$USD – a vote on the country ever day…

Given that currency trading is a vote by the whole world on your country every day and now that President Blowhard believes the dollar’s recent rise was because of “confidence” in him instead of an overflow from the Obama Administration, the US dollar is likely to decline now.

Trump commented that yesterday that the dollar was too strong because of “confidence in me”, but the currency has been going sideways to down since his inauguration.  Confidence in him?  More likely a rising lack of confidence.

And of course, the US dollar always does decline in Republican Administrations.

That was never more pronounced in historical terms than the day George W. Bush made his “Axis of Evil” speech.  That moment was the precise top for the dollar in his term.  It was as the entire world heard that and thought that guy is crazy and ran for cover.  It declined 40 percent and has not completely recovered.  No analysts ever seem to want to talk about it, preferring to say a weaker dollar makes American multi-national companies more competitive, but think what a drop of 40 percent in net worth means to the biggest economy in the world.

Subsequently, from the day Obama locked up the Democratic Party’s nomination in 2008 the dollar bottomed.  It was as if dollar bulls knew he would be President and were, after the raging uncertainties of the Bush Administration, damn happy he would be.  There were some wild swings in the currency as Obama battled Congressional Republican obstruction (shutting down the government…) but once he was reelected, it was clear sailing to the upside until now.

So what now?

The new era of raging uncertainties is just beginning so, despite professed Fed Reserve tightening, it is probably best to be defensive, if not downright bearish, on the US dollar.

(right click on the chart for a larger view)

USD2017-04-12_1312

Mirror, mirror, what’s the fairest rally?

This is a follow-up to the entry below entitled “To Brexit Or To Exit”.

It was suggested the current rally would continue to mirror the immediate post-Brexit, rally as it has been doing week-by-week since the election.  That continued today as the market put another spike up right on time (see the bars in the red ovals on the right and the left).

If the mirroring is to continue the market should put in two more up days this week before beginning a long chop-chop, likely for the rest of the year.

And it was suggested the rally would likely resume today into the end the week.  That is still likely unless the Fed kills it with news tomorrow.

(click on the chart for a larger view)

it_rhymes3

$CWX – What a difference a day makes

Corrections Corporation of American back in the growth business?

(right click on chart for a larger image)

cxw2016-11-09_1515

FIRST THEY CAME

First they came …” is a famous statement and provocative poem written by Pastor Martin Niemöller (1892–1984) about the cowardice of German intellectuals following the Nazis‘ rise to power and subsequent purging of their chosen targets, group after group. Many variations and adaptations in the spirit of the original have been published in the English language. It deals with themes of persecution, guilt and responsibility.

The best-known versions of the speech are the poems that began circulating by the 1950s.[1] The United States Holocaust Memorial Museum quotes the following text as one of the many poetic versions of the speech:[2]

First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out—
Because I was not a Jew.

Then they came for me—and there was no one left to speak for me.

 

 

 

$SPY – testing an important level

SPY, the monster S&P 500 ETF, took a look at 212.5 again today and held that support in late day trading. A couple of weeks ago it was doing that repeatedly.

My guess it will bounce a bit from here but the question is how high and what after that?

If it does not run right back up to the top of the recent range there is a likelihood that the steep decline market bears have so long been waiting for will be at hand.

The confounding thing about the general market in the past three months has been how many fundamental and technical indications have dropped into place that bear similarities to the market tops in 2000 and 2007 but the price drop has not gotten going in earnest.

For instance, monthly NYSE margin debt has clicked down again in a massive divergence to the market’s high level sideways move. Breadth in general has been declining despite price index defiance. It could be only the Fed, with an eye on the election, is holding the market up.

Whatever.

If today’s rip to the downside, on the other hand, is the shot that cripples the lumbering ship, 208 on SPY could be seen in a hurry, and 200 eventually would not be out of the question.

This is one of those times when long-term investors better sit up and take notice.  Decide how much of the current gain one is willing to lose and stick to it.  If there is a sell-off (for the rest of year?),  the signs it is, once again, not different this time have been obvious for some time.

(right click on the chart for a larger view)

spy2016-10-11_1808

Watching $BID for a market top

Sotheby’s Holding (BID) has so often been a market bellwether.

And at tops at that!  A rare thing in the world of calling market direction. Bottoms are easier to see and sometimes obvious but tops…”calling” tops has killed many a market prognosticator and killed many a bear.

So let me say right off I’m not calling a top here.  Just trying to pay attention…

And when BID quits rallying and/or diverges with general market, it is time to pay attention.  BID was down a bit on its monthly chart in September.  That is a lower high for the stock while the S&P 500 and Nasdaq drifted higher.

What’s it mean?  Maybe nothing.  Yet.  But take a look at the chart action showing BID with the SPX on the chart below in 2000 and 2007.  One might say, as BID goes so goes everything else.

And this time, so far, BID has not even crawled up to the top of its long-term price range, which is rather ominous going forward.

(click on the chart for a larger view)

bid_2016-10-03_0749

 

$UVXY – a look at a pure trending day

Following the red…

I guess the most surprising thing about today’s market sell-off is that it supposedly came out of the blue, a jet falling out of the sky.

But did it?  It’s September after all and September for bulls is historically the cruelest month.  Did everyone start thinking it would be different this time?  Again, yesterday?

Then there is the 40 day sideways move on the SPX…That could not go on forever. Typically when it breaks out of a tight range it breaks big one way or the other.

Now that’s a cloud hanging over the market that could be filled with thunder-and-lightning resistance on any snap back up to the breakdown line on the daily charts.

Technically speaking my follow-the-red indicator (the intraday trend) gave sell signals on the close yesterday on QQQ and SPY, but not on IWM.  It slid sideways into a buy signal on the VIX-based ETFs, in this cas the inverse 3x-leveraged UVXY (see chart below).  And UVXY, maybe the wildest and craziest ETF of all, put its volatility on display, up 32 percent on the day, 24 percent from the open.

Wow.

Can’t be totally bearish since this market has defied sell-offs like this before.  Downside trending days like today tend to use up all of initial selling power so Monday could easily be sideways to up.

Still, the bears are on the prowl so it is time for bulls and investors to use stops to keep from getting mauled.

(click on the chart for a larger view)

uvxy_2016-09-09_1306

$SPY – anticipating new highs

Following the green…

SPY, the ETF for S&P 500 index,  after being trapped in a box (see chart below) for 37 trading days, nearly four weeks of frustrating sideways chop, has a good chance it will resolve itself to the upside and into new high ground tomorrow.

And take the entire stock market with it.

The trouble is as it comes to the top of the box again, 45 of the stocks on my nifty-fifty stock list are on buys.  That’s a lot, so much that the last two times (8/15 and 8/23) there were 40 or more, the market took a sharp drop the next trading day.

The difference this time is market breadth has turned up after 27 days of decline.  It is as if the bears, having tried but failed to take the market down, have run out of time.

Note the follow through on SPY each time breadth turned up in the immediate past (the green lines on the chart).  If the market follows the green again this time there is no where else to go but to new highs.

But since anticipation is only anticipation, needless to say, one has to be nimble at this juncture either way, and protective stops are a must, long or short.

(right click on the chart for a larger view)

spy_green_2016-08-10_0615

This market could scream higher…

Call this a perspective on my Nifty-Fifty stock list.

Yesterday, there were 44 of the 50 stocks on sell signals.  That usually marks either the beginning of a bottom or the bottom itself.

On the up day today (however small) one has to lean to the idea this is the bottom itself.

Ask me, this is hard to believe since the market virtually has not gone down at all. So it seems this is a sideways move that will vault (scream) to new highs again soon. Maybe tomorrow.

Note on the chart below the past instances of 40 or more sells on the Nifty-Fifty.  Hard to believe but pretty plain to see.

(right click on the chart for a larger view)

NFTY50_2016-08-18_1435

#NYSE Margin Debt

This may be too simplistic but every time I look at this Doug Short chart, I think at least 800 SPX points down before this finishes unraveling. It takes time, of course, but this time that would put the S&P 500 somewhere in the 1400s.

These numbers from the NYSE are a month old so the current record rally is not in them yet but I suspect when it is, it’ll look similar to that little blip up in 2008 just before the real tumble continued.

For Doug Short’s article GO HERE.

(click on chart for a larger view)

Nyse Margin Debt 2016-04-02_1114

 

#NiftyFiftyStocks once again signal a bounce

Had 45 of the 50 stocks in my nifty-fifty stock list on sells yesterday (2/9/16).  That doesn’t guarantee a rally but often signals a turn in the market for at least a bounce.

And after today’s overnight down and the run up during the market’s regular session, it appears a reversal may be in.  Another hint that we may go up some from here came in the Dow stocks today – only four remained below their opens at the end of the day and two of those slip at the close.

My longer term swing signals have not entirely turned bullish yet so a rally long here remains iffy until further confirmation.

(right click on the chart for a larger view)NIFTY_FIFTY2016-02-09_1619