Welcome Stockaholics to the trading week of June 6th! This past week saw the following moves in the S&P: Bird's Eye view of the Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday 2:15 a.m. Boston Fed President Eric Rosengren speaks in Helsinki 12:30 p.m. Fed Chair Janet Yellen on economy Tuesday 8:30 a.m. Productivity and costs 1 p.m. $24 billion three-year note auction 3 p.m. Consumer credit Read MoreDespite jobs bombshell, Fed could still hike rates in July Wednesday 10 a.m. JOLTs 1 p.m. $20 billion 10-year note auction Thursday 8:30 a.m. Initial claims 10 a.m. Wholesale trade 1 p.m. $12 billion 30-year bond auction Friday 10 a.m. Consumer sentiment 2 p.m. Federal budget
Spoiler: Bonds & Bullion Soar As Plunge-Protection-Team Rescues Stocks From Painful Payrolls Puke Who could have seen that coming? Worst jobs print in 6 years and tumbling PMI, ISM, and Factory Orders - Did The Fed just lose it completely? Rate Hike odds plunged... even as stocks ripped back But Bonds and Bullion were the biggest post-payrolls winners... VIX was crushed once again in just utter idiocy off the lows to get S&P back to 2,100... notice a pattern there? On the day, The Dow got closest to getting back to unchanged On the week, Dow Industrials and Transports both ended lower on the week, S&P and Nasdaq scraped to unchanged, as Small Caps outperformed... Here are futures for the week - just for shits and giggles...notice a pattern? Financials limped lower... Once again bonds and stocks decoupled after stocks crashed to catch down... But that's nothing new... As did FX carry... In bond-land, things were crazy. On the week, yields collapsed and the curve flattened to new cycle lows... Bund yields crashed to an all-time-record low close... 2Y yields fell the most since 2009 today (slightly outpacing September 2015's Fed fold plunge)... FX markets were relatively well behaved all weeek (aside from JPY) until today when the US Dollar index plunged after payrolls... Today was the biggest drop in the USDollar Index in 7 months! And this week was the 2nd biggest drop in USDJPY since Lehman Despite the USD weakness, crude ended the week lower as PMs soared today... Gold and Silver surged back to 2 week highs... Oil extended its losses overnight after the weak jobs data then plunged on the rig count rise, but the panic bid into NYMEX close was perfect momentum ignition for stocks...first down week for oil in a month Charts: Bloomberg Spoiler: Weekend Reading: The End Of The Era Of Procrastination Submitted by Lance Roberts via RealInvestmentAdvice.com, Another week of going nowhere, really. The good news is that this sideways pattern of market action over the last year will come to an end and likely very soon. The only question investors have to get right is whether that resolution will be a continuation of the bull market that began in 2009 OR will it be the beginning of a more protracted bear market decline. “Step right up and place your bets.” I have updated the analysis from last week which shows that while the market did bounce during the holiday-shortened trading week, it did so on very light volume. However, the more encouraging news is that on Thursday the market DID break above the downtrend that began last May. However, since this is weekly analysis, that breakout MUST HOLD through the end of trading today (Friday). A failure to do so would negate the breakout and keep the markets confined in the current downtrending pattern. While the short-term market dynamics are improving, primarily based on “hopes” the Fed will NOT raise rates in July, the economic and fundamental backdrop continues to weaken. This divergence between price and reality will be resolved at some point and likely not to the satisfaction of those with a bullish bias. With the risk/reward ratio for equities still tilted to the negative, the current rally is likely one that investors should continue to ‘sell into’ particularly as we head deeper into the seasonally weak period of the year. Yes, there is a bullish argument to be made if the market can break out to new highs, and if that occurs I will certainly reassess the risk/reward of increasing equity exposure further at that point. But that is not today. Unfortunately, and frustratingly so, we remain confined this week to wait and see what happens next. As I stated, the only certainty is this consolidation/topping process will end. When? How? Those are the questions that must be answered which will determine the consequences of our actions. “In it’s place we are entering a period of consequences.” – Winston Churchill
Wins & Losses by past Presidents that served an 8th year For quite some time we have been displaying a chart of 8th Years of Presidential terms. The first time was October 19, 2015 in a post titled “Why 2016 could be a lousy year for the market.” Since then we have updated and expanded that chart to show the S&P 500 and NASDAQ as well as a few other scenarios applicable to 2016 such as incumbent party victories and losses. When 2016 is overlaid upon the updated chart there are some unsettling similarities. This year got off to a miserable start with steep January losses, the market then bottomed in February and rebounded to an April high followed by weakness into May and now a bounce higher. The magnitude of the moves in 2016 has been greater than the historical 8th Year average, but the shape and highs and lows have been in close proximity. This apparent tracking of the historical seasonal pattern has driven interest in each of the past 8th Years and whether or not the incumbent party won or lost the election. In the following chart, the six 8th Years since 1901 have been plotted individually. The only year with a positive full-year return was 1988, up 11.85%. In that year Republicans retained control of the White House. In 1940 Roosevelt was re-elected to a third term, but WWII knocked DJIA down 12.72% that year. Wilson, Eisenhower, Clinton and G.W. Bush turned the White House over to the opposing party and DJIA suffered full-year losses in each of those years.
ShadowTrader Video Weekly 6.5.16 - A crash course for when there is no crash Video from ShadowTrader Peter Reznicek
ER for the week beginning June 6th: $VRX $LULU $ONVO $RH $CASY $MIK $PAY $CVGW $ABIL $PLAY $THO $HDS $UNFI $SJM
Looks like we're pooping higher here. Who needs Yellen to drive markets up when we have a roaring American economy justifying P/E of 25. I wonder how much money would be pulled out of equities today if rates were a normal 4 - 5%. As soon as the hunt for yield doesn't give stocks as the only answer, I imagine this is gonna be a tough market.
My automated system Tech Trader doing well across the board with $SPY breaking year highs after going fully invested long back in May, which at the time seemed counter-intuitive with all the bearish talk on the streets, hawkish Fed, and expectations of sell-in-May seasonal weakness. Sector exposures are still largely long Consumer but as you can see in the chart below, it is very long everything else as well with next largest exposures being Technology and Energy. https://www.techtrader.ai/wall/?date=1465195907&post=9490
CNBC guy saying we are due for a 5% drop which is a buying opportunity. Does this mean we are going to rally now instead?
I wouldn't consider only a 5% drop a buying opportunity. If SHTF like it might we'll be going down much further. 5% really isn't a big deal, heck we had two corrections recently which gave plenty of chance for people to get in, and the macroeconomic risk is much worse now.
so i'll be completely honest here ... i haven't really been keeping up that closely with the day-to-day market action of late (really ever since march) ... truthfully, i'm not really a big fan of this slow grind market right now ... the market hasn't gone anywhere for months ... and really if you look a bit further out it has gone absolutely nowhere since 2014 ... literally ... we've been parked in a range between 2130 on the upside down to about 1800 on the downside for 2 whole friggin' years ... only today we are finally hitting the upper end of that 2 year trading range ... but anyway with that being said -- i'm curious to hear what everyone makes of the divergence that we've seen and continue to see outta the transports compared to the overall markets (and by "overall markets" i mean the cash spx, and the dow 30 basically...) today being another nice example as the overall markets are up fairly significantly today, but the transports lagging big time the spx is sniffing out ATHs but the TRANS nowhere near highs, no less its 2016 highs ... what's going on here? during much of this 7yr bull rally i recall seeing transportation leading things for the most part ... that's not the case now ... yet markets are within striking distance of ATHs again ... IDK man ... perhaps nothing to worry about at all here ... and these divergences are not what they used to be in the past ... admittedly i have been MIA from the markets for a long time so i could be way off here ... anyway just thought to get some 2c from our more active participants nevertheless... hope the markets are treating y'alls good!
