The recent rally abruptly came to an end yesterday as the market reversed down from key resistance levels. It takes a lot to reverse a major trend in any market and that's why I have been bearish for quite some time on many of the big stocks. Based on the Trade Triangle technology, I feel that we are going to see continued downward pressure on the markets.
One of the outstanding features of a bear market is that they don't let you out easily. Anyone who bought stocks in the last few days thinking that the market was going to go back up to the highs are now trapped holding losing positions. Continue reading "Reality Comes Back With A Vengeance"
What do I mean by that?
To put it simply, sometimes being on the sidelines in a cash position can be beneficial to your portfolio. There are times in the market when trends are very clear, whether it be up or down. At the moment when you look at the DOW Index, the Trade Triangle technology is indicating that you should be on the sidelines as the major trend remains down while the intermediate-term trend is positive. Over at the NASDAQ and the S&P 500, you should still be negative on those indices, providing the 4,636.93 and 1947.20 levels are not breached to the upside.
Today could be a very interesting day, we could see the recent upward momentum reverse back down and witness a pullback in the major indices and many stocks that have recently rallied against their longer-term negative trends.
Here are a few of the stocks I'm covering today. Continue reading "Sometimes No Position Is The Best Position"
There's no doubt that the dramatic 800 point rally we have seen the past three days is practically unprecedented, but did it change the major trend of the market?
The simple answer is no, the longer-term trend for the equity markets at the moment remains negative. But please don't misunderstand what I'm saying, I was as surprised as anybody at the velocity of the rally which exceeded the Fibonacci retracement levels I discussed recently.
Today should be an interesting day to say the least, and I doubt seriously that the market can close higher and would expect to see some sort of pullback from the current levels. There is also what I would consider to be a major resistance based on the highs that were hit on Feb. 1st at the 1939 level on the S&P 500. Providing that level holds, we are still basically in a downward trending market, albeit a choppy one.
The pullback in gold (FOREX:XAUUSDO) appears to be consolidating, which is good given its rapid move to the upside. In an ideal world, I would like to see gold continue to consolidate around the $1200 level before once again moving higher. I still believe that gold has broken the back of its four-year bear trend and has now embarked on a long-term bullish trend that could take it to the year 2020. Be sure to watch the Trade Triangles for signals that gold has once again embarked on an upward move. Continue reading "Bull Market Or Bear Market, Which Is It?"
After the close today, The Walt Disney Company (NYSE:DIS) announces its earnings for the fourth quarter. Analysts are expecting Disney to make $1.45 a share on revenues of 14.7 billion. But here's the rub, ESPN which produces 45% of Disney's revenues, lost 3 million subscribers last year and is now a potential Achilles' heel for Disney.
Here's how I'm looking at Disney:
The Trade Triangles are all red and negative indicating lower prices. Technically the chart for Disney looks dismal at best. Based on those two elements, I expect Disney to either come in on analysts estimates or to miss their earnings. I do not expect to see a surprise on the upside here. Based on that analysis you would want to be short (if you're not already based on the Trade Triangles) Disney before the close today.
Another stock that is set to report fourth-quarter 2015 results after the close today is Akamai Technologies Inc. (NASDAQ:AKAM). Analysts estimate that this stock should have positive earnings of around $0.50 a share. I would be surprised given the overall negative tone of tech stocks that even if Akamai reports good earnings, it won't go far on the upside. Technically speaking this stock according to the Trade Triangles is in a major downtrend, it has however completed a 61.8% Fibonacci retracement and is within striking distance of a long-term support line which comes in around $37 a share. I would be more inclined to go with the trend and stay short this market. The original Trade Triangle sell signal for this stock came on 7/6/15 at $69.13. Akamai closed on Monday evening at $40.98. Continue reading "Can Star Wars Save Disney Or Will ESPN Sink The Ship?"
Let me begin by acknowledging the Chinese New Year. You might ask yourself, "What does that have to do with the markets here in the US?" My answer to you would be everything. Remember how influenced we were with the slowdown in China last year? This slowdown could be exacerbated in 2016, putting even more pressure on our markets here.
2016 represents the year of the "Red Monkey" on the Chinese calendar and it does not auger well for stocks according to "The Business Times" of Singapore.
Here's what they say:
"Do not expect the Year of the Monkey to be easy for investments. You need to outsmart the monkey to do well in the lunar year 2016. Do expect world events impacting stock markets and investments to change sharply and quickly, like the agile monkey."
"Expect markets to be volatile in the first half of the year (we've already got that) and for events to unfold quickly," their Chinese astrology expert says.
"The Year of the Monkey is going to shake, rattle and roil financial markets. One has to be as intelligent, witty and nimble as the monkey to do well in such investment landscape," he writes.
The most-recent Monkey year was 2004. In that year, the Shanghai Composite climbed 36% only to come crashing down in a 44% correction that bottomed in June 2005 (and then rallied 500%).
MarketClub translation - be nimble in 2016. Continue reading "Is It A Monkey That's Going To Sink The Market?"