08-08-17
Stocks surged toward the upper extreme of our long forecasted time and price window for an August top before reversing sharply. The Nikkei stock index actually triggered a Sell. Profitable trades were closed out on the long side in Cotton and Sell side in the Nikkei, and Soybeans as shown below. Stark short term divergences are in full view today as the Russel small cap and Nikkei were testing 8 to 10 week lows on the same day as our DJIA & SP upside stock targets were achieved. It’s reasonable to expect that a correction phase has begun. Perhaps too many are looking for a drop into September/October, so we will assess this potential correction by the sentiment gauges degree of pessimism in coming weeks. Thus far option trader sentiment is rapidly moving toward oversold put buying extremes in spite of the spanking new intraday record highs today in the Dow and S&P 500 Index. At this pace it’s hard to see more than a 3 to 5% pullback before the market becomes oversold basis sentiment. Earnings have been strong, but dominant laggards Google and Amazon are holding back the herd short term and vital to future Tech rallies.
08-02-17
Stocks continue into our long forecasted topping zone in August. Perhaps too many are now looking for a correction from this area extending to 2500 on the S&P 500 Index. The expected correction trade into September is becoming crowded. Our trading updates have been late for followers recently due to travel. Ags have collapsed now that the summer peak heat appears to be over. Soft commodities are trending higher.
07-19-17
The earnings season was the expect trigger with S&P 500 targets (basis September futures) of 2474 and 2501 by early August. Amazingly we are already testing the first major target for our Summer 2017 forecast high.
07-16-17
Stock indices are breaking out to the upside into the later end of our earnings driven time and price zone that ends in the 1st half of August in the upper 2400’s basis the S&P 500 Index. If the July lows fail, then the odds of a more serious march to a Autumn low would likely be underway.
07-11-17
Earnings season begins this week in stocks and upside breakouts begin to increase in probability as July matures.
Oil inventories are declining, summer driving season is building and record heat are all supporting what is typically a seasonally strong period of the year for energy prices. However, once this period has climaxed we continue to expect weakness by year end. With US, Libya, Iran and Nigerian production increasing it continues to support our outlook for new record inventories glutting the markets this winter with a strong risk of OPEC failure and sub-$40 Oil. For now seasonality allows for $50 to 53.
07-09-17
Our summer topping zone in stocks continues to look plausible as the SP 500 hit our target zone support in our newsletter forecast and may still set up for a final low near mid July before one more run to new highs. Sept’ SP 2436.5 & 2442 are key resistance levels to indicate if the next up wave has begun or waiting for earnings season to begin as we have discussed. While the political fiscal agenda remains stalled, the technicals are still impressive. Dow theory is positive now that the Transports have hit new highs, small cap Russell has joined the record setting club and the advance decline line continues to move ahead of prices indicating strong breadth.
07-06-17
In our Financial Sense interview last week we mentioned that Oil would rise another couple dollars to $47 before encountering resistance, which it has done. Prices sold off from there on word that Russia would not curtail production further if OPEC requested. This is a seasonally strong time of year for Oil demand, but without surprisingly strong US and Chinese economic data, it’s hard to imagine Oil sustaining above $50. More likely is a test under $40 “by” early 2018.
Our efforts have been too aggressive buying the New Zealand $. The trend continues higher, but the gyrations have knocked out our close stops to date. Perhaps there will be a 3rd Buy for us to find redemption soon.
Wheat, Corn and the Soybean complex blasted off to the upside last Friday and have held most of their gains. If there is a further breakdown in the Dollar along with hot weather, it would keep prices edging higher.
Sugar achieved our downside long term objectives recently under 14 and has rebounded. It’s now hinting of a further upside continuation if over 14.07.
(*While trading position updates will be frequent, readers should check for updates without waiting for email notifications)
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