Earlier in the month, I mentioned that September is a historically weak month for the stock market. This September was no different with the stock market having it's worst September since 2011. Just how bad was it? The S&P 500 lost -3.9%, the DOW shed -2.2%, and the strongest index of the year, the NASDAQ, fell -5.1%. Gold, crude oil, and Bitcoin didn't want to be left out of the party and posted dismal numbers as well. Losing -4.8%, -7.1% and -7% respectfully.
The only bright spot on a monthly level was the U.S. Dollar Index, which posted a gain of +1.7%, it's first monthly gain since March of this year, where it posted a weekly increase of +.93%.
A Dark Cloud Cover pattern is a Japanese Candlestick Pattern that is typically associated with major top setups
Critical Support on the SPY highlighted by multiple technical analysis strategies suggests 335~335.25 is acting as a major support level
If price stays below the $339.95 level, then we interpret the trend as being Bearish. If price moves above the $343.55 level, it is Bullish
Critical Support on the SPDR S&P500 ETF (SPY) highlighted by multiple technical analysis strategies suggests 335~335.25 is acting as a major support level. The rally in the markets that started late Sunday and carried forward into early trading on Monday, September 28, 2020, suggests the market is attempting to rally above this support level to establish a potential momentum base. My advanced price modeling systems and Fibonacci Price Amplitude Arcs (originating from the 2009 bottom) have clearly identified this area as a critical resistance/support zone.
The first chart below highlights the SPY Monthly chart data and shows the recent peak in price that broke through the major resistance level near 335, then collapsed back below that same level. Prior to this recent collapse, the COVID-19 peak in February also briefly touched this same resistance level – confirming it as valid. We believe the current price activity suggests the markets are attempting to form some sort of price base above this $335 level on the SPY.
As you can see from the recent highs on the chart above, there is a new Fibonacci Price Amplitude Arc range set up by the COVID-19 collapse that may interrupt this Base Setup process. Look for the smaller OBLIQUE on the chart near where the word “Support” is. This is a new Fibonacci Price Amplitude Arc that reflects the most recent price range activity into targeted Fibonacci based price zones. Continue reading "Monthly Dark Cloud Cover Pattern May Be Calling The Top"→
According to the Energy Information Administration, U.S. petroleum inventories (excluding SPR) fell by 7.5 million barrels last week to 1.422 billion, and SPR stocks dropped by 0.8 million barrels. Total stocks stand 128 mmb above the rising, rolling 5-year average and about 128 mmb higher than a year ago. Comparing total inventories to the pre-glut average (end-2014), stocks are 363 mmb above that average.
Production averaged 10.7 mmbd last week, off 200,000 mb/d from the prior week. It averaged 10.325 mmbd over the past 4 weeks, off 16.9 % v. a year ago. In the year-to-date, crude production averaged 11.766 mmbd, off 3.2 % v. last year, about 400,000 b/d lower. Continue reading "U.S. Petroleum Inventories Fall"→
HealthEquity (HQY) is an undervalued and underappreciated stock that is a buy at the sub $50 level. The stock is hovering just above its COVID-19 lows despite the epic market rally. HealthEquity (HQY) has fallen from its 52-week highs of $89 to a low of $35 or 60% during the COVID-19 market meltdown. The recent sell-off in equities has resulted in a 20% dive moving from $61 to $48. This sell-off presents a great opportunity for this healthcare cost containment company.
Considering HealthEquity’s unique position as being distinctly disassociated from drug pricing issues, rising insurance costs, or the pharmaceutical supply chain, this sell-off is a great opportunity for an entry point. HealthEquity is in a strong position and being offered at a heavy discount. For long-term investors, HealthEquity presents a compelling picture of growth with a large addressable market moving forward and further strengthened with its acquisition of WageWorks.
HealthEquity’s Q2 Earnings
HealthEquity announced its Q2 earnings with WageWorks being fully integrated into its financial numbers as the acquisition closed on August 30, 2019. Revenue for Q2 was $176 million, growing 103% compared to $86.6 million for the second quarter ended July 31, 2019. Revenue this quarter included: service revenue of $103.8 million, custodial revenue of $46.9 million, and interchange revenue of $25.3 million. HSAs now exceed 5.4 million, an increase of 29% year over year. Total Accounts as of July 31, 2020, reached 12.5 million, including 7.1 million CDBs. Total HSA Assets as of July 31, 2020, were $12.2 billion. Total HSA Assets included $9.0 billion of HSA cash and $3.2 billion of HSA investment assets (Figure 2).
Almost all targets, which were set in the previous post, were reached last week except for the gold. I think the central banks bought the dip of the gold price, as the silver was lack of such strong support.
The majority of readers guessed it right as the US dollar index (DXY), aka “The King,” exceeded the target and reached the trendline resistance that I have mentioned at the beginning of the month. It is time for updates, and “The King” will open the series of charts.
The DXY daily chart is the first.
It is interesting to see how from time to time, the market catches traders in a “make it or break it” situation right at the end of the trading week, keeping their heads spinning with almost paranoiac thoughts – “I should keep the profitable position Vs. I should book the profit”. It is even worse this time as usually Friday is the “book the profit and relax” day, but the price just stalled on the trendline resistance; hence not much of the selling to cover was there. Continue reading "Gold & Silver: The King Reins In"→