If you are having difficulty seeing this email, you can view in your browser or click here to print.

One of the themes I've been talking about lately is potential for companies to issue weaker guidance in the coming earning season.  I've always look at stocks as a barometer and not a thermometer.  Stocks go up on the potential for the future gains in earnings.  Factset put out a note this past weekend on exactly my theme.   "Heading into the end of the third quarter, 98 S&P 500 companies have issued EPS guidance for the quarter. Of these 98 companies, 74 have issued negative EPS guidance and 24 companies have issued positive EPS guidance. The percentage of companies issuing negative EPS guidance is 76% (74 out of 98), which is above the five-year average of 71%. If 76% is the final percentage for the quarter, it will mark the highest percentage of S&P 500 companies issuing negative EPS guidance for a quarter since Q1 2016 (79%)".  I posted a chart below and although it's a little early ahead of the major earnings volume, it does give some some credence to what to watch out for in the coming month.  

We're starting to see cracks in some of the leading indexes and sectors as well some divergent action with some internals that I have some thoughts below with charts.  Sentiment is also divergent with index prices and I've seen sentiment fade before the indexes "catch down".  Tariff news over the weekend wasn't at all positive and Mueller/Trump news is heating up.  Markets, most of all, dislike uncertainty, and this could see some more softening with the indexes - or a lot more!  Stay nimble, tighten stops, and have a decent percentage of cash headed into October.

Happy to be back after a quick trip to California. 

• US Markets -  Sentiment divergent, Several green Setup 9's on upside, Fewer 52 week highs
  
• Hedge Fund Telemetry Trade Ideas - Made a bunch of changes today
  
• Bull Market With Negative Guidance
  
• Retail XRT ETF - Update
  
• Boeing Update
  
• Some Sectors on my radar
  
• PPO Monitor - Percentage Price Oscillator
  
• Bloomberg Technical Pattern Idea Screen
  
• Currency Update - No changes to bias
  
• European Market Update - Looks like another lower high
  
• Global Market Update - Bounce could stall here
  
• Asian Market Update - Nikkei getting late in upside move
  
• Crude Update - DeMark upside Countdown potential but sentiment remains extreme
  
• Gold Update - Sideways
  
• Bond Update - Make or break levels with sentiment
  
• DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 500 and Euro Stoxx 600 WE ARE NOW HIGHLIGHTING STOCKS ARE MOST ACTIONABLE
  

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.  When the new website launches we will be adding new charts and historical sentiment data for Euro Stoxx 50, UK FTSE 100, German DAX, French Cac 40.  We will be adding Japanese Bonds, German Bunds, and a few more.  
SPX bullish sentiment is at 75% and remains elevated

SPX daily another green Setup 9 and a pullback with 9's have been seen in the past 5 months

S&P 500 new 52 week high divergence

S&P cummulative breadth with another Sequential and Combo 13 with a green Setup 9.  The last signal did not work for more than a few days but the previous two did work well.

Nasdaq bullish sentiment is at 63%

NDX Index still holding the 50 day.  FANG's helping today

Dow Jones Industrial Average with 9-13-9 pattern.  

Dow Industrials also not seeing as many stocks hitting 52 week highs vs January

IWM Russell 2000 starting to break the 50

Trade Ideas Sheet - Long and short US equity ideas including ETF's.  We will be overhauling the Trade Ideas Sheets for long only, short only, ETF's when the new website rolls out soon.  There will also be a clearer email distribution with changes.  
Trade Ideas Changes:  TIF, UPS (friday - too tight of stops), XLP,  short stopped with gains, XLY, XLE stopped with loss. Added short 2.5% sized DIA, QQQ, XLK, XLI, AMZN, IBB.  Doubled to 5% BRK/B, BA, AXP short.
Stops on everything.  TSLA 320, GDX 18.35, AMZN 1850, , VOD 21.95, FEYE 16.00, FXI 41.95, NVDA 275, TXN 108.75 (raised), QQQ 185.50, XLK 77, SPY 295, XLY 118, AXP 114,  WHR 120, XRT 53, IWM 172, XLV 95, BRK/B 225, IBM 153, DIA 275, XLI 81.50, IBB 123, AMD 35

This is interesting since earnings expectations are very high vs 2016 after the market had been down for nearly 6 months.  Could the tax benefits sugar high start to wear off?

Retail under 50 day and I remain short as I expect a lot of lowered guidance calls.  

BA daily with green Setup 9.  This is the largest weight in the Dow so it correlates with the Dow's 9 too

BA weekly

Biotech IBB finally got the upside Countdown 13.  

Industrials XLI  a large price flip today

XLF is down 2% from recent upside exhaustion signal from last week

Staples XLP big reversal and I will watch if it can hold the 50 day.  I stopped out of long with a 3% gain

Transports IYT ETF big reversal today.  I've been showing transports subsectors for the past couple weeks as a risky place to be - especially rails

The PPO Monitor is a proprietary monitor developed to force rank Indexes, Sectors, and Stocks.  It ranks top down by strongest to weakest by percentage above/below the 50 day moving average.  Shorter term signals can be seen when the 10 and 20 day moving averages turn up (green) or down (red) which often are followed by the 50 day moving average.  This is useful to watch for historically overbought/oversold percentage above/below the 50 day moving average.  It is non correlated with the DeMark Indicators however we have found upside/downside exhaustion signals often occur when something rises to the top or drifts to the bottom of the monitor - increasing the timing aspect. We share this monitor with clients with Bloomberg Terminals.  An added feature is that each market/ETF can be expanded with each component force ranked in the same way.  A couple other features include price deviation from intraday VWAP (useful for intraday reversals) and new 20 day highs/lows on right side.  Please inquire if you would like to be permissioned to use the PPO Monitor.  

Today's highlights:  look as some of the better sectors breaking under the 10 and 20 day moving average.  Early signs of weakness.  GDX on the bottom is showing signs of bottoming

The following chart shows the Percentage Price Oscillator (50 day moving average) in action.   XLF has moved about 2.5% above the 50 day in the past 6 months and faded from there

S&P 500 Members/Absolute Price Performance and Relative Price Performance vs S&P 500 and Sector ETF's.  ETF's vs Index Sectors.  Pair Trades.  Long side  is first symbol, short side is second symbol.  

US Dollar bullish sentiment is at 21% and down from 96% 5 weeks ago

US Dollar Index

Euro bullish sentiment is at 63%

Euro Spot

UK Pound Sterling

Euro Stoxx 50 could be making another lower high

German DAX same story

UK FTSE now has a downside wave 5 price objective

Bloomberg World Index remains in a range from February

EEM Emerging Markets ETF

India Nifty 50 down 5% after recent Countdown 13

Nikkei bullish sentiment is at 79%

Nikkei with a Combo and could see some pullback.  

China / Hong Kong FXI ETF needs to clear 44

Crude bullish sentiment is at 86% and remains in extreme zone

WTI Crude Futures should work higher with this DeMark Countdown only on day 5 of 13 however sentiment could be a limiting factor

Gold bullish sentiment is at 26%

Gold sideways

Gold Miners

Bond bullish sentiment is at 53% and near the 50% majority line.  

US 10 Year Yield with a Combo 13.  

US 30 Year Yield at resistance

US 2/10 Year Yield Curve

Unsubscribe me from Hedge Fund Telemetry

Hedge Fund Telemetry LLC, P.O. Box 4675, Greenwich, CT 06861, United States