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First, people continue to chase green in the US equity markets. Look at AMD or Tilray as examples. They are jumping on Apple today after the product release yesterday that was pretty dull and Goldman lowered numbers.
Second, the downside DeMark exhaustion signals in China and Hong Kong had a nice upside response today. The US market does not fear the tariffs enough in my view, but celebrate when there is hope for talks. The US investor has a seemingly endless lack of
concern of any type of catalyst.
Third, the US Dollar is likely taking a time out from the recent rise and it could bring relief to a lot of other markets notably emerging markets and commodities.
- US Markets - Sentiment diverging from price, potential for another upside Countdown higher
- Hedge Fund Telemetry Trade Ideas - Closed DIA, HD shorts, added FXI and WHR long, AMD short
- AMD - The Poster Child for Chasing Green
- Tilray - Crazy
- Corporate Debt Levels and Yield Spreads - From Jeff Gundlach and quite amazing
- Some Recent Ideas - UPS, FEYE, etc
- XLE Energy ETF - Update
- Currency Update - Expect the USD to dip lower
- European Market Update - Lackluster action with the Eurostoxx 600
- Global Market Update - EEM bouncing but trading near low today
- Asian Market Update - Potential for upside in Japan and Hong Kong / China
- Crude Update - Stalled at resistance
- Bond Update - Still within tight range
- 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 67%
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SPX daily has a potential for one more move higher as there is a secondary upside Countdown following the recent green Setup 9. I am surprised the pullback did not move lower and still believe this is near a top. See below
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SPX 60 minute tactical time frame gives me pause with the daily chart. If this fails to make a new high this downside price objective is in play
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Nasdaq bullish sentiment is at 58% quite a divergence with recent price action
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NDX Index same story as the S&P. The signals are working but the pullbacks are shallow.
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Dow Jones Industrial Average continues sideways. I removed my DIA short and will be back with a turn.
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Hedge Fund Telemetry Trade Ideas
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Trade Ideas - Covered DIA, HD both at losses. Added long FXI, WHR long 2.5% size, Added short AMD 2.5% size.
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| AMD - The Poster Child of Chasing Green
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My friend Frank Cappelleri from Instinet sent me this chart today. "Is it a good time to get in?" NO
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The Erlanger Short Interest Data on Semiconductors is pretty revealing. The Type 1 stocks (heavily shorted) have notably outperformed the Type 4's (few shorts) This is unusual
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AMD is getting close to a top and I added a 2.5% short today
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AMD has a very low short intensity rank and low short ratio - Not a lot of people are short.
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Seasonaliity is weak in October historically
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Tilray went public in July and is a cannabis stock. There is no borrow on this and if you can find a borrow the rate is ridiculously expensive. Puts are expensive too. A put spread strategy is the only way to go if you wanted to bet on it going lower
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Corporate Debt Levels and Yield Spreads
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Jeff Gundlach posted this on his webinar the other day and it just struck me as truly amazing. I believe spreads will spike soon.
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WHL Whirlpool has been killed down nearly 40% from the upside exhaustion signals. Taking a shot with 2.5% size.
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UPS is starting to turn lower
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FEYE remains one of my favorite tech stocks and I hear the company has been very confident at recent investor meetings. They have picked up big contracts recently with GOOG and FB. That tells me those sites are getting hit constantly with cyber attacks.
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FEYE also is seeing an uptick in short interest with intensity very high
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Tiffany lower highs and soon lower lows
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BABA potentially bottoming
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Support is at 72.64 with a pending downside Countdown in progress
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US Dollar bullish sentiment is at 33% and continues lower
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Euro bullish sentiment is at 52%
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Yuan still in a tight range
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Euro Stoxx 600 is a broad index that still looks bad
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EEM Emerging Markets ETF nice gap up but trading near low of day is not encouraging
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FXI Hong Kong China ETF looks like a buy. Tom DeMark was saying China could move higher yesterday
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Crude bullish sentiment is at 88% and this is extreme
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Crude got up to resistance with an upside red Sequential Countdown but faded back lower. I thought this could break through on the hurricane supply disruption fears. Still in a tight range 70.94 upside resistance and 65.31 support
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Bond bullish sentiment is at 67%
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US 10 Year Yield still is below the resistance of 2.9952.
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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: ADS, CF, EGN, FICO, FLR, HMSY, LSI, LYV, ROL, SJI, SMTC, WWD
DAILY DOWNSIDE 13: FITB, HAYN, SE
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: CME, EXC, HUM, LMT, LXU, MDT, MRCY, TGT, WCN, WM
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: AREX, BAS, BCO, FCX, FMC, GHC, GPOR, IDCC, KAMN, NFX, ONE, PES, PLT, RGA, RGLD, SGMS, SLB
Updated: 9/10/18
WEEKLY UPSIDE 13: BRC, CIEN, EBS, ESRX, POOL, TXT
WEEKLY DOWNSIDE 13: NONE
Updated: 9/4/18
MONTHLY UPSIDE 13: AFG, AJG, AMD, CBT, CECO, EIG, IR, MAA, MRCY, MSA, MSFT, NSC, ORI, ROK, TDY, TTWO, UNT, UNP, WCG, WTR
MONTHLY DOWNSIDE 13: FTR, RRD, SMCI, SSI
Euro Stoxx 600 Universe:
DAILY UPSIDE 13: FABG SS, SCHA NO, SY1 GR, VPK NA
DAILY DOWNSIDE 13: BAB LN, FHZN SW, INCH LN, RUI FP
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: AKZA NA
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: AALB NA, BLND LN, BMW GR, FHZN SW, INVP LN, LIN GR, OMV AV, OSR GR, PPB ID, RI FP, TEN IM
Updated: 9/10/18
WEEKLY UPSIDE 13: IPN FP, LISN SW, SRT3 GR
WEEKLY DOWNSIDE 13: MONY LN, RPC LN
Updated: 9/4/18
MONTHLY UPSIDE 13: ACKB BB, GALP PL, IPN FP, KOMB CP, MTX GR, UCB BB
MONTHLY DOWNSIDE 13: ALPHA GA, BARC LN, TL5 SM
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