"Everyone has a plan 'till they get punched in the mouth" - Mike Tyson

September 29, 2014

The Insiders

This buyback craze is getting pretty interesting.  It's important to note one reason companies are doing buy backs is well, it makes their stock go up

Of late, corporate insider are really lightening up on stock with a  3:1 insider sell to buy ratio.  It's pretty clear, in general, managements are being sloppy about their buyback programs.

Check out Factset's latest buyback report for Q2

 If you notice while digging through the report, buybacks are no more prevalent than they were the financial crisis.  You wouldn't have a clue just by listening to main street media.  Well, at least I didn't.

What do you think could bring put a damper on the buyback craze??  I'll say increased competition and innovation.

Re-pricing

After Yellen confirmed the end of tapering next month, the market has continued it's re-pricing of all assets from the dollar to bonds to stocks.

We all want to front run the end of QE, but in the past the market has held up until QE ended.  Regardless, Q4 is going to be big-time as many under-performing funds are desperate to catch up.

@lumberjax shared this fantastic chart on stocktwits the other day.


Trade 'em well

September 28, 2014

Rotation Report: All bear'd up

It's easy to get all bear'd up on the markets after this week's action.  Lord knows we all want to front run the coming post QE drop.  But the POMO is still here and the fact of the matter is we're at meaningful buying levels in the immediate term.  

After Thursday's 80% down day, the major indices found buyers at key supports and moving averages.  It seems plenty of stops were taken out Thursday.  Also, take note the momentum picture in SPY and QQQ is still neutral/bullish.




The most notable junk bond ETFs also found support at the summer lows.   




Monday Morning update:  If these levels are to break today, the volatility picture suggests we have significant room for downside.  There just isn't a lot of fear out there right now.


The Asia Pacific Fund, a diverse fund of the largest Asian stocks, found support at the 100D MA and ended up hammering for the week.  Also note the daily cloud support.  If inclined, there is a very clear level to trade against.  



The DAX continues to carve out a topping pattern.  If it were to top out and break down, trend support from the 2009 lows is nearly 20% away


The US Dollar continues it's strongest move in years,  One thing to note is the RSI.  The last two times it rallied this strongly RSI made an M top in the overbought zone.  


The defense group is loitering near the highs.  One of the strongest groups in the market no doubt.  



The shippers broke the 40 week MA with no hesitation.   


Financials broke their short term relative strength uptrend.  I'm interested to see if it holds sideways or moves lower.


XLE probed deep into trend support from 2011, and found some buyers at the 40 week MA.  Note the long term momentum picture is still positive.


After a false breakout last Friday, the regional banks fell fast to support.  This is a great place to take a shot if you like some names in the group.  


The short term downtrends in gold miners price and relative strength are unsustainable, but very strong.  It's probably worth watching the price pivot level.


Trade 'em well!

September 25, 2014

Today was UGLY

With yesterday's solid performance and decent close it seemed reasonable we may see more of a push towards SPY 200's.  Instead we reversed in the lower part of the resistance zone.  Given the recent morning weakness has been bought, did that keep rationale bears from adding & building new positions?  

The two pivot levels in the S&P 500 futures i'm watching are 1940 and 1970.

This chart of the futures shows how little push into the resistance zone we actually had.  That's not what bulls want to see.
   


There was plenty of previously constructive price action taken to the wood chipper today.  That seems like a deterrent to any near term snap back rally.

ETF's EEM, SOCL and IGV essentially tell that story as strong short term trends continue lower.

IGV 50 day moving average was treated as a speed bump.


The SOCL 200D MA turned into a brick wall overnight.


We're starting to approach some support in EEM,but oversold didn't provide much of a bounce earlier in the week.


Plenty of folks may mention how strong the downside breadth was today, via 80% or 90% down days.  It's possible today was a near term selling climax.

If you missed last weekend's recap, check it out.  There are plenty of signs out there saying things aren't as pretty as they have looked.  On time frames longer than a few days, it's not a great investing environment.

Last week my pal Jordan @thetechnicalroom shared this chart on seasonality:

As you can see, this is a disgusting three weeks or so to be long stocks.  To me, it's a great time to enjoy the amazing fall weather, pick your spots and relax.  There will be plenty of opportunity into Q4 as career risk cranks up into a blazing inferno.

If you haven't noticed, there's a new quote up from the great philosopher Walter White.


As the market speeds up, our emotions can swing wildly.  DO NOT FORGET, YOU are the danger to your wallet.

Trade 'em well!

September 21, 2014

Rotation Report 9/22: Mirages

The market is at new highs, so everything's good right?  Well....The S&P 500 Equal Weight index to S&P 500 ratio has confirmed a downtrend.  This doesn't mean the market can't go higher, but the market is significantly thinning out.


The consumer ratio has broken key support.  The last time it broke well defined support was in early March, preceding the small cap sell-off.


Retail was unable to take out key resistance while gas prices and oil dropped to key support levels.  These might be signs the average consumer is just barely getting by.




Commodities across the board continue to drop.  Notably Silver gave up long time support.


In the bond arena, the downtrend in junk bonds to long term treasuries ratio is strong.  Bond market players continue to be more cautious.  This is another yellow flag the market has continuously shrugged off.  Again, i'm not saying junk bonds can't reach new highs.
 

TLT found a bid at the first support zone.  Can it continue?  


As TLT found support, KRE had a false breakout at wedge resistance.  That's no coincidence.  Is this a sign KRE's move is all about rates?  Near new market highs we'd like to think this has something to do with the strong economy and loan growth.  Time will tell.


The euro hit new lows this week as it continues to probe long term support.


Hong Kong is retesting a key pivot.


Russia is back at key support as the MA's have started to stiffen up.  It seems like only a matter of time before it breaks.


The DAX is near a key point.  I'm watching the RS pivot line.


Strong stuff: Software, rails everything healthcare >> biotech.  (Not too shabby eh?)

Weak stuff: coal, home furnishings, construction, sugar

Trade 'em well!

September 18, 2014

Late Night Setups

Here's what tomorrow's swing long watch list looks like:  LPHI and DNDN may be the only one's immediately in play, but these are all at interesting levels.








Trade 'em well!

September 16, 2014

QuickCap: In yo face, bears!

What a bounce back for the bulls today.  There are strong daily reversals in leading stocks everywhere.  Bears can't even lift their heads up these days.

Crude has made it's intentions known early this week as it's putting in a meaningful low.  The first clear resistance is the falling 10 week average around ~96.50.


Celgene bounced back hard today and stalled at the falling 10D.  Tomorrow's action will be interesting.  



In The Big Picture the stock to bond ratio, via SPY relative to TLT, is near a major breakout.  This has major portfolio construction implications.  Keep an eye on it throughout the week.  


ALNY has held up nicely during the mini sell-off.  Other biotechs are alive and well.

IWM failed to make much headway today.  It continues to under-perform the other indices.  114.75 is the pivot i'm watching.


 Freeport Mac is already trying to form an outside week after testing the 40 week moving average.  Maybe miners aren't dead?


One last thought for today.  Isn't this week a great example as to why we need to mentally prepare each day for all scenarios?

Trade 'em well!

September 15, 2014

QuickCap 9/15

It was a tough day for momentum stocks.  The QQQ's are 1 point away from a key support confluence, it doesn't seem like anything stands in the way.


Celgene traded lower, but found support near the 50D.


Tesla found a steady bid at trend support/50D MA.  


Nike bounced at the 10D MA and refused to break down.  This is the key retail cog.  The market needs this to stay over 80.


Facebook dropped like the other momo's, but there is a lot of support nearby. 


Spec players might be interested in this WPCS. It's sitting at a confluence of moving averages closing at 1.34.  This stock is the only thing that comes up on Finviz when you search for Bitcoin.  Maybe they keep ramping it.


Energy has a good shot to reverse it's recent losses...at least in the near term.

Alternative energy's long term momentum has lost it's steam at the 2011 high.  This group is starting to appear vulnerable on an intermediate term basis.


Catch you on the tweeter tomorrow

Reminder:

All ideas shown on this blog represent the authors opinion based on the data available.