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The Bull Thread

Discussion in 'Stock Market Today' started by bigbear0083, Apr 1, 2016.

  1. bigbear0083

    bigbear0083 Content Manager
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    A Closer Look at Technical Support

    Market Blog

    We continue to believe there is technical support for the S&P 500 Index as discussed in our August 9 blog, and we’re already seeing some signs of the pessimism that is necessary for forming a bottom. The negative sentiment intensified August 14 following the inversion of the yield curve (discussed in our August 14 blog), so today we want to take a closer look at some key levels the LPL Research team is watching.

    [​IMG]

    First is resistance, or levels that an index or stock may struggle to rise above. Despite Tuesday’s 1.5% gain, the S&P 500 ran right into its 50-day moving average near 2,940. This level also marked the 2018 highs for the market, adding to its significance.

    As for support, or levels at which we think buyers are likely to step into the market, there are three key levels we are watching:
    1. 2,822. The intraday low from August 5 is only about 1% below Wednesday’s close, but it may be viewed by short-term traders as a tactical way to gauge whether we have hit the bottom in this current pullback.
    2. 200-day moving average. Currently at 2,796, the 200-day moving average is a closely watched trend indicator that is commonly viewed as either support or resistance, depending on where the index sits in relation to it.
    3. 2,740. Perhaps the strongest level of support for the S&P 500 is 2,740. As seen in the LPL Research Chart of the Day, Key Levels for the S&P 500 Index, this benchmark has actually tested 2,740 two times so far this year, but it failed to close below that level either time. 2,740 also happens to be 9.5% below the July highs, right in line with a standard 10% correction.
    “We believe a retest of the December lows remains unlikely,” said LPL Chief Investment Strategist John Lynch. “We think any decline beyond 10% from recent highs would be excessive, and we would recommend that suitable investors rebalance and add to positions accordingly if the S&P 500 falls that far.”
     
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  2. bigbear0083

    bigbear0083 Content Manager
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    Home Builder Sentiment Keeps Climbing
    Fri, Aug 16, 2019

    The NAHB's Housing Market Index for August saw its second straight month with a modest increase bringing it to 66 compared to expectations of an unchanged 65. Although the index has been grinding higher since plummeting to its late 2018 low, it is still well off of its December 2017 record high of 74.

    [​IMG]

    Breaking down the indicator by its sub-indices, improved present sales and traffic led to a stronger index in August. Both rose by 2 and are now at their highest levels of 2019. Future sales outlook still remains bleaker though as it declined to 70 in August. As shown in the chart below, in addition to the spike lower at the end of last year, future sales have been in a downtrend since February 2018. Unlike present sales and traffic, the rebound of future sales' off of the December low has not seen promising follow-through.

    [​IMG]

    [​IMG]

    Of the individual regions, sentiment in the West continues to be the strongest improving to 75 in August. Granted this is still off of its cycle highs; as is the case for each of the regions. The other regions generally saw improvements as well, other than the South. While the South did not improve, it did hold steady at a solid reading of 69. The Midwest jumped by 5 points and the Northeast also improved to 57.

    [​IMG]
     
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  3. bigbear0083

    bigbear0083 Content Manager
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    Homebuilders Still Cruising
    Wed, Aug 21, 2019

    The S&P 1500 Homebuilder group has had a great 2019 as mortgage rates have fallen over 100 bps from their highs in late 2018. As shown below, the group just recently broke out to new 2019 highs after a 3-month sideways period, and as of this morning, it was up 40% year-to-date.

    [​IMG]

    While 2019 has been a great year for homebuilders, remember that the group had a terrible 2018. As shown below, the group actually hit its peak of the current cycle in January 2018 when it actually got relatively close to its housing bubble highs from 2005. From high to low in 2018, however, the group was down 40%. That's how you get a 40% YTD gain in 2019 without managing to re-take 2018 highs. At current levels, the homebuilders are roughly 26% from their bubble highs made in mid-2005.

    [​IMG]

    In an earlier post today, we looked at the ratio of the Nasdaq 100 to the S&P 500. While the Nasdaq has outperformed the S&P 500 by a wide margin throughout the current bull market, the homebuilders have basically traded back and forth with the S&P for the last 10 years with periods of ups and downs. From a relative strength perspective, the homebuilders are nowhere close to recovering the gains they made versus the S&P during the housing bubble.

    [​IMG]
     
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  4. bigbear0083

    bigbear0083 Content Manager
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    Is a Small-Cap Labor Day Rally Coming Soon
    [​IMG]
    In the below chart, forty years of daily data for the Russell 2000 index of smaller companies are divided by the Russell 1000 index of largest companies, and then compressed into a single year to show an idealized yearly pattern. When the graph is descending, large-cap companies are outperforming small-cap companies; when the graph is rising, smaller companies are moving up faster than their larger brethren. The most prominent period of outperformance generally begins in mid-December and lasts until late-February or early March with a surge in January. This period of outperformance by small-caps is known as the “January Effect” in the annual Stock Trader’s Almanac.
    [​IMG]
    In recent years, another sizable move is quite evident just before Labor Day. One possible explanation for this move is individual investors begin to return to work after summertime vacations and are searching for “bargain” stocks. In a typical year, small-caps would have been lagging and could represent an opportunity relative to other large-cap possibilities. As of Friday’s close (August 16, 2019), Russell 2000 is up 10.8% compared to the Russell 1000 being up 15.5% year-to-date. Lagging small-caps and resilient U.S. consumers could be the ideal setup for a repeat of this pattern this year. However, the small-cap advantage does historically wane around mid-September.
     
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  5. bigbear0083

    bigbear0083 Content Manager
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    Claims Edge Towards The 2019 Low
    Thu, Aug 22, 2019

    Last week's reading on initial jobless claims came in at 220K (revised up to 221K) which was above the past several weeks' range. This week's claims data fell back to the opposite end of this range with a 209K print. This handily beat expectations of a drop to only 216K and was the largest one-week decline in claims since the first week of July when it fell by 14K. As per usual lately, although this does not mark any new low, it is still a healthy reading. Seasonally adjusted claims have now remained at or below 300K for a total of 233 consecutive weeks and at or below 250K for 98 weeks.

    [​IMG]

    The move in the four-week moving average for claims, which helps to smooth out the fluctuations of the high-frequency indicator, was unexciting this week with a tiny 0.5K increase from last week. While the increases have been small, this week marked the third straight week that the moving average has moved higher. So far in 2019, there have been three other streaks like this with each one ending at the fourth week.

    [​IMG]

    Non-seasonally adjusted claims came in at 169.9K this week, which is over 17K below last week's number. For the current week of the year, this was the largest week-over-week drop in claims in five years when it fell by 20K in 2014. This was also the lowest number for the NSA data for the current week of the year (33rd week) of the cycle. This week's NSA print was also 3.7K lower than the comparable week last year.

    We must also note that over the coming weeks due to seasonal patterns, claims typically see their lowest levels of the year (usually in the final week of August or the first week of September).

    [​IMG]
     
  6. bigbear0083

    bigbear0083 Content Manager
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    Complexity Behind the Fed Rate Cut

    Economic Blog

    Minutes from the Federal Reserve’s (Fed) July meeting, released August 21, show the complexity of policymakers’ discussions leading up to the first rate cut of this economic cycle.

    Policymakers debated what to do amid strong consumer spending, a solid labor market, tepid inflation, sluggish business investment, financial stability, global risks, and the persistent headwind of trade uncertainty. Ultimately, the Fed announced a 25 basis point (0.25%) rate reduction after a vote with two dissents (Fed presidents Esther George from Kansas City and Eric Rosengren from Boston).

    The minutes also reinforced Fed Chair Jerome Powell’s description of the rate cut as a “mid-cycle adjustment,” a characterization that was especially evident from upbeat economic commentary. These rate changes, which we’ve referred to as “course corrections,” have been a feature of many economic cycles and have been more of a risk management tool in response to building risks than a response to an impending recession.

    “The Fed recognized the growing need for looser policy as insurance against heightened global uncertainty,” said LPL Research Chief Investment Strategist John Lynch. “Lower rates could provide a buffer if uncertainty materially weighs on growth, reducing the chances of a policy mistake or a rush to cut rates before a recession.”

    Participants generally agreed that the U.S. economic outlook was solid, even though inflation had slipped a little this year. In fact, domestic economic strength was the driving force behind the two dissents. George voted against a rate cut because there were few signs of weakness in incoming data or the medium-term economic outlook. Rosengren dissented because he saw no “clear and compelling case” for rate cuts, especially given his concerns for financial stability.

    The minutes, however, gave few clues on the future path of policy, and participants emphasized the importance of maintaining “optionality” with policy and basing rate decisions on incoming information.

    As shown in the LPL Chart of the Day, Investors Expect More Rate Cuts Ahead, investors are positioning for multiple 25 basis point rate cuts through the end of 2019.

    [​IMG]

    We agree that one or two more 25 basis point “insurance” rate cuts could be ahead as the Fed attempts to ease pressure on the Treasury yield curve and global currencies.
     
  7. bigbear0083

    bigbear0083 Content Manager
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    S&P 500 Stocks Breaking Out
    Thu, Aug 22, 2019

    Over the past few sessions, the S&P 500 has been sitting in the upper end of this month's range. It will still take a bit more work from the bulls to help break the index out of this range and even more work to move back to previous all-time highs. As for some of the individual stocks within the index, today we want to highlight some recent breakouts or potential breakouts.

    Unlike the broader S&P, most of the stocks shown below have entirely recovered recent losses and are now in the process of breaking out to new highs. Such is the case for Accenture (ACN), ANSYS (ANSS), Celanese (CE), Home Depot (HD), HLA Tencor (KLAC), and Tyson Foods (TSN). For some others like Norwegian Cruise Line (NCLH) and QUALCOMM (QCOM), the breakout is instead from a downtrend.

    The breakout for HD is perhaps the most recent development following the stock's surge in response to earnings earlier this week. Similarly, TSN had been stuck under resistance around $83 since May, but a positive reaction to earnings on August 5th was just the catalyst needed for the stock to break out. After a mild pullback in the middle of this month, TSN is beginning to make its push higher again.

    [​IMG]

    While the overall sector is currently the most extended at over 2 standard deviations above its 50-DMA, the Utilities sector (XLU) notably has a significant number of stocks eyeing a breakout. Many of these have been in strong uptrends throughout the past year but have taken a pause since June. After rebounding off of early August lows, these stocks have come back up to these June resistance levels. Xcel Energy (XEL) has already broken out and if XEL and the rest follow the script of Duke Energy (DUK), there is further upside for these stocks. Start a two-week free trial to Bespoke Institutional to access our interactive Chart Scanner and much more.

    [​IMG]
     
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  8. bigbear0083

    bigbear0083 Content Manager
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    The back and forth of increasing tariffs and threats between the United States and China has pushed businesses to put a hold on capital expenditures (capex). As the effects of the tensions spread, LPL strategists discuss why they are suggesting slower growth the second half of this year and why they have lowered their 2019 U.S. gross domestic product (GDP) forecasts to 2%. The good news is the U.S. consumer remains in good shape, with many retailers reporting strong earnings last week. Additionally, second quarter earnings are wrapping up, and earnings are coming in much better than had been expected just two months ago.

    Yield curve inversions

    LPL strategists also discuss the yield curve, as the 2-year/10-year spread is near inversion. The short-end of the curve has been inverted for some time, but the belly of the curve is nearing inverted status as well. It is worth noting, though, that the long-end of the curve is still nowhere near inversion. For instance, the 10-year/30-year spread is still above the lows set earlier this summer. Historically, the long-end of the curve has inverted before a recession has taken place.

    [​IMG]

    Due to delayed trade negotiations and increased tariff threats between the United States and China, businesses have held back on their capital expenditures (capex). Year-over-year growth in orders for nondefense capital goods (excluding aircraft) has ground to a halt, averaging just 0.3% over the last three months. In response, we’ve lowered our 2019 GDP forecast to 2%, insinuating that growth will slow further in the second half of the year.
     
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  9. bigbear0083

    bigbear0083 Content Manager
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    What's Driven the S&P 500?
    Wed, Aug 28, 2019

    In last night's Closer, we showed the biggest contributors to the S&P 500's gain so far in 2019 as well as the stocks that have weighed on the index the most. Give the S&P's 14% YTD gain, it's probably not surprising to hear that only one stock in the entire S&P 500 has weighed on the total index performance by at least 20 bps: Pfizer (PFE). On the other hand, 11 different stocks have added at least 20 bps to total index performance in 2019. We show the 10 best and worst-performing stocks this year by the overall contribution to the S&P 500's performance in the table below. As shown, mega-cap Tech like Microsoft (MSFT) and four of the five FAANG names have been the biggest contributors along with Mastercard (MA), Visa (V), and two retailers—Walmart (WMT) and Home Depot (HD).

    [​IMG]

    At the industry group level, health care stocks related to Pharmaceuticals, Biotech, and Life Sciences are one of only two industry groups to weigh on S&P 500 performance this year. Energy is the other standout with a 4% decline. Software & Services is the best performer, driving a 3.3% contribution to the S&P 500's return this year. Media & Entertainment, Retail which includes Amazon (AMZN), and tech Hardware are the only other groups that have added at least 1% to the total 14.46% gain for the S&P 500 so far in 2019.

    [​IMG]

    While YTD numbers look really great, things are not so hot versus this time last year; the S&P 500 is actually slightly lower year-over-year. As a result, the gap between the contribution of gainers and those of decliners is much narrower. Only four stocks drove a gain of at least 20 bps for the headline index over the past year: Microsoft (MSFT), Procter & Gamble (PG), Mastercard (MA), and Visa (V). We note that the top ten gainers are almost exclusively very blue-chip stocks: large tech companies, credit card networks, and some consumer names. Only the cell phone tower REIT American Tower (AMT) is unusual in this list of big-cap, well-known stocks. Losers are concentrated in Health Care, Banks, and Tech. While Alphabet (GOOG), Apple (AAPL), and Amazon (AMZN) aren't down drastically versus last summer, their market caps are big enough to have cost a lot of performance for the S&P 500's overall performance. Smaller cap stocks like NVIDIA (NVDA), DuPont (DD), AbbVie (ABBV), and Schlumberger (SLB) are a verry different story.

    [​IMG]

    At the industry group level, there have been more decliners than gainers, though only Energy and Banks have cost the index more than 80 bps; on the flip side only Software has been a greater than 80 bps gainer. Defensive industry groups like Utilities, Household & Personal Products, and Real Estate have all drive the S&P 500 higher while cyclical industry groups like Capital Goods and Tech Hardware have weighed.

    [​IMG]
     
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  10. bigbear0083

    bigbear0083 Content Manager
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    Consumer Confidence Defies Pessimism
    August 28, 2019

    U.S. consumers are feeling especially empowered these days, despite growing pessimism about the economic outlook.

    As shown in the LPL Chart of the Day, Consumer Confidence Pushes Through Trade Uncertainty, the Conference Board’s Consumer Confidence Index fell to 135.1 in August. Still, that’s the fifth-highest reading of the economic cycle, an impressive feat given trade tensions and other global headwinds.

    [​IMG]

    August’s strong consumer confidence reading was driven by a 19-year high in consumers’ views of present economic conditions. That’s no surprise to us, as steady gains in wages and jobs typically support consumer spending. Fiscal stimulus implemented in 2018 provided an extra boost of income through lower tax rates and added tax credits, and lower oil prices have allowed consumers to allot more income to discretionary spending.

    “Consumer spending has been one of the most encouraging trends in the economy lately, thanks to a solid U.S. labor market,” said LPL Financial Chief Investment Strategist John Lynch. “It’s difficult to see a near-term economic downturn with such a strong undercurrent from the U.S. consumer.”

    A U.S. economy carried by the consumer isn’t a bad situation to be in. After all, consumer spending accounts for about 70% of gross domestic product, so healthy consumer activity could carry the expansion on its own.

    However, U.S. businesses need to transition into leadership at this point in the cycle. As we mentioned in Tuesday’s blog, capital expenditures (capex) need to rebound as the cycle matures to help sustain the expansion. Unfortunately, trade uncertainty has increasingly weighed on corporate sentiment, so a resurgence in capex may not be possible without a U.S.-China trade resolution.
     
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  11. bigbear0083

    bigbear0083 Content Manager
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    B.I.G. Tips - Years Like 2019: August Edition
    Thu, Aug 29, 2019

    We’ve highlighted the chart below comparing 2019 to 1998 a number of times over the last several weeks, and the similarities between the performance of the S&P 500 in each year has continued right up through the end of August. While the pullback from the highs this Summer hasn’t been as severe as it was in 1998, the timing of both and the subsequent periods of backing and filling has been striking. A continuation of the similar patters certainly wouldn’t be a positive in the short term, but the silver lining is that Q4 1998 was exceptionally strong.

    [​IMG]

    As we do throughout the year, in our most recent B.I.G. Tips report we compared the S&P 500's trading pattern this year to all other years in order to see which ones were the most similar. With those similar years, we then analyzed how the S&P 500 performed for the remainder of the year in order to help come up with a framework for what to expect for the rest of this year. It shouldn't surprise anyone that 1998 made the list, but a number of other notable years also had strong similarities to the pattern of 1998 with very different outcomes as well.
     
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  12. bigbear0083

    bigbear0083 Content Manager
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    Jobless Claims Snoozefest
    Thu, Aug 29, 2019

    Initial jobless claims data were released this morning without any major new developments, largely as a result of seasonal effects. Last week saw claims come in at the lower end of their recent range at 209K. This reading was revised up to 211K and this week's release showed another small increase to 215K, which was slightly ahead of the 214K forecast. Although claims came in weaker than expected, they remain at strong levels.

    [​IMG]

    Likewise, the four-week moving average came in pretty flat once again this week only falling by 0.5K. With this modest improvement to 214.5K, through all of August, the moving average has been in a tight 2.25K range. This range is also still off of its lows set earlier this year in April.

    [​IMG]

    Most of the reason for the lack of movement this week in initial jobless claims data is due to seasonal effects. Looking back at the current week of the year (34th week) over the past ten years, non-seasonally adjusted claims has only seen an average week-over-week change, in absolute terms, of just 3.4K. As shown in the second chart below, that is the smallest change for any given week of the year. That also actually makes this week's 4.2K increase to 175.6K larger than normal. But still sticking to the script of little changes as well as the broader trend of slowing improvements in labor data, this week's NSA data was only 0.1K lower year over year. One important thing to consider with this minor improvement from last year, over the next couple of weeks, non-seasonally adjusted claims typically make their yearly low. In other words, in the coming weeks, we should be able to get a pretty good idea on how this year's low stacks up to prior years of the cycle.

    [​IMG]

    [​IMG]
     
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  13. bigbear0083

    bigbear0083 Content Manager
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    per lpl research: "Could the Baltic Dry Index really be making 9-year highs if we were headed for a global recession?"

    [​IMG]
     
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  14. bigbear0083

    bigbear0083 Content Manager
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    Labor Day Seasonality
    Tue, Sep 3, 2019

    We are now headed into the home stretch of the year and fortunately for bulls even though September is the worst month of the year, market performance over the next three months is one of the best periods of the year. As shown in the screenshot from our Seasonality Tool below, performance of the S&P 500 over the next week over the past ten years has been fairly weak with a 0.1% median decline. One month performance is slightly better with a modest gain of 1.51%, but 3 months out the S&P 500 has been higher by an average of 6.28%.

    [​IMG]

    Coming off of the long Labor Day week, we wanted to take a look at seasonality around the holiday. As shown below, similar to what our Seasonality Tool is showing, going back to 1928, near term performance of the S&P 500 has been weak after Labor Day with declines that Tuesday after the holiday, the week after and one month after. But by New Year's Eve, the index is higher by an average of 1.24%. Furthermore, the index has only been up in the weeks after Labor Day less than half of the time, while it is positive 70% of the time by the end of the year.

    [​IMG]

    When it comes to what has happened over the month leading into the holiday weekend, with the S&P falling 1.81% in August but rising 2.8% last week, this year has actually been more of a setup for outperformance relative to seasonal patterns around Labor Day. As shown in the chart below, average performance in the days, weeks, and months following Labor Days that were preceded by declines in the month leading up to the holiday but gains in the week before typically have been stronger than other periods (11 prior occurrences). In fact, the week and month after Labor Day have typically been positive rather than negative after similar scenarios to the current one.

    [​IMG]

    In the table below, we break down the performance across each of the eleven prior times that this has occurred. The Tuesday Labor Day is actually more consistently negative than other years—which we have ended up see play out this year. Again though, longer-term performance gets stronger and is more consistently positive. By the end of the year, there have only been two years where the S&P 500 was lower after similar price action to the current situation. One of those declines was in 1987 when the S&P fell 23.6% through the end of the year. Needless to say, this was a bit of an outlier.

    [​IMG]
     
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  15. bigbear0083

    bigbear0083 Content Manager
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    Down August, Up YTD, No Worries
    [​IMG]
    Now that the very volatile month of August has finished on the downside folks are concerned about the other worst month, September, and for good reason. Since 1950, September is the worst performing month of the year. However, while August was negative this year with the market still up year-to-date the prospects for Q4 and the year as a whole are not so ominous. In fact, it’s kind of bullish.

    Early last month we relayed the historical data on August declines being quite commonplace though overall, years with August declines were quite choppy and not especially bullish. However when the market was up year-to-date at the end of August despite an August decline the picture changes dramatically. In the tables here you can see that after some extended volatility and negativity in September Q4 and the year as a whole has been rather positive.

    Since 1949 in years the market was up YTD in August but down for the month DJIA was up in September 56.3% of the time (9 of 16) with an average gain of 0.76%, up in Q4 81.3% of the time (13 of 16) with an average gain of 5.68% and up for the year 100% of the time with an average gain of 17.43%.

    The S&P has a similar record up 58.8% of the time in September (10 of 17) with an average gain of 0.81%, up in Q4 94.1% of the time with an average gain of 5.73% and up for the year 100% of the time with an average gain of 20.21%.

    Since 1971 NASDAQ was up in September 66.7% of the time (6 of 9) with an average gain of 0.35%, up in Q4 66.7% of the time (6 of 9) with an average gain of 4.04% and up for the year 100% of the time with an average gain of 21.72%. NASDAQ was hit much harder in the 1983 bear market and 1997 Asian Financial Crisis than the much larger cap (at the time) DJIA and S&P.
    [​IMG]
     
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  16. bigbear0083

    bigbear0083 Content Manager
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    No New Lows Despite 100 Week Streak For Claims
    Thu, Sep 5, 2019

    This week's reading on initial jobless claims was expected to come in unchanged from last week at 215K. Instead, the indicator disappointed slightly with last week's number being revised up to 216K and this week's data showing 217K new jobless claims filed. In terms of the seasonally adjusted data, claims continue to remain in the middle of the past year's range. Even though they were also flat over the past year (visible in the inlaid chart below), claims have in fact still been at very healthy levels. The streak of consecutive weeks at or below 300K has now grown to 235 weeks. This week also marked the 100th straight week of claims comin gin at or below 250K! As has been the case for some time now, claims may not be improving or degrading at any significant rate, but the labor market still holding up just fine.

    [​IMG]

    The four-week moving average reinforces this point as it has also been flat for the past year and a half outside of the spike lower in April. This week, the moving average ticked up to 216.25K as the lower reading of 211K from the first week of August rolled off the average to be replaced with this week's higher 217K. Again, as with the weekly seasonally adjusted data, the moving average is still at healthy levels relative to history even though the pace of improvements has slowed. Fortunately, looking ahead to next week, there is a good chance the moving average can make a move lower as the recent high of 221K will come off the average.

    [​IMG]

    As we discussed last week, the end of August and beginning of September typically see the smallest average week-over-week changes in non-seasonally adjusted initial jobless claims data despite the yearly low typically coinciding around this time of year as well. That continues to hold true this week as the NSA data only rose by 1.5K compared to the average absolute move of 8K. This week's reading of 178.4K is still well below the average for the current week since 2000, but it was 4.8K higher than the comparable week last year. The only other year of the cycle that the current week saw a YoY increase was in 2017 when it saw an unusual 32.9K increase YoY. Looking ahead to next week, the comparable week last year marked the lowest level in NSA data of the cycle at 162.6K. It would be a promising sign to see this low taken out, but given the higher frequency of YoY increases this year (second chart below), it is questionable if we will see that happen.

    [​IMG]

    [​IMG]
     
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  17. bigbear0083

    bigbear0083 Content Manager
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    ISM Non Contraction Index
    Thu, Sep 5, 2019

    Just two days after one of the weakest ISM Manufacturing reports in years, Thursday's release of the ISM Non-Manufacturing report for the month of August was a complete 180 from its Manufacturing counterpart. While economists were expecting the headline index to rise from 53.7 in July up to 54.0, the actual reading was considerably higher at 56.4. While it's only the highest reading since May, the fact that it increased at all was a surprise to many. On a combined basis and accounting for each sector's share in the overall economy, the Composite ISM for August rose from 53.4 up to 55.6 for its biggest monthly gain since February.

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    In terms of the breadth of this month's report, it wasn't particularly strong, but it wasn't bad either. On a m/m basis, just four components increased while six declined. On a y/y basis, though, things were much weaker as just two components (Business Activity and Inventories) were higher this August than last. The biggest gainers on a m/m basis were Business Activity and New Orders, while on the downside Backlog Orders, Inventory Sentiment, and Employment saw the largest declines. In the case of Business Activity, that component's 8.4 m/m increase was the largest since February 2008. Ahead of Friday's Non-Farm Payrolls report, though, the decline in the Employment component is especially notable as its level is now the lowest since March 2017.

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  18. bigbear0083

    bigbear0083 Content Manager
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    Sentiment Back to Normal
    Thu, Sep 5, 2019

    Bullish investor sentiment as measured by AAII's sentiment survey rose 2.5 percentage points to 28.64% this week. While this is an improvement, bullish sentiment is still in the 18th percentile of the data over the past decade. We must also note that the survey would not have captured any benefit from today's news on the trade front and the technical breakout of stocks and other assets like crude oil. Save a tweet or a headline reversing what appears to be optimism given today's positive price action, we'll likely see a bigger jump in bullish sentiment next week.

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    Bulls borrowed from the bears this week as bearish sentiment fell from 42.2% last week to 39.5%. As with bullish sentiment, this is not necessarily a dramatic improvement as it is still higher than 83% of weeks over the past 10 years. Bearish sentiment also remains the predominant sentiment level among investors as the bull-bear spread is still fairly wide at -10.87 percentage points. Granted, that is the narrowest spread since the last week of July when it was only 28 bps in favor of bears.

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    The bulk of the loss in bearish sentiment went to bulls, but a small portion also went to the neutral camp as the percentage of investors reporting as neutral grew to 31.9%. While bullish sentiment is still several percentage points below its historical average and the opposite applying to bearish sentiment, neutral sentiment has been pulling back to its historical average over the past few months. Where it currently sits at 31.9%, it is only 0.33% from that average.

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  19. bigbear0083

    bigbear0083 Content Manager
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    S&P 500 Breakout Stocks
    Tue, Sep 10, 2019

    As we have previously noted, some of the stocks that have been the most beaten down this year have been experiencing distinct outperformance recently. While not necessarily the worst YTD performers in the index, below are a handful of charts taken from our Chart Scanner tool that have recently broken above the top of their downtrend channels. This does not necessarily mean that these stocks are looking to completely take a 180 in regards to their long term trends, but at least in the short term, they are showing promise. Notably, as it has been the top performing sector yesterday and today, multiple of these stocks are energy plays.

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    It is not just the stocks that are in downtrends that are showing signs of a breakout. Below are some more stocks that have been in healthy uptrends over the past year or have at least been sideways such as Activision Blizzard (ATVI) and Weyerhauser (WY). For ATVI and WY, both stocks have been in a range for most of the past year. More recently, these two have begun making higher lows and are now at the upper end of these ranges. For ATVI, it's now looking to fill the large gap from earnings around one year ago. Similarly, Arconic (ARNC), Copart (CPRT), Sysco (SYY), TJX (TJX), T Rowe Price (TROW), and VF Corp (VFC) have all run up to resistance at prior highs, the only difference being these moves are in the context of long term uptrends. In the case of some like CPRT and SYY, the break out is already occurring while others like ARNC and TJX need a bit more work from the bulls. Start a two-week free trial to Bespoke Premium to access our interactive Chart Scanner and much more.

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  20. Auri

    Auri Member

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    Is the Cannabis Sector still Bullish ?

    Do the companies with growth potential and good prospects .... are they bullish ?

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    Benchmark Botanics Inc.'s (BBT.C) wholly owned subsidiary, Potanicals Green Growers Inc., received its retail sales license from Health Canada, on July 26, 2019.

    The license allows Benchmark to supply and sell finished cannabis products to provincial governments throughout Canada and through Canada's distribution and retail supply chain. Benchmark will be providing recreational and medical dried cannabis, capsules and other forms of cannabis products as the government of Canada makes more forms of the product legal for sale and consumption later this year.

    "Receiving the Health Canada sales licence is of significant importance and signals a giant step forward for the growth of Benchmark," commented William Ying, chief executive officer of Benchmark Botanics. "The sales licence gives the company the ability to sell additional products and is very timely with the new legalization for the edible market soon upon us. Our sales license will allow us to enter the Canadian medical and recreational marketplaces, as well as fulfill potential international supply agreements."

    Along with the approvals for the Zhejiang Yatai Pharmaceutical Co. Ltd. joint venture and sales license represent another key milestone in Benchmark's path toward becoming one of global leaders in the development and commercialization of cannabis and cannabis-derived products designed to support health and wellness. Since late 2017, Benchmark has secured all regulatory approvals required to harvest and sell cannabis, which has contributed to the continuing growth and enhancement of the business.

    Benchmark and Zhejiang Yatai Pharmaceutical Co. Ltd. signed a definitive agreement to establish a joint venture company in Canada, subject to compliance with Canadian Cannabis Act and related regulations, to cultivate, manufacture, process and market high-content cannabidiol (CBD) cannabis products, along with the research and development of medical cannabis; and the extraction, isolation and purification of high-CBD cannabis oil for commercial applications. Zhejiang Yatai is a publicly listed company on the Shenzhen Stock Exchange (stock code: 002370).

    Zhejiang Yatai Pharmaceutical is one of the top 500 China Enterprises founded in 1989 which researches, produces, sells, and exports pharmaceutical products, tablets, capsules, patches, powder injections in China and internationally.


    Zhejiang Yatai 2018 Financial Highlights


    Market Cap $ 8.525 B USD

    Revenues $188.29 M USD

    Net Income: $30.1M USD

    803 employees

    50 offices in 24 provinces China

    GMP standards / modern pharmaceutical production techniques

    2002 ISO 9001 quality certification – ISO 14001 environmental protection


    http://en.yatai.com/


    https://benchmarkbotanics.com
     

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