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First, the market celebrates any progress or less than bad news on China tariffs. As it was widely expected $200 billion more but at 10% to start vs the 25% as feared. A slight concession by the US. The tariffs go into effect on September 24th, a little earlier than expected and before the first talks start on September 28th. The Chinese are still very unclear who they are dealing with as the decision maker is Trump. Apple was exempt from tariffs thanks to Tim Cook's dinner with
Trump recently. Expect the Chinese to retaliate further to where it will start to be felt in the US.
Second, bond yields continue to climb and I expect them to move further with relatively low DeMark Countdowns on the upside and sentiment that is just now starting to move lower. Some people has expected the great rotation out of bonds into stocks to happen but it will likely mean people long bonds and bond funds will just see lower values on their investments.
Third, Elon Musk and Tesla are now under criminal investigation. The stock is down about 5%. Not only are they looking into his "Funding Secured" tweet but other statements that were possibly materially false. This is not good for Elon and Tesla as he owns 30% of the company and is levered extensively with the possibility of a margin call if the stock dropped below 250. I have heard it might be closer to 200 but breaking that important level of 250 would break the cabal of
tightly held mutual fund long holders. Think before you Tweet.
Website is coming along and hopefully we can roll out this week. Again, if any client would like a free copy of Jason Perl's excellent book "DeMark Indicators" please email me your address and I will send you a copy.
- US Markets - Sentiment divergent. Potential for nominal new highs, Russell relative underperformance
- Hedge Fund Telemetry Trade Ideas - A
couple changes today
- FDX and UPS - Update
- Tesla - Criminal Investigation
- NSC - Rail Stocks Nearing a Peak
- Recent Stock Ideas
- Cannabis - The good company and the dumb company
- Bloomberg Automated Technical Pattern Screen
- Currency Update - no change to bias
- European Market Update - A little lift but still cautious
- Global Market Update - India making a 6 week low
- Asian Market Update - Nikkei should continue higher, FXI trying to hold
- Crude Update - Crude should continue higher
- Gold Update - Sideways
- Bond Update - US yields should continue
higher
- DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 500 and Euro Stoxx 600 - NOTE I HAVE CHANGED BACK TO S&P 500 SO PEOPLE CAN FOCUS ON THE LARGEST STOCKS
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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 the ability to make nominal new highs.
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Nasdaq bullish sentiment is at 60% and very divergent from index price
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NDX Index bounced off 50 day but still is below yesterday's high
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Dow Jones Industrial Average sideways
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IWM Russell 2000 has been underperforming other indexes for over a month
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Hedge Fund Telemetry Trade Ideas
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Trade Ideas - Removed KO long +4.5%, GS long -1%, trimmed AMZN short to 2.5% from 5% +3.5%, Added long TXN 2.5%
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FDX reported a very weak earnings report last night and the stock is getting hit hard. This could be a tell on other transports stocks as well demand for retail
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Tesla Update - Criminal Investigation
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Elon Musk is really in trouble here as is the stock
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NSC - Rail Stocks Nearing Peak
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NSC with more upside Countdown's
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TXN new long idea. Chips could bounce a little and I'm thinking of this at a short term trade
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Tiffany lower highs with lower wave 3 price objective of 109
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Coke stalled at resistance and I decided to take profits of 4.5% on this trade
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Facebook still has a downside Countdown and price objective at 142
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AMD is starting to stall out
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Cannabis - The good company and the dumb company
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GW Pharma still looks higher with the upside Countdown. This can be volatile so size this small
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Tilray got the upside red Sequential Countdown 13 today. Take a look at the financials on this one and you'll be amazed how ridiculously overvalued it is
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Bloomberg Automated Technical Pattern Recognition Screen
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Let me know how you like this screen.
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US Dollar bullish sentiment is at 21%
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US Dollar Index at support
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Euro bullish sentiment is at 60% and a new recent high
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Yuan did hit the lowest level intraday in a month
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Yen still on day 12 of 13
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Euro Stoxx 50 trying to move but we've seen this before
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EEM Emerging Markets ETF still has work to do
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India Nifty 50 Index new 6 week closing low
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Nikkei bullish sentiment is at 76%
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Nikkei should continue higher
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FXI nearly at the 50 day.
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Crude bullish sentiment is at 75% and could work higher
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Crude back to 70. I still see this higher
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Gold bullish sentiment is at 25%
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Gold still going sideways
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Bond bullish sentiment is at 64% and remains elevated despite bond market weakening
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US 10 year yield is going higher
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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 500 Universe:
DAILY UPSIDE 13: AET, CINF, GLW
DAILY DOWNSIDE 13: MCK, NUE, UA
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: ALGN, CF, COO, IT, PKI, PYPL, RJF
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: MCK, WDC
Updated: 9/17/18
WEEKLY UPSIDE 13: COST, EFX, HON, IR, JWN, LOW, RCL
WEEKLY DOWNSIDE 13: BHGE
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: ACA FP, COLR BB, CS FP, DNB NO
DAILY DOWNSIDE 13: SSE LN, TIT IM
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: SCHA NO
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: FHZN SW, KGF LN, RRS LN,
RSA LN, SPD LN, TIT IM
Updated: 9/17/18
WEEKLY UPSIDE 13: NONE
WEEKLY DOWNSIDE 13: DIA SM, EOAN GR, INGA NA
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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