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7/3/18
Thomas Thornton

Flip Flops

It's Summer and time for the beach and flip flops.  I'm headed to the beach and will be back on Monday.  Sentiment charts will be updated each day a little after 5pm on the website and if there is anything important, I will put out a quick note.  Friday could see some action with the monthly US Jobs report fyi.  

Speaking of flip flops, the US markets have been doing some flip flops with yesterday opening with a gap down and a strong recovery.  Today there was a gap up and it's fading off the early highs.  Same story with sectors too.  It can make for some good trading opportunities yet my overall call is to hold some extra cash, raise stops on longs, and to selectively look for short ideas if that fits into your risk perimeters.   This is an environment that can chop one's PNL to bits too.  

This is the first mini vacation since I started Hedge Fund Telemetry and I want to thank everyone for the support. For those clients in the US, Happy 4th of July.   For everyone else, enjoy the week and make some money while we're on the beach.  Lastly, we are working behind the scenes to improve the website/sentiment charts and hopefully we can roll out the new features in the coming weeks.  I'm really excited about what we're doing.  

Notable:

  • US Markets - Sentiment still at the midpoint.  Top 10 S&P attributes on a custom chart look toppy

  • Hedge Fund Telemetry Trade Ideas - No changes.  

  • European Markets - Lackluster attempt at bouncing without a close near the highs

  • Currencies - Looking at both daily and weekly with some perspective of an alternative scenario

  • Asian Markets - A recovery off the lows today

  • Gold Update - I like it long

  • Crude and Energy Update - Upside green Setup 9 could see a multi day pullback

  • Bond Update - Still looks good to be long bonds while the 2/10 continues to flatten

  • DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600

US Markets


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 51%


SPX stalling here with 2700 the big support level everyone is watching


Nasdaq bullish sentiment is at 45%


NDX still has a pending upside Countdown on day 7 of 13.  The big difference with the recent Countdown and those in the past couple years with the NDX is that it's become choppy rather than steady up.  


Just in case you were wondering what stocks have contributed the most to the S&P this year


Those 10 stocks in a custom index are showing signs of topping.  The upside exhaustion signals were present in January too.  

 
Hedge Fund Telemetry Trade Ideas


Trade Ideas - No changes.  

 
European Markets


Germany’s Merkel was able to keep her ruling coalition together after a last minute deal on immigration was reached.  This helped the DAX but I have to say, a close at the highs would make me consider this being a buy


Euro Stoxx 50 same story.  Just can't get a close at the highs.  

 
Currencies


US Dollar bullish sentiment is at 89% and very extreme.  Some give back is due


US Dollar Index is stalling with the backdrop of extreme sentiment.  There remains an upside Countdown on day 9 of 13 so there is potential for another lift.  


Weekly of the US Dollar Index shows a recent green Setup 9 and this is either the first of five waves up or the fourth of five on the downside.    At this point I can't tell but wanted you to see the potential downside in the US Dollar if this came into play.  


Euro bullish sentiment is at 24%


Euro Spot continues in a tight range here


Weekly of the Euro Spot has an upside potential at 1.2991 if the alternate scenario happens.  


A PBOC Governor said they will keep the Yuan at a "reasonable and balanced level".  This causing the Yuan to strengthen for the first time in 14 sessions (prior to his comments the currency made a new 12 month low).  A big intraday reversal after a couple new exhaustion signals.  

 
Asian Markets


Shanghai had a pink Combo downside exhaustion (2nd one in last month) and reversed up after the PBOC comments.  


Hong Kong did reverse too but still was down on the day


Nikkei fell again

 
Gold Update


Gold bullish sentiment is at 10% and should reverse higher after today's action


GLD is reversing higher today after both a pink Combo and red Sequential 13 downside exhaustion signals


XAU Gold Spot did get the downside pink Combo yesterday too.  I like gold here as a long


Newmont Mining was my pick for Gold Miners as a long and it's working nice

 
Crude and Energy Update


Crude bullish sentiment is at 84% and remains in the extreme zone


WTI Crude Futures did get the green Setup 9 and is reversing.  This could be a multi day pullback


XOP energy ETF did have the recent upside exhaustion and is up today but look at the today's bar how it gapped up, went higher and now is trading below the open but is still up on the day.

 
Bonds


Bond bullish sentiment is at 68% slightly down from the recent high of 73%


US 10 year yields are on the lows today and I still believe they go lower


TLT Bond ETF is on the highs today and still looks good as a long


2/10 Yield Curve continues to flatten

 
DEMARK SCREENS - Daily, Weekly, Monthly Upside/Downside Exhaustion Signals

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:   JAKK, RBC
DAILY DOWNSIDE 13:   WAFD, Y

DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN:   ACT, CF, DNR, EQT, FRT, EQT, HRL, LSI, MCF, NR, TSCO, WST
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP:   ALGT, ASGN, FII, GS, KELYA, LMT, LXU, MSTR, RTN, STI, USB

Updated: 7/1/18
WEEKLY UPSIDE 13:   AES, BBY, CACI, DPZ, EAT, MGLN, MUSA, WCG
WEEKLY DOWNSIDE 13:   AYI, FTR

Updated: 7/1/18
MONTHLY UPSIDE 13:    ADI, AEE, BAX, BCOR, ETFC, ICUI, ITG, MED, MOH, NEE, SMTC, THG, TTEK, TXN, VICR, VSH, WCN, WST
MONTHLY DOWNSIDE 13:    TUES

Euro Stoxx 600 Universe:

DAILY UPSIDE 13:   NONE
DAILY DOWNSIDE 13:  AENA SM, CA FP, DIA SM, GAM SW, TEL2B SS

DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN:   AZN LN, DSY FP, HIK LN
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP:   PFG LN
Updated: 7/1/18
WEEKLY UPSIDE 13:  NONE
WEEKLY DOWNSIDE 13ISS DC, ORK NO

Updated: 7/1/18
MONTHLY UPSIDE 13:     BLND LN, CDI FP, CRH ID, DCC LN, DOM LN, RACE IM, REL LN, RMS FP, SXS LN, WKL NA, ZAL GR
MONTHLY DOWNSIDE 13:  BMPS IM




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