March 18, 2017 Leave a comment
Highlight: Bonds and USD in minor retreat following the FED meeting. STORMM indicators are reaching levels that will signal a renewed rally higher in the near term.
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We cover STORMM signals for the SP500, 10yr Treasury yield, USD, gold, oil, and the VIX with Pring Turner business cycle charts. The charts are arranged first with a STORMM annotation followed by a TMS view and two moving average charts. With a similar time scale its easy to compare signals across multiple charts by scrolling down the page.
SP500: The SP500 had its STORMM indicators have bounced off oversold conditions to again challenge the ATH and the NYMO indicator has followed this same signal. However, the other accompanying indicators have stayed on a sell signal but are slowly changing to a buy signal – a continuation we expect this coming week.
SP500 Stratasearch: We’re introduced a new chart and technical indicator set for SPXL developed using the outstanding software from Stratasearch. The accompanying chart at the top of page 2 in our Stockchart public series contains the last 6 months of signals for the SPXL using some of these indicator sets. The best of the set of indicators we’re displaying have the following performance backtest results from 2007: APR: 52.17%, Ave Trade: 11.79%, Ave Win%: 47.74%, Ave Loss%:8.19, Pct Profitable trades: 35.71%, Num trades:42, wins:15 loss 27. Stops at 3,4, and 8%. Some of the other indicator combinations produce a more profitable number of trades but at the expense of yearly performance. Stop loss levels are key to avoid significant drawdowns. We are currently exploring a combination of tactical asset allocation (momentum strategy) across a set of 10 asset classes with optimized Stratasearch signals to determine performance characteristics. Results will be presented in the future. As with all our indicators, the signals are for instructional purposes and not presented as advise to buy or sell a security.
SPXL: The current SPXL signal came very close to a new buy signal but failed to fully reach a new signal.
Europe:No change: The STOXX50 has a STORMM buy signal that is supported by the accompanying indicators.
SP500:Long term technicals: The set of charts are a collection of classical indicators that are valuable on a long-term to mid-term time spans and have been key in calling key tops and bottoms over the last 15 years.
Weekly SP500 (EOW 3/18/17): Buy: All the weekly indicators are on a buy signal for the weekly SP500.
Monthly SP500 (EOM- 2/17): Buy All the monthly indicators are on a buy signal.
US 10 yr Treasury bond yield: Following the FED meeting US bond yields have retreated but from the STORMM indicators this is a minor pullback in a major trend higher for yields. The TMS and Renko indicators have signaled this minor retreat while the Pring indicator is still on a rising yield status. This divergence should resolve toward rising yields soon as the STORMM indicators are in oversold levels on the cusp of a renewed climbing yields signal.
TNX weekly (3/18/17) Rising yields: However, this charts indicators are starting to top out and turn downward. Again a key inflection point for bonds coming.
TNX monthly (2/17) Rising yields: Similar to the daily and weekly charts, these indicators are topping out and at a key inflection point.
USD: The USD, similar to US bonds is going through a minor retreat following the FEB meeting and from the STORMM indicators remains in a major uptrend. The near term retreat is confirmed by sell signals from the accompanying indicators. This divergence should resolve soon as the STORMM indicators are in oversold territory and on the verge of signaling a resumption of the major trend upward for the USD.
Oil (and commodities): The recent decline was excessive and took the STORMM indicators to levels that signaled a minor bounce to be followed by a renewed decline to equivalent or lower lows for both oil and commodities. We are now seeing the minor bounce in oil and commodities that should complete soon.
VIX:No change: The VIX has been on a hill and valley ride recently and while the Bollinger Bands are tight plus occansionally crossed, we’re avoiding any new signals for the VIX until a clearer trend emerges.
Pring business cycle:No change: Bonds have broke below their signaling 250dMA while stocks and now commodities are above their 250dMA. Inflation and commodities appear to be strengthening which points to a stage 4 in the Pring business cycle. Stage 4 is a late stage but a normal part of the Pring business cycle divisions that is followed by stage 5 where strengthening inflation eventually has a negative impact on stocks (trend below their 250dMA).
Pring deflation: inflation:No change: This indicator is now crossing by multiple measures into a deflationary trend due to the rising US bond yield and USD movement. This growing trend will put pressure on the FED to continue its rate increases beyond the all anticipated March rise.