charts: September Stock Markets

Courtesy of thepatternsite.com

Courtesy of thepatternsite.com

Possible Explanation By Investopedia
Since 1950, the month of September has seen an average decline in the Dow Jones Industrial Average (DJIA) of 1.1%, while the S&P 500 has averaged a 0.7% decline during September. Since the Nasdaq was first established in in 1971, its composite index has fallen an average of 1% during September trading. This is, of course, only an average exhibited over many years, and September is certainly not the worst month of stock-market trading every year.
There are several theories which attempt to explain this phenomenon. One particular theory points to the fact the summer months usually offer light trading volumes on the stock market, as a good deal of investors typically take vacation time and refrain from selling stocks from their portfolio. Once fall begins these investors typically return to work and exit positions they had been planning on selling. When this occurs, the market experiences increased selling pressure, and thus an overall decline.
*As well, many mutual funds experience their fiscal yearend in September. Mutual fund managers, on average, typically sell losing positions before year end, and this trend is another possible explanation for the market's poor performance during September.

Data from moneychimp.com

            Yrs  Yrs  Avg

Month  Up  Dn   Gain/Loss

Jan        39   26   +0.94%

Feb       37   28    -0.13%

Mar       42   23   +1.10%

Apr       44   21   +1.36%

May      37   28   +0.11%

Jun       33   32    -0.07%

Jul        35   30   +0.83%

Aug     37   28    -0.18%

Sep     29   36     -0.65%

Oct     40   25     +0.68%

Nov    43   22     +1.37%

Dec    49   16     +1.59%

The data above supports that September is the worst month of the year and that the best six months of the year is November to April.

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Past performance is not indicative of future results

1st Day of the Month Gains

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: SPY Buying Pressure Weakening

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 go to "Search This Blog" 
  Then enter "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.  Take a few minutes to go back and review some older posts.  It will be time worth spending and always wait for confirmations.

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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

Picasso ST Cycle Dates

In this update only the dates will be mentioned with an "H" for high and a "L" for low.
The chart amplitude can and will be misleading at times.
In addition, it is the date that is most important rather than if that date is a projected high or low with amplitude as sometimes shown on the chart.
One important reason is because in some cases a date may invert and the amplitude and the "H" or "L" may not mean anything.
A low may actually turn out to be a high and visa versa.
Also it is very important that other tools always be used to confirm any potential ST Cycle Date.

Picasso Dates, always +/-
8/31-9/3* H
9/17 L
9/20-26 H
10/5-9 L

* Note that 9/3 is an Anniversary Date of the 1929 high on 9/3/1929

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepageThis 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

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 warning that it should be carefully watched.

Buying Pressure has been falling also.   See the current post of Buying Pressure.

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Past performance is not indicative of future results

chart: SPY Buying Pressure

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 go to "Search This Blog" 
  Then enter "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.  Take a few minutes to go back and review some older posts.  It will be time worth spending and always wait for confirmations.

Keep following JustSignals using Twitter, @StockTwits 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

7th & 9th Years of the Decennial Pattern

                                                  

        

                                                    

The above charts start from 1915 and go to the current year 2016.

Each decade is shown separately.  As you can see the 7th and 9th years have been highlighted in yellow.

The reason for this was to show that highs have been made in the 7th and 9th years of a decade.

In some cases a high was made in the 6th year as in 1916-17, 1946, 1956-57, 1966 and 1976-77.

Since the current bull market which started in 2009 is 7 1/2 years mature, it is likely that 2016-17 & 2019 may put a damper on the bull and give way to another bear market.

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Past performance is not indicative of future results

Druckenmiller & GLD

In the second quarter of 2015 Stanley Druckenmiller bought 2,880,000 shares of GLD.

In the first quarter of 2016 he reduced that position by 30%.

In the second quarter of 2016 he sold out his entire position.

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Past performance is not indicative of future results

Bits of evidence – not proof

Market Letter

August 16, 2016…………………………………………..

Hello!

The Dow, the S&P 500, and the NASDAQs had been trading generally sideways for at least two weeks in an overbought condition attended by extremely high bullish investor sentiment.  Then, as a child tests his parent for days on end, the bulls continued to challenge and prod, leading to several days of gap-up Opens which settled back into sideways moves for the rest of the day.  The situation was akin to that of an inflating balloon, in which the observer knows what the eventual outcome will be – the only question being When it will happen.  It’s too soon to be certain; but it may be that the balloon popped today.

In recent weeks and moonths, the Russell 2000 and the S&P 600 SmallCaps had been lagging the Dow, theS&P 500, and the NASDAQs; but recently they had caught fire and had set new Highs of their own, which signaled a return to the Bull party of the “man-in-the-street” investor.This phenomenon typically occurs at the very end of a bull trend, and is characteristic thereof.  It is a powerful warning that the party is ending.  It is also a signal that the “little guy” is about to be burned, unless he is very careful and fleet of action.

On the 60-minute chart of the NASDAQ Composite, please note the worry at the top, where a series of small downmoves (together) bearishly engulfed the single spike-bar to the top; and, especially, the Gap on the downswing which followed – and the relatively strong Down Close.

Please also note the clearly bearish cast of the topping-and-reversing pattern shown on the S&P 600 SmallCaps chart.

All of the factors cited above are bits of evidence – not proof – that the tide may have turned, to the downside.  I think that the odds favor a decline; and it could be substantial.  My suggestion is toseriously consider taking some of your chips off the table.

Silver seems to be especially vulnerable to a decline.  We can see what appear to be Exhauston Gaps on the way Up, and a large Rounded Top.  The most powerful argument lies in the Commitments of Traders chart, which shows that the Large Speulators (“hedge funds”) are in a higher Net Long position than EVER.  This situation cannot continue forever, or for much longer.  It is a recipe for a massive implosion.  The Silver bulls have been testing, testing, testing the limit.  The “little guy” is right in there too, Net Long; and when the dike finally breaks there will be a mass rush for the exits that will be a sight to beold; and not everyone will be able to escape unscathed.  I think that the “little guy”should call it a day, pack it in, and get out now.

Respectfully submitted.                                                                                                                    

CandleWave, LLC                                                                                                                

By William Kurtz, President

906 Whippoorwill Dr., Palm Harbor FL 34683 USA

Wkurtz1@verizon.net     info@CandleWave.com

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Past performance is not indicative of future results

SPY weekly chart with REI

The following chart is the weekly SPY.  Below is the REI (range expansion index by Tom DeMark)

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Past performance is not indicative of future results

Rydex MMF @ a Low

 RYFXX - Rydex US Government Money Market

Since tracking the daily market capitalization of RYFXX, Friday August 12,2016 closed at a low since March 2009.
From March 2009, stock market highs have been accompanied by low amounts of cash in the Rydex Money Market Fund and stock market lows have been accompanied by high amounts of cash in the Rydex Money Market Fund.
The following are some lows and highs in the Rydex RYFXX money market fund that occurred near lows and highs in the stock market.

RYFXX   market capitalization
3-10-09   $1,367Mil  

4-4-12  $585Mil

6-18-12  $1,123Mil

5-24-13  $726Mil

6-24-13  $1,421Mil

12-5-13  $649Mil

2-10-14  $981Mil

9-15-14  $761Mil

10-16-14  $1,202Mil

1-5-15  $693Mil

1-30-15  $1,111Mil

3-10-15   $655Mil 

6-5-15   $667Mil

9-9-15   $1,434Mil


11-24-15  $700Mil

2-5-16  $1,066Mil

8-12-16  $495Mil  <------


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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

SPY weekly chart

Courtesy of eSignal

There are 4 windows in this chart:
1-price chart - blue is bullish and red is bearish
2-macd - circles added at crossovers
3-ADX - horizontal lines were added
4-short term indicator - vertical lines were added

Summary:
In the current week, so far, there is a bearish bias, but, no sell signal yet.
The price bars are still blue and still above the blue trend line.
The macd is still bullish & waiting for the histogram to flatten out and turn down.
The ADX is narrow and indicates a trend less market.  When the red line is above the blue line a red horizontal line was drawn and when the blue line is above the red line a green horizontal line was drawn.
The short term indicator is over bought and so the vertical line is currently red.
The bar chart indicates that an Elliott Impulse Wave is or maybe complete.  Since an EW is not complete until it is history, each time the market makes a nominal new high the EW count gets redrawn.

If we are not at a high we maybe close to a high. When the market does decide that it is tired and it wants to take a rest, you should see more evidence.  Right now only a caution light appears to be flashing.

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepageThis 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

Picasso ST Cycle Dates

In this update only the dates will be mentioned with an "H" for high and a "L" for low.
The chart amplitude can and will be misleading at times.
In addition, it is the date that is most important rather than if that date is a projected high or low with amplitude as sometimes shown on the chart.
One important reason is because in some cases a date may invert and the amplitude and the "H" or "L" may not mean anything.
A low may actually turn out to be a high and visa versa.
Also it is very important that other tools always be used to confirm any potential ST Cycle Date.

Picasso Dates, always +/-
8/12 L
8/31 H
9/16 L
9/20 H

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepageThis 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

Earl & Earl2

By Danny of LunaticTrader.com

Stock markets kept pushing higher and the recent lunar green period added 121 points to the Nasdaq. Will there be no letup?
Of course the market cannot keep climbing without any pullbacks, so we will get a letup and probably sooner rather than later. Lunar cycles have not done well so far this year, but the recent green period could mark the return of some normalcy in that department. A new red period is getting underway, so we will find out soon. Here is the current Nasdaq chart:

The Nasdaq has come very close to its all time high and may break it any day. But my technical indicators are indicating potential problems. The faster Earl (blue line) keeps weakening and may paint a bearish divergence soon. The slower Earl2 (orange line) is flattening out and may turn down any day. The MoM is starting to pull back from a major peak in the +8 euphoric zone. That's not a setup I want to buy, especially not when a new lunar red period is starting.
The LT wave for August is also indicating weakness after a possible top today (+/-1 day).

I wouldn't be too greedy at this point. It has been a great rally over the last 6 weeks, but trees don't grow into the sky. I will take some profits here and then see when the next buying opportunity comes along.

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. Just submit your email address in the box on the Blog homepageThis 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

SPY - Possible ST caution signs

Courtesy of eSignal

Above is the daily XIV which is above it's upper band today.
Usually it needs time to get back into the bands at lower prices.

Courtesy of eSignal

Courtesy of eSignal

Courtesy of eSignal

The three charts above are the SPY 240min, daily and weekly charts.  Today each has completed a "minimum" of 5 Elliott Waves.  This, if the wave does not change, is usually a heads up for some kind of counter trend move.  The time frame is not known until it starts to happen.  This is NOT guaranteed, as Elliott Waves are not fully confirmed until it is history.  That is why it is only raising a caution flag at this time.

Note that the months of August and September, in the past, have been weak months for the stock market.

Also note that several posts on this blog have indicated a "probable" rise into the year end due to the strong breadth seen in February and June along with some other factors.
So, at this time, it is likely that any pullbacks may become buying opportunities, but, not to be invested in blindly.  This stock market is eight years old and there are many indications that a top is in the making going back to late 2014.

To review stock market valuations, one good website to look at is  AdvisorPerspectives.com By Doug Short
One good article:
http://www.advisorperspectives.com/dshort/updates/Q-Ratio-and-Market-Valuation?utm_source=dshort_feed&utm_medium=rss&utm_campaign=graph_link

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Past performance is not indicative of future results

Up 5 Straight Months !

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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