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November 23, 2014

Rotation Report: Blow off top

This weekend traders everywhere are wondering if the Friday gap up was the blow-off top in equities.  Let's take a look.

Friday SPY touched the flat/falling upper bollinger band.  It's hard to see much more upside coming this week with this band setup.  But hey, anything is possible.


Looking in depth at the NYSE, we see the advance-decline line, the up-down volume line and stock only advance decline line all hit new short term highs.  Strong action here


The stock / bond ratio via SPX/USB ratio is testing the 2007 highs once again.  It's such a HUGE level.


The 10 year treasury yield looks ready to roll over here with 3 topping tails at the falling 10 week MA.


Volatility term structure continues to trade in the toppy zone.  We've seen that can persist, but it's more extreme now.


Is sentiment getting overheated?  It's pretty close


The smoothed traders index is also at a clear overheated area.  The last two dips down here were the peaks in last December and September.


Shifting outisde of the US...

Brazil had a heck of a week and is testing some resistance after blasting through the 50 day MA Friday.


Emerging markets relative to the emerged markets continues to consolidate.  It appears there is more opportunity in emerging markets heading into 2015.


Asia via APB has found buyers at the 40 week MA time and again.   


Copper is still trying to base and bottom out.  The Friday action is uninspiring.  It's worth keeping an eye on the falling 50 day MA as it's right here at price.


Back to some US stock groups...

The energy producers ETF is at a key level.


Airlines are starting to roll over in a meaningful way.  It's safe to say they were a leading group off the October lows.


This coming while the Transports advance-decline % line shows a slight bearish divergence.  This sure doesn't seem like a good time to jump into a transport stock. 


Gold Miners are resting at the first key pivot level.  Early week action may set the tone here.


It's going to be an interesting holiday week.  The market's posture seems fine, but we're definitely reaching some extremes where we want to back off the long side.  It also appears treasuries will be a place to be long this week.

Trade 'em well and have a great Thanksgiving!

November 20, 2014

Brand new bullish signal in Retail stocks

Today we've got a brand new sign of strength in retail stocks.  Retail's relative strength broke free of over a half a year of resistance.  We can call it a major head and shoulders bottom.  This is a group we all need some/more long exposure to.


Traditional holiday plays are working, cold weather plays / home renovation plays are working.  It's a great group right now!  Feel free to shoot me a tweet if you know of a public company that does roofing in Western New York :)




Trade 'em well!

Biotech

If you haven't by now, check out my biotech post on see it market.  In short, a big move is coming soon, we just aren't sure which direction yet.

These last couple of days have seen XBI print some toppy tails.  As you can see, the action is happening at channel upper boundary resistance.


Taking a closer look at the daily chart, we see the wedge building with a positive RSI reversal.  More deets about the positive RSI reversal on the chart.


The 173-166 range is our short term tell.  That said, the R/R short is favorable given a decent open(risk 4 points to make 16 points).

Trade 'em well

Reminder:

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