Welcome Stockaholics to the trading week of January 9th! 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 Earnings: Acuity Brands, Commercial Metals, Global Payments, Barracuda Networks 9:00 a.m. Boston Fed President Eric Rosengren 12:40 p.m. Atlanta Fed President Dennis Lockhart 3:00 p.m. Consumer credit Tuesday Earnings: Synnex 6:00 a.m. NFIB survey 10:00 a.m. Wholesale trade 10:00 a.m. JOLTs 1:00 p.m. $24 billion 3-year note auction Wednesday Earnings: KB Home, MSC Industrial 1 p.m. $20 billion 10-year note auction Thursday Earnings: Taiwan Semiconductor, Infosys, Shaw Communications, Delta Airlines 8:30 a.m. Philadelphia Fed President Patrick Harker 8:45 a.m. Chicago Fed President Charles Evans and Atlanta Fed's Lockhart on a panel 8:30 a.m. Initial claims 8:30 a.m. Import prices 12:30 p.m. Atlanta Fed's Lockhart 1:00 p.m. $12 billion 30-year bond auction 1:15 p.m. St. Louis Fed President James Bullard 1:45 p.m. Dallas Fed President Rob Kaplan 2:00 p.m. Federal budget 7:00 p.m. Fed Chair Janet Yellen holds town hall with educators Friday Earnings: JPMorgan Chase, Bank of America, PNC Financial,Wells Fargo, First Republic Bank, BlackRock 8:30 a.m. Retail sales 8:30 a.m. PPI 9:30 a.m. Philadelphia Fed's Harker 10:00 a.m. Consumer sentiment 10:00 a.m. Business inventories
"19,999.63!" The Washington Post is very disappointed... The Dow tried (and failed) 8 times... Here is how Bob Pisani explained it... VIX with a 10 handle could not get Dow to 20k... It's been since The Fed hiked rates... Small Caps ended the day red, Nasdaq surged... On the week, Nasdaq soared (best week in a month, 2nd best week post-election)... The Dow's moves were all USDJPY driven today as once again it was Buy The Fucking Payrolls Dip day... Bear in mind that The Dow had gone nowhere since Nov 2014 until the election... Notably S&P 500 (and Nasdaq) also broke to fresh intraday record highs... All major S&P sectors closed green on the week with Healthcare (Biotechs) outperforming... Gold is 2017's best performing asset for now... The USD rallied today post payrols but was already moving higher as Yuan tumbled overnight... The USD Index closed the week unchanged... Bonds sold off hard today but the entire curve (except 2Y) ended the week lower in yield, led by 30Y yields dropping 6bps to end the week perfectly at 3.00% Crude closed the week lower with silver and gold outperforming... One last thing...
Spoiler: Weekend Reading: The Beginning Of The Ending Submitted by Lance Roberts via RealInvestmentAdvice.com, A few week’s ago I 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 the weekend newsletter entitle “Dow 20,000” the market was beginning to take on an eerily similar feeling: “If this market rally seems eerily familiar, it’s because it is. If 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.” With Janet Yellen and the Fed once again chasing an imaginary inflation “boogeyman” (inflation is currently lower than any pre-recessionary period since the 1970’s) the tightening of monetary policy, with already weak economic growth, may once again prove problematic. “But Lance, this is the most hated bull market ever?” If price acceleration in the market is a sign of investor optimism, then the chart recently published by MarketWatch should raise some alarm bells. The only other time in history where the Dow advanced 5000 points over a 24-month period was during the 1998-1999 period of “irrational exuberance” as the Fed was fighting the fears an inflationary advance, while valuations were rising and GDP growth rates were slowing. Maybe it’s just coincidence. Maybe “this time is different.” Or it could just be the inevitable beginning of the ending of the current bull market cycle. Here is what I am reading this weekend. Fed, Economy & More Trump 2016 – The Beginning Of The End For The EU by Simon Constable via Forbes The Art Of Trade Warfare by Danielle DiMartino-Booth Economics Is Not Astrophysics by Emmett Tyrell via American Spectator Guiding Thoughts On Regulatory Reform by Sam Batkins & Ike Brannon via Cato Institute Trumps Tax Plan & The Dollar by Farhi, Gopinath & Itskhoki via Proj. Syndicate Did Ford Cave To Trump? by IBD Markets Underestimating Trumponomics by Fergal O’Brien via Bloomberg What Strong Jobs Recovery Tells Us by Mohamed El-Erian via Bloomberg Reagan vs. Trump Macro Initial Conditions by Macroman via Global Macro Monitor On Policy – It’s President Trump vs Candidate Trump by Caroline Baum via MarketWatch The Fed’s Playbook For 2017 by James Rickards via Daily Reckoning Fed’s Policy Uncertainty Bingo by Mike Shedlock via Mishtalk Trump Has Enormous Blindspot To WallStreet by Michael Krieger via Liberty Blitzkrieg Markets Not The Time To Be Bearishby Jared Dillian via Maulding Economics Markets Post-Inauguration by Ed Yardeni via Yardeni Research Valuation & Investment Analysis by John Hempton via Bronte Capital Why January Is Still The Most Important Month by Jeff Hirsch via Almanac Trader The Zero-Budget Portfolio by Meb Faber via Faber Research Is The Market Overpriced? by William Droms via MarketWatch 2016 Year In Charts by Charlie Bilello via Pension Partners Meet The 2017 Dogs Of The Dow by Jon C. Ogg via 24/7 WallStreet Missed Most Of 2016’s Projections, Here’s 2017 By Byron Wein via Blackstone Investors Enter 2017 In Front Of A Steamroller by Sam Ro via Yahoo Finance Interesting Reads Top Research Papers Of 2016 by Cullen Roche via PragCap 10-Times Less Is More by James Altucher 2017 – Most Risks Since WWII by Tyler Durden via ZeroHedge Fair Share? Top 400 vs Bottom 50% by Mark Perry via AEI What Is The Neutral Interest Rate by Mark Spitznagel via Mises Institute U.S. Growth Rates Hits New Low by William Frey via Brookings Institute Risk Of A Global Conflagration Has Risen via Council On Foreign Relations If Italy Leaves EU, It’s The Beginning Of The End by Steve Forbes via Forbes How To Play Catch-Up For Retirement by Joel Johnson via Forbes The Struggles Of Retirement Planning by Richard Eisenberg via MarketWatch Donald Trump, Trade Warrior Edition by Edward Harrison via Credit Writedowns The Troubling Birthrate Decline by Stephen Mihm via Bloomberg Also Read: American’s Prefer Cats To Kids by John Mauldin via Zerohedge Threat To Profits For 80% Of Advisors by Paul Katzeff via IBD Not-So-Secret Intelligence: Tapped Central Banks by Reuven Brenner via Asia Times Hidden Costs Of “Made In America” by Chico Harlan via Washington Post Red Flags Waving by John Hussman via Hussman Funds 2016 Charts Of The Year by Dana Lyons via Tumblr Important Reading You Should Catch Up On by Jesse Felder via The Felder Report “Do. Or Do Not. There Is No Try” ? Yoda, Empire Strikes Back
January Trifecta: 1 for 3 with Positive Santa Claus Rally As defined in the Stock Trader’s Almanac, the Santa Claus Rally (SCR) is the propensity for the S&P 500 to rally the last five trading days of December and the first two of January an average of 1.4% since 1950. The lack of a rally can be a preliminary indicator of tough times to come. This was certainly the case in 2008 and 2000. A 4.0% decline in 2000 foreshadowed the bursting of the tech bubble and a 2.5% loss in 2008 preceded the second worst bear market in history. Including this year, Santa has paid Wall Street a visit 53 times since 1950. Of the previous 52 occasions, January’s First Five Days (FFD) and the January Barometer (JB) were both up 28 times. When all three indicators were positive, the full year was positive 26 times (92.9% of the time) with an average gain of 17.8% in all years. A positive SCR is encouraging and further clarity will be gained when January’s First Five Days Early Warning System (page 14, STA 2017) gives its reading next week and when the January Barometer (page 16, STA 2017) reports at month’s end. A positive First Five Days and January Barometer would certainly boost prospects for full-year 2017. Post-Election Year January Seasonal Pattern: Brief Weakness Early In recent years it has become rather common for the market to be down on the last day of the year and then down again on the first trading day of the New Year. The market was indeed down on the last day of 2016, but rebounded solidly on the first day (and second day) of 2017. However, today the market struggled which could be a sign that the market is slipping back into its recent, disappointing January pattern. In the above chart, January’s performance for the recent 21-year period has been plotted. Of the five major indices only NASDAQ finishes the month with an average gain. After early gains, first two or three trading days, DJIA, S&P 500, NASDAQ and Russell 1000 tend to weaken and slip until the sixteenth trading day. The only reprieve has been a brief mid-month (eleventh trading day) bounce. However, past Post-Election Year Januarys have a substantially different pattern. Early gains are present, but the retreat afterwards comes to an end by the fifth, sixth or seventh trading day depending on index. From that low point the trend is sideways to higher by the end of the month with positive across the board average gains. If the major indices can shake of today’s minor setback and break out to new all-time highs, January 2017 will likely follow the much more bullish Post-Election Year January pattern. Trump rally resumes, 66.7% chance it lasts through end of April Although the market’s rally since Election Day has largely been attributed to Donald Trump’s victory, it could actually be called “The-election-is-finally-over rally.” Historically the S&P 500 has rallied after Presidential Election Day passes. Since 1952, the S&P 500 has advanced 68.8% of the time from the day after the election to the end of November and through the end of December. Expanding beyond yearend until Inauguration Day, S&P 500 has advanced 75% of the time. The current rally has been solid, but there have been better. History also suggests that the S&P 500 will continue to rally through President Trump’s first 100 days in office as six of the last nine (66.7%) newly elected Presidents were greeted with S&P 500 gains. First image: http://www.northcountrypublicradio.org/news/pages/the-first-100-days Why January is still the most important month Devised by Yale Hirsch in 1972, the January Barometer (JB) has registered nine major errors since 1950 for an 86.4% accuracy ratio. This indicator adheres to propensity that as the S&P 500 goes in January, so goes the year. Of the nine major errors Vietnam affected 1966 and 1968. 1982 saw the start of a major bull market in August. Two January rate cuts and 9/11 affected 2001.The market in January 2003 was held down by the anticipation of military action in Iraq. The second worst bear market since 1900 ended in March of 2009 and Federal Reserve intervention influenced 2010 and 2014. Last year, DJIA slipped into an official Ned Davis bear market in January. Including the eight flat years yields a .742 batting average. Let’s compare the January Barometer to all other “Monthly Barometers.” For the accompanying table we went back to 1938 for the S&P 500 and DJIA — the year in which the January Barometer came to life — and back to 1971 for NASDAQ when that index took its current form. The accuracy ratios listed are based on whether or not the given month’s move — up or down — was followed by a move in the same direction for the whole period. For example, in the 79 years of data for the S&P 500 for the January Barometer, 60 years moved in the same direction for 75.9% accuracy. The Calendar Year ratio is based on the month’s percent change and the whole year’s percent change; i.e., we compare December 2015’s percent change to the change for 2015 as a whole. By contrast the 11-month ratio compares the month’s move to the move of the following eleven months. February’s change is compared to the change from March to January. The 12-month change compares the month’s change to the following twelve months. February’s change is compared to the change from March to the next February. Though the January Barometer is based on the S&P 500 we thought it would clear the air to look at the other two major averages as well. You can see for yourself in the table that no other month comes close to January in forecasting prowess over the longer term. There are a few interesting anomalies to point out though. On a calendar year basis DJIA in January is slightly better than the S&P. 2011 is a perfect example of how the DJIA just edges out for the year while the S&P does not. For NASDAQ April, September and November stick out as well on a calendar year basis, but these months are well into the year, and the point is to know how the year might pan out following January, not April, September or November. And no other month has any basis for being a barometer. January is loaded with reasons. Being the first month of the year it is the time when people readjust their portfolios, rethink their outlook for the coming year and try to make a fresh start. There is also an increase in cash that flows into the market in January, making market direction even more important. Then there is all the information Wall Street has to digest: The State of the Union Address, FOMC meetings, 4th quarter GDP, earnings and the plethora of other economic and market data. In the 48 up Januarys since 1938 there were only 3 major errors for a 93.8% accuracy ratio. These years went on to post 16.1% average full-year gains and 11.7% February-to-December gains.
Improving International Fundamentals, but Increasing Risk in 2017 Posted by lplresearch We expect that 2017 will be the year of improving fundamentals, but increasing risk, in many of the international markets. The biggest expected improvement in fundamentals comes from the uptick in corporate earnings. After declining corporate earnings for several years (since 2012 for the MSCI EAFE Index, and since 2011 for the MSCI Emerging Market Index index) earnings have been increasing, and are expected to continue to do so. We also expect that a stronger U.S. economy, boosted in part by tax cuts, infrastructure and defense spending, and deregulation will also boost economies, and therefore companies, across the globe. The incredible irony is that it is the risks to overseas investing are largely coming from disenchantment over increased globalization. Beginning with the U.K.’s June vote to leave the European Union, many 2016 and scheduled 2017 elections and referendums across Europe are challenging European economic and political integration. Their outcomes have been muted thus far, but could be more extreme and more negative, depending on the results of elections in France and Germany later this year. Of course, U.S. trade policy itself may be a negative for overseas markets, as President-elect Donald Trump has suggested a more protectionist mindset than previous administrations. Also adding to the risks of overseas investing, for the first time in several years, major global central banks have divergent monetary policies. The U.S. Federal Reserve (Fed) is now clearly tightening monetary policy, the only major central bank likely to do so in 2017, though the Bank of England is under some pressure to raise rates after the pound’s post- Brexit vote decline. A few emerging market central banks, most noticeably Mexico’s, are under the same pressure. Fed tightening is expected to keep upward pressure on the U.S. dollar. Our base case is for this pressure to be contained, with the dollar appreciating modestly over the course of the year. Strength in overseas profit growth should be enough to overcome the expected dollar headwind. However, should there be prospects for more Fed tightening than currently expected, the resulting stronger dollar, which would be negative for overseas investments, might overcome the positive effects of stronger overseas earnings. Consumer Pulse – Personal Finances Jan 6, 2017 Each month, Bespoke runs a survey of 1,500 US consumers balanced to the demographic weights tracked by the US Census. In the survey, we cover everything you can think of regarding the economy, personal finances, and consumer spending habits. We’ve now been running the monthly survey for more than two years, so we have historical trend data that is extremely valuable, and it only gets more valuable as time passes. All of this data gets packaged into our monthly Bespoke Consumer Pulse Report, which is included as part of our Pulse subscription package that is available for either $39/month or $365/year. We highly recommend trying out the service, as it includes access to model portfolios and additional consumer reports as well. If you’re not yet a Pulse member, click here to start a 30-day free trial now! Below are charts from our most recent survey (covering the month of December) regarding personal finances. We asked consumers to tell us how they feel about their personal financial situation today, versus last year and also versus the average person. As you can see, since the election, the US consumer is significantly more comfortable with their personal financial position now as well as compared to how they felt last year. You should keep this information handy for next time you hear a CEO or CFO of a struggling retailer tell how “challenging the retail environment” is. It may be challenging, but it’s definitely not because of the consumer! Bespoke’s Sector Snapshot — 1/5/17 Jan 5, 2017 We’ve just released our weekly Sector Snapshot report (see a sample here) for Bespoke Premium and Bespoke Institutionalmembers. Please log-in here to view the report if you’re already a member. If you’re not yet a subscriber and would like to see the report, please start a 14-day trial to Bespoke Premium now. Below is one of the many charts included in this week’s Sector Snapshot, which simply highlights the year-to-date returns so far for the major S&P 500 sectors. In 2016, Health Care was by far the worst performing sector, but it has been the best so far this year. Financials and Energy, on the other hand, were two of the top sectors in 2016, but they’ve underperformed over the first few days of 2017. To see our full Sector Snapshot with additional commentary plus six pages of charts that include analysis of valuations, breadth, technicals, and relative strength, start a 14-day free trial to our Bespoke Premium package now. Here’s a breakdown of the products you’ll receive. Bespoke’s “Most Volatile Stocks on Earnings” Jan 5, 2017 Corporate earnings have pretty much been at the back of investors’ minds since the Presidential election back on November 8th. But earnings will come into view again beginning next week when the banks kick off the fourth quarter earnings reporting period. At the start of each quarterly earnings season, we update our list of the “most volatile stocks on earnings.” But before getting to the individual stocks, we wanted to take a look at earnings volatility at the sector level. Using our Interactive Earnings Report Database, which contains more than 135,000 individual stock earnings reports going back to 2001, we calculated the average one-day absolute percentage change that stocks in each sector have historically seen on their earnings reaction days. For a stock that reports in the morning, its earnings reaction day is that same trading day. For a stock that reports after the close, its earnings reaction day is the next trading day. As shown below, the average one-day change on earnings for all stocks across all sectors going back to 2001 has been +/-5.55%. That means you can expect the average stock to move more than 5% in either direction when it reports earnings each quarter. But Tech stocks are much more volatile than Utilities stocks. The average Tech stock has historically moved +/-7.21% on its earnings reaction day, while the average Utilities stock only moves +/-2.23%. The next most volatile sector on earnings is Consumer Discretionary, followed by Telecom and then Health Care. The remaining sectors all see average one-day moves below the overall average for all stocks. Now moving on to the most volatile individual stocks on their earnings reaction days, below is a list of the top 40. To make the list, the stock had to have at least 10 quarterly earnings reports in our database (2.5 years worth), and it had to be trading above $5/share. The stocks below all typically see an average one-day move of more than +/-11.75% on their earnings reaction days. As shown, Rubicon Project (RUBI) is the most volatile of any stock, moving +/-16.93% on its historical earnings reaction days. LendingTree (TREE) ranks second at +/-15.74%, followed by ChannelAdvisor (ECOM), Retailmenot (SALE), and MDC Partners (MDCA). Some of the more notable stocks on the list include Netflix (NFLX), Travelzoo (TZOO), Tableau Software (DATA), Twitter (TWTR), First Solar (FSLR), and Pandora (P). Netflix (NFLX) typically sees a move of +/-14.05% on its earnings reaction days, so expect a big day either up or down when it reacts to its evening earnings report on January 18th. Still No Majority Among the Bulls Jan 5, 2017 Despite a positive start to equities in the New Year, bullish sentiment among individual investors still can’t get over the hump. In this week’s sentiment survey from AAII, bullish sentiment increased from 45.57% up to 46.20%. This makes it 105 straight weeks where bullish sentiment has been below 50% – the second longest streak in the history of the survey (back to 1987). Like what you see? Click here to gain full access to Bespoke and our 2017 outlook report. The reality is that sentiment on the bullish side really hasn’t moved much in either direction over the last six weeks. In fact, with a range of just over three percentage points in the last six weeks, bullish sentiment has been in the narrowest range since 1995 and the second narrowest six-week range on record. Dow 20,795 Jan 4, 2017 With investors, or maybe just the media more specifically, intensely focused on when the Dow Jones Industrial Average (DJIA) will finally break above 20,000, we wanted to see how analyst price targets for the 30 components of the index compare to current prices. Additionally, if each of the stocks in the index traded up to their respective consensus target, where would the index trade? Obviously, this is purely a theoretical exercise as not a lot of weight is put into specific price targets. That being said, where targets stand relative to current prices provides a gauge as to how bullish or bearish the analyst community is towards a specific stock, or in this case, the DJIA. The table below lists each of the DJIA’s 30 components along with their consensus price target from the analyst community as well as how many points would be added to the index if the target was reached. With a consensus target of $182.95, analysts are expecting 13.3% upside for UnitedHealth (UNH). While three other stocks are expected see more upside based on their target prices in percentage terms, because of its higher share price and the fact that the index is price-weighted, if UNH rallies to its target price it would add nearly 150 points to the overall index. Behind UNH, the only other stock that would contribute more than 100 points to the DJIA if its target was reached would be Apple (AAPL), with analysts expecting 13.5% of upside. The stock that analysts are the most bullish on is NIKE (NKE). With a current target of $62.04, analysts expect nearly 20% upside from the stock, but because of its relatively low share price, that would translate to just under 70 DJIA points. Analysts are usually tilted to the bullish side, but there are eight stocks in the DJIA where the consensus target is actually lower than the current price. At a level of $158.75, IBM’s consensus target is 5% below where it closed yesterday. Likewise, for Goldman (GS), it closed yesterday 2.2% above its consensus target. Ever since November, GS has been a big contributor to the DJIA’s gain, but if you put any weight into price targets, other stocks are going to have to start taking the lead in order for the DJIA to break above 20K. Combining all the price targets for the 30 stocks, analyst price targets currently imply 913 points of upside for the DJIA relative to yesterday’s close, which would take the index up to 20,795 (a 4.6% gain). For a group that is usually associated with rose-colored glasses, analysts that cover the 30 stocks in the DJIA aren’t really all that bullish right now. Like what you see? Click here to gain full access to Bespoke and our 2017 outlook report.
Stoaholics 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 (1/9-1/13) <-- click there to open! In addition we have our weekly stock picking contest now up and running as well!- Stockaholics Weekly Stock Picking Contest for the Week of (1/9-1/13) <-- click there to open! We also now have a daily stock picking & market direction guessing challenge running here!- Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (1/9) <-- click there to open! It would be pretty awesome to see some of you join us and participate on these. Have a fantastic weekend everyone!
Here are the most anticipated ERs for this upcoming week ahead (I'll also have the earnings chart posted in here as well once it's ready) ***Check mark next to the stock symbols denotes confirmed earnings release date & time*** Monday 1.9.17 Before Market Open: Monday 1.9.17 After Market Close: Tuesday 1.10.17 Before Market Open: Tuesday 1.10.17 After Market Close: Wednesday 1.11.17 Before Market Open: Wednesday 1.11.17 After Market Close: Thursday 1.12.17 Before Market Open: Thursday 1.12.17 After Market Close: Friday 1.13.17 Before Market Open:
Here is a snapshot of the major markets this past week: ShadowTrader Video Weekly 1.8.17 - Records set, caveats abound, FANG, Peter's Folly Video from ShadowTrader Peter Reznicek
and as promised here is the earnings chart to go along with the upcoming earnings announcements this week- ($BAC $JPM $GPN $WFC $AYI $CUDA $KBH $LMNR $CMC $DAL $SNX $PNC $WDFC $FRC $FCEL $INFY $FHN $BLK $MSM)
We wound up getting that Santa Clause rally after all. It was a nice way to start the New Year but we do have some small warning flags and overbought conditions. Bulls are still firmly in control but a little caution wouldn't hurt. Jan 9th- 13th 2017 Free market wrap and Sector watch
Pulled this from StockTwits the other day -- a comparison of Investor Credit to the SPX. @Cy McCaffrey post looking at SPX / EBITDA made me think of it. I try not to be too much of a Chicken Little, but geez aren't we scary-high right now?!
Yes, we are scary high right now. And when this market falls, it'll be Donald Trumps fault, and Republicans.
Gotta think the RUT heads lower tomorrow, after Friday's weak close in the last hour of trading. I've read a bunch of folks suggesting the RUT's current pattern is a bull flag -- but I don't know -- the total divergence on Friday from the rest of the market is only furthering my doubts...but I'm staying neutral as we continue to trade sideways...BUT if I had to bet, I'd bet to the downside. This neutrality is really annoying my system, as I expected, OK more like wanted, some sort of confirmed move by now so I could make another play. In hindsight, I could've placed BCS / BPS trades at each one of these TL touches...I'm just not there yet from a risk perspective. Anyway, I'm wading dangerously into Trading Journal territory, sorry! So tomorrow -- I'm thinking down, with the REAL test being support @ 1355. That level is huge if it cracks, IMHO. If I'm wrong and we head upwards for the day, 1372 is where I see initial resistance -- turned out to be more so than I thought on Friday, so I'd be interested to see what the RUT does at that level. Of course, the ATH is the major level, but before that we had a strong rejection around 1389, so I'd expect some stickiness there for sure. Hope everyone had a great week & ha an even better week!
In going from negative to positive credit balance, in that chart there's a short time where the balance is even. I saw an article the other day discussing how the Dow goes up with the national debt. It implied that when the nation tries to balance its books, that is when the market struggles. And that's one thing, is that there's a difference between a nation being in debt and a person being in debt; as a person it's horrible to be in debt and try to operate from a position of debt, but for a nation it's actually okay. That throws a lot of people off. So my read of Value543's chart is that when people chicken out and go to positive credit balance, that worsens things for the market. Instead of thinking, "it's really a big mountain of red right now", look at that chart and see what happens when investor credit goes up (to the positive): the market goes down. So what should investors do, according to that chart lol? Watch out for when investors start trying to make their credit positive; there's a short time where the balance goes even.
Great point -- you know what else? The reversal to positive credit is almost instantaneous, whereas the build up of negative credit takes seemingly forever. At the end of the Tech Bubble...June 2007 to Oct 2007...each time there is this slow build up (and subsequent climb in the market). Then, suddenly, it's over...the backside of those build ups look like cliff faces. You might have been able to get an "early warning" in July 2007 (note the minuscule red bar before going green), but for the most part there is 0 warning of the cliff...at least in terms of this "indicator." Thanks for jumping on this chart, @anotherdevilsadvocate -- appreciate your tw0 cents!
Good Monday morning traders! Here are this mornings pre-market movers & news: Spoiler: 1/9 Monday's Stock News Movers: URBN, GPN, ARIA, KO, PG, MCD, MACK (Click to Show!) 1/9 Monday's Stock News Movers: URBN, GPN, ARIA, KO, PG, MCD, MACK Good day Stockaholics! Happy Monday! Frontrunning: January 9 European shares dip, sterling falls on Brexit comments (Reuters) Pound Falls to 10-Week Low as May Hints at Single-Market Exit (BBG) Offshore Yuan Falls for Second Day as Bears Reload After Squeeze (BBG) Trump's choices for top Cabinet posts face big tests this week (Reuters) Nine Trump Nominees Who’ll Face Extreme Vetting by Democrats (BBG) Meet the Mercers: New Power Brokers in Trump’s Washington (WSJ) Why the China Manipulator Label Looks Increasingly Appealing to Trump (BBG) Turkish Lira Extends Losses as Rate Speculation Mounts (BBG) Auto Makers in Hot Seat as Political Pressure Rises (WSJ) GM Won’t Move Small-Car Production From Mexico (WSJ) ‘La La Land’ Sets Golden Globes Record With Seven Statuettes (BBG) Big China bitcoin exchange says no government pressure on outflows (Reuters) Brazil Worries the ‘China of South America’ Is Eating Its Lunch (BBG) McDonald’s Aims to Flip China Results by Ceding Control (WSJ) UnitedHealth to buy Surgical Care Affiliates in $2.3 billion deal (Reuters) German Industrial Output Rises in Sign of Economic Strength (BBG) Navy, Trump planning biggest fleet expansion since Cold War (Reuters) Kansas Offers Cautionary Tale for Trump's Tax Ambition (BBG) Police arrest 16 in France over Kardashian robbery (Reuters) Trump’s Canceled Overseas Projects Only Brought in $323,150 (BBG) China Is Planning a New, Relaxed Approach to Growth (BBG) Your Favorite Food Can Tell You About What Your Money's Worth (BBG) Florida airport shooting suspect to appear in federal court (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!): SGYP JDST JNUG DUST NUGT AMGN EXAS GPN UNH KO JPM CMC MSFT MCD T AAPL BCRX AYI WDFC UGLD AMZN SIVB UNP GOOGL THIS WEEK'S EARNINGS CALENDAR: TODAY'S EARNINGS RELEASES: BEFORE MARKET OPEN: AFTER MARKET CLOSE: THIS MORNING'S UPGRADES/DOWNGRADES: THIS MORNING'S PRE-MARKET NEWS MOVERS: source: cnbc.com Urban Outfitters — The retailer said comparable retail segment net sales for the two-month holiday shopping period ended Dec. 31, 2016, rose 1.5 percent from the same period the prior year. Total company net sales saw a 3 percent year-over-year increase. Urban Outfitters and Free People retail segments saw low single-digit growth in net sales, while that of Anthropologie Group declined 1 percent, according to a release. Shares were more than 11 percent lower in premarket trade. Surgical Care Affiliates — UnitedHealth subsidiary Optum is acquiring Surgical Care Affiliates in a deal worth about $2.3 billion. Shares of SCA jumped nearly 17 percent in premarket trade, while UnitedHealth shares traded half a percent lower. Global Payments — Shares climbed more than 5 percent in premarket trade after the firm raised its current-year guidance to adjusted earnings per share of $3.70 to $3.90, up from the prior estimate of $3.45 to $3.55 adjusted earnings per share. The revenue estimate of $3.35 billion to $3.45 billion was also up from a previous forecast of a $3.2 billion to $3.3 billion range. Ariad Pharmaceuticals — Shares leaped more than 70 percent in premarket trade after Takeda Pharmaceutical announced it will acquire Ariad in a deal worth about $5.2 billion, or $24 a share. Shares of Ariad closed at $13.74 per share Friday. Coca-Cola — Goldman Sachs downgraded the beverage maker's stock to "sell" from "neutral," and cut its price target to $39 a share, citing recent structural changes and currency headwinds that will likely constrain earnings growth. Goldman also upgraded Dr. Pepper Snapple to neutral from sell given a more favorable backdrop for U.S.-focused staples stocks, including potential benefits from tax reform. Procter & Gamble — Goldman Sachs downgraded the stock to "sell" from "neutral," and trimmed its earnings estimate and valuation multiple, given Procter & Gamble's stretched valuation relative to peers, risk that it cannot turn its business around, and lack of significant upside from tax policy changes or dealmaking. McDonald's — The fast-food giant said it is selling a controlling stake in its China business to an investor group led by state-owned Chinese conglomerate Citic. Washington-based private equity firm The Carlyle Group will also have a stake in the deal, which is valued at up to $2.1 billion. Merrimack Pharmaceuticals — French drugmaker Ipsen said it would buy some assets of the U.S.-based drugmaker for up to $1 billion. Merrimack shares jumped more than 37 percent in premarket trade. Have a good trading day to everyone in here on this Monday!
