042118 (post vacation) Weekend update

Highlights:  The SP500, US bonds yields, and VIX generated new signals this week forecasting near term equity weakness and progressing long-term threats. The deflation: inflation ratio has a strengthening inflation trend which correlated with rising yields and commodities.   Details in the blog.

The STORMM blog is updated on the weekend and our stockcharts daily. The charts are accessible via the link in the right side bar. Please vote and elect to follow our charts.

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 STORMM indicators switched to a validated buy signal on the most recent rally (4/4/18) and all the supporting indicators align with this new call.  However, with the recent weakness in the SP500 the STORMM indicators have aligned to initiate a new sell signal (awaiting full validation) and so far the most sensitive indicator (NYMO) has also generated a sell signal.  The other accompanying indicators are turning and moving toward sell signals as well.  We would typically in this bull market anticipate this to be a minor pullback before the rally continues from the 4/4 buy signal, however the VIX and US Bond rate indicators are suggesting equity weakness near term which makes us cautious until we see a firm support zone develop.   On a broader view the STOXX50, DOW, and Transports all have developing STORMM sell signals similar in to the SP500.

We are now waiting to see how the declining triangle plays out in the next few weeks.  As you can see below the declining upper arm of the triangle has offered resistance that was combined this week with overhead resistance at support line from the 2016 / Trump rally.  We now have a large gap and potential support around the bottom leg of the triangle in the SP2560-2600 area.  We also have the minimal FIB support at 38%=2570.  This is a key support zone to determine if the E leg of the triangle holds and then leads to a new rally or if further weakness develops as we retrace to the FIB. support zones for this rally (SP2400).  May will be interesting.

SPXL:  This week’s retreat has lead the SPXL indicator to switch to a sell signal.   For 2018 the accumulative gain from this indicator is 21.7%.

Europe:  The STOXX50 developed a second buy signal that reached validation from March 26th with the Renko and TMS charts supporting.  However, like the US equity picture a STORMM sell signal is developing.

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.

An interesting relationship between the SP500 and US bonds on a long-term time frame is included below.   The chart includes the trend lines since 2009 with the up trend channel for the SP500 with recent price action bouncing outside to the upside in recent movements while the 10 year is approaching its down channel line from the 1980’s.  The ratio of these two is in the upper panel and appears to be forming a head and shoulders  pattern that is currently challenging the neck line.   We’re clearly at a key test point for both markets as the 10 year bond approaches 3.0%.  Fib. retracement levels for the SP500 from the 2009 low span SP1500  to SP2000.  We’ll be watching this relationship progress in the next few weeks.

 

Weekly SP500 (EOW 3/31/18): Buy All the weekly indicators are on a buy signal for the weekly SP500 but the recent price retreat is turning this set of indicators downward slowly.

Monthly SP500 (EOM- 3/18): Buy All the monthly indicators are on a buy signal but this past weeks price retreat is turning this set of indicators downward slowly.

US 10 yr Treasury bond yield:  The  ten-year bond yield has now a very unusual fourth rising yield STORMM signal that is supported by all the accompanying indicators. The move of the 10 year through the 3% line will occur soon and we’ll be watching closely the nature of this climb to see if a new multi decade bond trend is established.

TNX weekly (3/31/18) Rising yields:   A strong uptrend resumes.

TNX monthly (3/18) Rising yields:  Similar to the weekly chart a strong uptrend resumes.

USD: No change: The USD has finally responded to rising US bond yields and turned this past week to a STORMM buy signal with all the accompanying indicators supporting this signal.

Oil (and commodities):No change:  The recent decline in commodities from the strengthening bond yields and USD appears to have ended and a very unusual fourth STORMM buy signal was generated Feb 12th for oil (not commodities in general).

VIX:  The VIX generated a new buy signal this week with tight Bollinger Bands which typically leads to a VIX spike as equities weaken.

Pring business cycle: No change:  The bond component of the three Pring business cycle indicators has been bouncing around its 250dMA but is more convincingly in a negative alignment.  With stocks and commodities in a positive relationship it appears we’re now in stage 4 of the Pring business cycle which is a latter stage status for the market (6 cycles total).  The next cycle would see a decline initiate for equities due to some degree of economic contraction.

Pring deflation: inflation:  The developing inflation trend is becoming more established each week supporting a Stage 4 Pring economic cycle call and correlated to rising bond yields

 

 

 

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033118 Weekend update

Highlight:  VIX setting up for a new move and daily + monthly SP500 indicators signal weakness ahead but not the start of a bear market.

The STORMM blog is updated on the weekend and our stockcharts daily. The charts are accessible via the link in the right side bar. Please vote and elect to follow our charts.

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 STORMM indicators are on validated sell signal that continued this week despite the recent rally.  The STORMM indicators have again crossed into very oversold territory which signals a minor rally in an on-going down-trend and that we’ll return to equivalent or lower lows (see the yellow circled indicator on our stockcharts page).  The accompanying indicators are bottoming and beginning to respond to recent rally but the majority are still on a sell signal.  We expect some of the more sensitive indicators to signal a buy as this minor rally relieves the oversold conditions.The significant story this week was the monthly SP500 did not cross is 10dMA signaling a bear market.  So it appears so far this is a major retracement but not the start of bear market.  The other monthly SP500 indicators align with this equity market status.

SPXL:  A pending buy signal

Europe:  The STOXX50 buy signal from March 6th has failed and the TMS and Renko charts support the sell signal for the equity market.

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.

An interesting relationship between the SP500 and US bonds on a long-term time frame is included below.   The chart includes the trend lines since 2009 with the up trend channel for the SP500 with recent price action bouncing outside to the upside in recent movements while the 10 year is approaching its down channel line from the 1980’s.  The ratio of these two is in the upper panel and appears to be forming a head and shoulders  pattern that is currently challenging the neck line.   We’re clearly at a key test point for both markets as the 10 year bond approaches 3.0%.  Fib. retracement levels for the SP500 from the 2009 low span SP1500  to SP2000.  We’ll be watching this relationship progress in the next few months.

Weekly SP500 (EOW 3/31/18): Buy All the weekly indicators are on a buy signal for the weekly SP500 but this past weeks price retreat is turning this set of indicators.

Monthly SP500 (EOM- 3/18): Buy All the monthly indicators are on a buy signal but this past weeks price retreat is turning this set of indicators.

US 10 yr Treasury bond yield: No change: The  ten-year bond yield has now three rising yield STORMM signals which is a very strong trend confirmation.   However, the near term weakness in bond yields has been further supported this week with the Renko chart signaling declining yields.  We now have all three of the accompanying charts signaling a decline while the STORMM indicators remain on a strong rising yields signal.  Given the long-term signal and the strength of the short-term signals we expect the divergence to resolve to rising yields.

TNX weekly (3/31/18) Rising yields:   A strong uptrend resumes.

TNX monthly (3/18) Rising yields:  Similar to the weekly chart a strong uptrend resumes.

USD: No change: The USD has finally responded to rising US bond yields and turned this past week to a STORMM buy signal with all the accompanying indicators supporting this signal.

Oil (and commodities):No change:  The recent decline in commodities from the strengthening bond yields and USD appears to have ended and a very unusual fourth STORMM buy signal was generated Feb 12th for oil (not commodities in general).

VIX:  The VIX has crossed two of its sell signal Bollinger Bands but the third has not been tagged.  The VIX consolidating mid channel with tightening band width while the TMS and Renko charts remain on a rising VIX signal.  It appears the VIX is setting up for one more spike which is a negative near term for equities.

Pring business cycle: No change:  The bond component of the three Pring business cycle indicators has been bouncing around its 250dMA but is more convincingly in a negative alignment.  With stocks and commodities in a positive relationship it appears we’re now in stage 4 of the Pring business cycle which is a latter stage status for the market (6 cycles total).  The next cycle would see a decline initiate for equities due to some degree of economic contraction.

Pring deflation: inflation:No change This indicator continues to struggle and signal a new trend in either direction.   A slightly positive bias suggests a slow rise in 2018.

 

 

 

Weekend update 032418

Highlight: The 2016 and Trump rally are over and the big question is where’s the bottom – some indicators to watch are discussed in our blog.

The STORMM blog is updated on the weekend and our stockcharts daily. The charts are accessible via the link in the right side bar. Please vote and elect to follow our charts.

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 MACD indicator that invalidate the recent STORMM sell signal reversed this week and again crossed its zero line within two weeks of the previous MACD signal.  This invalidates both signals and restores the STORMM sell signal to a valid signal.   This is a rare alignment of signals and more typically is seen around buy signals.  Adding weight to this sell signal is that all the accompanying indicators are now on a sell signal as well.  Given the market performance in the last week this new signal doesn’t appear to be a surprise but it is significant that it emerged from a strong reversal downward in the market trend – a rare alignment of the STORMM indicators.  It is not clear yet how strong this trend reversal will be so caution.  The VIX signals (below) forecasted this retreating trend in the SP500.

The uptrend from 2016 is likely over along with the Trump rally.  Our STORMM indicators are in very oversold territory but can stay there as the market drops so we turn to other technical to get some estimate of potential bottoms forming.

In the chart below the Elder USHL5 reaching the -5000 area IDes forming bottoms.  The Fib retracements level are first at the 320MA/ Fib 38% retracement level at SP2500 and then the full Fib 50-68% level at SP2240-2350.  The PMO and PPO indicators on the SP500 also confirm the 2016 uptrend is over.

Additionally the other longer term charts on page two of our stockcharts page can be used to ID bottoms.  The one we’re particularly watching closely as we approach the end of March is the SPX monthly chart (second below) for a cross of is EMA10 line which would signal a sell and is also beyond the 2yr bull market limit from the last low in 2015.  Most of these longer term charts have further to fall before forming a bottom so the major question now is this the ending move a retreat that started in Feb. or is it the start of a bear market with the 2009 bull market over.

 

SPXL:  The most recent SPXL buy signal failed on Friday and we’re back to the sell signal from Feb.

Europe:  The STOXX50 buy signal from March 6th has failed and the TMS and Renko charts support the sell signal for the equity market.

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.

An interesting relationship between the SP500 and US bonds on a long-term time frame is included below.   The chart includes the trend lines since 2009 with the up trend channel for the SP500 with recent price action bouncing outside to the upside in recent movements while the 10 year is approaching its down channel line from the 1980’s.  The ratio of these two is in the upper panel and appears to be forming a head and shoulders  pattern that is currently challenging the neck line.   We’re clearly at a key test point for both markets as the 10 year bond approaches 3.0%.  Fib. retracement levels for the SP500 from the 2009 low span SP1500  to SP2000.  We’ll be watching this relationship progress in the next few months.

Weekly SP500 (EOW 3/24/18): Buy All the weekly indicators are on a buy signal for the weekly SP500 but this past weeks price retreat is turning this set of indicators.

Monthly SP500 (EOM- 2/18): Buy All the monthly indicators are on a buy signal but this past weeks price retreat is turning this set of indicators.

US 10 yr Treasury bond yield: No change: The  ten-year bond yield has now three rising yield STORMM signals which is a very strong trend confirmation.   However, the near term weakness in bond yields has been further supported this week with the Renko chart signaling declining yields.  We now have all three of the accompanying charts signaling a decline while the STORMM indicators remain on a strong rising yields signal.  Given the long-term signal and the strength of the short-term signals we expect the divergence to resolve to rising yields.

TNX weekly (3/11/18) Rising yields:   A strong uptrend resumes.

TNX monthly (2/18) Rising yields:  Similar to the weekly chart a strong uptrend resumes.

USD: No change: The USD has finally responded to rising US bond yields and turned this past week to a STORMM buy signal with all the accompanying indicators supporting this signal.

Oil (and commodities):No change:  The recent decline in commodities from the strengthening bond yields and USD appears to have ended and a very unusual fourth STORMM buy signal was generated Feb 12th for oil (not commodities in general).

VIX:  The VIX continued to climb this week and has gone through 2 of its 3 BB sell signals.   There is still room for it to spike higher which is bad for equities.   The TMS and Renko charts support the VIX rally.

Pring business cycle: No change:  The bond component of the three Pring business cycle indicators has been bouncing around its 250dMA but is more convincingly in a negative alignment.  With stocks and commodities in a positive relationship it appears we’re now in stage 4 of the Pring business cycle which is a latter stage status for the market (6 cycles total).  The next cycle would see a decline initiate for equities due to some degree of economic contraction.

Pring deflation: inflation:No change This indicator continues to struggle and signal a new trend in either direction.   A slightly positive bias suggests a slow rise in 2018.

 

 

 

032218 Thursday update; new SP500 signal

Highlight: The STORMM indicators generated a sell signal for the SP500.  The VIX crossed one of three sell signals with more upside room.  Details in the blog discussion.

The STORMM blog is updated on the weekend and our stockcharts daily. The charts are accessible via the link in the right side bar. Please vote and elect to follow our charts.

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 MACD indicator that invalidate the recent STORMM sell signal reversed this week and again crossed its zero line within two weeks of the previous MACD signal.  This invalidates both signals and restores the STORMM sell signal to a valid signal.   This is a rare alignment of signals and more typically is seen around buy signals.  Adding weight to this sell signal is that all the accompanying indicators are now on a sell signal as well.  Given the market performance in the last week this new signal doesn’t appear to be a surprise but it is significant that it emerged from a strong reversal downward in the market trend – a rare alignment of the STORMM indicators.  It is not clear yet how strong this trend reversal will be so caution.  The VIX signals (below) forecasted this retreating trend in the SP500.

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 most recent SPXL buy signal is in danger of failing with any further price retreat.

Europe:No change  The STOXX50 has resolved to generate a new buy signal on March 6th that is supported by both the Renko and TMS charts.

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.

An interesting relationship between the SP500 and US bonds on a long-term time frame is included below.   The chart includes the trend lines since 2009 with the up trend channel for the SP500 with recent price action bouncing outside to the upside in recent movements while the 10 year is approaching its down channel line from the 1980’s.  The ratio of these two is in the upper panel and appears to be forming a head and shoulders  pattern that is currently challenging the neck line.   We’re clearly at a key test point for both markets as the 10 year bond approaches 3.0%.  Fib. retracement levels for the SP500 from the 2009 low span SP1500  to SP2000.  We’ll be watching this relationship progress in the next few months.

Weekly SP500 (EOW 3/17/18): Buy All the weekly indicators are on a buy signal for the weekly SP500.

Monthly SP500 (EOM- 2/18): Buy All the monthly indicators are on a buy signal.

US 10 yr Treasury bond yield: No change: The  ten year bond yield has now three rising yield STORMM signals which is a very strong trend confirmation.   However, the near term weakness in bond yields has been further supported this week with the Renko chart signaling declining yields.  We now have all three of the accompanying charts signaling a decline while the STORMM indicators remain on a strong rising yields signal.  Given the long-term signal and the strength of the short-term signals we expect the divergence to resolve to rising yields.

TNX weekly (3/11/18) Rising yields:   A strong uptrend resumes.

TNX monthly (2/18) Rising yields:  Similar to the weekly chart a strong uptrend resumes.

USD: No change: The USD has finally responded to rising US bond yields and turned this past week to a STORMM buy signal with all the accompanying indicators supporting this signal.

Oil (and commodities):No change:  The recent decline in commodities from the strengthening bond yields and USD appears to have ended and a very unusual fourth STORMM buy signal was generated Feb 12th for oil (not commodities in general).

VIX:  The VIX generate a buy signal on March 11 and we have the Bollinger Bands width tightening.  This could be an early signal for equity weakness and warrants close monitoring into the coming week.

3/22 update: The accompanying TMS and Renko charts now support the VIX buy signal.  And today’s price action took the VIX through its first of three sell signals with plenty of room for a further advance in the VIX.

Pring business cycle: The bond component of the three Pring business cycle indicators has been bouncing around its 250dMA but is more convincingly in a negative alignment.  With stocks and commodities in a positive relationship it appears we’re now in stage 4 of the Pring business cycle which is a latter stage status for the market (6 cycles total).  The next cycle would see a decline initiate for equities due to some degree of economic contraction.

Pring deflation: inflation:No change This indicator continues to struggle and signal a new trend in either direction.   A slightly positive bias suggests a slow rise in 2018.

 

 

031918 Monday update – SP500 signal update

Highlight: The STORMM indicators generate a new signal for the SP500 but not what we expected.  Details in our blog discussion.

The STORMM blog is updated on the weekend and our stockcharts daily. The charts are accessible via the link in the right side bar. Please vote and elect to follow our charts.

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 STORMM indicators crossed into oversold territory with today’s retreat and generated a new sell signal.  However, the MACD indicator crossed its zero line in positive, divergent manner which invalidates any new STORMM sell signal.  So while many of  the accompanying indicators are / or trending to a new sell signal the STORMM indicators remain on a buy signal indicating a minor retreat in the on-going rally from the last set of STORMM buy signals.   The chart below illustrates the current indicator status and is from our Stockcharts album that is available to the public.

 

 

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.

The negative for a sustained equity rally is the rising US bond yields seen on all time frames and their associated indicators.   A very strong trend higher in yields that is a strong ceiling for a sustained equity rally.

SPXL: No change:  Similar to the STORMM signals the SPXL indicator generated a buy signal at the bottom of the last retracement (Feb 12) that remains valid.  And similar to the STORMM indicators the SPXL technical are in oversold territory leaving room for a substantial rally.

Europe:No change  The STOXX50 has resolved to generate a new buy signal on March 6th that is supported by both the Renko and TMS charts.

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.

An interesting relationship between the SP500 and US bonds on a long term time frame is included below.   The chart includes the trend lines since 2009 with the up trend channel for the SP500 with recent price action bouncing outside to the upside in recent movements while the 10 year is approaching its down channel line from the 1980’s.  The ratio of these two is in the upper panel and appears to be forming a head and shoulders  pattern that is currently challenging the neck line.   We’re clearly at a key test point for both markets as the 10 year bond approaches 3.0%.  Fib. retracement levels for the SP500 from the 2009 low span SP1500  to SP2000.  We’ll be watching this relationship progress in the next few months.

Weekly SP500 (EOW 3/17/18): Buy All the weekly indicators are on a buy signal for the weekly SP500.

Monthly SP500 (EOM- 2/18): Buy All the monthly indicators are on a buy signal.

US 10 yr Treasury bond yield: No change: The ten  year bond yield has now three rising yield STORMM signals which is a very strong trend confirmation.   However, the near term weakness in bond yields has been further supported this week with the Renko chart signaling declining yields.  We now have all three of the accompanying charts signaling a decline while the STORMM indicators remain on a strong rising yields signal.  Given the long term signal and the strength of the short term signals we expect the divergence to resolve to rising yields.

TNX weekly (3/11/18) Rising yields:   A strong uptrend resumes.

TNX monthly (2/18) Rising yields:  Similar to the weekly chart a strong uptrend resumes.

USD: No change: The USD has finally responded to rising US bond yields and turned this past week to a STORMM buy signal with all the accompanying indicators supporting this signal.

Oil (and commodities):No change:  The recent decline in commodities from the strengthening bond yields and USD appears to have ended and a very unusual fourth STORMM buy signal was generated Feb 12th for oil (not commodities in general).

VIX:  The VIX generate a buy signal on March 11 and we have the Bollinger Bands width tightening.  This could be an early signal for equity weakness and warrants close monitoring into the coming week.   The accompanying TMS and Renko charts don’t yet support a VIX buy signal.

Pring business cycle: The bond component of the three Pring business cycle indicators has been bouncing around its 250dMA but is more convincingly in a negative alignment.  With stocks and commodities in a positive relationship it appears we’re now in stage 4 of the Pring business cycle which is a latter stage status for the market (6 cycles total).  The next cycle would see a decline initiate for equities due to some degree of economic contraction.

Pring deflation: inflation:No change This indicator continues to struggle and signal a new trend in either direction.   A slightly positive bias suggests a slow rise in 2018.