in prices has panicked many investors. Barron’s reported that the 4% decline in Bloomberg Barclays Global Aggregate Index was “the biggest two-week loss in more than a quarter-century.” It has been a tough eight days for those trying to buy the index tracking ETFs or the financial sectors as there has been little in the way of a pullback to buy. I think that those who jumped into the market late last week may have to take some heat as I think there will be a better risk entry point in the weeks ahead. I place considerable emphasis on the entry price for all ETF or stock positions as I discussed in a recent article “Finding The Best Entry Levels”. I have found that too many investors and traders get caught up in the emotion of the market especially when it is moving relentlessly higher and therefore they...

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The Week Ahead: Investors Dodge A Bullet

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The Week Ahead: Investors Dodge A Bullet

It is doubtful that anyone will forget last week for many years to come. The political and financial ramifications will have an impact for the next four years or more.  Though it is way too early to guess what will happen it is doubtful than pollster will be one of the top ten career choices for new college graduates. It was certainly perplexing week for the market but last week’s action is should influence stocks for the rest of the year.  The corrective patterns in the A/D lines as we started the week suggested the bounce before the election did not mean that the correction was over but the post-election action has changed that view. The futures markets conviction over a Clinton victory ended about 8:00-8:15 EDT as after trading as high as 2152.50 it closed at 2140.25. The selling was relentless for the next four hours as the S&P futures bottomed out at 12:15 AM as the S&P futures hit a low of 2028.50. At the lows the S&P futures were down 107 points or over 5%. Just over four hour later the futures were back above the 2100 level. The fact that the selling was absorbed by the futures market overnight was a blessing for investors but not all traders. Those were long inverse ETFs or put options did not have the opportunity to reap the same gains as futures traders.  If the futures had even been down 40-60 points when stocks opened at 9:30 AM Wednesday morning it would have been ugly. It is likely that panic selling would have occurred as many widely held ETFs would have opened sharply lower taking many investors out of their positions near a short-term market low. This is why I feel investors really did dodge a bullet on last Wednesday’s open. It could have been as bad as August 24th of 2015 when the Dow Industrials dropped 1000 points in early trading. The chart above from an SEC Report shows that the S&P futures were  down slightly over 5% as the stock market opened.  In just five minutes the futures were trading almost 7.5% lower and the SPY was trading down 7%. The SPY had dropped 5.6% the previous week so the sharply lower opening added to investor’s pain but 10 minutes after the lows the losses had been cut in half. From the low on Monday August 24th at $177.63 the SPY rebounded to close the week at $194.03 as it was up slightly for the week. It was not until early October (A Surprising Turn In Stocks This Week?) that the market internals indicated that a bottom was in place and that a buying opportunity was at hand.  There are some ways that once can identify a panic low and one of my favorite techniques is to use the starc bands. This weekly chart of the continuous E-mini S&P 500 contract reveals that since 2014 prices have only dropped below the starc- band five times.  The long tail (the bar under the candle body) is an indication of demand at lower levels.  In early February of 2014 (point 1) the futures had a low of 1732 on Wednesday and then closed the week at 1793 as the NYSE A/D line moved above its WMA. There was a...

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The Week Ahead: A Trick or Treat Market?

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The Week Ahead: A Trick or Treat Market?

Just after noon on Friday it seemed as though stocks were going to finish the week slightly lower for the week but then the news from the FBI regarding new emails rocked the market. The S&P futures dropped 20 points in just over an hour. Though the market recouped much of these losses the tone of the market definitely changed. Investors are wondering whether the start of the new month will mark the start of a new more friendly market or whether the end of October is setting the stage for more investor pain. In last week’s column I looked at the last three-election year markets (Market Insights From Past Election Years) and concluded that the price action was the most similar to 2012 when there was a sharp post election decline. Let’s look at some of the positive and negative factors that are likely to impact stocks for the last two months of the year. The Positives According to the Investopedia  Sell in May and Go  Away  ” Since 1950, the Dow Jones Industrial Average has had an average return of only 0.3% during the May-October period, compared with an average gain of 7.5% during the November-April period.” Looking at the seasonal pattern for the Spyder Trust (SPY) going back to 1988 reveals that it typically bottoms in early October (line 1) and tops in late May (line 2). The weekly chart shows a short-term flag formation that requires a weekly close above $216.70 for an upside breakout and a close below $211.24 for a downside break. The weekly chart shows major support line a, is at $207.60 with the rising 40 week MA at $206.80. The bullish sentiment for the stock market is still quite low with just 24.8% bullish according to the AAII survey of independent investors. The level of bullishness is close to levels normally seen at market lows. As I noted at the February lows (Is There Blood In The Streets Yet?) “According to AAII the bullish% dropped 8.3% in the latest survey to 19.2% bullish just above the 17.9% reading from mid-January .”  At the bear market low on March 5, 2009 only 18.9% were bullish. The analysis of the number of the S&P 500 stocks above their 50-day MA shows that the 5 day MA is at 34% which is well below the mean at 56%. The trend of the MA is still down, line a and at the October 2015 and January lows the MA stropped below 16%.  These low levels when accompanied by bullish signals from the market internals created low risk buy signals for Viper ETF subscribers. The surprisingly strong advance reading of 2.9 for 3rd quarter GDP is an encouraging sign and is consistent with the improvement in some of the other economic data. The manufacturing sector could still do either way and needs to see significant improvement in the coming months. The strengthening economy is consistent with the sharp rise in yields from the July lows. The 38.2% resistance at 1.791% from the June 2015 high at 2.489% has been overcome. The 50% resistance is at 1.924% with the downtrend (line a) and the 61.8% resistance at 2.056%. There is additional resistance from the 2014 and 2015 highs, line b, at 2.258%. This earnings season so far has been better than...

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The Week Ahead: Market Insights From Past Election Years

Posted by on 3:37 pm in Stock market strategies, Technical Analysis | Comments Off on The Week Ahead: Market Insights From Past Election Years

The Week Ahead: Market Insights From Past Election Years

The earnings season got started with a bang last week as Netflix (NFXL) reported a 36.5% increase in year-over-year revenues and added 3.6 million subscribers. After closing Monday at $99.80 it opened Tuesday at $116.63 and continued to move higher all week closing at $127.50 The big banks also beat Wall Street’s expectations as strong trading revenue boosted stocks in Goldman Sachs (GS), Bank of America (BA), JP Morgan Chase (JPM) and Citigroup (C). For several years market skeptics have argued that the market could not go up without the financial stocks but this may now be removed from the wall of worry. The chart of the DJ US Financial Sector (DJUSFN) shows that it has been holding above the 20 week EMA for the past month. A weekly close above the resistance at 460, line a, would be a significant upside breakout and signal a move to the 500 area. The weekly OBV has turned up from support at line c, but is still below its WMA.  The weekly relative performance broke its downtrend (line d) in August and then pulled back to its WMA. The way the RS line has turned up from its WMA consistent with a market leader. Viper ETF subscribers are already long the SPDR S&P Regional Banking ETF (KRE) and will look to be a more aggressive buyer in the financial sector once the A/D lines move out of the corrective mode. Many Wall Street strategists are not looking for stocks to move higher through the end of the year (Yearly Forecasts – Fact or Fiction) and the recent high cash level of fund manager’s also suggests a high level of bearishness. According to Bloomberg the BofA Merrill Lynch October Fund Manager Survey the cash levels are the highest since November 2001 .  According to Michael Hartnett, chief investment strategist at BofA, “This month’s cash levels indicate that investors are bearish, with fears of an EU breakup, a bond crash and Republicans winning the White House jangling nerves.” The chart shows that the cash levels have been rising for several years. At the market high in 2007 the cash levels were below 3.5%. At the correction lows in 2010 and 2011 the cash levels were also low which did not allow for aggressive buying by fund managers at low prices. Last week’s AAII survey reveals the individual investor is also not bullish as the % dropped 1.7% to 23.7%. The bearish % rose 4.1% to 37.8%. At important lows the bullish % can drop below 20% and we are not far away from these levels. The financial media has been focused lately on what stocks may or may not do well whether Clinton or Trump wins. I think this may already be factored into stock prices but the fears could cause further selling in the weeks ahead. But what did the technical studies look in the last quarter of the past three election years. In 2004 the NYSE Composite gained 10.3% in the 4th quarter. The NYSE A/D line (One Indicator Stock Traders Must Follow) moved above and below its WMA in October 2004 before breaking out to the upside on October 29th (line 1). The NYSE A/D line was in the acceleration mode until early December as the NYSE Composite gained 6%....

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The Week Ahead: Monthly Signal Keeps Investors On Right Track

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The Week Ahead: Monthly Signal Keeps Investors On Right Track

Despite the market angst over the FOMC meeting and comments from the Big Bears since August that the stock market had to crash the major averages survived another month. Heading into the last day of the month the S&P 500 was just 2% below its all time high yet according to AAII only 24% of individual investors were bullish. In addition to the last day of the month it is also the end of the 3rd quarter. Active managers are likely to again underperform their benchmarks for another quarter.  Earlier in the year a Financial Times article revealed that “98.9 per cent of US equity funds underperformed over the past 10 years, 97 per cent of emerging market funds and 97.8 per cent of global equity funds.” Looking at those funds sold in various Euro zone countries the message is the same as their chart indicates. Almost 100% of a actively managed equity funds sold in the Netherlands have failed to outperform their benchmarks over the past five years. It has also likely not been an easy year for most individual investors in the US as the market plunged for the first six weeks of the year as the Spyder Trust (SPY) had a low of $178.33 on February 11th.  At the time only 19.2% were bullish in the AAII survey and over 48% were bearish. From the February low the SPY is now up over 21%. Though there were signs in February “Is There Blood In The Streets Yet?” from a number of technical studies that the worst of the selling was over but still each month there was something else for investors to worry about.  This was the proverbial  “Wall of Worry” that is often the focus of the headline driven financial media that in my view does a good job of keeping investors out of the market. The recent trend of weak earnings seasons has been used each quarter as a reason stocks can’t go higher and if it is a slow news week the TV media trots out those perennial bears who warn of a market bubble.  In April I pointed out “Why Bubble Fears Are Bullish For Stocks”  and each month I have tried to debunk the latest additions to the wall of worry. It has clearly been a year of wide market swings as evidenced by the post Brexit vote drop as well the 400-point plunge on September 9th.  After the February lows it was the continued improvement of the A/D line in March that provided further evidence that the intermediate trend was positive. On April 1st the S&P 500 A/D line moved above the 2015 highs which provided a strong signal that the stock market’s next major move would be higher, not lower. At the end of May there was another significant technical development as the monthly NYSE A/D line closed well above the monthly high from 2015 (line d). It has always been a very good indicator of the market’s health. At the end of May 2003 the A/D line moved to a new high signaling that the bear market from the 2000 high was clearly over. The monthly A/D line peaked in May 2007 (point 1) and at the October 2007 highs it formed lower highs, point 2. The weekly...

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Should Investors Tune In Or Tune Out?

Posted by on 3:52 pm in Uncategorized | Comments Off on Should Investors Tune In Or Tune Out?

Should Investors Tune In Or Tune Out?

The stock market moved sideways for most of last week with the heaviest selling on Wednesday. Finally on Friday we got Janet Yellen’s long awaited comments from Jackson Hole where she said “the case for raising rates has strengthened in recent months.” This did little to change the already low expectations for a rate hike in September but then Fed Vice Chairman Stanley Fischer hinted on CNBC that a rate hike was still possible next month. The S&P futures reversed course on his comments as the futures dropped 20 points. This increases the focus on the September 20-21 FOMC meeting which makes it more likely that it will be tough three weeks for investors and traders.  It does not help that we are entering a seasonally weak period where an increase in market noise can play a larger role. The recent tight ranges and low volume does make the market more vulnerable to wide swings. This low volatility is evident on this Bloomberg chart as there has been only one day with a 0.80% range since mid-July.  In the article they commented that “the market is locked in its tightest trading range since the end of 1965.”  ( I took a look at the chart of the time period and the S&P 500 peaked out early in 1966 and then dropped over 20%) The volatility is likely to be different  in September as on Friday the S&P futures dropped below the lows of the past fourteen days. The stock market rallied Friday afternoon and the Spyder Trust (SPY)  closed  just barely above the doji low of two weeks ago. Therefore a weekly doji sell signal was not triggered but it could be next week if SPY closes below $217.23.  As I discuss in the Market Wrap section the A/D lines have not yet moved into the corrective mode. Many are wondering if we do get a market correction in the next few weeks how far might the S&P 500 or SPY fall?  The fact that the 20-week EMA at $213.32 is still rising strongly is a healthy sign. It does not rule out a drop below the EMA  as part of a correction in the major trend. It would take more time and a deeper correction before the SPY could complete a major top.  The 20-week EMA is now 1.8% below Friday’s close. The weekly S&P 500 A/D line has been flattening out after rising strongly since February (section b). It also could correct back to its WMA but it shows no hint yet of topping out.  The A/D line is still clearly on the February buy signal. The recent action shows some similarities to early 2013 (chart on right) as there was also a strong six-month rally before there was a meaningful correction. From early January through the middle of June 2013 the SPY stayed above its strongly rising EMA. In 2013 the SPY corrected for five weeks as it dropped below the 20 week EMA for two weeks before the market again turned higher. The selling in the stock market increased in late June (point d) after Fed Chairman Ben Bernanke commented that the bond-buying program could be stopped by the end of the year. This pullback turned out to be a great buying opportunity. The weekly...

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Another Wrong Way Crude Oil Trade

Posted by on 3:29 pm in Uncategorized | Comments Off on Another Wrong Way Crude Oil Trade

Another Wrong Way Crude Oil Trade

Most experienced commodity traders know that crude oil is one of the more volatile commodity markets where the gains as well as the risks are high. Having followed the crude oil market for thirty years I am still amazed how many try to trade this market based on fundamental analysis. Over the years through my past crude oil training sessions in Singapore and London  I have made a number of converts. This week the new head of one of the oldest commodity trading firms recommended shorting crude oil at $50-$55 according to Bloomberg based on bearish fundamentals. Those who follow the crude oil market may remember the negative headlines on crude oil as prices dropped in early 2016.  The decline was based on the perceived weak demand, concerns over the economy and a rising trend in oil rig counts. This data is the focus of the major financial news networks. In early January as crude oil prices were collapsing a Barclay’s commodity analyst commented to CNN  that “The fundamental situation for oil markets is much worse than previously thought.”  The sharp slide was due in part to small speculators dumping long positions. As was also the case during the July decline many jumped on the short side of the market based on these bearish forecasts. Just a week later on January 21st I pointed out in “Time To Squeeze The Short Oil Speculators?” my analysis of the open interest (the number of crude oil contracts outstanding) suggested those on the short side were about to get squeezed.  As it turned out crude oil made its low on January 20th. Though many have maintained an overall bearish outlook on crude oil prices in 2016, the energy ETFs like the Energy Select Sector SPDR Fund (XLE) and SPDR S&P Oil & Gas Exploration & Production ETF (XOP) have outperformed the Spyder Trust (SPY) YTD by 10-15%. As crude oil dropped below $40 in early August several analysts were calling for a drop to $35 or lower based on their negative fundamental analysis.  On August 3rd, Zacks Equity Research even advised shorting oil and the energy ETFs (Oil in Bear Territory: Short Oil & Energy ETFs) As was the case in January the technical outlook was much different in early August. A look at the weekly analysis will illustrate why the $50-$55 level is so important. The weekly chart shows the doji low in early August and the key resistance in the $51 area, line a. A weekly close above this level would complete a reverse head and shoulders bottom formation as the August low may represent the left shoulder. The upside target from this formation is in the $75-$80 area. The Herrick Payoff Index (HPI) which uses volume, open interest and prices has been diverging from prices since 2015, line d. The HPI also formed a short-term divergence early in the year that was confirmed by the move above its WMA and the downtrend, line c. On the July drop the HPI dropped back below the zero line but moved back into positive territory just after the August lows. The daily chart of the October crude oil contract shows the thirteen day rally from $40 to $49.36 which thoroughly confused the media and likely added to the mounting hedge fund losses....

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Don’t Worry This Bubble Market Turns Slowly

Posted by on 8:43 pm in Stock market strategies, Technical Analysis | Comments Off on Don’t Worry This Bubble Market Turns Slowly

Don’t Worry This Bubble Market Turns Slowly

The stock market recorded nice gains on Monday but then returned to its narrow trading range since it has not had a 1% move either up or down for the past month. The Spyder Trust (SPY) has been grinding higher as it is up 1.3% during the period. Even though the broad market gains have not been impressive the attitude of many professionals, as expected, has become a bit more positive. At the end of February I discussed  why investors should not avoid stocks because of their fears over China, weak crude oil prices, earnings or a weak economy. It was also important that with the close on February 27th “the weekly NYSE A/D line has moved back above its WMA for the first time since the start of the year”. The daily chart of the Spyder Trust (SPY)  shows the both the bullish divergence at the February lows as well as the break of the downtrend in the A/D line. Despite the pickup in articles that are more positive on the stock market more high profile bears keep coming out of the woodwork. In a letter to investors in his $28 billion dollar hedge fund manager Paul Singer thinks that the negative yields in many of the world’s bond markets has investors facing “the biggest bond bubble in world history” . He also fears a drop may be very sudden and very sharp. I found it interesting that Elliott further stated “Everyone is in the dark….Experience doesn’t count for much, and extreme confidence may be fatal.”  Is this possibly an excuse for the continued poor performance of the hedge fund industry? It has been my view for over two years that the hedge industry as entered its own bear market.  (“The Bubble No One Is Discussing”) In last week’s column I wondered why there was not any euphoria amongst stock investors despite the many proclamations of a major bull market top.  The bond market is clearly a very crowded trade as nervous investors fight for yields but most bond traders I come across are nervous not euphoric. These concerns come as the stock market is ready to endure another month or more of obsessive discussion on whether the Fed will raise rates. This Friday Janet Yellen will be giving a widely anticipation presentation that is likely to be fully dissected by the bond market CSIs. This will be the start of another round of painful debates even though the futures markets currently reflects that there is a low chance of a September rate hike. It seems that many investors are still convinced that a rate hike will be negative for stocks and that it will likely cause a recession.   As I have noted in the past this only typically happens late in a rate hiking cycle, not at the start. The long-term chart of 10 Year Constant Maturity yields has the recessionary periods shaded in grey. Prior to the recession in 1970 rates had been rising for a number of years, line a. This was also the case during the recession in 1973-1975, line b, as rates continued to rise after the recession was over. The major rise in rates occurred in the late 1970’s as the Fed was trying to fight inflation. The yields finally peaked above 15%...

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The Week Ahead; What’s Missing From This Bull Market?

Posted by on 11:17 am in Stock market strategies, Technical Analysis | Comments Off on The Week Ahead; What’s Missing From This Bull Market?

The Week Ahead; What’s Missing From This Bull Market?

The stock market spent most of the week consolidating its gains after the sharp rally in reaction to the July jobs report. Thursday’s sharply higher close and very positive A/D numbers suggests that stocks are likely ready for another push to the upside as the S&P 500 challenges the 2200 level. The new high in the major averages and leading action of the advance/decline lines has still not convinced everyone as Goldman Sachs advised their clients on August 1st to “avoid all stocks for the next three months”. They are also sticking with their yearend target for the S&P 500 at 2100 which is 3.7% below current levels. It has not been a good year for Goldman Sachs as on February 16th they advised selling gold short when the December contract was trading at $1209. As of last Thursday’s close at $1350 it is up 11.6% since this recommendation.  Their crude oil forecasts also seem to be out of sync as they turned bullish three weeks before it topped out in June. As they continue to lay off staff I hope they consider hiring some good technical analysts. There has been a shift in some of the market commentary as it is not nearly as negative on the stock market as it was in July. If the S&P 500 can close above 2200 I would expect to see a further reduction in the bearish commentary. There are still many bearish article as mid-day Friday as one article advised to Sell Everything based on the following questionable bullet points. Our greatest investment minds are warning investors to avoid stocks and bonds. There are a multitude of fundamental reasons for this warning. Perhaps the most paramount of all is the issue of moral hazard. Moral hazard – really?  Looking back at the author’s previous articles I found his February 25th 2013 article proclaiming it was still a secular bear market.  The 53% gain in the Spyder Trust (SPY) since this article illustrates the danger of having an inflexible investment outlook and fighting the trend. There was little change in individual investor sentiment over the past week as the bullish % just rose 1.5% to 31.3% while the bearish % was unchanged at 26.8%. The neutral camp at 42% is still quite high. The CNN Fear & Greed Index is still well in Greed territory  at 76 as it has been for the past month or so but it is below the recent highs. I have found this measure to be much better at market bottoms than at market tops. This is because when two of its components, stock price breadth and stock price strength, are very high my analysis indicates it is a sign of a strong as well as healthy market.  High levels are not necessarily bearish unless they start to diverge and then turn lower. It should be noted that stock price breadth  does not track the actual A/D data as it looks at the advancing and declining volume. Put and Call option data is a contrary indicator as when too many are buying puts it is a sign that too many are bearish on stocks. Converesely a prolounged period were the call buying is much higher than the put buying it can be a negative. It is the...

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