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2/22/19
Thomas Thornton

Trade talks over Big Macs

The markets are up today on hopes for a positive outcome today with President Trump and Chinese trade negotiator Vice Premier Liu at the White House.  We should hear later today or read some Trump tweets positive developments.  I believe any trade deal with be less than stimulative to both the US and China economies in the intermediate term or long run.  This will be a sell the news moment after the markets have gained a substantial amount from the December lows.  Just remember markets top with the backdrop of good news.   

I continue to see many upside DeMark Countdown 13 sell signals from within the S&P components to now EEM, China Shanghai Composite and Hong Kong Hang Seng Index.  Add to the mix several European markets have had some recent upside exhaustion signals combined with some on the US major indexes too.  S&P bullish sentiment earlier this week hit 88% well into the extreme zone and has backed off to 79%.   I was just called by CNBC to comment on the markets which I reiterated what I just wrote above but I was asked where to put money now.  I said perhaps in short term bonds which is boring or in cash even more boring but the point is I expect the next drop to be a no place to hide type of low liquidity pullback.  Several US Indexes are on day 8 of 9 with a Setup count.  Monday could be a significant day.   

NOTE:  The site should be up this weekend as we've been working behind the scenes to improve the functionality, stability, and improved templates for me to format each Daily Note.  Thank you for your patience.   We'll be working all weekend.  
US Markets


SPX bullish sentiment is at  79% and this Setup 9 that should hit Monday could be a significant day


SPX 60 minute overshot the recent signals but the wave 5 price objective has been  2802


SPY vs TLT Stocks vs Bonds also with a 9-13-9 pattern ending this Monday.  


OEX S&P 100 similar chart


Nasdaq bullish sentiment is at 65%.  The NDX is on day 8 of 9 with green Setup


Nasdaq Composite on day 8 of 9 with Setup too.  Although there is a secondary Countdown on day 8 of 13


NDX 60 minute tactical time frame should have the 13 by the time you read this


Dow Jones Industrial Average ditto with the Setup 8 of 9


IWM Russell 2000 ditto with the Setup but we have another Combo 13 today too

 
Hedge Fund Telemetry Trade Ideas

Trade Ideas Sheet
Trade Ideas Changes:   TOOK PROFIT ON EEM LONG +7.25%, ADDED SHORT 2.5% CMG AND DRI.  YES, THE INDEX HEDGES ARE BUGGING ME (WHICH USUALLY MEANS THEY WILL WORK SOON)

 
FAST FOOD since that's what is likely being served today at the White House


Fast food spending peaked last year


MCD bounced as a surprise to me but still feel good about the short as business is slowing


CMG Chipotle got the Sequential 13 after the gap up.  They closed the Chipotle in Greenwich which maybe is a better read on how Greenwich is decent short.  


DRI Darden several signals of late.  We'll know if we are right under 105 the 50 day


SBUX with a big surge in late October and follow through.  I'm close to adding this short too


Euro bullish sentiment is at

 
SECTORS THAT MIGHT HAVE A LITTLE UPSIDE REMAINING


XLI Industrials despite this being stretched I'm not shorting yet


XLK Tech had some signals last week and should get the 9 on Monday


Semi's are just ridiculous since all they have done since October is guide down but say they see a second half recovery.  The comps for the second half are really tough and that would mean they have to get rid of all inventory and grow.   That is unlikely.  I'm not going here short until I see the upside Sequential Countdown 13.  Patience


Transports looking done about here.  A lower low on Monday from today's low would add to conviction


ITB Homebuilding.  Getting late here for the hommies


IBB Biotech still looks toppy

 
ASIAN MARKETS WITH UPSIDE EXHAUSTION SIGNALS


Shanghai with Sequential Countdown 13 today


Hong Kong too


FXI China Hong Kong ETF only on day 11 of 13 but I took profits on this yesterday


India still sideways with wide levels to watch 11,000 and 10,500.   Just that simple

 
European Markets


Euro Stoxx 50 will have Setup 9 Monday too


UK FTSE 100 has price flipped down after the upside Countdown 13's.  A very good record if you use the DeMark Indicators

 
Emerging Markets with upside Countdown 13's


EEM has been a good trade but I sold last half today +7.25% after taking 8% gain on first half.  


Tencent the largest weighting in EEM still could lift a little more but it's late in the Countdown

 
Goldman Sachs VIP


I'm going to make custom charts of these over the weekend.  I think this is a better reflection of what hedge funds are doing vs 13F's.   A lot of the shorts are due to M&A but the longs are the usual suspects of mega cap tech with very low short interest. 

 
More FANG updates


The custom indexes of the FANG's are still late in the Countdown so this could still see a little more upside on the major indexes.   This is the FANG + Index that you can track.  


Nikkei


AMZN needs a little more upside to get the 13

 
Crude Update


Crude bullish sentiment is at 88% down from the recent 93% bell ringer elevated level.  WTI had several upside exhaustion signals in the past few days

 
Copper still looks good long

Copper bullish sentiment is only at 51% so there's more upside potential.  It's on day 7 of 13 with an upside Countdown.  Copper vs Gold ratio below is also supportive for stronger Copper

 
Bond Update


Bond bullish sentiment is at 69% while the 10 year yield continues to slightly drop to low end of recent range

 

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