Welcome Stockaholics to the trading week of May 28th! 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: T.B.A.
Bond Bear Bloodbath: EU Meltdown Sparks Safe-Haven Surge Well that escalated quickly... Italian asset manic-selling, US Treasury panic-buying Ugly week for Chinese stocks... But Italy (and now Spain) were probably the biggest headline-makers on the week... Italian stocks worst week since Nov 2016 (US election) Italian stocks worst two-week drop Jun 2016 (Brexit) Italian banks worst week since Jun 2016 (Brexit) Italian 2Y Spread to Bunds biggest spike since July 2012 Italian redenomination risk biggest spike ever to record high... The Euro is down 8 of the last 9 weeks against the dollar... European "VIX" spiked to its highest premium to US "VIX" since September of 2017... And as Italian capital markets cratered, so US Treasuries were bid... And gold... And in US, while Trannies and Nasdaq outperformed, The Dow and Small Caps struggled to get green on the week... FANG-ish stocks managed gains with NFLX best - now bigger than Comcast and Disney... While EU Banks were ugly, US Banks suffered this week too... HY Credit risk spiked most since Feb this week... While stocks clung to the week's gains, bond yields plunged... Treasury Bonds had their best week in 13 months (10Y) and 30Y futs saw their biggest weekly price appreciation since July 2016. 10Y tumbled back below 3.00%... and 30Y rallied off the crucial downtrend-level of around 3.23% - just as Bill Gross said... And this won't help as Specs added to already record net shorts this week... The Dollar index ended the week unchanged after a 5-week win streak... Overall an ugly week for cryptocurrencies... with Bitcoin outperforming and Bitcoin Cash worst... With the dollar flat, PMs and copper largely eked out modest gains, but it was crude that was crushed... WTI plunged back to a $67 handle this week - its worst week since February and worst day since June 2017 Gold managed to get back above - and cling to - $1300... for its best week since March... But we do note the big swing in Gold/Silver (gold outperforming) today... Finally, there's this - Smart money is piling out of stocks at an unprecedented pace, accelerating this week... Bonus Chart: Since The Fed's "Dovish" FOMC Statement, bonds & bullion are bid, stocks unchanged and the dollar dumped...
Spoiler: Weekend Reading: Everyone Is Passive Until The Selling Begins Authored by Lance Roberts via RealInvestmentAdvice.com, "Apple has just announced that next quarter they will quadruple their sales of their iPhone X+ as every person on the planet now owns one.” If that were a real announcement the stock price should immediately skyrocket higher, right? Nope, it didn’t. In fact, it didn’t move at all. Why? Because, no one bought or sold a single share. How can that be? Because the whole world is now “passively” investing. Well, that’s the way a lot of advisors are proposing as the way you should invest. The problem is that it is lazy money management, so why are you paying for the advice, but more importantly, markets don’t function that way. Larry Swedroe wrote a piece just recently admonishing active portfolio managers and suggesting that everyone should just passively invest. After all, the primary argument for passive investing is that active fund managers can’t beat their indices over time which is clearly demonstrated in the following chart. Oops. There are large numbers of active fund managers who have posted stellar returns over long-term time frames. No, they don’t beat their respective benchmarks every year, but beating some random benchmark index is not the goal of investing to begin with. The goal of investing is to grow your “savings” over time to meet your future inflation-adjusted income needs without suffering large losses of capital along the way. Don’t get me wrong, I admire Larry very much. However, it is important to understand a couple of important concepts around the “fallacy” of passive investing. First, while my example above is extreme, the problem with even 20% of the market being “passive” is the liquidity issues surrounding the market as a whole. With more ETF’s than individual stocks, and the number of outstanding shares traded being reduced by share buybacks, the risk of a sharp and disorderly reversal remains due to compressed credit and liquidity risk premia. As a result, market participants need to be mindful of the risks of diminished market liquidity, asset price discontinuities and contagion across asset markets. As Howard Marks, mused in his ‘Liquidity’ note: “ETF’s have become popular because they’re generally believed to be ‘better than mutual funds,’ in that they’re traded all day. Thus an ETF investor can get in or out anytime during trading hours. But do the investors in ETFs wonder about the source of their liquidity?’” Secondly, individual investors are NOT passive even though they are investing in “passive” vehicles. Today, more than ever, advisors are actively migrating portfolio management to the use of ETF’s for either some, if not all, of the asset allocation equation. However, they are NOT doing it “passively.” The rise of index funds has turned everyone into “asset class pickers” instead of stock pickers. However, just because individuals are choosing to “buy baskets” of stocks, rather than individual securities, it is not a “passive”choice but rather “active management” in a different form. While the idea of passive indexing works while all prices are rising, the reverse is also true. The problem is that once prices begin to fall the previously “passive indexers” will become “active panic sellers.” With the flood of money into “passive index” and “yield funds,” the tables are once again set for a dramatic and damaging ending. It is only near peaks in extended bull markets that logic is dismissed for the seemingly easiest trend to make money. Today is no different as the chart below shows the odds are stacked against substantial market gains from current levels. As my partner, Michael Lebowitz, noted: “Nobody is going to ring a bell at the top of a market, but there are plenty of warped investment strategies and narratives from history that serve the same purpose — remember internet companies with no earnings and sub-prime CDOs to name two.” Investors need to be cognizant of and understand why the chorus of arguments in favor of short-sighted and flawed strategies are so prevalent. The meteoric rise in passive investing is one such “strategy” sending an important and timely warning. Remember, everyone is “passive” until the selling begins. Oh, I almost forgot, the other problem with the whole “passive investing” mantra is that “getting back to even” is not a successful investment strategy to begin with. Just something to think about as you catch up on your weekend reading list. Economy & Fed Ford, GM & FCA Bet On Trump And Lost by Matthew DeBord via BI Deal Or No Deal With China by Caroline Baum via MarketWatch Guaranteed Jobs Is Guarantee Of Stagnation by Allan Golombek via RCM There Is A Disconnect Between The Fed & Workers Economy by Pedro Da Costa via BI Blundering Into Recession by James Rickards via Daily Reckoning The Next Recession Will Be Devastatingly Non-Linear by Charles Hugh Smith via Of Two Minds US Will Spend $700 Billion On ObamaCare Subsidies In 2018 by Tyler Durden via ZeroHedge Markets Goldman: Something Isn’t Quite Right by Tyler Durden via ZeroHedge How Stable Is Earnings Growth by Macromon via Global Macro Monitor Charts That Make You Go Hmmm… by Sven Henrich via Northman Trader Iran Sanctions Could Push Gold Higher by Simon Constable via Forbes Is Oil About To Become Front Page News by John Rubino via DollarCollapse.com Stocks Down 20% By Time Yield Hits 4% by Brian Sozzi via TheStreet.com Volatility Floored by Dana Lyons via The Lyons Share Bulls Vs Bears Tug Of War by Michael Cannivet via RCM A Hidden Risk Investors Need To Watch Out For by Ryan Vlastelica via MarketWatch What Are They Smoking by Ed Yardeni via Yardeni Research BofA: 15-Signs It’s Late In The Game via ZeroHedge Would Cam Newton Buy Stocks Now by Spencer Jakab via WSJ Gundlach Defends Technical Analysis by Robert Heubscher via Advisor Perspectives Most Read On RIA Riding The Bull by Lance Roberts It’s Okay To Hold Some Cash by John Coumarionos The Trend Is Your Friend, Till It’s Not by Michael Lebowitz American Gridlock by Lance Roberts 10-Habits Of The Fiscally Fit by Richard Rosso Kass: There Is No Special Sauce by Doug Kass Research / Interesting Reads Where Debt Slaves Are Most Vulnerable by Wolf Richter via Wolf Street 9-Ways To Plan For A Comfortable Retirement by Robert Powell via USA Today Income Inequality And Tomorrow’s Retirees by Michael Hiltzik via LA Times Over-75 & Deep In Debt – Join The Crowd by Maurie-Backman via Motley Fool 43% OF Americans Can’t Pay For Food Or Rent by Daisy Luther via The Organic Prepper Fed: 22% Of Americans Can’t Pay Monthly Bills by Tyler Durden via ZeroHedge 31% Of Americans Have Less Than $5000 Saved by Emmie Martin, CNBC Is It 1999 All Over Again? by Jeff Troutner via Equis Partners Borrow…If You Dare by Nick Maggiulli via Dollars and Data Tilson: How Success Led To My Fall by Whitney Tilson via Yahoo The Meaning Of High Profit Margins by Edward Harrison via Credit Writedowns Why Young Americans Are Drawn To Socialism by Steve Chapman via Reason.com “What’s the difference between a pro and an amateur? Professionals look for what’s wrong with a setup. Amateurs only look for what’s right.” - Mark Harila
Here are the percentage changes for the major indices for WTD, MTD, QTD & YTD in 2018- S&P sectors for the past week-
Best and Worst Performing Nasdaq 100 Stocks of 2018 May 25, 2018 The average stock in the Nasdaq 100 is up just over 3% year-to-date. Using snapshots from our popular Trend Analyzer tool, below is a look at the best and worst performing stocks in the Nasdaq 100 so far in 2018. At the top of the list is Netflix (NFLX) with a year-to-date gain of 81.96%. Over the last five days alone, NFLX is up 7.4%, and it’s 10.95% above its 50-day moving average. As you can see in the trading range screen on the right side of the snapshot, recent gains have pushed NFLX well up into overbought territory. Micron (MU) has experienced an even bigger move over the last five trading days with a gain of 12.41%. The stock is 17% above its 50-DMA, and it’s up 49.5% YTD. Align Tech (ALGN) is the third strongest Nasdaq 100 stock so far in 2018 with a gain of 42.69%. Behind ALGN are Adobe (ADBE), Seagate (STX), Amazon.com (AMZN), and Autodesk (ADSK) — all with 2018 gains of more than 30%. Other notables on the list of big winners so far this year for the Nasdaq 100 include NVIDIA (NVDA) with a gain of 28%, Intel (INTC) at +18.6%, Microsoft (MSFT) at +14.93%, and Wynn Resorts (WYNN) at +14.86%. Not all Nasdaq 100 stocks are going gang-busters this year. As shown below, 11 stocks in the index are down more than 20%, and an additional 13 are down 10%+. DISH Network (DISH) and NetEase (NTES) lead the list of losers with year-to-date declines of more than 35%. DENTSPLY SIRONA (XRAY), Incyte (INCY), Kraft Heinz (KHC), and Symantec (SYMC) are all down more than 25%, while stocks like Celgene (CELG) and Comcast (CMCSA) — among others — are down more than 20%. As you can see from our “Trend” ratings and our Trading Range section, the majority of these stocks are in long-term downtrends and trading in oversold territory. Visit our Trend Analyzer page to learn more about this unique feature that’s part of our Bespoke Premium service. Stocks Start Summer Steady May 24, 2018 Memorial Day has been the unofficial first bookend to summer for decades. Prior to 1971, the date floated around a bit as it was traditionally the last day of May. Since 1971, it’s been formally changed to the last Monday in May. Originally, it was known as “Decoration Day,” as a formal date to decorate graves of the fallen in the years after the Civil War, but over the years the name shifted to Memorial Day. For stock market investors, the shortened Memorial Day week has historically been positive. As shown in the chart below, average and median returns are higher for Memorial Day week than all weeks since 1971, and stocks are more likely than average to end the week up. Since 1971, the S&P 500’s average return during the four-day week of Memorial Day has been an advance of 0.54% (median: 0.61%) with positive returns 62% of the time. That’s quite a bit higher than the average return of 0.16% (median: 0.27%) for all weeks since 1971. Investors Liked What They Saw During Earnings Season May 21, 2018 Roughly 2,100 companies reported earnings during the unofficial Q1 2018 reporting period that ran from April 9th through May 18th. We track the one-day stock price performance of every company that reports earnings. This obviously helps us monitor individual stock performance, but it also gives us an idea of how investors are reacting to earnings results at the macro level. (In order to track performance, remember that for a stock that reports earnings in the morning before the open of trading, we use its price change on that trading day. For a stock that reports earnings after the close of trading, we use its price change on the next trading day.) Below is a chart that shows the one-day price reaction (%) for every stock that reported earnings during the Q1 reporting period. We’ve separated the distribution by stocks that beat EPS estimates, missed EPS estimates, and reported inline EPS estimates. As shown, 67.9% of stocks beat EPS estimates, while 24.5% missed and 7.7% reported inline. The average stock that beat EPS estimates gained 1.78% on its earnings reaction day. The average stock that missed EPS estimates had a one-day drop of 2.75% in response, while the average inline report saw a one-day price drop of 0.73%. While the average stock that beat EPS estimates gained 1.78% on its earnings reaction day, you can see in the chart that there were hundreds of stocks that beat but still fell in price. Similarly, while most stocks that missed EPS estimates fell on the news, there were plenty that gained as well. For investors looking for detailed earnings report analysis, our Earnings Screener is an amazing tool. The Earnings Screener allows users to pull up historical quarterly earnings report analysis for every US stock going back to 2001. The Screener also allows users to track macro trends related to earnings using our “Aggregator” functionality. The chart below uses data pulled directly from our Earnings Screener. It shows the average one-day stock price reaction to various earnings outcomes during the Q1 2018 reporting period compared to all periods since 2001. As shown, the average stock that beat EPS estimates this season gained 1.78% on its earnings reaction day. Since 2001, the average stock that has beaten EPS estimates has gained 1.90% on its earnings reaction day. So this season, earnings beats gained slightly less than normal. For stocks that missed EPS estimates, this season they fell an average of 2.75% on their earnings reaction days. Since 2001, stocks that have missed EPS estimates have averaged a one-day decline of 3.48%. So this season, stocks that missed EPS estimates fell much less than they usually do. Stocks that reported inline EPS fell a lot less than they normally do as well. Combining the beat, miss, and inline outcomes, the average one-day change for all stocks that reported this season was +0.48%. Since 2001, the average one-day change for all stocks that have reported earnings has been +0.08%. That means that this season, stocks reacted much more positively than usual, and the reason was because the inline and missed reports fell less than they usually do. To gain access to our Earnings Screener tool, please sign up for a Bespoke Institutional trial. The Screener is only available at the Bespoke Institutional level. Yanny or Recession? Posted by lplresearch So what do you hear? Are you Team Yanny or Team Laurel? In case you haven’t heard, some people hear the word “Yanny,” while others hear the word Laurel in this epic division. Take a listen here and see what you hear. In the end, it comes down to how high or low of a frequency your ears can pick up. Scientists claim that most “younger ears” will hear Yanny, while “older ears” will hear Laurel. “Much like people hear the words Yanny or Laurel, it is amazing that we all look at the same economic data and come to wildly different conclusions regarding how soon a recession is coming,” explained Ryan Detrick, LPL Research Senior Market Strategist. Many economists are worried about the Federal Reserve (Fed) hiking rates, peak earnings profits, the yield curve flattening, bond yields popping, and crude oil up significantly over the past year. With this being the second-longest economic recovery since WWII, are we really in the ninth inning of the rally? “Although I hear Laurel, I also hear a very strong economy. One with expanding global corporate profits, low inflation, a record-high Leading Economic Index (LEI), fiscal stimulus still coming, and broad-based market participation. We see very little chance of a recession over the next 12-18 months,” according to Detrick. Here’s the catch: even if you know a recession is coming, would it matter? As our LPL Chart of the Day shows, looking at the last 10 recessions dating back to the 1950s*, we found the S&P 500 Index was actually higher during the recession seven times! Additionally, the max pullback during a recession came in at an average of only 17.6%, and a year after the recession ended, stocks were higher nine out of 10 times. Economic indicators continue to look strong, and we expect double-digit stock returns when all is said and done in 2018**. We’ll worry about a recession when we start seeing the warning signs pile up. Even then, our view is that long-term investors shouldn’t panic over any potential recession-based corrections and may consider using the weakness as an opportunity. Memorial Day Trading: Bullish Day After In the Stock Trader’s Almanac we show how the days after Memorial Day have been rather bullish. Improved performance since 1986 is also highlighted. Some of this bullishness after Memorial Day can be attributed to the strength of the first two days of June (in many years). NASDAQ exhibits a similar pattern to S&P 500 over the same time periods.
Stock Market Analysis Video for May 25th 2018 Video from AlphaTrends Brian Shannon ShadowTrader Video Weekly 5.27.18 Video from ShadowTrader Peter Reznicek (VIDEO NOT YET UP!)
Here are the current major indices pullback/correction levels from ATHs as of week ending 5.25.18- 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 5.28.18 Before Market Open: Spoiler: CLICK HERE TO VIEW MONDAY'S AM EARNINGS TIMES & ESTIMATES! NONE. (MARKETS CLOSED IN OBSERVANCE OF MEMORIAL DAY) Monday 5.28.18 After Market Close: Spoiler: CLICK HERE TO VIEW MONDAY'S PM EARNINGS TIMES & ESTIMATES! NONE. (MARKETS CLOSED IN OBSERVANCE OF MEMORIAL DAY) Tuesday 5.29.18 Before Market Open: Spoiler: CLICK HERE TO VIEW TUESDAY'S AM EARNINGS TIMES & ESTIMATES! Tuesday 5.29.18 After Market Close: Spoiler: CLICK HERE TO VIEW TUESDAY'S PM EARNINGS TIMES & ESTIMATES! Wednesday 5.30.18 Before Market Open: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S AM EARNINGS TIMES & ESTIMATES! Wednesday 5.30.18 After Market Close: Spoiler: CLICK HERE TO VIEW WEDNESDAY'S PM EARNINGS TIMES & ESTIMATES! Thursday 5.31.18 Before Market Open: Spoiler: CLICK HERE TO VIEW THURSDAY'S AM EARNINGS TIMES & ESTIMATES! Thursday 5.31.18 After Market Close: Spoiler: CLICK HERE TO VIEW THURSDAY'S PM EARNINGS TIMES & ESTIMATES! Friday 6.1.18 Before Market Open: Spoiler: CLICK HERE TO VIEW FRIDAY'S AM EARNINGS TIMES & ESTIMATES! Friday 6.1.18 After Market Close: Spoiler: CLICK HERE TO VIEW FRIDAY'S PM EARNINGS TIMES & ESTIMATES! NONE.
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 Tuesday (5/29) <-- click there to cast your daily market vote and stock pick! Stockaholics Weekly Stock Picking Contest & SPX Sentiment Poll (5/28-6/1) <-- click there to cast your weekly market vote and stock picks! ======================================================================================================== And finally, we have our monthly stock pick contest and market poll for June up this week!- Stockaholics June 2018 Stock Picking Contest & SPX Sentiment Poll <-- click there to cast your monthly market vote and stock picks! ======================================================================================================== 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!
And as promised here is the most anticipated earnings calendar for this upcoming trading week ahead- ($CRM $MOMO $COST $BOX $HPQ $DKS $DLTR $KORS $ADI $ULTA $DG $LULU $ONVO $VMW $BAH $BNS $AMWD $WDAY $ANF $MRVL $AEO $PVH $CIEN $GME $HEI $WMS $BURL $ESLT $DSW $BMO $BIG $TECD $LABL $QTNT $GES $CHS $SPTN $JT $ILL $CMD $KIRK $CMCO) If you guys want to view the full earnings post please see this thread here- Most Anticipated Earnings Releases for the week beginning May 28th, 2018 <-- click there to view!
White House says prep team for US-North Korea summit to head to Singapore as scheduled https://www.cnbc.com/2018/05/26/whi...ummit-in-singapore-to-leave-as-scheduled.html
The commemorative coin is still on sale. Seems that market is still not expecting the summit to succeed I heard that there was fear that Kim was not going to give up his program, and the fear was that he was just going to show up then back out to show the whole world that he had played Trump for a fool. I expect the summit to go through successfully. Trump has just been angling to get an advantage. It's really South Korea that can end up with egg on their face.
Euro Stoxx 50 falling; global markets are pulling back without reaching January's high. Oil plummets another day.
Italian stocks weigh down Europe as political worries fester https://www.marketwatch.com/story/i...-gains-as-political-worries-fester-2018-05-28 Yeah also the German 10 year yields is now trading at just 0.34% on Italian fear If it doesn’t bounce overnight, then we should see the US yields down significantly tomorrow as well.
Wasn't able to update late Friday due to travelling for the holiday, but I got stopped out at 13.54 for a loss - glad I did before today's rough open.
Ok. On a broader time frame not the best price level. But for a faster swing trade, I'm prepared to enter with a first long at 2670
