February 4, 2017 Leave a comment
Highlight: The STOXX50 and USD generate new signals this week.
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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 a developing sell signal that was cancelled with Friday’s rally. We remain in a buy STORMM signal with nearly all the accompanying indicators confirming. The R.Walker series did initiate a sell signal mid-week but this has failed after the Friday rally.
SP500 Stratasearch: We’re introducing 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, PctProfitable 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 remains on a sell signal despite Friday’s rally.
Europe: The STOXX50 again generated a STORMM buy signal that is not yet 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 2/3/17): Buy: All the weekly indicators are on a buy signal for the weekly SP500.
Monthly SP500 (EOM- 1/17): Buy All the monthly indicators are on a buy signal.
US 10 yr Treasury bond yield:No change: The dual STORMM rising yields signals from late July and September have forecast the amazing spike in yields that we continue to watch. Recently from overbought level for the STORMM indicators yields have again completed a minor trend decline. This week the STORMM indicators generated a third rising yield signal which is very unusual. In the last two weeks all the accompanying 10yr bond yield indicators have turned to rising yields supporting the forecast for rising yields across all our indicators from daily to monthly.
Long term bond yields: We have two charts for the US ten-year bond yield to compliment the SP500 weekly / monthly charts using the same set of indicators for both time frames.
TNX weekly (2/3/17) Rising yields: The amazing climb in US bond yields has finally turned the weekly chart to a confirmation of climbing yields – clearly a major turn in bond yields is now occurring.
TNX monthly (1/17) Rising yields: The monthly US bond yield indicators has joined the weekly and confirmed rising yields from all.
USD: The USD STORMM indicators have generated a buy signal that is not yet supported by the accompanying indicators but does correlate with the continued rise in US bond yields. This new signal will be challenged by political headwinds.
Oil (and commodities): No change: The recent drop in oil prices completed a minor bounce as the indicators forecast and has resumed its major trend downward. The price action has invalidated the mid-Sept STORMM buy signal and returned us to a STORMM sell signal from Jun 9th.
VIX: The VIX bounced around all week and in the process generated a sell signal and then a new buy signal but settled the week in the lower end of its BB range in neutral.
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: The Pring inflation deflation indicator has a negative KST and the CRB index has crossed to the negative its 200dMA. However the CRB and GTX indexes are slowing rising above their moving average lines suggesting inflation is strengthening but needs further progression to confirm the rising trend.