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Warren Buffett and Charlie Munger of Bershire Hathaway have been holding a lot of cash.  They are big fans of stock buybacks of companies they hold like Apple and Coke.  Today it was announced that Berkshire will relax some of the buyback rules thus paving the way for them to buy back shares in the open market.  The stock is ripping higher taking the financial ETF XLF up too since it's the largest weight.  I covered XLF and reduced some exposure in the sector.  What I have been thinking about is how they can't find any great deals in this market.  Take it as a sentiment read since they see better value in themselves than what's out there in the market.  This compares with the October 2008 New York Times op ed when Buffett wrote how he was buying stocks in the US.  You could have thrown darts back then at anything.  Today, nearly 10 years later is different.

A lot of people are talking about the "breakouts" in the market and yesterday there were only 74 new 20 day highs within the S&P 500 and only 19 within the Nasdaq 100.  You'd think there would be more right?  There are now a lot of stories about the narrow attribution that I've been discussing for quite a while and today it continues with breadth slightly down on the day.  Bullish sentiment is getting back near the extreme zone for equities and there are many companies on deck with earnings in the coming weeks.  The bar is high, shorts are absent, the USD is higher for the quarter and speculation in a narrow group has now sucked in the FOMO types like January.  Yesterday's bounce back after the Netflix whiff was reassuring them that there is nothing to worry about.  I'm making another call to raise cash if long index ETF's.  

Notable:

• US Markets - Sentiment getting close to extreme zone again
  
• Hedge Fund Telemetry Trade Ideas - A bunch of changes today
  
• European Markets - Quiet trading
  
• PPO Monitor - Some rotation seen in banks and some defensives
  
• Asian Markets - Hong Kong still has a downside Countdown in progress
  
• FANG Insanity - Structured Notes.  What could go wrong?
  
• Airlines - Long Ideas
  
• Crude and Energy Update
  
• Gold and Silver Update
  
• Copper Update - Near downside exhaustion with very low sentiment
  
• Coke - Doubled up long idea
  
• LULU - About to do the downward dog
  
• Berkshire Hathaway - Looks good but I don't want to chase
  
• Bond Update
  
• DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600
  

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 75% getting back near the extreme zone

SPX bullish sentiment vs VIX bullish sentiment ratio is at 68% the highest level since January

SPX is above 2800 and many people are excited about this yet with the narrow attribution of large cap tech doing most of the work this year it is concerning me that this can't continue with the upside exhaustion signals present within those names

Nasdaq bullish sentiment is at 76%

QQQ is a little off the highs and I'd watch the 2 day VWAP at 179.50 as first support.  

IWM Russell 2000 still going sideways after peaking in June

Transports are far from breakouts

Trade Ideas -

Euro Stoxx 50 is back above the 50 day with resistance at 35 and support at 3430

European Banks still look terrible and not ready to buy

The PPO monitor is showing strength in the middle with financials and transports today.  Still weakness in gold and energy.  Some of the defensive sectors like staples and utilities have drifted up near the top but are weak today.  

Hong Kong is now on day 11 of 13 with a downside red Sequential Countdown.  Should see a downside exhaustion in this week

Japan Nikkei is on day 7 of 9 with a green Setup and we'll see if this will be another inflection point

Leave it to Wall Street to create products during manias.  There are now FANG structured Notes that pay a huge yield as long as these don't go down 40%.  That could never happen right?!!

SPX Airline Index had a downside exhaustion 13 a few days ago and a good reaction up today.  Considering Crude was cited for some of the weakness in the past quarter by many companies, the recent drop in Crude is a relief.

Alaska Airlines was added to the Trade Ideas Sheet today as a long idea

Crude bullish sentiment is now at 53% down from 88% a week ago.  Quite a quick drop

WTI Crude Futures has to bounce on this green Setup 9 or else a new downside red Countdown will begin

XOP Energy ETF continues weak.  OIH by the way has been worse and could have a downside exhaustion soon.  I noticed on the DeMark screens below HAL had a downside exhaustion yesterday.  I like to see more with exhaustion signals in the group before I get long

Gold bullish sentiment is at 9% and is low however I want to see the downside exhaustion with GLD and Gold Futures which is getting closer

Gold bullish sentiment vs SPX bullish sentiment ratio is the most oversold since last December which is when we went long Gold

GLD has been a disappointment as we bought the first downside exhaustion and now the secondary Countdown is on day 9 of 13.  Getting there and I'll be patient.   

Gold Futures same story

Silver did have a downside exhaustion last week but hasn't been able to turn as well

Copper bullish sentiment is at 11%

Copper Futures is on day 12 of 13 with a downside Countdown.  Getting closer to a bounce

Coke has moved over 45 resistance and I doubled up my long to 5%.  I did say in June that Warren Buffett would make the next 10% in KO vs Apple.  Apple is flat and KO is up 8%

LULU is about to do a downward dog (they sell yoga pants) with the recent upside 13.  Nearly up 100% YTD is a little excessive

I've been short this in the past year and recently covered near the lows.  The move up today has a new upside red Countdown on day 3 of 13.  I like how this trade yet I don't want to chase.  Maybe I'm wrong and I should chase?

Bond bullish sentiment is at 69% and is slightly off the highs

TLT Bond ETF continues to drift and still has an upside Countdown on day 12 of 13 unfulfilled.  

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