Welcome Stockaholics to the trading week of November 7th! This past week saw the following moves in the S&P: Major Indices End of Week: Bird's Eye view of the Major Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: News Corp, Nissan, Sysco, Dean Foods, MGM Growth, Ryanair, Rockwell Automation, Scripps Networks Ineractive, Congizant Tech, Sotheby's, LendingClub, Windstream, Priceline, Marriott, AMC Entertainment, Hertz Global 2:00 p.m. Senior Loan Officer Survey 3:00 p.m. Consumer credit Tuesday U.S. Election Day Earnings: Toyota, ArcelorMittal, DR Horton, Johnson Controls, CVS Health, Cinemark, Valeant, Momo, SeaWorld, TripAdvisor, Echostar,Valvoline, Vivint Solar 6:00 a.m. NFIB survey 7:45 a.m. Chicago Fed President Charles Evans at Council on Foreign Relations 10:00 a.m. JOLTs survey 12:20 p.m. Chicago Fed's Evans Wednesday Earnings: Burberry, Viacom, Wendy's, Norwegian Cruise Lines, Dish Networks, Mylan Labs, SunLife Financial, Sunoco Logistics, Popeyes, Shake Shack, Silver Wheaton, The Container Store, Flowers Food,Atmos Energy, AmeriGas Partners 10:00 a.m. Wholesale trade 1:30 p.m. Minneapolis Fed President Neel Kashkari 9:00 p.m. San Francisco Fed President John Williams Thursday Earnings: Disney, AstraZeneca, Siemens, Michael Kors, Nordstrom, Kohl's, Macy's, Manulife Financial, Ralph Lauren, SodaStream, Nvidia, Petrobras, Blue Buffalo, Sunrun, 8:30 a.m. Initial claims 9:00 a.m. St. Louis Fed President James Bullard 2:00 p.m. Federal budget Friday Veterans Day Bond market closed, stock market normal hours Earnings: Allianz, JC Penney, Brookfield Asset Management 10:00 a.m. Consumer sentiment
Crude Carnage Slams Stocks To Longest Losing Streak In 36 Years What else was there for today... After 8 losing days in a row, the battle was on today to avoid 9 in a row.. AND THEY FAILED - this 9-day losing streak is something that has not happened since Dec 1980 VIX was up 8 days in a row before today (touching 22.99) - A mini flash crash struck as payrolls printed but all efforts were in place to try and get S&P green. Today's positive VIX close is the 9th in a row - an all time record streak. Everyone and their pet rabbit is hedging... VIX term structure is the most inverted since Brexit (and the Aug 2015 crash) Implied Correlation spikes (massive macro overlays being put on in equities) And short-term Peso vol has exploded to Lehman levels... Following Q3's biggest short-squeeze in 7 years, the first month of Q4 has seen "Most Shorted" stocks collapse, erasing all Q3's gains... * * * On the day, Nasdaq was the laggard... Stocks are down on the week... (apart from Trannies), led by Nasdaq on FANG Fallout... Nasdaq's worst week in 9 months Camera On A Stick crashed, smashed, and then crashed again... All major US equity indices are down year-over-year, and are rapidly giving up year-to-date gains... Treasury yields slid all week (but the long-end underperformed the belly post-Fed, post-payrolls)... The USDollar Index tumbled 1.3% on the week - the worst week in over 3 months... Cable and Swissy were best among the majors... As cable soared the most since Oct 2009... But all eyes were on the peso as it dumped and pumped... The Dollar's ugly week provided support for PMs (and Copper) as crude plunged... Copper has now risen 10 days straight - the longest streak in 2 years... WTI Crude managed to close just above $44.00 but ended the week down almost 10% - its worst week since January...
Spoiler: Weekend Reading: Markets Send A Warning Submitted by Lance Roberts via RealInvestmentAdvice.com, Over the past few months, I have repeatedly written about being stuck within an ongoing trading range and warned of the dangers of a downside break. From last week: “The problem with going nowhere is that it makes managing money much more difficult. With the market having broken the bullish trend line from the February lows, as shown below, along with remaining overbought with a sell signal in place, the risk to the downside outweighs the potential for a further advance currently. With downtrend resistance from the previous highs pushing prices lower, the risk of a break below 2125 is elevated. Being a bit more cautious given the current technical backdrop will likely be prudent.” Well, it didn’t take long as this past week the markets broke through that support and are now testing the 200-dma. With sell signals in place, the downside pressure currently remains as shown in the chart above by the vertical dashed black lines. As I stated in yesterday’s post I expected a bounce on Thursday. “Importantly, the violation of that crucial support suggests a further correction is likely. However, by the time a break is completed, the market has already become short-term oversold and a “sellable bounce” is very likely. As Bloomberg noted: “The index’s longest-ever run of losses was eight days, matched at the height of the financial crisis in October 2008. The S&P 500 started falling on Monday, September 29 and saw lower closes at the end of every trading day until October 10, in what was its worst week in history.” With the markets now matching an eight-day decline as of Thursday’s close, there is an extremely high likelihood of a bounce, particularly next week following the election. In order for the markets to regain their bullish footing, and reverse some of the technical deterioration, an advance above 2150 would be required with an eventual breakout to new all-time highs. Given the stronger dollar, weak economics, over-valuation, and rising rates, there is mounting evidence that we have seen the highs for this current market cycle. Therefore, it is advisable that rallies back towards 2125 are used to rebalance portfolios, raise higher levels of cash and reduce overall portfolio risk. After all, we can’t “buy low” if we didn’t “sell high” to begin with. In the meantime, here is what I am reading this weekend. Fed / Economy Fed To Pensions: Suspend Disbelief by Danielle DiMartino-Booth via Money Strong Clocks Fall Back & Consumer Spending May Too by Sarah Ponczek via Bloomberg Endless Presidential Campaign & The Economy by Steve Goldstein via MarketWatch Restaurant Recession Has Arrived by Tonya Garcia & Ciara Linnane via MarketWatch Economic Anxiety Isn’t Behind Trump by Anatole Kaletsky via MarketWatch Would Higher Rates Boost Growth by J.Bradford Delong via Project Syndicate Obama’s Economic Commentary Is All Wrong by Steve Forbes via Forbes Why The ECB Will Print, Print, Print by Yves Smith via Naked Capitalism Fed Won’t Say What It Should by Narayana Kocherlakota via Bloomberg Fed’s Tactical Advice Shouldn’t Reflect Strategy by Scott Sumner via The Money Illusion Irrational Tossers by Buttonwood via The Economist Recessionary Conditions Persist by Ironman via Political Calculations Yellen Questions Reveals Slim Knowledge by John Cochrane via The Grumpy Economist Consumer Warning As Auto Repo’s Soar by Tyler Durden via Zero Hedge Peak Auto Sales? by Aaron Layman via AaronLayman.com Markets Will Falling Asset Prices Trigger A Recession by Mike Shedlock via MishTalk.com Investors Must Be Contrarians by Tren Griffin via 25iq Investors Betting On Inflation by Luke Kawa via Bloomberg When Will The Great Crash Begin by Richard Dyson via The Telegraph Bonds Find Welcome Floor by Lisa Abramowicz via Bloomberg If The Market Is Going To Crash… by Alex Rosenberg via CNBC More Reasons To Worry About Stocks by Michael Kahn via Barron’s Market Sends A Miserable Message by James Mackintosh via WSJ Market Timers So Bearish It’s Bullish? by Mark Hulbert via MarketWatch Investors Have Given Up Beating The Market by Anthony Mirhaydari via Fiscal Times To Everything There’s A Season by Doug Kass via Real Clear Markets Interesting Reads Alpha Wounds: Lack Of Independent Judgement by Jason Voss via CFA Institute Companies Lose Billions On Stock Buybacks by Bernard Condon via AP Here’s Whats Wrong With Gold by Greg Guenthner via Daily Reckoning Ballot Measure Could Upend Porn Industry by Kari Paul via MarketWatch Avoid The 7-Scariest Retirement Mistakes by John Wasik via Forbes Financial Decisions Postponed For Election by Helaine Olen via Slate Candidates Should Be Discussing Poverty by Nicholas Kristof via New York Times Difference Between Comedians & Everyone Else by James Altucher Could BlockChain Prevent A Rigged Election by Brian Kelly via RCM Recessions, Predictions & The Stock Market by Pater Tenebrarum via Acting-Man blog Factor Shift: What Isn’t Working Anymore by Jennifer Thomson via Gavekal Valuation Measures Far Beyond Double by John Hussman via Hussman Funds Investors Over Prepared For Election Volatility? by Dana Lyons via Tumblr This Economic Flag Is At Half Mast by Jesse Felder via The Felder Report “Passive Investing Is The Path To Mediocrity” — Doug Kass
S&P 500 Extends Losing Daily Losing Streak to 9 It looked as though S&P 500 was finally going to end its losing streak at 8 consecutive days until the last hour of trading. Since 1950, there have only been 22 other S&P 500 daily losing streaks of eight or more days. 11 of 22 went onto last 9 or more days. The worst by performance occurred early in October 2008 when S&P 500 plunged 22.9% in eight trading days. The longest losing streak was in April and May 1966 at twelve days. Once the streak ended, S&P 500 generally enjoyed a nice bounce and reversal of trend. This bounce and reversal can be seen in the above chart of S&P 500 30 trading days before and 60 trading days after a losing streak of eight or more consecutive trading days. In the following table, S&P 500 performance 1-, 3-, 6- and 12-months after an eight straight day losing streak appears. 1-month later is somewhat mixed however, the average gain is 1.81%. 3-months after is stronger with S&P 500 up 68.2% of the time averaging 4.5%. 6-months and 1-year later S&P 500 further improved. Election Day Seasonality Suggests Market Rally October did live up to its reputation of being weak in Election years. For S&P 500 October’s 1.9% decline was its second worst monthly performance this year and it was also the third consecutive down month. DJIA has also declined in three straight months. NASDAQ and Russell 2000 suffered the most damage in October, off 2.3% and 4.8% respectively. October’s poor performance in presidential election years has historically been accompanied by an incumbent party loss since 1952 (see page 28 of Stock Trader’s Almanac 2016). In the following chart the 30 trading days before and 60 trading days after the last 16 presidential elections are plotted. In the above chart, Election Day is Day 0. Prior to 1984, the market was closed on Presidential Election Days so the close on the day before was used. Since 1984, the close of trading on Election Day was used. Day 26, to the left of “0” was the first trading day of October in 2016. As of today’s close, S&P 500 is suggesting an Incumbent party defeat. It is also noteworthy to observe weakness across all three lines between 10 to 5 Trading days before Election Day and then a rally from right around 5 Trading days before to Election Day. Market Ready to Jump After October Surprise & Election Tension Perhaps, the market is actually less concerned about the election and more concerned about the Fed. Economic data has been improving and the labor market has remained firm. Data firming, inflation trending in the correct direction and a Fed that seems eager to raise rates does add up to a high probability of a rate increase in December. Further evidence of a pending rate hike is evident in the rising U.S. dollar index, which briefly touched 99 last Thursday, its highest level since January. As well as Treasury bond rates steadily moving higher throughout October. Once Election Day passes, political uncertainty should subside and no matter who claims the White House, Congress will most likely remain split resulting in at least two more years of gridlock. The end of political uncertainty is also coinciding with the market’s strong historical tendency to rebound briskly following three straight down months. Coupled with the start of the market’s “Best Six Month”, November to April, there is a strong case to remain committed to being long per our Tactical Seasonal Switching strategy. Three Peaks and Post-Election Year 2017 However, the Three Peaks and a Domed House Top Pattern we have been tracking since the beginning of summer suggests an inauspicious future for the market. That’s not to say it’s a foregone conclusion that the market has topped out and will playout in textbook fashion with George Lindsay’s Basic Model shown below. This current Three Peaks lines up quite well with Lindsay’s Basic Model. The Three Peaks section lasted just 8 months from Peak 1 (point 3) in February/March 2015 to Peak 3 (point 7) in October/November 2015, falling right in the 8-10 time span of the Model. The Domed House top time frame in the Basic Model is about 7 months from the end of the Separating Decline at point 14 to the top at point 23. From the Separating Decline low in February 2016 that would have put the top sometime around or after September. But the current mid-August top is not out of line with historical examples of this pattern. We have seen this phase of the pattern transpire in much shorter and longer time frames. After the Domed House Top, the pattern resolves at point 28, somewhere back around points 10 and 14 at a minimum. It can go substantially lower before a new high, which could culminate in a bear market. On the flipside, the more likely scenario at present with market, political and economic conditions as they are mentioned above, is that this pattern can still play out in its entirety, while the market rallies after the election through yearend and the Best Six Months. Even if it does complete at just the minimum level the approximate 15% drop would not be a bear market. It’s just something we have our eye on and wanted to be sure all Almanac Investors and Traders were aware of the risk suggested by this pattern. Point 27 has also been recorded in the past at higher levels than point 23 and has taken several months to play out. As the economy firms up and the election is over we expect seasonality to take over and drive stocks higher, but next year is another story all together. As the Fed begins to tighten and rates rise and the new president completes their first 100 days look for the market to soften further as post-election year forces get stronger and the Best Six Months comes to an end in April. At which point we may find ourselves entering bear market territory. For now, after three down months in a row, we expect a rebound.
Could There Be A Big Sell-Off After The Election? Posted by lplresearch With the S&P 500 down eight consecutive days for the first time since October 2008, many are wondering what this could mean for the rest of the year. Election jitters are pulling equities lower, and the big question is: could we see a big sell-off after the election? For starters, November and December are historically two of the strongest months, and this plays out in an election year as well. Going back to 1950, the last two months of the year during an election year have averaged +2.5% and been higher 75% of the time. End-Of-The Year Equities Tend To Be Strong Breaking it down by the party in power shows that Republicans have returned 2.6%, whereas Democrats have returned 2.4% the last two months of the year during an election year. In other words, there is very little difference in performance depending on which party wins the election. What appears to matter more is how the economy is doing. The two largest declines below were in 2000 and 2008. In late 2000, the economy was months away from a recession, while in late 2008, it was in the midst of a recession. With the economy on firm footing now, this is another positive for the rest of 2016. Why A Big Sell-Off Is Unlikely The Rest Of This Year Here’s another way to look at things. The S&P 500 is currently beneath the low daily close in October (2126.15 on October 31); how often will it close the month of November beneath this level? In other words, make a “lower low.” Looking back at history, a close beneath the October low is very rare. In fact, only five times (2007, 2000, 1991, 1973, and 1950) has that ever happened. Incredibly, looking out to December, only once has the month of December closed out the month beneath the low close for the month of November—and that was in 1969. In other words, we could see some volatility, but a big drop from here is simply rather rare. Close Beneath October Lows Is Very Rare Last, should there be a pullback, how big of a pullback could we see? Again going back to 1950* and breaking it down by presidential cycle, election years see a 3.3% average drop from the end of October until the end of the year. This though is greatly skewed by a 22% drop in 2008 and an 11% drop in 2000. Turning to the median returns, an election year sees a median pullback of only 1.2%. Be aware that after three days in 2016 though, November has already pulled back 1.8%. If There Is A Pullback, It Should Be Contained According to Ryan Detrick, Senior Market Strategist, “Election anxieties have many on edge and questioning if we could see a big drop in equities during the rest of this year, given the recent eight-day losing streak. Well, the good news is history would say no. In fact, the only time we’ve seen large drops in the final two months of the year during an election year going clear back to the election in 1952 were in 2000 and 2008. Both of those times, the economy was a larger factor in the weakness than the election. With the earnings recession finally ending and the best gross domestic product (GDP) print in two years in the third quarter, the economy is fortunately on improving footing as we head into 2017.”
Monday morning pre-market earnings: ($MEET $ARIA $PLUG $CXRX $MGM $CC $LC $CTSH $HZNP $HLTH $FDC $PGNX $ON $NAT $SYY $FOLD $ARLZ $WIN)
Stockaholics come join us in our weekly market poll and vote where you think the markets will end this upcoming week ahead!- Weekly SPX Poll - Sentiment (11/7-11/11) <-- click there! In addition we have our weekly stock picking contest now up and running as well!- Stockaholics Weekly Stock Picking Contest for the Week of (11/7-11/11) <-- click there! We also now have a daily stock picking & market direction guessing challenge running here!- Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (11/7) <-- click there! As well as an SPX price poll- SPX - 2175 or 2000? Which one comes first from here? <-- click there! And lastly we have a Fed poll...will they hike, will they stand pat? Vote!- Fed Poll: Will the FOMC raise rates to <0.75% on Wednesday December 14th @ 2:00PM ET? <-- click there! It would be awesome to see some of you regulars here at Stockaholics join us and participate on these sentiment polls & challenges! Have a fantastic weekend everyone!
Get well rested this weekend Stockaholics! We've got a busy week upcoming! Should be lots of fireworks I think!
Nov 4th 2016 Pro market Wrap Free Friday Bears still in control market did some technical damage this week. Once we get through the election barring any unforeseen events like a terrorist attack on American soil we could be setting up for a nice snapback rally
Upcoming earnings this week: ($NVDA $VRX $DIS $ACIA $JCP $PCLN $CVS $MEET $PTX $NTES $ARIA $PLUG $CXRX $TASR $ENDP $MGM $OPK $CTSH $OA)
obviously the election will be front & center for the markets this week ... but what else is everyone watching besides this election in this upcoming week ahead? hopefully we can get through this election ... truth be told i am kind of tired of hearing about it over and over and over again ... let's get on with it already
the record for the most consecutive down days for the cash s&p is 12 days set in april of 1966 we're currently at 9 days as of friday's close ... we would need to close down monday thru thursday of this coming week to set the new record @ 13 days ... anyone think we'll do it?
Great kick off as always CY! A couple of things on my mind... Almost every chart I look at is oversold and a great many of them are broken. You would think we would start seeing some charts start to set up for reversal trades (like base break outs) but I am not seeing any. Are you guys seeing the same? Also I have been reading “A Complete Guide to Volume Price Analysis" and it seems to make a lot of sense. But I had the thought... With all of the Dark Pool trading that goes on these days are we even getting a clear picture of volume? and does VPA apply anymore?
i posted this video up to the bear thread a few hours ago, but maybe it would have been bettered presented in the main thread here... i don't normally like to post up ron walker's videos here because: 1.) the guy can sometimes be very bias in his analysis 2.) his videos are extremely long and put me to sleep sometimes 3.) see both 1 & 2 lol but on a serious note -- i think his video this week is a bit less bias than usual, as he goes into great detail outlining all of the possibilities (both bearish & bullish) in these upcoming days/weeks ahead- 11 4 market update Video from Ron Walker TheChartPatternTrader this video might be one of ron walker's longest vids ever ... nearly 2 hours long .... it's pretty extensive to say the least
Stick a fork in the Trump bounce, Markets bounce on Monday imo... http://www.cnn.com/2016/11/06/polit...ss-fbi-has-not-changed-conclusions/index.html
