Welcome Stockaholics to the trading week of March 26th! This past week saw the following moves in the S&P: Major Indices End of Week: Bird's Eye view of the Major Futures Markets on Friday: Economic Calendar for the Week Ahead: Sector Performance WTD, MTD, YTD: What to Watch in the Week Ahead: Monday Earnings: Paychex, Red Hat 7:10 a.m. Fed Governor Randal Quarles 10:30 a.m. Dallas Fed manufacturing 12:30 p.m. New York Fed President William Dudley 1:00 p.m. $30 billion 2-year auction Tuesday Earnings: FactSet, Lululemon Athletica, McCormick, Shoe Carnival,H&M, IHS Markit 9:00 a.m. S&P/Case-Shiller home prices 10:00 a.m. Consumer confidence 11:00 a.m. Atlanta Fed President Raphael Bostic 1:00 p.m. $35 billion 5-year auction Wednesday Earnings: GameStop, Walgreens Boots Alliance, BlackBerry, Oxford Industries, PVH 8:30 a.m. Real Q4 GDP 8:30 a.m. Advanced economic indicators 10:00 a.m. Pending home sales 11:30 a.m. Atlanta Fed's Bostic 1:00 p.m. $29 billion 7-year auction Thursday Earnings: Constellation Brands, Worthington Industries, Switch 8:30 a.m. Jobless claims 8:30 a.m. Personal income/spending 8:30 a.m. Core PCE 9:45 a.m. Chicago PMI 10:00 a.m. Consumer sentiment 1:00 p.m. Philadelphia Fed President Patrick Harker Friday Good Friday holiday Markets closed
Carnage... Everywhere "It'll be fine" they said... "You buy the dip" they said..."just follow my tracks"... Post-Powell, Gold is the big winner... Only Nasdaq remains in the green for the year, as Small Caps joined the rest in the red this week... But it was an ugly week for global markets. Chinese stocks slammed (but rescued late on Friday by The National Team)... Chinese commodities carnaged... Japanic... Europe was eviscerated... And back in 'Murica, things were just as bad... *DOW AVERAGE FALLS 426 POINTS TO LOWEST SINCE NOV. 22 *S&P 500 SINKS 5.9% IN WEEK, BIGGEST DROP IN MORE THAN TWO YEARS *NASDAQ 100 PLUNGES 7.3% IN WEEK, MOST SINCE AUGUST 2015 Nasdaq worst but everything was carnage! Today was chaos - futures show the desperation: three algo ramps fail and we crash into the lows... The Dow broke its triangle, broke below key averages, and is down over 10% from its record highs (in correction)... The Dow record intraday high on 1/26/18 was 26616.7. The S&P crashed to its 200DMA... As FANGMAN stocks were all ugly, led lower by Facebook... Facebook is at its lowest since July... Banks were not quite as ugly as tech but almost... VIX spiked above 26... a long way from the flash crash on payrolls... Credit markets were a bloodbath in IG... All Sectors blew wider (there are no financials)... And EU HY spreads are blowing out... High Yield Bond ETF crashed to its lowest since 11/16/16... As bank credit risk spiked above Feb highs... Shit is getting real... Credit is now leading VIX... Treasury yields ended the week lower, tumbling in the afternoon today as stocks slumped... 10Y Yields tumbled to their lowest since Feb 9th this week... This is the 21st daily close in a row with a 2.8x% handle. Jeff Gundlach's favorite 10Y Yield indicator is signaling a notable drop in yields to come... The yield curve stabilized modestly this week... at 10 year flats.... The Dollar tried to bounce yesterday but ended at the lows of the week and lowest since Feb 20th... This is the first down week in the last five weeks... Bitcoin managed to scramble into the green for the week, after cryptos erased their losses from G-20 concerns... While Chinese commodities crashed; as the dollar tumbled, the energy complex ripped higher along with PMs (as copper tumbled)... Gold was the best performing precious metal as Palladium tumbled... WTI/RBOB had a big week but note (lower pane) that as selling pressure hit stocks, the energy sector dumped into the red on the week... Finally, this is far from over!!! "It's baked in the cake"... Say goodbye to The Shanghai Accord. What happens next...
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018- S&P sectors for the past week-
Midterm Election Year Low Bottom Pickers Paradise With the Ides of March behind us now and market volatility heating up, it’s prudent to remember that this type of market action is normal at this time of the year and during midterm election years. American presidents have danced the Quadrennial Quadrille over the past two centuries. Normally, major corrections occur sometime in the first or second years following presidential elections. In the last 14 quadrennial cycles since 1961, 9 of the 17 bear markets bottomed in the midterm year. After the midterm congressional election and the invariable seat loss by the president’s party, the president during the next two years jiggles fiscal policies to get federal spending, disposable income and social security benefits up and the economy firing on all pistons. By Election Day, the president hope to have danced his their way into the wallets and hearts of the electorate and, hopefully, will have choreographed four more years in the White House for their party. Since 1914 the Dow has gained 47.4% on average from its midterm election year low to its subsequent high in the following pre-election year. A swing of such magnitude is equivalent to a move from 20,000 to 30,000 or from the current Midterm low of 23860 to 35790. In the table below of the gains from the Midterm Low to the Pre-Election Year highs since the establishment of the Federal Reserve in 1913 we have highlighted the concentration of six (6) January and four (4) October Midterm lows and nine (9) December Pre-Election Year highs. For additional perspective, here are the average annual gains by year of the 4-Year Presidential Election Cycle for the Dow and their Yearly Seasonal Patterns since 1949 for the S&P 500. Note the pronounced Worst Six Months decline in the Midterm Year. From Midterm Low NASDAQ Can Reach Nirvana Yesterday we detailed how the Dow has gained nearly 50% from its midterm low to its pre-election year high and how the S&P 500 worst six months are more pronounced in the midterm year. Today’s focus is on how NASDAQ often reaches near market nirvana from its midterm low to its pre-election year high. Since 1974 NASDAQ has gained 70.2% on average from its midterm election year low to its subsequent high in the following pre-election year. A swing of such magnitude is equivalent to a move from 5,000 to 8,500 or from the current Midterm low of 6,777 to 11,520. In the table below of the gains from the Midterm Low to the Pre-Election Year highs since NASDAQ was created in 1971 we have highlighted the concentration of four (4) October Midterm lows and four (4) December Pre-Election Year highs. For additional perspective, here are the average annual gains by year of the 4-Year Presidential Election Cycle for NASDAQ and its Yearly Seasonal Patterns since 1971. Note the even more pronounced Worst Six Months decline in the Midterm Year for NASDAQ. How Worried Should You Be About The Yield Curve? Posted by lplresearch As the yield curve flattens, investors continue to worry about the potential implications for the economy and markets. Why? Inverted yield curves have a perfect history of predicting economic recessions over the past 50 years. The yield curve is a graphical representation of bond yields of similar credit quality across a range of maturities. A flattening curve, when shorter-term rates rise more quickly than longer-term rates (or fall more slowly), is often perceived as an indication that slower economic growth lies ahead. An inverted yield curve, where short-term rates are higher than long-term rates, has historically been a precursor to a recession. Earlier this year, the difference between the 2- and 10-year Treasury yields was down to 0.50% before bouncing some, but it is currently back down to 0.54% (as of Thursday’s close). Does this mean trouble is around the corner? Looking back at the previous five recessions, once the yield curve hit 0.5% it took a median of nearly a year before the curve inverted. Once it inverted, it took about 20 more months until a recession started. All along the way, the S&P 500 posted a median return of 21.5% over those 32 months. “A flattening (or inverted) yield curve can be concerning, but everyone makes it sound like that means a recession will start tomorrow. History says otherwise,” said Ryan Detrick, Senior Market Strategist. “Don’t forget we are looking at record profits and revenues for the S&P 500 in 2018 amid multi-decade highs in manufacturing and services, along with soft data indicators such as consumer confidence. In other words, the economy is still on quite firm footing, and we see few reasons to expect a recession over the next 12-18 months.” Why Stocks Like Higher Rates Posted by lplresearch After the Federal Reserve hiked rates for the sixth time this cycle and left the door wide open for at least another two hikes this year and three to four more in 2019, higher rates are likely coming. The 10-year Treasury yield continues to consolidate beneath the 3% level, near four-year highs. What does it mean for equities if rates and yields do indeed go higher? Fortunately, to the surprise of many, stocks historically do very well when rates increase. One of the bigger conundrums we have seen during this recent cycle of higher rates is how both stocks and rates can trend higher at the same time. As we illustrated in a recent Weekly Market Commentary, bond yields and stocks tend to trade together until the 10-year Treasury yield gets up around 5%. “Going back to the early 1960s shows that when the 10-year Treasury yield goes higher, stocks tend to follow along. In fact, out of 23 periods of rising rates, the S&P 500 Index gained 19 of those times. Things were even more pronounced recently. Since 1996, stocks gained all 11 times we saw higher rates,” according to Ryan Detrick, Senior Market Strategist. Not to be outdone, the current period of higher rates began in September 2017 and the S&P 500 is up another 11% since then. History suggests higher rates may be a good thing and should the 10-year Treasury yield break about the critical 3% area, this could be further support for the bull market. Global Indices Below 200-DMAs With Death Crosses To Boot Mar 23, 2018 It’s been a week to forget for global equity indices. In the charts below we chart local currency prices for indices in the US (S&P 500), Europe (Stoxx 600), Italy (FTSE MIB), Spain (IBEX 35), the UK (FTSE 100), Germany (DAX), Japan (Nikkei 225), and Australia (ASX 200). All are now below their 50-DMAs and the US is the only index hanging on to its 200-DMA. Adding to that technical damage are a number of death crosses. This bearish technical indicator is triggered when the 50-DMA passes below the 200-DMA when both are downward sloping. The Stoxx 600, FTSE 100, and DAX. As if death crosses and moves below long-term averages weren’t enough, the Stoxx 600, IBEX 35, FTSE 100, and DAX are all at 52-week lows on a closing basis. The Nikkei closed the week with its second-largest decline since the 2016 US Presidential election, and US equities have dropped on 4 of 5 trading days in 3 of the past 4 weeks. The weakness of the price action across global equities is consistent and broad-based. Leaders Lag and Laggers Lead Mar 22, 2018 It has been a pretty nutty week for the equity market over the last four days as sectors which had been holding things up have sold off sharply, while sectors that had been left for dead have been picking up a little bit of late. The charts below show the relative strength of the S&P 500 Technology and Financial sectors. As usual, rising lines indicate that the sector is outperforming the S&P 500 and vice versa. For much of 2018, these two sectors have been outperforming the rest of the market. With the two sectors accounting for just about 40% of the entire S&P 500, their strength was enough to hold the rest of the market up. This week, that has all changed, though, as both sectors are down around 4%. For Technology, it hasn’t seen a downturn relative to the broader market that was this steep since late November, while the last decline of this magnitude for the Financial sector was in December. So which sectors have been picking up the slack? Well, of course, it’s the ones that everyone left for dead a few weeks ago. The charts below show the relative strength of the Energy and Utilities sectors, and in both cases, the sectors sold off sharply to start the year, but with the broader market weakness, both sectors have gotten a lift – relatively speaking. While the two have outperformed this week, they are still marginally lower. One area of the market that has seen a big boost with all the tariff talk is small caps. Despite Trump’s “America First” policies and rhetoric, the Russell 2000 has underperformed the S&P 500 over the course of President Trump’s time in office. Ever since the President brought up the issue of tariffs, though, the Russell has rallied and is now up 3% in March compared to a 2% decline in the S&P 500. Take the Trading Day Off Mar 20, 2018 In early February we published a report for our research subscribers showing that more than 100% of SPY’s price change since 1993 (when it began trading) can be attributed to after-hours trading. If you bought SPY at the close on every trading day since 1993 and sold it at the next trading day’s open, you’d have a gain of 569%. Conversely, if you bought SPY at the open of every trading day and sold it at the close that same day, amazingly, you’d be down 8.2%. Below is a historical chart showing the cumulative price change since 1993 for both of these strategies. (Jeff Sommer at the NY Times wrote a piece referencing this trading phenomenon that we found that you can view here.) The chart above looks at the trading strategy over a very long time period. Today we wanted to see how the strategy has been doing just over the last year. As shown below, after-hours trading is still where it’s at. Over the last year, had you bought SPY at the close every trading day and then sold it at the open the next morning, you’d be up 12.2%. Had you done the opposite and bought SPY at the open of every trading day and sold it at the close that same day, you’d only be up 0.9%. So far in 2018, the after-hours strategy has meandered along, while the intraday strategy has really struggled of late. Translated: there has been a lot of selling going on during regular trading hours recently.
Stock Market Analysis Video for March 23rd 2018 Video from AlphaTrends Brian Shannon (VIDEO NOT YET UP!) ShadowTrader Video Weekly 3.25.18 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
Here are the current major indices pullback/correction levels from ATHs as of week ending 3.23.18- Here is also the pullback/correction levels from current prices- ...and here are the rally levels from current prices-
Here are the most anticipated ERs for this upcoming week ahead (I'll also have the weekly earnings calendar posted in here as well once it's out) ***Check mark next to the stock symbols denotes confirmed earnings release date & time*** Monday 3.26.18 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! Monday 3.26.18 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! Tuesday 3.27.18 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 3.27.18 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 3.28.18 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 3.28.18 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 3.29.18 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 3.29.18 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 3.30.18 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. (MARKETS CLOSED IN OBSERVANCE OF GOOD FRIDAY!) Friday 3.30.18 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. (MARKETS CLOSED IN OBSERVANCE OF GOOD FRIDAY!)
Stockaholics come join us on our stock market challenge threads for this upcoming trading week ahead!- ======================================================================================================== Stockaholics Daily Stock Pick Challenge & SPX Sentiment Poll for Monday (3/26) <-- click there to cast your daily market vote and stock pick for Monday! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (3/26-3/30) <-- click there to cast your weekly market vote and stock picks for this week! ======================================================================================================== We also have our upcoming monthly market poll and stock picking contest for the month of April!- Stockaholics April 2018 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks for April! ======================================================================================================== ...and also our upcoming quarterly poll and stock pick contest for Q2!- Stockaholics Q2 2018 Quarterly Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your quarterly market vote and stock picks for Q2! ======================================================================================================== And finally, we have our mystery chart challenge now up as well! Weekly Mystery Chart & Technical Analysis Challenge (3/26-3/30) <-- click there to participate! ======================================================================================================== It would be pretty sweet to see some of you join us and participate on these! I hope you all have a fantastic weekend ahead!
Just a reminder to all that the cash markets (as well as Globex futures) will be closed on Friday March, 30th for the Good Friday holiday-
And as promised here is the most anticipated earnings calendar for this upcoming trading week ahead- ($LULU $RH $NVCN $BB $RHT $GME $PAYX $WBA $TEUM $STZ) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning March 26th, 2018 <-- click there to view!
So 60 Minutes today...rumors that Trump will do something to distract from it. Will see if we get a repeat of election night; futures crash, then regular hours bounces back.
Broker TD Ameritrade suffers system-wide outage https://www.cnbc.com/2018/03/26/broker-td-ameritrade-suffers-system-wide-outage.html
Ok. a 50 handle rally since the nadir of Friday at 2585. A key for the week is rallying above around 2640 level.
markets pretty much sideways right now....trying to digest all the news that came out over the weekend?
