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Just got in from a fun weekend for the Formula 1 race in Austin.  Always a great time especially this year since my daughter came with me to see her first F1 race.  She was very impressed and amazed.   If you get a chance to attend a race it's quite the spectacle.  

Three Quick Thoughts for Monday:

First, China is trying a lot of ways to stabilize their markets with a top down policy approach.  3Q18 Real GDP and September details were near the weak consensus.  Beijing’s economic priority now is offsetting the trade-war economic drag with MP and FP initiatives. The leaders see the slowing and this has always been a big risk and concern that there could be political instability.  So far, China has shown restrain to react to Trumps rhetoric and has proposed some industries to target.  If, BIG IF, they start to target individual US companies, it would be a game changer escalating bringing the awareness to the American public as the markets would react very negatively.

Second, the USD is the first thing I am looking on my Bloomberg on my phone when I wake up each day and sometimes in the middle of the night.  A higher USD as discussed all year would have a lot of alarm bells ringing.  The USD looks higher and a new high is not far.  There are signs European and Asian access to USD is getting tight.  

Third, markets have seen fading after early strength.  It's been happening all over the world.  This is a concern as it continues to run buyers over weakening risk appetite.  The buy the dip people are backing off with the enthusiasm seen in recent years as confidence wanes.  This week in the US will have the busiest week with earnings and with markets down from highs the bar has actually been lowered so the potential for some sharp gains are probable.  On the other hand, look at the recent Netflix pop and drop multi day fade and I would attribute that to the fact that there has been very little short interest in Netflix as well similar all the big mega gap FANG stocks.   With markets at weak support levels any breaks could be magnified to the downside without a decent amount of shorts.  A lot is riding on these earnings reports to stabilize the US markets.  Tight stops, extra percentage of cash, and downside hedges is prudent strategy right now.  

• US Markets -  No sentiment charts today but I did post readings on key markets.  Everything at support
  
• Hedge Fund Telemetry Trade Ideas - FCX stopped out Friday as mentioned it was possible
  
• US Markets vs World Ex US ETF - Update still looks risky with downside DeMark Countdowns
  
• PPO Monitor - Percentage Price Oscillator Force Ranked Sector Rotation - Defensive sectors on top
  
• Copper Update
  
• Bloomberg Technical Pattern Recognition Screen
  
• Currency Update -  The USD looks higher
  
• European Market Update - Just terrible price action
  
• India Update -  At support but looks lower
  
• Asian Market Update - Nikkei at support, MUST have follow through tomorrow in China
  
• Crude Update - At support
  
• Gold Update -  Stalling and I might exit longs if USD continues higher
  
• Bond Update  -  Lower yields before higher.  
  
• DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 500 and Euro Stoxx 600  Weekly data updated
  

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 13% and the index could move to the downside lower Trend Factor target at 2622 - note in February it did hit the .8919 target

SPX 60 minute tactical time frame will lock in the wave 5 downside breaking the recent lows and all the recent buyers will likely run for the doors

Nasdaq bullish sentiment is at 10% and is very low.  Big weights MSFT, INTC, AMZN, GOOGL reports Wednesday and Thursday.   A lot of pressure on them to deliver

Dow Jones Industrial Average looks concerning there are several very heavy weighted Dow components reporting this week

IWM Russell 2000 still looks the worst of all US indexes

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:  STOPPED ON FCX LONG -8%
Stops on everything.  TSLA 285, GDX 17.35 , FEYE 16.00, NVDA 255,  QQQ 179, XLK 75, SPY 285, XLY 113, AXP 109,  XRT 50, IWM 163, NSC 173, DIA 260, XLI 77 IBB 116,  ABT 75, AMZN 1860 DXJ 56 , GLD 111, IEF 98  TLT 112 , AAPL 225, BA  370, IBM 140, NFLX 375 (RECENTLY ADJUSTED STOPS)  

VTI looks lower

Copper bullish sentiment is at 28% and faded after early China related strength

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:  The defensive sectors remain at the top and we are seeing a lot sectors break 20 day lows which were the recent lows so this is concerning

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.  If you would like a PDF from Bloomberg with full details of how this is formulated, please email.  We will be doing a webinar in the coming weeks specifically on this system.

US Dollar Index bullish sentiment is at 76%

Yuan still looks lower

Euro Spot still in range

British Pound Sterling could not continue the upside momentum

Euro Stoxx 50 just looks terrible still.  Look at the fade today

Opened up and faded hard too

Nikkei bullish sentiment is at 33% and the index is holding support

China / Hong Kong FXI ETF gapped up but faded to low of day.  

Shanghai MUST follow through or else global markets could act rather consider the China top down talk won't help China markets.  

WTI Crude Futures bullish sentiment is at 57% and Crude is at support

Gold bullish sentiment is at 27% and the metal is stalling.  I might sell this if the USD continues higher

Gold Miners GDX ETF same plan

Bond bullish sentiment is at 39%

US 10 Year Yield still believe a move lower before higher

US 2/10 Year Yield Curve has backed off enough in a wave 2

What keeps me motivated.... this girl!

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