020919 Weekend update

Highlights:  Vix generates a new buy signal = negative for equities.  Details at STORMM Blog

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 STOCKCHARTS: STORMM public list.  With a similar time scale its easy to compare signals across multiple charts by scrolling down the page.

SP500:  The four STORMM indicators are overbought and aligned for a new sell signal but again as in January indicator #1 is extremely over bought and signals a minor pullback to be followed by a move to recent or greater highs.   The accompanying indicators are all in overbought territory as well.

 

SP500:Long term technicals: This 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 2/9/19): 2 Sell: 1 Buy: The three weekly charts are starting to recover from the December selloff but so far only one has turned to a bullish signal.

Monthly SP500 (EOM- 1/19): Sell:  All three monthly SP500 charts are on a sell signal.

VIX: The VIX cross of it’s lower Bollinger Band is complete which generates a new buy signal that is a negative near-term for the SP500.    Additionally, its BB width is tightening which adds to the significance (validity) of this new signal.

US 10 yr Treasury bond yield: No change: The STORMM indicators have quickly moved to overbought levels for the 10 yr bond yield and have generated a new declining yield signal.  We now have the TMS and Renko indicators supporting a declining yield STORMM signal with the Pring KST indicator trending to confirm.

TNX weekly (2/9/19) Rising yields:   A strong uptrend continues but is weakening rapidly.

TNX monthly (1/19) Declining yields:  The monthly yield chart has turned ahead of the weekly and confirmed the STORMM declining yield signal.

USD:  Similar to the rapid switch in bond yields from rising to declining, the USD has gone from a STORMM buy to sell signal.  Similar to the 10yr yield indicators, two of the three have confirmed a sell signal for the USD.

The USD is very close to invalidating its last STORMM sell signal.  Given that US bond yields continue to decline this strength in the USD is signaling global move to safety which is a negative for equities and commodities.

Oil (and commodities): No change: Oil and commodities are on a buy signal and the recent overbought alignment of these indicators has signal a minor decline which has completed and a continued major rally which is on-going.

Pring business cycle: Advisor Perspectives The Pring business cycle graphs have bonds moving above its 250dMA while equities and commodities are below. We’re not fully convinced the positive bond graph will hold and the latest STORMM signal for resumption of rising rates supports this view.  Therefore we’re assuming we’re in a stage 5 to stage 6 transition in the Pring business cycles.   Stage five advises to reduce stock holdings while stage six advises to reduce inflation hedges (raise cash).

Pring deflation: inflation:  This indicator is just starting to turn toward inflation as the USD is cracking after its significant spike.

 

 

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