Thursday, November 27, 2014

JNK vs S&P500

2007-2008 and 2010-2011
    
2010-2011 and 2013-2014
This is a chart of JNK.  It tops out before the DJIA and the S&P500 (charts not included above).
JNK topped in 2007 and in 2010 just before the 2008 and 2011 corrections.  The question is will the 2013 and 2014 in the JNK be suggesting another correction again now?  Or was the October 2014 correction it?  This is another chart to be watched carefully for any further hints.

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Past performance is not indicative of future results



Wednesday, November 26, 2014

Short Term Forecast

Review of the last Short Term Forecast Dates Made Nov 6th
- Forecast Trend Change Dates are (+/-)
1) Nov 14th-16th +/-
2) Nov 29th +/-

COMMENTS
On one of the forecast dates, Oct 17th +/-, the market started a rally from the Oct 15,16 bottom.  The next date to watch is Nov 29th especially since the intermediate term forecast is for a down bias after the period of mid to late November. 

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  
 
NEW SHORT TERM FORECAST DATES
- Forecast Trend Change Dates are (+/-)
1) Dec 6 +/-
2) Dec 11-14 +/-
3) Dec 16 +/-
4) Dec 25 +/-

Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates

Intermediate term cycles forecast at this time points up into mid to late November and then a down bias into December/January. 

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Past performance is not indicative of future results

Monday, November 17, 2014

DJIA Seasonality Charts & Data


                       This chart is courtesy of EquityClock.com

There are two line charts.  A blue line and a magenta line.  As in the legend the blue line represents the composite of Mid-Term Election Years and the magenta line represents a composite of many years.  The Timeframe: 81 year range ending 12/31/2009.
As suggested by this chart we are in the seasonally favorable period.

Per EquityClock.com
The Markets
Stocks traded flat on Friday as the momentum following the significant gains recorded since mid-October shows signs of waning.   The S&P 500 Index recorded a gain of a mere 0.02%, however, the fourth straight week of gains was logged, adding another 0.39% to chart further all-time highs.   Gains during the week ahead my be difficult to achieve as November options expiration drags on broad equity benchmarks.   Over the past 60 years, the S&P 500 Index has averaged a loss of 0.03% during options expiration week.   Losses were realized in approximately half of the periods.   This year’s November option expiration occurs much later than usual on the 21st; similar instances of November 21st expiration dates have been particularly negative for stocks.   The S&P 500 Index has recorded a decline of 1.16% during this late expiration week with negative results recorded in 63% of periods.   The last instance was in 2008 when a November option week decline of 8.39% had a significant impact on the statistics for this downbeat timeframe.   The good news is that the losses are typically reversed in the week that follows.   The S&P 500 Index averaged a gain of 0.49% post expiration week with positive results realized in nearly two-thirds of the periods.   Post expiration week generally encompasses US Thanksgiving, providing further buoyancy to equity benchmarks during what is a holiday shortened period.

S&P 500 Index returns surrounding November Options Expiration
Year Options Expiration Week Return Post Expiration Week Return
2013 1.56% 0.37%
2012 -1.45% 3.62%
2011 -3.81% -4.69%
2010 0.04% -0.86%
2009 -0.19% 0.01%
2008 -8.39% 12.03%
2007 0.35% -1.24%
2006 1.47% -0.02%
2005 1.10% 1.60%
2004 -1.17% 1.05%
2003 -1.43% 2.21%
2002 1.69% 2.28%
2001 1.64% 1.03%
2000 0.13% -1.90%
1999 1.86% -0.38%
1998 3.36% 2.47%
1997 3.74% -0.80%
1996 0.93% 1.51%
1995 1.24% -0.02%
1994 -0.19% -1.99%
1993 -0.60% 0.10%
1992 1.00% 0.82%
1991 -2.61% -1.69%
1990 1.08% -0.64%
1989 0.74% 0.69%
1988 -0.54% 0.29%
1987 -1.48% -0.69%
1986 0.56% 1.37%
1985 2.27% 1.72%
1984 -2.09% 1.72%
1983 -0.72% 1.27%
1982 -1.80% -1.56%
1981 0.03% 2.78%
1980 1.43% 1.01%
1979 2.25% 0.85%
1978 -0.37% 1.45%
1977 -0.68% 1.43%
1976 2.70% 1.21%
1975 -1.58% 1.91%
1974 -4.00% -4.19%
1973 -1.35% -4.27%
1972 1.55% 1.54%
1971 -0.55% 0.36%
1970 0.42% 2.64%
1969 -2.83% -0.54%
1968 1.76% 0.49%
1967 0.66% 1.16%
1966 -0.83% -0.50%
1965 -0.33% -0.23%
1964 1.26% -1.30%
1963 -1.38% -3.79%
1962 2.35% 2.29%
1961 0.77% 0.31%
1960 -0.09% 0.56%
1959 0.21% 1.28%
1958 -0.73% -0.42%
1957 0.45% 1.24%
1956 -1.29% -1.31%
1955 0.66% 0.31%
1954 -0.27% 3.29%
Average: -0.03% 0.49%
Frequency of Gains: 32 38

Now let's compare 2014, a Mid-Term Election year ending in a "4", to other such years in this chart above.

Year    Options Expiration Week Return     Post Expiration Week Return
1954                     -0.27%                                    3.29%
1974                     -4.00%                                   -4.19%
1994                     -0.19%                                   -1.99%
2014                         ?                                             ?
Average:                       -1.49%                                   -0.96%
Frequency of Gains:    0 out of 3                           1 out of 3

When looking at similar years as 2014, the statistics look different than in the large data chart above including all years from 1954 to 2013.

Now let's look at all years ending in a "4" (the decennial pattern)    

Year    Options Expiration Week Return     Post Expiration Week Return
1954                     -0.27%                                    3.29%
1964                      1.26%                                   -1.30%
1974                     -4.00%                                   -4.19%
1984                     -2.09%                                    1.72%
1994                     -0.19%                                   -1.99%
2004                     -1.17%                                    1.05%2014                                                                     
Average:                       -1.08%                                   -0.24%
Frequency of Gains:    1 out of 6                           3 out of 6

Lets compare the analysis summaries from above

               Options Expiration Week Return     Post Expiration Week Return
1st Data Chart:
Average                -0.03%                                        0.49
# of Gains          32 out of 60=53%                   38 out of 60=63%
2nd Data Chart:
Average                -1.49%                                       -0.96%
# of Gains            0 out of 3=0%                          1 out of 3=33%
3rd Data Chart:
Average                -1.08%                                       -0.24%
# of Gains           1 out of 6=17%                         3 out of 6=50%

Observation: When you filter the years 1954 to 2013 you make a better comparison to 2014 and the results change.
The top blue and magenta line chart took into consideration the Mid-Term Election Years.  The 60 years of data should have made a similar comparison.

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Past performance is not indicative of future results

Velocity of Money

StockTiming.com
by Marty Chenard

Stagnant Money?
Food for thought:  The Central Banks are creating imbalances that are a growing problem.   Along with this, the G20 approved a 2 Trillion dollar five year plan to try and reverse their economic weakness.  If these countries are in such a weak economic situation, how do you think they will get the 2 trillion dollars they are talking about?
 
Below is the St. Louis Fed's chart on the Velocity of Money.   Money is not turning over so economic weakness is still a problem.   With all the QE money pumped in, you would think that some improvement would show up.  How is stagnant money supposed to help an economy expand?





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This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions. 
Past performance is not indicative of future results
 

Thursday, November 6, 2014

Short Term Forecast

Review of the last Short Term Forecast Dates Made Oct 20th
- Forecast Trend Change Dates are (+/-)
1) Oct 22nd-24th +/-
2) Oct 26th-28th +/-
3) Nov 7th +/-


COMMENTS
On one of the forecast dates, Oct 17th +/-, the market started a rally from the Oct 15,16 bottom.  The next dates, Oct 22-24 +/-, could be called a running correction into the next set of dates, Oct 26-28+/-.  This occurred due to the strength and momentum of the rally.  Any dips were immediately bought into.    The next date is Nov 7th and any comments on that date will have to wait until the next update.  Congratulations to all of you that were able to catch part or all of this great rally.

Following cycles has been good to use as a guide or as a potential future road map, but, other tools must always be used for confirmation of any forecast trend change date.  
 
NEW SHORT TERM FORECAST DATES
- Forecast Trend Change Dates are (+/-)
1) Nov 14th-16th +/-
2) Nov 29th +/-


 For those of you that follow Elliott Waves, the SPY Weekly chart made a minimum count of 5 waves up from the March 2009 bottom to the Sept 2014 top.  The intraday chart of the SPY relabeled the EW count down from the Sept 19th top.  It was a minimum of 5 waves down and now the EW count is three waves down to the Oct 15th bottom.  It suggests that we are in a 4th wave counter trend rally now.   If these counts are correct it now suggests that the 4th wave should stall soon and resume the down trend and make a new low.  But, as usual, always watch your indicators for hints of market direction as an EW count can change at anytime.
THIS SCENARIO DID NOT WORK OUT AND THE COUNT DOWN FROM SEPT 19TH WAS RELABELED AS AN A-B-C CORRECTION WHEN THE MARKET RALLIED TO NEW ALL TIME HIGHS.  THE 5 WAVES UP FROM THE MARCH 2009 LOW IS STILL THE CURRENT COUNT.
 
Since cycles do not distinguish between trading days and calendar days, the cycle dates may come out on Holidays or weekends.  So the dates suggested that do fall on such days are to be used as a window.   So, as always, other tools must always be used for confirmation of any forecast cycle trends.  All forecast dates will still be noted with a "+/-" because the cycle dates are not always as perfect as we would like them to be.  Although they have been pretty accurate.   

Intermediate Term Forecast Trend Change Dates


Intermediate term cycles forecast at this time points up into mid to late November and then a down bias into December/January.  Today the AAII weekly sentiment was released.  A bearish reading of 15.1% was reported and it is the lowest reading since the July 14,2005 reading of 14.04%.  At that time the market had a shallow pullback and then rallied in a big way in the 4th quarter of 2005 and then into 2006 & 2007.

Keep following JustSignals using Twitter or Follow By Email.   
Just submit your email address in the box on the Blog homepage
This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions. 
Past performance is not indicative of future results

TRIP

Chart Courtesy of eSignal
There were many hints here that TRIP was going to have a rough ride.
1) the price bars at the yellow arrow turned red
2) the Elliott Wave count started labeling a 1,2,3,4,5 impulse wave down
3) the black Relative Strength line broke support at the horizontal fushia line at the blue arrow
4) then the Relative Strength line turned negative as shown by the blue line

The relative strength line is now in an area of previous support as is the price chart and the Elliott Wave count has completed a minimum 5 wave count, but, will it fill the gap from July 2013 ?

This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions. 
Past performance is not indicative of future results