S&P 500 and the Death Cross

Courtesy of Yardeni.com

The red trend lines and the question mark were added to this chart.
Note the years where the red trend lines were broken and then bottomed.
Have to comment on the bottom of the first blue line in 1974 even though there was not enough data here to show where the red trend line would have been broken.  An important low.
Then 1981-82, 1987, 1999-2000, 2007.
Now it is staring us in the face again.   Not a question of "if it will happen", but, "when it will happen".
Thank you to Ed Yardeni for this wonderful chart!

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.

Short Term CIT forecast Update

Wednesday June  25,2014 @ 9:20am

Change in Trend (CIT)  

Short Term CIT forecast Update

The last forecast made on June 13th stated, "So far there is no change in the forecasted cycle lows today, June 13th & July 6th with a bounce in between.  This bounce may find itself ending around June 23rd +/-"

Since June 13th the market bottomed that morning and then rallied to June 23rd +/- as the cycles suggested.  It then proceeded to sell off, and the futures are indicating a lower open this morning.

 

Following cycles has been good to use as a guide or potential future road map, but, other tools must always be used to confirm any forecasted cycle trends.  

 

UPDATE 

 So far there is no change in the next forecasted cycle low July 6th +/-

But, cycles indicate that there may be some kind of counter trend action between June 26th and July 4th.

Since cycles can 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.  All other days are still noted with a "+/-" because the cycle dates are not always as perfect as we all would like them to be.  Although they have been pretty accurate.  

  UPDATE in the Intermediate Term forecast 

Intermediate term cycles are currently pointing down into July 2014 - August 2014 +/- and may even extend further out in the 3rd and possibly the 4th quarter 2014.

So this may prevent some rallies from materializing, but if they do occur, some investors may take advantage of these rallies and sell into them.

We continue to witness this type of action.

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.

S&P500 daily chart

 

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.

XAU daily chart

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.

Short Term CIT forecast Update

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Friday June 13,2014, 11am

Change in Trend (CIT)  

Short Term CIT forecast Update

The last forecast made on May 28th stated, "After May 28th, the next forecasted cycle lows are June 13th & July 6th with a bounce in between."

Since May 28th the market continued its rally to a top on June 9th.  It then proceeded to sell off, so far, to a bottom made this morning, Friday June 13th, at around 10:00am, just as forecasted on May 21st.

Following cycles has been good to use as a guide or potential future road map, but, other tools must always be used to confirm any forecasted cycle trends.  

UPDATE 

 So far there is no change in the forecasted cycle lows today, June 13th & July 6th with a bounce in between.  This bounce may find itself ending around June 23rd +/-

There is no change in the Intermediate Term forecast 

Intermediate term cycles are currently pointing down into July 2014 +/-.

So this may prevent some rallies from materializing, but if they do occur, some investors may take advantage of these rallies and sell into them.

We continue to witness this type of action.

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.

Barron's Confidence Index vs S&P500

Courtesy of Barron's and eSignal

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.

Short Term CIT Forecast Update

Change in Trend (CIT)  

Short Term CIT forecast Update

The last forecast made on May 21st stated, "Upward bias into the end of the month, in cycle terms, works out to be May 28th +/-"

Looking back from today, May 28th, that is exactly what happened.  Today even though the S&P500 closed down, it made an intraday high before selling off.  

UPDATE - 

After May 28th, the next forecasted cycle lows are June 13th & July 6th with a bounce in between. 

So far the "Short Term CIT Forecast Update's" have been very accurate.   Let's see if they continue to perform well. 

There is no change in the Intermediate Term forecast 

Intermediate term cycles are currently pointing down into July 2014 +/-.

So this may prevent some rallies from materializing, but if they do occur, some investors may take advantage of these rallies and sell into them.

We continue to witness this type of action.

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.

NYSE Margin Debt

One observation is that there seems to be a correlation between margin debt (investor positive and negative credit balances) and the S&P500

Second observation is that high margin debt tops out before the S&P500 and the converse was observed as well

Charts last posted here on March 9,2014 and updated today

Charts courtesy of dshort.com

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.

Short Term Update

Change in Trend (CIT)  

Short Term CIT forecast Update
The last forecast made stated "Today's sell off (May14th) was not at or lower than the May 7th and May 9th lows so far this month.  At this point the cycles should bottom this week and then have an upward bias into the end of May."

UPDATE - Well the next day, May15th, we took out the May 7th low and the mid month low forecasted worked out.  Now, the upward bias into the end of the month, in cycle terms, works out to be May 28th +/-

After May 28th, the next forecasted lows are June 13th & July 6th with a bounce in between. 

There is no change in the Intermediate Term forecast 
Intermediate term cycles are currently pointing down into July 2014 +/-.
So this may prevent some rallies from materializing, but if they do occur, some investors may take advantage of these rallies and sell into them.
We continue to witness this type of action.

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.

Rober W. Colby WARNING!

Courtesy of Robert W. Colby Asset Management, Inc.

WARNING !

Now is the time to Reduce Risk and Focus on Capital Preservation
Our Safety First Portfolio Is Outperforming Stocks
Bonds are Bullish, Stocks are Vulnerable
The data clearly show that the move to Safety has already begun. The table below shows that over the latest 4 1/2 months, our Safety First Portfolio has outperformed the S&P 500 significantly.

Portfolio/Index 2014  YTD (through 1:00PM EDT today) Strategy   Data Sheet
Safety First Portfolio                +12.39                   Absolute Return  Safety First                               S&P 500 Index Total Return +1.72%

US Bonds Confirm Bullish Trend    

Long-term, Medium-term, and Inflation Protected U.S. Treasury Bonds rose to their highest level in 10 months today, and are all systematically bullish based on our analysis.

Introducing our Dynamic Allocation Shift Capability  

We now have the ability to shift your money from our Stock Portfolios to our Safety First Portfolio when the stock market turns down (bearish.)  That way, we can focus on capital preservation.  Since the safest investments often rise when risky stocks fall in price, reflecting the shifts of giant, multi-billion dollar institutional portfolios, the safest investments actually can make money for you even when stocks go down.

We can then shift your money back to stocks when the market improves and moves upward (bullish)... Automatically.... based on Robert W. Colby's Systematic Trend Identification Methods.

Be prepared for unforeseen Black Swan financial "accidents"

Posted here on April 16,2014 "JNK:TLH Ratio - Where are we now" ?

Below is an update of that chart...

The 3 year chart

The 1 year chart

Note in the 3 year chart that the red line crossed over the blue line in June 2011.
The same thing happened again in April2014, look at the 1 year chart above.
Although it also happened in May 2012, it was after the 2011 sell off and indicators were over sold and bullish at that time.

Watch your indicators carefully and note that the Intermediate Term Cycles posted on this blog are still pointed down in to July 2014. 

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.

Short Term CIT Forecast Update

Change in Trend (CIT)  

Short Term CIT forecast Update
The last forecast made stated "Currently the next CIT appears to be a window of April 26th to May 1st and possibly a top with a probable sell off into mid May."

Today's sell off was not at or lower than the May 7th and May 9th lows so far this month.

At this point the cycles should bottom this week and then have an upward bias into the end of May.

There is no change in the Intermediate Term forecast 
Intermediate term cycles are currently pointing down into July 2014 +/-.
So this may prevent some rallies from materializing, but if they do occur, some investors may take advantage of these rallies and sell into them. 
We continue to witness this type of action.

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.

S&P500 Negative Momentum

Courtesy of StockCharts.com, Yardeni.com, EquityClock.com

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.

Hanging Man Candlestick May Signal Caution

 

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.

Tall Buildings Lead to Market Falls?

Building starts this year and is estimated to be completed in 2020

To review this theory please take a look at a previous post made on April 13,2011
Link     http://bit.ly/i0UNBX

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.

S&P 500 High Risk Periods

Courtesy of Prometheus Market Insight

Our Secular Trend Score (STS) and Cyclical Trend Score (CTS) are calculated using a large basket of fundamental, technical, internal and sentiment data. The historical data used by our models extend back to the market crash in 1929 and have enabled our STS to correctly identify every secular inflection point and our CTS to correctly identify more than 90 percent of all cyclical inflection points during the last 85 years. Additionally, when analyzed collectively, these data identify extremes in the risk/reward profile of the stock market from an investment perspective. Since early 2013, stock market investment risk has remained in the highest one percentile of all historical observations, and the latest speculative surge during the last year has increased overall risk to one of the highest levels ever recorded, joining a select group of three time periods that includes the long-term tops in 1929 and 2000.

 As we often stress, this particular measurement of investment risk is not a top call or an indication that a severe market decline is imminent. Overbought rallies such as this one can remain overbought for a long time as speculative momentum carries prices to higher and higher extremes. What the current investment risk/reward profile tells us is that a severe market decline will almost certainly occur after the current cyclical bull market terminates. In his latest weekly commentary, fund manager John Hussman reviews another data set that indicates stock market valuations have now exceeded those at the previous bubble peak in 2000. We have included an excerpt from his commentary below, although we would highly recommend reading the entire article.
At bull market peaks, investors typically fail to recognize cyclically elevated profit margins, assuming that those margins are permanent and that earnings can be taken at face value. If there is one thing that separates our views here from the bulk of Wall Street analysis, it is the historically-informed insistence that investors are mistakenly banking on record-high profit margins to be permanent. For more on this, including evidence that historical profit margin dynamics remain quite on track and have not changed a whit, see The Coming Retreat in Corporate Earnings, and An Open Letter to the FOMC: Recognizing the Valuation Bubble in Equities.
While the evidence may be alarming to some, make no mistake: The median price/revenue multiple for S&P 500 constituents is now significantly higher than at the 2000 market peak. The average price/revenue multiple across S&P 500 constituents is now above every point in that bubble except the first and third quarters of 2000. Only the capitalization-weighted price/revenue multiple – presently at about 1.7 – is materially below the price/revenue multiple of 2.2 reached at the 2000 peak. That’s largely because S&P 500 market capitalization was dominated by high price/revenue technology stocks in 2000. [Geek's Note: as a result, if one chooses a universe of stocks by first sorting by market capitalization, one will probably find that price/revenue multiples of those stocks are lower today than in 2000]. Regardless, the historical norm for the capitalization-weighted S&P 500 price/revenue ratio is only about 0.80, less than half of present levels. The fact is that unless current record-high profit margins turn out to be permanent, against all historical experience to the contrary, the overvaluation of the broad equity market is equal or more extreme today than it was at the 2000 bubble peak.

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.

Short Term Cycles Update

Change in Trend (CIT) 

Short Term CIT forecast Update
The last forecast made stated the "next cycle turn appears to be around April 22-24 and probably a short term bottom".   Since the Cycle dates, now CIT, are always +/- in their time frame, April 25th falls in this window and on Friday there was a 15 point sell off in the S&P500 and a 140 point sell off in the DJIA.
Currently the next CIT appears to be a window of April 26th to May 1st and possibly a top with a probable sell off into mid May.  This is a possibility since the last couple a days of a month and the first couple of days of the subsequent month is usually a positive time frame.
"Yale Hirsch, publisher of the Stock Trader's Almanac, believes the growing awareness among investors of the monthly favorable period caused it to change, beginning in the mid-1980s. As more investors tried to get in ahead of this monthly rally, it had the effect of causing the rally to begin sooner. Hirsch says the pattern has been altered so that the new seasonality shifted to the last three trading days of any month and the first two of the next month."
For more on this see --->   http://www.cbn.com/finance/best-days-month-invest.aspx

There is no change in the Intermediate Term forecast
Intermediate term cycles are currently pointing down into July 2014 +/-.
So this may prevent some rallies from materializing, but if they do occur, some investors may take advantage of these rallies and sell into them. 
We continue to witness this type of action.

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.

Cycles Update

From the Weekend Update April 13,2014

Short term cycles:
In the Update from April 10th -
"Next watch for buy signals in your best oscillators/indicators.  Still looking for a bullish bias into April 17th +/- "
So far buy signals have not been showing up but are watching for them closely.  The market still wants to go down but watch it closely for signs of turning up.
Indications are for some cycles activity on April 15th & 16th that may affect the stock market and it may display some volatility on these days.
After Thursday April 17th the next cycle turn appears to be around April 22-24 and probably a short term bottom.    

The rally into April 17th was a good call, but, the market did not turn down into the cycle turn date of April 22-24.   The market continued to rally in to that time frame where we are right now. 
With the MACD on buy signals for the DJIA and the SP500, the best strategy for now would be to wait for weakness and or sell signals as mentioned in the previous post that discusses the Stock Market Seasonality.

Intermediate term cycles are currently pointing down into July 2014 +/-.
So this may prevent some rallies from materializing, but if they do occur, some investors may take advantage of these rallies and sell into them. 

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.

The Stock Market Seasonality

Chaikin Market Insights April 20, 2014
chaikinpowertools.com

The S&P 500 Index needs to close above 1,872.50 – 1,880 to avoid a slide back down towards 1,800. Its close last week of 1,865 was a 62% retracement of the April decline and the Fibonacci devotees amongst you will recognize the resistance that usually implies.
Economic indicators have been good and earnings have been benign but I recommend caution at this juncture. I believe that raising cash on rallies is the prudent course as a 5 – 10% correction seems likely and the seasonality is not favorable for the market as we exit April.

The JustSignals post from April 15,2011 and worth reading again 
On the close of April 20th we will look at the daily MACD (12,26,9) for both the DJIA and the SPX...If the MACD is on a sell for both then according to Sy Harding we sell the position that was entered into last Fall 2010...   See  www.streetsmartreport.com  Sy Harding's Seasonal Timing Strategy (STS) for more information...
If the MACD is not on a sell signal for both, then wait until there is one and sell your long position...
Years ago Yale Hirsch founder of the Stock Trader's Almanac did back testing and found that the best months to hold stock was from November through April...
Sy Harding and others found a way to fine tune the buy and sell during that period with the use of oscillators...On October 16th if the daily MACD (12,26,9) is on a buy signal you go long...If not you wait until the daily MACD changes to a buy signal...On April 20th if the daily MACD is on a sell signal you sell your long position...If not you wait until the daily MACD changes to a sell signal...
Sy Harding has had an excellent return using this one strategy over many decades...
In fact if you followed this strategy it would have kept you out of the 1987 crash, the 9/11/2001 crash, the 2008 crash and more recent it would have gotten you out in the second half of April 2010 before the May 2010 flash crash...
I am sure that there are many investors still trying to break even from the damage of the 2008 crash.
I highly recommend the book "Beat the Market the Easy Way" by Sy Harding.   You will learn many more strategies like this one from a seasoned investor...

Currently both the DJIA and the SP500 are both on MACD buy signals.   They should both be watched for their next sell signals.


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.

JNK:TLH Ratio - Where are we now ?

This post is an update to the March 27,2014 post

Above chart dated February 21,2014 - courtesy of stockcharts.com

Above chart dated April 16,2014 - courtesy of stockcharts.com

JNK - SPDR High Yield Bond ETF
TLT - Barclays 20+ Year Treasury Bond ETF
TLH - iShares 10-20 Year Treasury Bond ETF

See previous charts posted on this blog on, May20,2011,  April 21,2011 & April 14,2011...
To better understand this post, please read the past posts and to see what happened in hindsight ...

As of today, there is a negative divergence in these charts...
In other words the JNK:TLH chart is not confirming the high in the SPX with a corresponding high in the JNK:TLH chart...

As seen at the top of this blog, maybe it is best said as follows... "Confidence is contagious. So is lack of confidence" -Vince Lombardi


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.

Todays SPX Chart

From the Weekend Update posted on Sunday April 13th

"Indications are for some cycles activity on April 15th & 16th that may affect the stock market and it may display some volatility on these days."

Well today there was volatility as forecasted !

See the 60min chart below for intraday signals

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.