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Happy Friday and hope everyone has a great weekend. Next week is the Fourth of July holiday on Wednesday so I'm going to be off the desk Thursday and Friday spending some time with the family at a beach or pool. If anything interesting happens, I will send a quick note with comments.
Today's action, on the last day of the month and quarter, across the world had equity markets up on the day but several (Europe) faded off the highs and the US markets while still up but is showing signs of fading with many ETF's and indexes under today's VWAP levels.
- Financials are the big story today with the XLF financial ETF up 1.20% but off highs. This comes after the second part of the stress tests were released. The results were decent for most but for some not so great. Yesterday I shorted a few of them with a started 2.5% sized position and on the bounce today increased the short to 5% weight. Besides still seeing downside DeMark Countdown's in progress, the short interest within the large cap financials is extremely low. I'm talking for some the short interest ratio or days to cover is under 1 day and the number of shares short is half of what it was at the start of the year. If you are long a stock you want to see that skepticism as any good news will cause the shorts to cover thus driving up the stock price.
- The weakest stocks today are those that have had a very strong quarter - FANG's and the Hedge Fund Telemetry Extend and Pretend Index is down .45% on the day while the S&P is up .75%
- Gold Futures did get the downside exhaustion signals we expected with the red Sequential and pink Combo 13's today. I added to the long GLD position today in the Trade Ideas Sheet
- Currencies are reversing today and I promise to send the weekly Currency Focus email today
- Bonds continue to look good on the long side which makes me believe there is a stealth risk off trade happening.
DeMark Signals - 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 43%
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SPX bouncing off green Setup 9. 2750 resistance
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Nasdaq bullish sentiment is at 39%
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QQQ NDX nice bounce off 50 day which now will be important support
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Dow Jones bouncing but still under 50 day. Downside red Countdown is in play.
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IWM is showing a rather weak bounce
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Hedge Fund Telemetry Trade Ideas
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Trade Ideas - Took off half short MSFT +1.6%, Covered TXN +5%, added to shorts 2.5% each MS, JPM, C. Added to GLD long to make it 5%
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Today's intra day action shows most sector ETF's up on the day but many are dipping below the VWAP levels as a sign of sellers coming in to fade
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US Dollar bullish sentiment is at 94% and this matches the high seen on May 29th. This is very very extreme so a pullback would not surprise
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US Dollar Index daily big reversal but there still is an upside Countdown on day 9 of 13. Maybe we'll see some consolidation first but I do expect the 50 day to hold as support
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DXY US Dollar Index on a weekly time frame did have a green Setup 9 and this could stall out the USD but I still expect a little more upside before
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Euro bullish sentiment is at 20%
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Euro positioning dropped in a big way last week -59%. Wait until you see the chart of this with the DeMark indicators
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Euro is having a big day today but still needs follow through. I am skeptical that will happen
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FXI Hong Kong China ETF looks similar to most of the other Asian indexes as it gapped up and stalled.
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Euro Stoxx 50 looks similar to other indexes as it moved up today yet faded all the way back to nearly the open.
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Amazon gapped up early and has faded. I do believe this is topping
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KO looks good still as a long as there now is an upside wave 3 price objective of 46.17. This needs to clear 45 and that looks like tough resistance. I still like this long and would buy more with a stop below the 50 day.
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Gold - All systems are go
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Gold bullish sentiment is at 8% and combined with the DeMark signals I like the risk reward here
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Gold Futures did get both the red Sequential and pink Combo 13's today on the downside. I added to the long GLD
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Silver Futures on day 10 of 13 with a downside Countdown but...
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SLV did get the downside red Countdown 13 today
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Newmont Mining was the Gold Miner I picked as my proxy for a long in the space. Price flip up today and outperforming GDX
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Down on a strong day tells me there is more downside potential with these 20 extended stocks
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Bond bullish sentiment is at 72% and still could go higher
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TLT Bond ETF is on day 8 of 13 and continues to act well.
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US 10 year yield still looks lower
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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 and monthly on the first day of the new month. Price flips occur when a stock closes higher/lower than four previous closes and increases conviction of a price turn.
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: CENTA, DNR, ESV, HLX, SCL, TSCO, UTI
DAILY DOWNSIDE 13: AIN, ASGN, CR, LXU, MMC, PCAR, TRMB
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: AWR, BGS, CALM, CNX, EE, FF, MCF, NFX, PETS, RGLD, UBA
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: CW
Updated: 6/25/18
WEEKLY UPSIDE 13: BLKB, CRVL, GOOG, HMSY, IDXX, JCOM, MATX, NEE, NP, NWBI, PAYX, SHLM, TBI, VIVO
WEEKLY DOWNSIDE 13: CPWR, PRA
Updated: 6/4/18
MONTHLY UPSIDE 13: BJRI, IDA, NSP, PFS, PVH, SCSC, SYY, TSCO, VDSI, VLO
MONTHLY DOWNSIDE 13: CLW, LQDT
Euro Stoxx 600 Universe:
DAILY UPSIDE 13: LOGN SW, RDSA NA
DAILY DOWNSIDE 13: INGA NA, PRY IM, PSM GR
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: CARLB DC, DWNI GR
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: WRT1V FH
Updated: 6/25/18
WEEKLY UPSIDE 13: EDF FP, INF LN, MTX GR, OCDO LN, SCHA NO
WEEKLY DOWNSIDE 13: LRE LN, MAESKB DC
Updated: 6/4/18
MONTHLY UPSIDE 13: ADS GR, AMEAS FH, AV/ LN, BVS LN, DG FP, HELN SW, HLMA LN, ITRK LN, LEG GR, NESTE FH
MONTHLY DOWNSIDE 13: NONE
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