charts: DIA & XIV

Courtesy of ChaikinAnalytic.com

Courtesy of ChaikinAnalytics.com

The two charts above are very interesting.  Both went from OS to OB while the CMF was falling.  This usually indicates weakness.  The Futures are down big this morning and that is not a surprise.  The big "but" here seems to be in the action of the RSvsSPY.  At "this time" a market pullback maybe considered a buying opportunity "as long as" the RSvsSPY manages to stay relatively in the green area or close to it without a definate move into the red area.

More on this later...

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Past performance is not indicative of future results

Harry Dent's Spending Wave

Courtesy of Harry Dent

The above chart was updated in 2013.
In general the shape of the red spending wave and the blue line of the DJIA (adjusted for inflation) share a very common shape.  The yellow areas highlight common highs and lows.  The two black vertical lines display the 2016 forecast high and the 2021 forecast low.  What is very interesting is that JustSignals LT cycles are calling for similar highs and lows.  Rough times just ahead is a very good possibility.

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Trading Patterns & First Day Gains

Next Monday is May 2nd and the first trading day of the new month.  The following post was last made on October 28, 2015, so now is a good time for a refresher on this subject.

* Take a look at the 3rd chart below by JEFFREY A. HIRSCH, editor-in-chief of the Stock Trader's Almanac. The data shows that the month of May has had the largest total DJIA points gained on the first day of the month from September 1997 to December 2012.

 





Browsing the Fidelity Customer Service Learning Center can be very useful

Monthly trading patterns: Human behavior shapes market activity
By Jeffrey A. Hirsch
 www.stocktradersalmanac.com

Click on the following link for the full article
http://bit.ly/1HbpM7W

The following is an excerpt from the article

Monthly cash inflows into S&P stocks  

For many years, the last trading day of the month plus the first four of the following month were the best market days of the month. This pattern is shown in Figure 1, where from 1953-1981 the S&P 500 shows these five consecutive trading days posting gains a much larger percentage of the time than the other 16 trading days of the average month. The rationale was that individuals and institutions tended to operate similarly, causing a massive flow of cash into stocks near beginnings of months.

Courtesy of Jeffrey A. Hirsch

“Front-running” traders took advantage of this phenomenon, drastically altering the previous pattern. Figure 2, which follows the S&P 500 from 1982 onward, shows the trading shift caused by these “anticipators” to the last three trading days of the month plus the first two. Another astonishing development shows the ninth, tenth, and eleventh trading days rising strongly as well. One possible explanation is that this mid-month bulge is caused by the enormous growth of 401(k) retirement plans (participants’ salaries are usually paid twice monthly).

 

Courtesy of Jeffrey A. Hirsch

------- > > > DJIA gains more on first day than all other days

Over the last 15 1/4 years the Dow Jones Industrial Average has gained more points on the first trading days of all months than all other days combined. While the Dow has gained 5481.72 points between September 2, 1997 (7622.42) and December 31, 2012 (13104.14), 5323.19 points were gained on the first trading days of these 184 months. The remaining 3674 trading days combined gained just 158.53 points during the period. This averages out to gains of 28.93 points on first days, in contrast to only 0.04 points on all others. See Table 1.
Note that September 1997 through October 2000 racked up a total gain of 2632.39 Dow points on the first trading days of these 38 months (winners except for seven occasions). But between November 2000 and September 2002, when the 2000-2002 bear markets did the bulk of their damage, frightened investors switched from pouring money into the market on that day to pulling it out in fourteen months out of twenty-three. This netted a 404.80 Dow point loss. The 2007-2009 bear market lopped off 964.14 Dow points on first days in 17 months from November 2007 to March 2009. First days had their worst year in 2011, declining seven times for a total loss of 644.45 Dow points.
First days of June have performed worst. Triple digit declines in four of the last five years have resulted in the worst net loss. August is the second net loser. In rising market trends, first days perform much better as institutions are likely anticipating strong performance at each month’s outset. S&P 500 first days track the Dow’s pattern closely but NASDAQ first days are not as strong with weakness in April, August, and October.

Courtesy of Jeffrey A. Hirsch

 For more information contact
 JEFFREY A. HIRSCH, editor-in-chief of the Stock Trader's Almanac and Almanac Investor newsletter, and the author of The Little Book of Stock Market Cycles (Wiley, 2012).
 www.stocktradersalmanac.com

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Past performance is not indicative of future results

chart: AAPL

Courtesy of ChaikinAnalytics.com

Just one opinion...
Do your own due diligence...
Earnings out today ATB...

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Past performance is not indicative of future results

chart: $SPX/$VIX

Courtesy of StockCharts.com

Green = buy (use stops)
Red = sell (use stops)

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Past performance is not indicative of future results

What is Picasso saying?

This earlier post is being repeated again since nothing has changed much since and the Picasso dates have been accurate, so far.

This was posted on February 21,2016 & March 29,2016:
Again, Picasso is not displaying any swings going forward for the DJIA.  So it is not easy to interpret a near flat line with an upward bias into April & "maybe" May.  But, GE is the only stock left in the Dow30 that is one of the original DJIA stocks.  Although the price charts of GE & the DJIA are not similar, their changes in trend have been similar in the past.  Due to this similar trend between GE & the DJIA, it is best that Picasso's readings for GE be used temporarily as a proxy for the DJIA.

In looking back we can see that Picasso was able to look into March and April and see that the rally should continue higher and it did.  Picasso is now approaching potential turn dates.  Below are dates that are now appearing after the, as described above, "a near flat line with an upward bias into April & "maybe" May".

Picasso's dates are always +/-

April 7 to 12 - low
April 20 to 25 - high
April 29 to May 2 - low
May *7 to 17 - high
June *17 - low

Intermediate cycles - Late April early *May high & *June +/- low

* = potentially important dates


The Average Election Year chart has been a good guide, so far.  See chart on March 24,2016 post.

The 8th Year of a Two Term President chart has been an excellent guide, so far.  See chart on March 24,2016 post.

The market is short term OB and the cycles still looks positive.  But, we are now in the window of the first turn date suggested by the 8th Year of a Two Term President chart and the Average Election Year Pattern.
The next group of suggested turn dates for a high are between April 20 & May 17 with a cluster of cycles on or around  May 7.
So watch indicators carefully for confirmation of a high.

More, as it unfolds.



From the April 21,2016 Post - Thought it would be a good idea to repeat this as well.






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2016 revisited

Courtesy of chartoftheday.com

This chart has been posted on this blog several times.  The chart above has been updated with a few more notations.  The stock market has been in sync with the Average Election Year chart up until early April.  So the red arrows and blue arrows were added to hopefully show where some future turning points may occur with the help of both the Average Year and the Average Election Year instead of just using the Average Election Year by itself.  If you take a close look at this chart you will see that both charts were not in sync with each other from Jan - April and that they do seem to be in sync from May - Dec.

In addition, look at this past post on the Escape Velocity at:
 http://justsignals.blogspot.com/2016/03/2016-bear-or-bull.html

Putting these two items together is very compelling for 2016.

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Past performance is not indicative of future results

China Yuan Gold FIx

ZeroHedge.com
Submitted by Tyler Durden on 04/20/2016 12:51 -0400


China's shift to an official local-currency-based gold fixing is "the culmination of a two-year plan to move away from a US-centric monetary system," according to Bocom strategist Hao Hong. In an insightfully honest Bloomberg TV interview, Hong admits that "by trading physical gold in renminbi, China is slowly chipping away at the dominance of US dollars." Gold, silver, and petroleum "are the three USD-based commodites that China wants most control of" according to Hong but "gold in particular is one of the commodities that China is hoarding very hard."

Click on this link for the full article by Zero Hedge

bit.ly/1WHD2M8

 

 

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chart: Buying Pressure Falls Again

As they say, A Picture Is Worth A Thousand Words.
Buying pressure dropped to 8 on today's close.  That broke through to a new low.  This indicates weakness in the market.   The highlights on this chart are pretty self explanatory.  Another caution light is flashing so be on your toes.

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Sy Harding's STS

This was posted on Oct 15,2015 and since tomorrow is April 20,2016 it is timely to post it again.

Excerpts from "Beat the Market the Easy Way" by Sy Harding
"Sell in May and Go Away"
"Ned Davis Research Inc. published numerous studies showing the positive  historical results of being invested in the markets for the seven month period of October 1 to May 1, and being in cash the other five months."
"Thus an investor standing aside during the market's unfavorable seasons not only matched the buy and hold performance of the S&P 500 and did so with only 50% of market risk, but also avoided the emotional stress  of seeing portfolios often plunge precipitously during unfavorable seasons."

  "IT IS NOT A FIXED 6-MONTHS IN, 6-MONTHS OUT!"

It is BEST to read this book.  The book is available at many libraries, either in paper or digital versions or it can be purchased easily online.

In summary, after the research made by Ned Davis Research Inc., Yale Hirsch of the Hirsch Organization and Alan Newman, editor of the Crosscurrents newsletter, Sy Harding's firm, Asset Management Research Corp. conducted more detailed research.  In their research they found that when the Moving Average Convergence Divergence (MACD), developed by Gerald Appel, was applied, the performance was much better.
"It works this way in our (Sy Harding's) seasonal strategy."
"If MACD is on a technical buy signal, indicating a rally is underway, when the October 16 earliest calendar date for seasonal entry arrives, we will enter at that time."
"However, if the MACD indicator is on a sell signal when the October 16 calendar date arrives, indicating a market decline is underway it would not make sense to enter before that decline ends, even though the average best calendar entry date has arrived.  In that event, our (Sy Harding's) Seasonal Timing Strategy simply waits to enter until MACD gives it's next buy signal, indicting that the decline has ended."
Use the same method in reverse when April 20 arrives to better pinpoint the end of the markets favorable period in the Spring.

Please take the time to read Sy Harding's book.  It is relatively short and easy to read and it has many more exciting findings by Sy Harding.

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Brother's Earl & Earl2

By Danny

US markets have climbed to new highs for the year, in line with our analysis of two weeks ago. The Nasdaq and S&P 500 are now bumping into the overhead resistance area formed by last year's highs. Of course, most traders see that and most traders expect some kind of pullback soon. Will we get it? Let's have a look at the Nasdaq chart:

Courtesy, By Danny of LunaticTrader

 We may see a test of the 5000 level in the coming days. But bearish divergences have been shaping up in both the Earl and MoM indicators, while the slower Earl2 (orange line) is clearly headed down from a major peak. So, the chances for a sudden pullback are high and this is not an attractive setup to enter the market for those who are still looking to get in on the long side. In the best case we may get a sideways chop until the indicators are back in the bottom zone. Equally likely is a drop to 4700 or so.

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Past performance is not indicative of future results

chart: Buying Pressure KEEPS Falling

As they say, A Picture Is Worth A Thousand Words. 
Buying pressure dropped to 9 on Friday's close.  That broke through a previous low and now it has made a new low.  This indicates some weakness in the market.   The highlights on this chart is pretty self explanatory.  Another caution light is flashing to be on your toes.

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chart: SPY & the Hi Lo 10dma

The 10 Day Hi-Lo is flashing a caution light.  When the SPY makes a higher high while the 10 day Hi-Lo starts to drop, be on watch.  In the past divergences appear at most turns in the market.  At the very least, the 10 day Hi-Lo develops lower highs and lower lows at or near tops and higher highs and higher lows at or near bottoms.
This one down turn in the 10 day Hi-Lo is not by itself an indicator of a guaranteed turn, but, it is a waring that it should be carefully watched.

Buying Pressure has been falling and we are getting closer to the potential ST and Intermediate Term forecast turns in the market.

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chart: Buying Pressure FALLING

Buying Pressure Negative Divergence

 This chart is obvious about it's course.  Negative divergence is showing it's ugly head again.  This chart has in the past been a leading indicator.  Other indicators need to confirm what this chart is currently saying.  Keep an eye on them and listen to the periodic posting of what Picasso is saying also. 

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chart: SPY Buying Pressure

SPY (top) & Buying Pressure (bottom)

For those of you that have seen the Buying Pressure chart in the past you will see a pattern that repeats itself very often.  It tends to lead the market at turns.  For those of you that are not familiar with this chart, please look at past posts.

One easy way to find them is to GOOGLE the following  
justsignals.blogspot.com buying pressure

This will get you a list of the posts and just click on them to review and get familiar with them.

Buying Pressure has started to have a negative divergence with the SPY daily chart.  Once this happens a caution light goes on.   Confirmations must follow before taking any actions.  This mostly leading indicator has turned just before the time period of the next potential turn as seen in many charts posted on this blog.  Take a few minutes to go back and review them.  It will time time worth spending.  Update yourselves and get more familiar with all the potential turning points and always wait for confirmations.

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chart: SPX vs Composite Cycle

Courtesy of Time-Price-Research

This chart was posted on the Time-Price-Research website and it certainly was interesting enough to share here since it is very similar to what has been posted on this site over the last several months.

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Past performance is not indicative of future results

chart: daily SPY, what to do now

Courtesy of eSignal

Recent posts have shown that the stock market is in OB territory.  What do we do now and what should we look for?  In the daily SPY chart above there are a few indicators that are similar to most indicators that are commonly used. 
First window is a price chart with a blue trend line.
Second window is a MACD.
Third window is the ADX.
Fourth window is a fast OB/OS indicator.
When the price breaks below the blue trend line a sell signal is generated as you can see earlier in Dec.
Then the MACD should also give a sell signal also seen earlier in Nov.
The ADX's DMI red line will cross above the DMI blue line indicating more selling than buying as seen in Dec.
The price will then "probably" be short term OS.  In many cases, but not in all cases, the market will try to rally before turning down again.  If you look at the fourth window you will see the indicator in OB territory ( green circles) after the sell signals in the first three windows.  When this happens it is usually a good time to lighten up on weak stocks, sell and or sell short and of course with very important stops in place.   Because, head fakes do happen!
Today, morning strength was given back in the afternoon and that is usually a sign of a weak market. 

Be careful and ALWAYS USE STOPS !

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Past performance is not indicative of future results

What is Picasso Saying?

This was posted on February 21,2016 & March 29,2016:
Again, Picasso is not displaying any swings going forward for the DJIA.  So it is not easy to interpret a near flat line with an upward bias into April & "maybe" May.  But, GE is the only stock left in the Dow30 that is one of the original DJIA stocks.  Although the price charts of GE & the DJIA are not similar, their changes in trend have been similar in the past.  Due to this similar trend between GE & the DJIA, it is best that Picasso's readings for GE be used temporarily as a proxy for the DJIA.

In looking back we can see that Picasso was able to look into March and April and see that the rally should continue higher and it did.  Picasso is now approaching potential turn dates.  Below are dates that are now appearing after the, as described above, "a near flat line with an upward bias into April & "maybe" May".

Picasso's dates are always +/-

April 7 to 12 - low
April 20 to 25 - high
April 29 to May 2 - low
May *7 to 17 - high
June *17 - low

Intermediate cycles - Late April early *May high & *June +/- low

* = potentially important dates


The Average Election Year chart has been a good guide, so far.  See chart on March 24,2016 post.

The 8th Year of a Two Term President chart has been an excellent guide, so far.  See chart on March 24,2016 post.

The market is short term OB and the cycles still looks positive.  But, we are now in the window of the first turn date suggested by the 8th Year of a Two Term President chart and the Average Election Year Pattern.
The next group of suggested turn dates for a high are between April 20 & May 17 with a cluster of cycles on or around  May 7.
So watch indicators carefully for confirmation of a high.

More, as it unfolds.

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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

charts SPY vs FXY

Courtesy of TradeStation

Courtesy of TradeStation

Note that SPY gap down was being bought into and the gap up in FXY was being sold into.
Keep an eye on them.

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Past performance is not indicative of future results

Best Months for Gains

Courtesy of Bloomberg

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Past performance is not indicative of future results