Indexes Hit Record Highs On Trade Optimism

Hello traders everywhere. The DOW hit a record high Friday after White House economic adviser Larry Kudlow said China and the U.S. were getting close to reaching a trade deal trading 120 points higher. The S&P 500 and NASDAQ also hit all-time highs, climbing +0.6% and +0.7%, respectively.

Trade-sensitive names such as Caterpillar, Boeing, Apple, and Micron Technology all rose at least +0.5%. Gold, meanwhile, gained +.60% for the week trading at $1,472.10 per ounce. Crude oil, however, hasn't had the same fate losing -.35% on the week entering a sidelines position, much like gold.

The U.S. Dollar continues to trade right around the $98 level, and we're waiting on a breakout above $98.39 to give us a green weekly Trade Triangle, which would indicate a move to a long-term uptrend. On the flip side, Bitcoin continues to be stuck in a tight trading range, but we could get a move lower if it breaks below $8,363, triggering a red weekly Trade Triangle. Continue reading "Indexes Hit Record Highs On Trade Optimism"

Stocks Slump After Hitting Record Highs

Hello traders everywhere. Stocks wavered Friday after President Donald Trump threw cold water on recent U.S.-China trade optimism by saying he has not agreed to roll back existing tariffs.

President Trump made his comment Friday, noting Beijing would like him to scrap those levies. Those comments came after trade optimism earlier in the week, sparked a massive rotation out of bonds, and lifted equities to record levels.

The Dow Jones traded 55 points lower, while the S&P 500 and Nasdaq fluctuated around the flatline.

Entering Friday afternoon's run to the close, the DOW is up 1% for the week. The S&P 500 and Nasdaq are both up 0.6% and .8% for the week. It would be the third straight week of gains for the DOW while the S&P 500 headed for its fifth straight weekly gain. The Nasdaq was on pace for a six-week winning streak. Continue reading "Stocks Slump After Hitting Record Highs"

October Jobs Report Beats Expectations

Hello traders everywhere. As we head into the Friday close, the S&P 500 and NASDAQ are trading at record high levels and looking to close at record highs for the week getting a boost from a better than expected jobs number for October. The S&P, DOW, and NASDAQ will all post weekly gains over +1%.

The U.S. economy added 128,000 jobs in October, the Labor Department said Friday. Economists polled by Dow Jones expected a gain of 75,000 jobs for the previous month. October jobs growth easily beat estimates despite a decline of 42,000 jobs in the autos sector due to a General Motors strike that has now been settled.

Jobs growth data for September and August were also revised substantially higher. September's number was revised up to 180,000 from 136,000. August's job growth was revised to 219,000 from 168,000. Continue reading "October Jobs Report Beats Expectations"

Adaptive Dynamic Learning (ADL) Suggests Volatility May Surge

Over the past few weeks and months, a number of key economic data has continued to rally the US major indexes towards new highs, hopes of a US/China trade deal, a continued shift of capital in the US markets for protection and safety, and moderately strong US economic indicators and an earning season that appears to be moderately strong for Q3 of 2019. The interesting facet of this move higher is that it is happening while trading volume has diminished dramatically in the SPY. The futures contracts, the ES, YM, and NQ, continue to show relatively strong volume activity though.

Additionally, the overnight Repo markets have risen to the attention of many skilled analysts. The concern is that the continued US Fed support of the overnight Repo facility may be a band-aid attempt to support a gaping credit crisis that is brewing just outside of view. We’ve been doing quite a bit of research over the past few weeks regarding this Repo market support by the US Fed and we believe there is more to it than many believe. We believe certain institutional banking firms may be at extreme risks related to derivative investments, shadow banking activities and/or global commodity/stock/currency/asset risk exposure. The only answer we have for the extended Repo facility at increasing levels is that the institutional banking system is starting to “fray around the edges”. Thus, we believe some larger credit risk problems may be just around the corner.

Our longer-term analysis continues to suggest that “all is fine – until it is not”. Our belief that a capital shift that has been taking place over the past 5+ years where foreign capital continues to pour into the US markets is driving US stock market prices higher. There is evidence that the capital shift into the US has slowed over the past 5+ months, yet one would not notice this by looking at these longer-term charts. The point we are trying to make today is that price peaks near current highs have, historically, been met with strong resistance and collapsed by 8 to 15% on average. Continue reading "Adaptive Dynamic Learning (ADL) Suggests Volatility May Surge"

S&P 500 Vies For Record Close

Hello traders everywhere. As we head into the Friday close, the S&P 500 is making a run at its intra-day record high of 3,027.98 by trading just shy of it hitting 3,027.39, which happens to be above its record close of 3,025.86 which was set on July 26th of this year. The move higher was bolstered by strong quarterly earnings from Intel along with apparent progress on the U.S.-China trade front.

On a weekly level, the S&P 500 will post a weekly gain of +1.2% while the DOW will check in with a weekly gain of +.8% and not too be outdone the NASDAQ is looking to close out the week with an increase of +1.8%, leading the pack. For the NASDAQ, this will be four straight weeks of gains, while the S&P 500 will have three weeks, and the DOW will have its second winning week out of the last three.

Crude oil spiked this week, gaining +4.7% for week triggering a new green weekly Trade Triangle. The spike is due to news that OPEC will consider instituting even deeper production cuts at its December meeting and a drop in the oil rig count. The US oil and gas rig count fell sharply this week, according to Baker Hughes, with a decline of 25 rigs for the week. This week marks nine decreases out of the last ten weeks. The total oil and gas rig count now stand at 830, or 238 down from this time last year. Continue reading "S&P 500 Vies For Record Close"