Welcome Stockaholics to the trading week of December 19th! This past week saw the following moves in the S&P: Major Indices End of Week: N/A. 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 9:45 a.m. Services PMI 1:30 p.m. Fed Chair Janet Yellen speaks in Baltimore on the state of the job market Tuesday No reports expected Wednesday 10:00 a.m. Existing home sales Thursday 8:30 a.m. Initial claims 8:30 a.m. Durable goods 8:30 a.m. Real GDP 9:00 a.m. FHFA HPI 10:00 a.m. Personal income Friday 10:00 a.m. New home sales 10:00 a.m. Consumer sentiment
Stocks Suffer Worst Week Since Election As Banks, Bullion, & Bonds Sink The market's message to Dow 20,000 (or China's message to 'Murica)? Thanks to China stealing an underwater drone and quad witch shenanigans, US equities closed red post-Fed... And while Gold spiked today on China, it remains the biggest laggard post-Fed (though even bank stocks are now red)... And today's China headlines realy spooked the market on edge anyway from OPEX On the week only The Dow managed to hold onto gains... Trannies Dropped 2.5% - worst week in 6 months Financials dropped 1.6% - worst week in 3 months NYSE Composite worst week since election On the week, stocks were mixed but Trannies worst... Dow 20,000 was lost - 2 lower highs in a row post Fed spike... Quad Wicth saw more VIX chaos with a total collapse into the close (note the corrrelation between stocks and VIX was extremely high once again - as opposed to norm) Financial stocks were the week's worst performers (and healthcare best)... Treasury yields ended the week higher across the curve BUT the long-end dramatically outperformed... And the yield curve has tumbled in recent days... The USD Index rose notably on the week to close at 14 year highs... (led by Yen and Aussie Dollar weakness) The Dollar dump after China sparked some chaos in commodities and lifted crude oil into the green, silver was worst on the week... Gold spiked today on China headlines but ended the week ugly - 6th weekly drop in a row (worst week since election week)
Spoiler: Weekend Reading: Copious Cognitions Submitted by Lance Roberts via RealInvestmentAdvice.com, Over the last few week’s I have discussed the post-election surge in the market based on rather optimistic outlooks as opposed to the technical underpinnings that currently exists. As I specially stated in last weekend’s newsletter entitle “Dow 20,000”: “If this market rally seems eerily familiar, it’s because it is. In fact, the backdrop of the rally reminds me much of what was happening in 1999. 1999 Fed was hiking rates as worries about inflationary pressures were present. Economic growth was improving Interest and inflation were rising Earnings were rising through the use of “new metrics,” share buybacks and an M&A spree. (Who can forget the market greats of Enron, Worldcom & Global Crossing) Stock market was beginning to go parabolic as exuberance exploded in a “can’t lose market.” If you were around then, you will remember.” Of course, this is what we were told this week by Janet Yellen, and the Fed, as they finally lifted rates for the first time in 2016 with the expectation the economy will continue to perform “well,” the current rate is only modestly below the “neutral” rate, and the rate hike is a vote of confidence in the economy. Or course, the irony is when she stated the Fed is expecting to hike rates 3-times next year. Considering their previous track record for lifting rates, it is astonishing the market continues to “buy” the nonsense. As I penned last weekend, the ramp up in the market against a backdrop of a “fear” of rising inflationary pressures, when none really exists, is a dangerous brew for the markets. With interest rates and the U.S. Dollar already heavily front running the Fed in the tightening of monetary policy, there is a very high risk of an “accident” occurring which takes investors by surprise. But for now it is the holiday season, so “hope” is much more “fun” than the politics of reality. Which reminds me, it is that special time of year to share “Festivus.” Here is what I am reading this weekend. Fed, Economy & More Trump Trump’s Unhappy Fate Is To Oversee A Crisis by James Rickards via Daily Reckoning Fed & The Destruction Of The American Dream by Danielle DiMartino-Booth Why Trump Is Biggest Risk To Global Economy by Ivana Kottasova via CNN Money Reversing The Tragic Trends Of Our Time by IBD Trumps Self-Defeating Trade Policy by Steve Chapman via Reason.com Economy Not As Strong As Consensus Believes by Robert Johnson via MorningStarr What A Fed Rate Hike Will Mean by Patrick Gillespie via CNN Money What Markets Did Last Time Fed Raised Rates by Katie Little via CNBC Some Factors To Consider About Trumphopia by Anthony Mirhaydari via The Fiscal Times Will Fed Words Finally Come To Something by Caroline Baum via MarketWatch Trump Doesn’t Herald New Paradigm Of Growth by Joachim Fels via PIMCO Trump, Crony Capitalist-In-Chief by David Cay Johnston via Daily Beast Fed’s Rate Increase And You by Stephen Gandel via Fortune Air Pocket Coming To Houston Home Sales – by Aaron Layman Markets Bonds Are Flashing A Warning Sign For Stocks by Jonathan Garber via BI The One Chart “Trump Traders” Must See by Greg Guenthner via Daily Reckoning Gundlach: Watch For “Sell Off” By Inauguration by Akin Oyedele via BI Now Is The Perfect Time To Buy Stocks by Bryan Rich via Forbes How To Make The Trump Rally Last by Mohamed El-Erian via Bloomberg The “Big Fat Ugly Bubble” Is The Threat by Mark Spitznagel via ZeroHedge Real Winner Of OPEC Deal: Shale Drillers by Patti Domm via CNBC Markets In The Trump Era by Jonathon Trugman via NY Post Feel Great About The Market? Some Perspective by Gregg Fisher via Gerstein-Fisher How Trump Could Blow Up The Bull Market by John Mauldin via Forbes 7-Stumbling Blocks To The Market by Evelyn Cheng via CNBC 5-Lies Investors Tell Themselves by John Coumarianos via WSJ Trump Rally Biggest Since Hoover by Sue Chang via MarketWatch What Would Bertrand Russell Say About The Index by Doug Kass via Real Clear Markets Dow 20,000? Do I Hear 21? by Michael Kahn via Barron’s Back To Extreme Greed by Chris Sheridan via Financial Sense Dividends Show Distress In Economy by Ironman via Political Calculations How Overpriced Is The Market Anyway by Michael Kahn via Barron’s Goldman Sachs’ Covert Scheme To Raise Oil Prices by Michael Covel via Daily Reckoning Interesting Reads Real “Fake News” Is Mainstream Media by Tom Basile via Forbes This Christmas We Need Humility by Stephen Moore via The Washington Times The Complexity Of Inequality by Michael Heise via Project Syndicate 4-Lessons Of America’s Election by Michael Boskin via Project Syndicate Risk Of A Global Conflagration Has Risen via Council On Foreign Relations Time For A Return Of Keynes by Therese Raphael via Bloomberg Did ACA Add 20-Million To Insurance Rolls? No. by IBD Hamilton Would Not Approve by Lambert Strether via Naked Capitalism A Short Squeeze In Treasuries by Edward Harrison via Credit Writedowns American Dream May Be Hard To Revive by Bob Davis via WSJ Will Trump Bring Higher Rates? Don’t Count On It by Neil Irwin via NYT Emerging Market Hat Trick by Rob Arnott via Research Affiliates Interest On Debt Fastest Growing Budget Item by CRFB Historical Valuation Measures Are Double by John Hussman via Hussman Funds This Is The Index To Watch by Dana Lyons via Tumblr Why Is The Fed Tilting At Windmills by Jesse Felder via The Felder Report “Without action, the best intentions in the world are nothing more than that: intentions.” ? Jordan Belfort, The Wolf of Wall Street
Santa Claus Rally or the Grinch Who Stole Christmas? (Part 2) Posted by lplresearch Yesterday on the blog, we noted some potential reasons the Grinch could come for equities, as various levels of sentiment are beginning to get somewhat frothy. With the premiere of How The Grinch Stole Christmas turning 50 years old this Sunday, today we’ll take a look at why you should still believe in Santa and not become a Grinch. The Santa Claus Rally in December and the likelihood of higher equity returns during this festive month is one of the best-known trading axioms. This is also known as the “December Effect,” first noted by Yale Hirsh in his Stock Trader’s Almanac in 1972. But here’s the catch about the Santa Claus Rally; it isn’t talking about the entire month of December, only the last five days of the year and the first two days of the following year. In fact, as we noted earlier this month, going back to 1950, the S&P 500, on average, is actually flat as of the 15th; then it has frequently seen strong returns over the rest of the month. So should you believe in Santa? Going back to 1950* on the S&P 500, looking at the last five days of the year and first two days of the following year, would you believe out of all the days of the year these seven days are the second strongest? That’s right; the days during the Santa Claus Rally have gained 1.4% on average and were higher 77.3% of the time. Looking at all the possible seven-day combinations of the year, only starting on the day with 46 days left in the year (usually around the third week of October) was stronger than the seven days during the Santa Claus Rally. Now that is reason to believe. Per Ryan Detrick, Senior Market Strategist, “The Santa Claus Rally isn’t just a bullish time of the year, it is also a great indicator for how January will do. When the seven days of the Santa Claus Rally have been positive, then January has been up 1.3% on average and higher nearly 65% of the time—both better than your average January. Here’s where it gets good; when Santa doesn’t show up, January has been actually down 0.3% on average and higher only 40% of the time. Believe in Santa or not, if he doesn’t show up—the New Year might not start off so well.” Here are all the recent Santa Claus Rallies and subsequent January performance on the S&P 500 back to 1996. We’d put it like this; not all red Januaries have had a weak Santa Claus Rally during this period, but all weak Santa Claus Rallies have led to a red January. Over the past 20 years, stock market performance during the Santa Claus Rally has been negative five times and the following January was also red all five of those times. Last, the Santa Claus Rally has been red the past two years, and it hasn’t been down three consecutive years since 1946, 1947, and 1948. Could it happen again? That depends if you feel like a Grinch or not. Merry Christmas and a joyous holiday season to everyone. When Do New Highs Happen? Posted by lplresearch The rally since the U.S. election continues, as the Dow has now closed at a new all-time high for six consecutive days. As we noted at the start of the month, December historically is a strong month for equities regardless of the scenario coming into the month, and so far that has played out nicely this year. With all the new highs happening over the past month, this brings about the question: when do most new highs tend to happen? Per Ryan Detrick, Senior Market Strategist, “Going back to 1950* on the S&P 500, it turns out the historically strong month of December hasn’t seen as many new all-time highs as you’d think. In fact, it has only had 77 new highs and ranks ninth out of 12 months. On the other side of the spectrum, no month has seen more new highs than November.” Taking a closer look at December, it isn’t surprising, but the S&P 500 has never been lower on the year when it made a new all-time high in the last month of the year. In fact, since 1950, the S&P 500 has made a new all-time high in December during 16 other years besides this year, and the average yearly return has been 23%. With the current year-to-date return in 2016 about half of that, this year has been below average. Does a new all-time high in December tell us much about the following year? It doesn’t look like it means much if you are bullish, as the year after a new high is made in December has been up 7.0% on average, versus the average year since 1950 up 8.9%—so it has been a little weaker. A Bigger Picture Look At The Bull Market Posted by lplresearch On Friday, the S&P 500, Dow Jones Industrial Average, and Nasdaq all closed at new all-time highs. The Dow closed above 19,000 for the first time ever three weeks ago; now it is a strong up day or two away from potentially closing above 20,000. It is easy to get caught up in the huge move we’ve seen out of equities since the election, but it is just as important to remember what things were like heading into this move. We noted many times over the summer how historically tight the trading range was for equities at that time. From the tightest two-year trading range in more than twenty years, to the tightest 30-day range in 50 years, to the least-volatile two-week stretch in 21 years – it all added up to expectations of a big move later this year. In fact, in late July we summed up the lack of movement like this: “Tight ranges don’t stay that way forever, just as volatile times don’t stay volatile forever. History would suggest that tight ranges like we are in now tend to resolve higher.” It is now safe to say that has played out very nicely, but how much more could be left in the bull’s tank? As we laid out in Irrational Exuberance Part Two last week, the equity bull market is alive and well according to our methodology based on valuations, fundamentals, and technicals. Let’s take a much bigger picture look at things now. As Ryan Detrick, Senior Market Strategist, noted, “It is easy to get caught up in the near-term volatility of equity markets, but taking a bigger picture look at things sometimes helps to clear up a blurry picture. Doing this shows a nice breakout from a 13-year consolidation and greatly increases the odds of potential strength going forward into at least 2017, if not much further.” As the chart below shows, the S&P 500 has previously moved from very long periods of sideways action, to a decade-or-longer bull market. After consolidating for 13 years from 2000 to 2013, the current bull market that dates from the breakout to new all-time highs is only three years old. If history repeats once again, this bull market could have much further to run. Welcome to the Most Boring Market in 21 Years Posted by lplresearch The second half of July has historically been boring for equities. Considering the huge drop to start 2016 and big rebound in late February and March, then the Brexit 5% two-day drop and nearly just as quick recovery, the second half of July has been very quiet, as nearly all volatility has stopped. To show just how tough it has been for the S&P 500 to make a move, in the past 11 days the S&P 500 has alternated between higher and lower closes for just the fifth time since World War II. Looking at the recent action, the S&P 500 hasn’t moved more than 0.75% (up or down) for 14 consecutive days. That is the longest such streak in 16 months. It hasn’t closed higher or lower by 0.5% for 10 straight days for just the third time the past 20 years. And the intra-day high and low range over the past 11 days has been only 0.92%, the tightest range ever in the 45 years of available data. Put it this way: 30 of the first 31 days in 2016 had a larger one day range (0.92%) than the past 11 days have had. Digging into the past 11 trading sessions a little more, the S&P 500 close has moved in a range of only 0.61%. Take note, this isn’t using intra-day highs and lows over the past 11 days, just the past 11 closes. This is the tightest range since August 1995. Below we look at all the times there was an 11-day range tighter than the current 0.61%. In conclusion, tight ranges don’t stay that way forever, just as volatile times don’t stay volatile forever. History would suggest that tight ranges like we are in now tend to resolve higher. Considering August and September are two of the most volatile and weakest months of the year, it will be quite interesting to see how this resolves.
ShadowTrader Video Weekly 12.18.16 - How to tie market profile together Video from ShadowTrader Peter Reznicek
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 (12/19-12/23) <-- 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 (12/19-12/23) <-- 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 (12/19) <-- click there! And lastly we also have a Santa Claus Rally poll! Will Santa deliver a market rally this year or not? Vote!- Santa Claus Rally in 2016? Yes or No? Vote! <-- click there! ======================================================================================================== In addition as we're coming up to the new year 2017 we've got a handful of new market polls for you folks to vote on- /GC Gold Futures - $1000 or $1400 next? Vote! <-- click there! /CL Crude Oil Futures - $40 or $60 next? Vote! <-- click there! /DX US Dollar Index Futures - $105 or $95 next? Vote! <-- click there! 10-Year Treasury Note Yields - 3% or 1.75% next? Vote! <-- click there! Will the Euro hit parity against the USD in 2017? Yes or No? Vote! <-- click there! U/J - 130 or 100 next? Vote! <-- click there! SPX Poll - 2350 or 2150 first? Vote! <-- click there! Fed Poll: How many times do you think the FOMC will hike rates in 2017? <-- click there! SPX Poll - how BULLISH are you for 2017? <-- click there! SPX Poll - how BEARISH are you for 2017? <-- click there! ======================================================================================================== And lastly here are our upcoming monthly, quarterly, and yearly stock market polls & stock picking challenges to kick off 2017! First the polls- Monthly SPX Poll - January 2017 Sentiment <-- click there! Quarterly SPX Poll - Q1 Sentiment (January - March) 2017 <-- click there! Yearly SPX Poll - 2017 Sentiment (Jan. - Dec.) 2017 <-- click there! And here are our stock picking challenge threads- Stockaholics January 2017 Stock Picking Contest <-- click there! Stockaholics Q1 2017 Quarterly Stock Picking Contest <-- click there! Stockaholics 2017 Yearly Stock Picking Contest <-- click there! ======================================================================================================== And finally we have a 2017 predictions and stock market calls thread now open ... do you have a prediction for 2017 (whether that be a stock market prediction or a sports prediction, etc?) post 'em up in the thread link below! 2017 Predictions & Stock Market Calls <-- click there! It would be pretty awesome to see you all join us and participate on these sentiment polls & challenges as we close out 2016 and open 2017! Have a fantastic weekend everyone!
Dec 16th 2016 Pro market Wrap and Sector Watch Free Friday Consolidation after a uneventful Fed announcement. We could get that Santa clause rally into the end of the year which is typically the last few days of December and first couple of days of January. After that the Bears could try to take control but we will worry about that when the time comes
That was quite the interesting week we had in the market last week on the FED. While the indices were mostly flat on the week, we did see some pretty wicked moves in the FX markets post-Fed ... you can pretty much see exactly where the FOMC announcement came out when you look at those week-to-date comparison charts up above. Holy USD Index face ripping rally batman! I gotta be super honest here but I'm not sure I can even remember such a powerful 2-day rally in the greenback as we had saw last Wednesday and Thursday ... what a move! And, considering that we saw this happen up at the highs was even more impressive IMO. Commodities took it on the chin this past week, however Gold is still kind of hanging in there considering the super strong dollar ... if you take a look at the bottom right corner of my 9 chart grid above, you'll see I have a comparison with the USD Index ... while the USD has clearly broken out in a big way this past week (fresh 14 year highs), Gold is still hanging out above its YTD lows which is kind of interesting to me. There is also a comparison with the S&P 500 ... that one is a 10-year chart. I had posted a similar chart on last week's discussion thread but I wanted to include that in my grid here as well just to show how both the S&P 500 and USD index have been moving in lockstep with each other since about 2014 ... recall that we had seen pretty much the inverse relationship between the two since 2008. Interesting. Treasuries on the other hand took a beating this past week on the fed announcement, testing 2-year lows. And interestingly, the defensive sectors in the S&P were mostly higher this past week while he offensive sectors were lower. The VIX is still quite low. But, that is probably to be expected as volumes will be extremely low going into these final 2 trading weeks of the year. Barring some crazy black swan event, we probably will see a continuation of the move that we've been seeing these past few months to close out this 2016.
Earnings for this upcoming week ahead: ($NKE $MU $FDX $LEN $BBRY $RAD $KMX $DRI $ACN $RHT $PAYX $WOR $WGO $VAL $GIS $CCL $FDS $FINL $VAV $NEOG)
Normally I'd say this below picture (Weekly chart) is a reversal pattern. Mostly because of the doji that was formed, which is usually a sign of reversal. And it may be. However, we closed on support of the 15 year monthly trend line. This makes me think we will be going high, at least in the short term.
Let's see how Chinese stocks do, with all the US-China posturing going on...not even Elon wanted to mess with Trump any more Semiconductor stocks are a viable play in the tech sector, they have nicer P/E ratios than the typical tech stock.
Thermal insulation material manufacturer Superlon Holdings posted a five percent increase in 2Q17 net profit to RM5 million due to better margins for its manufacturing division. Revenue meanwhile was flat at RM22.3 million.
I wanted to get long before bed tonight on some /ES futures, but I didn't get a pullback to the trend line I was looking for. I hope I don't wake up tomorrow a poor man because our market is up 50 points.
Good morning Stockaholics! Happy Monday ... hope you all had a nice weekend. Here are your pre-market stock movers & news this morning- Spoiler: 12/19 Monday's Stock News Movers: LEN, MOS, COST, DIS, RAI, CCL, AMZN, AAPL, BP, PX, UTX 12/19 Monday's Stock News Movers: LEN, MOS, COST, DIS, RAI, CCL, AMZN, AAPL, BP, PX, UTXGood day Stockaholics! Happy Monday! Frontrunning: December 19 Electoral college expected to officially select Trump (Reuters) China says discussing return of undersea drone with U.S. military (Reuters) Neutral PBOC Sets Up First U.S.-China Tightening Since 2006 (BBG) Wall St sleepwalking into Trump volatility surge (FT) Ukraine's largest bank rescued by state, prompts call for calm (Reuters) U.S. Factories Are Working Again; Factory Workers, Not So Much (WSJ) Senators call for probe of cyber attacks (Reuters) Koch escalates tax reform battle with report on gasoline prices (Reuters) As yuan weakens, Chinese rush to open foreign currency accounts (Reuters) China house price growth slows as lending curbs take hold (FT) Russia, Iran and Turkey to hold Syria talks in Moscow on Tuesday (Reuters) Japan eyes record spending, less new debt in financial year 2017/18 budget (Reuters) German Business Confidence Improves as Growth Strengthens (BBG) Aramco IPO Could Still Be in U.S. as Kingdom Plays Down Rift (BBG) Digital currency sales take off, but with no regulation questions abound (Reuters) Danone Sales Growth to Miss Target as Spain, Activia Falter (BBG) Bond Selloff Shows Risks of China’s Efforts to Restrain Credit (WSJ) A $55 Billion Manager Who Bought at Market Low Returns to Cash (BBG) Here’s how Obama can hit back at Putin over hacking (Reuters) STOCK FUTURES NOW: FRIDAY'S MARKET HEAT MAP: FRIDAY'S S&P SECTORS: TODAY'S ECONOMIC CALENDAR: MOST ACTIVE TRENDING PRE-MARKET DISCUSSIONS (TICKER SYMBOLS ARE CLICKABLE!): EGLT NKE XBI DIS VALE TWLO LEN UGAZ MOS AMP WTW DNKN ETFC IBB BMY DRIP FOR GUSH BWA ALNY MRK DIA SCHW CYBE TODAY'S EARNINGS CALENDAR: THIS MORNING'S PRE-MARKET NEWS MOVERS: source: cnbc.com Lennar — The homebuilder reported quarterly profit of $1.34 per share, 5 cents a share above estimates. Revenue also beat forecasts. Lennar sold more homes at higher prices compared to a year earlier. Mosaic — The fertilizer producer struck a deal to buy the fertilizer business of Brazilian mining firm Vale for about $2.5 billion in cash and stock. Costco — Citi upgraded the warehouse retailer's stock to "buy" from "neutral," saying it sees a clear path to accelerating comparable sales, thanks to the abatement of deflation in food and gasoline. Walt Disney — The stock was added to the US1 list at Bank of America/Merrill Lynch, saying the stock is positioned for outperformance. The firm sees upbeat prospects for Disney's parks and resorts, as well as its movie studios. It also sees the potential for significant capital returns to shareholders. Reynolds American — Reports say rival tobacco producer British American Tobacco will increase the cash portion of its $47 billion cash-and-stock takeover deal to buy Reynolds. Allied World Assurance — The Switzerland-based insurer will be bought by Toronto insurance company Fairfax Financial for $4.9 billion in cash and stock. The deal values Allied at an 18 percent premium above Friday's closing price. Carnival — German investment firm Berenberg cut its rating on the cruise line operator to "hold" from "buy." The firm said it is still optimistic about the 2017 cruise industry outlook but notes the potential negative effects of higher fuel costs, rising interest rates, and a stronger dollar. Amazon.com — Amazon is considering the development of mobile technology for booking truck freight, according to The Wall Street Journal. Apple — Apple plans to file an appeal this week, challenging the European Union's $14 billion tax assessment. The EU claimed that Apple's tax deal with the Irish government amounted to illegal state aid. Ireland is also planning to challenge the ruling. BP — BP struck a deal to buy a 10 percent stake in United Arab Emirates oilfields for $1.8 billion. BP will pay about $2.2 billion in stock to gain access to those fields. Praxair — Praxair could finalize a deal to buy German industrial gas rival Linde by mid-week, according to multiple reports. The two had failed to come to agreement in talks earlier this year, but sources say Linde and Praxair have resolved the issues that grounded the prior talks. United Technologies — The stock was upgraded to "outperform" from "neutral" at Credit Suisse, with the price target increased to $125 per share from $108. The firm now thinks large industrial conglomerates like United Tech and fellow Dow component GE are now more attractive after lagging the market this year. Have a good trading day to everyone in here on this Monday!
In SPY puts, Finacials still draggig, if they remain low and the rest of the market follows we might have a nice little day. Weekly trendline also shows us under a major resistance... Edit : Spy Puts Dec 23rd 225 @ 1$ Out 0.80... what a boring day
