January 14, 2017 1 Comment
Highlight: Introducing a new set of technical indicators for the SPXL a 3x of the #SP500 index
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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: A very quite week that continued with a STORMM buy signal for the SP500 we now have the accompanying charts except the TMS and Pring indicators are confirming this new signal. Earlier in the week a developing STORMM sell signal was of concern but failed yesterday to reach full validation. With little change in the SP500 we’re turning to a new set of indicators for short term tracking of the 3x SP500 – SPXL:
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: current signal is on a buy with a 4 and 8% stop. The current SPXL signal aligned with the STORMM buy signal.
Europe: No change The STOXX50 has a buy signal from Nov 8th with the TMS and Renko charts supporting this call. Similar to the SP500, the STORMM indicators forecast a minor retracement in the major trend upward and we expect this move in the coming week.
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 1/14/16): Buy All the weekly indicators are on a buy signal for the weekly SP500.
Monthly SP500 (EOM- 12/16): Buy All the monthly indicators are on a buy signal.
US 10 yr Treasury bond yield: 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. However the TMS, Renko, and Pring accompanying indicators do not yet support this signal. Resolution of this divergence (likely to rising yields given the weekly and monthly major trends upward) should occur soon.
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 (1/14/17) 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 (12/16) Rising yields: The monthly US bond yield indicators has joined the weekly and confirmed rising yields from all.
USD: No change: All the charts for the USD are developing sell signals but are far from convincing or validated signals. Therefore we’re sticking with the confirmed buy signals from the fall of 2016 until the picture is resolved – likely as the bond yield major trend upward reasserts itself in the next 1-2 weeks.
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: No change The VIX generated two sell signal last week as equities weakened. The VIX is now declining with the TMS and Renko charts starting to turn. Mid channel support for the VIX did not develop and the VIX is now moving to oversold levels.
Pring business cycle:N o 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 stengthening 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.