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This morning Tiffany's reported much better earnings than expected and the stock is up 20%. It's a huge move and there are takeaways about the strength and weakness of the high end consumer around the world. They recently opened a cafe in the NYC flagship store where you can now have breakfast but that's not the driver as the key metric moving the stock is a much stronger worldwide comp +7% vs expectations for +3.1%, including Americas and Asia-Pacific both +9%, although Europe (9%) fell more than (4%) consensus. European weakness is a little bit of a surprise considering the US Dollar was weak during the quarter yet perhaps it's due to the overall weaker economic environment seen in the Euro Zone Citi Economic Surprise Index and specifically very weak retail sales numbers. Weather wasn't a problem for Tiffany's but it has been for a number of retailers who have missed numbers like Target the mid level retailer. It's funny how weather is a go to excuse for when they miss and brilliant corporate execution for when they beat.
Europe and Asia
fell hard today and the US markets opened on the lows and have bounced off those lows. Of course it doesn't matter until the end of the day when it seems like our friends 'The Sellers' come back. Today's action is interesting too in that the US Dollar continues higher while bonds are showing a rare amount of strength. Financials were strong yesterday and weak today while the FANG stocks are are green today. The Energy sector is also weak today after all of the upside exhaustion signals. GE's CEO was speaking today and the stock is down 6%. I guess I should stop being upset I sold out of that one a little early. The Fed Minutes just came out and the market spiked so ff today's lows break, things will get without a doubt much more slippery to the downside in the coming days. I'm headed off the desk for the rest of the day.
Notable:
- US Markets - Still in a tight range
- Tiffany's and Target - The Have's and Have Not's
- Hedge Fund Telemetry Trade Ideas - No changes
- European Markets - Reversals down after exhaustion signals
- Currencies - US Dollar on day 10 of 13.
- Asian Markets - Reversals down
- PPO Monitor - Starting to see Energy weakness showing up
- Bloomberg
World - Reversal down
- Hedge Funds are topping - An interesting tell
- Crude and Energy Sector
- Bond Update
- DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600
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Here's a link to the Hedge Fund Telemetry market sentiment page with 40 charts of sentiment including equities, bonds, currencies, and commodities updated each day.
SPX bullish sentiment is at 45% and remains near the 50% level.
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Ned Davis 'Trading Sentiment' has moved higher but is not at recent peak levels.
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Dow Jones watch the 24500 level
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Nasdaq bullish sentiment is at 42%
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QQQ watch the 167 then the 165/164 support levels
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Tiffany's has ripped higher throughout the day. Seems tempting to short this move but wait for it to stop going up and then average a 2 day VWAP to find a support level. As of now today's VWAP is 119.31 and with it above this level it's not a short
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Target had an upside exhaustion 13 yesterday and it's on today's DeMark Screens below. A day late I know but it happens
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Hedge Fund Telemetry Trade Ideas
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No changes to Trade Ideas. I grabbed this after the Fed Minutes spike. Gave back 50bps.
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UK reversing hard after upside exhausiton
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German DAX gave back a few weeks of gains. Watch out for follow through
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Italy has been leading to the downside with all of the political noise. This is a big deal for the Euro Zone and people are freaking out with the populist's
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Euro Banks have been a risky place as I've expressed for a year and today it made a new closing low with a wave 5 downside price objective of 116.67
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US Dollar bullish sentiment is at 80% down a little from the recent reading of 91%
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DXY US Dollar Index is now on day 10 of 13 with the upside red Sequential Countdown. I want to see a pullback to the circle
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Euro bullish sentiment is at 15% and still weak
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Euro is on day 8 of 13 with recent downside Countdown
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UK Pound Sterling is on day 10 of 13 with its Countdown
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Yen daily reversed hard with the green Setup 9. This isn't what the JCB wants to happen
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The weekly of the Yen illustrates the series of lower lows (inverted) that have occurred ending with a weekly green Setup 9. Abe and company came to power in late 2012 with the idea of weakening the Yen to spur 2% inflation. It's becoming clear this is not working.
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Nikkei bullish sentiment is at 80% still in the extreme zone
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Nikkei did reverse with the recent upside exhaustion signals
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Shanghai Composite was also very heavy last night
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Hang Seng has been going sideways for 4 months now
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India's Nifty 50 broke below the 50 day again
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PPO Monitor (Percentage Price Oscillator)
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Sectors are ranked by % above/below the 50 day moving average. Energy has been on the top for a while but there are some cracks starting to show that are signals of rotation. Notice the sectors that are nearly or breaking below the 10 day moving average.
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Upside exhaustion and reversal down
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This index of Hedge Funds has upside exhaustion that has been seen ahead of other tops in the market.
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Crude bullish sentiment is at 83% still extreme
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WTI Crude Futures still has an upside pending Countdown on day 11 of 13.
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Jason from Sentimentrader had this on his note today. He puts out great work and highly recommend it. Combined with my work this isn't a good thing for buying energy stocks here
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Flannery talks and stock goes down. Hold off on buying for now.
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Bond bullish sentiment is at 26%
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The US 10 year yield monthly has an upside green 9 and it's been a good indicator in the past
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High yield vs Investment Grade turning. Need to watch this for continuation
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DEMARK SCREENS - Daily, Weekly, Monthly Upside/Downside Exhaustion Signals
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Daily/Weekly DeMark upside/downside exhaustion signals (Sequential) Weekly updated on Monday's. Price flips occur when a stock closes higher/lower than four previous closes.
The upside 13's are sell signals and downside 13's are buy signals. Price flip's are confirmation signals that increases potential for a price trend change. For example, if you are long a stock and there is an upside 13, you will want to take cautious action by selling down or out of a
position. If initiating a short sale with the upside 13's, we tend to start with a 1/2 size and add with the downside price flip. The opposite is true for when there are downside 13's. Take a 1/2 size position and add with the upside price flip. The DeMark Indicators are designed to assist the user with buying into weakness and selling into strength to anticipate trend exhaustion. Selling into a rally and buying into a decline often afford the opportunity to exit a trade without too serious a loss if wrong.
S&P 1500 Universe:
DAILY UPSIDE 13: AVA, BCPC, BRO, CBSH, CDR, EGL, GEO, GES, MNTA, MTX, NFLX, PLT, SLAB,
SSI, TGT, UFCS, WRLD
DAILY DOWNSIDE 13: AAN, ABC
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: BKE, CACI, CATO, CHE, CRR, CRS, GES, GWW, MNRO, MOH, MOV, NSP, OMI, PTEN, QSII, RRC, SHLM, SRDX, TTI, UNT, VRTS, WEX
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: D,
PPL
Updated: 5/21/18
WEEKLY UPSIDE 13: BRS, CNMD, CUB, CVG, GHL, GWR, HP, MASI, MRO, NSC, MNK, QNST, RJF, SGMS, WPX
WEEKLY DOWNSIDE 13: ALK, PZZA
Updated: 5/1/18
MONTHLY UPSIDE 13: CTXS, HSII, SYK, UFCS, WBS
MONTHLY DOWNSIDE 13: AKRX, HLX, HVT, MNK
Euro Stoxx 600 Universe:
DAILY UPSIDE 13: BAYN GR, DRX LN, GALP PL, ITRK LN, MGGT LN, MTX GR, PRU LN, RIO LN, ROR LN
DAILY DOWNSIDE 13: GJF NO
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: HPOLB SS, SCAB SS
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: AF FP, HTO GA, ILD FP, SKG ID, STAN LN
Updated: 5/21/18
WEEKLY UPSIDE
13: AAL LN, AMS SM, BP/LN, FP FP, GN DC, RMG LN, SAF FP, STM IM, UBM LN, UMI BB
WEEKLY DOWNSIDE 13: FER SM
Updated: 5/1/18
MONTHLY UPSIDE 13: HNR1 GR, HWDN LN, MHG NO
MONTHLY DOWNSIDE 13: AGK LN
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