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9/7/18
Thomas Thornton

Silence is Golden

Keeping one's mouth shut is a great virtue, as in Don't tell anyone else about it—silence is golden. Although this precise phrase was first recorded in 1848, it is part of a much older proverb, "Speech is silver and silence is golden."  Elon Musk went on a live webcast last night and smoked weed, drank whiskey and fired up his flamethrower and he said "running a car company is hard."  No kidding!  Where is the board of directors to tell him to shut up and execute?  Do they realize every time he opens his mouth or Tweets, he's causing a liability for the company? The other notable news today is the Chief Accounting Officer resigned after being on the job for 1 month.  There have been several high ranking finance people leaving in the past six months.  The company needs capital, has some large debts due soon, and their bonds are currently trading at 83 cents on the dollar. This is just one of the many issues facing Tesla besides looming competition, production issues, and SEC/shareholder lawsuits.   I'm short Tesla and I am not covering.  

The US markets are starting to make a small turn lower while the European markets continue a steep decline making multi month lows.  I feel Europe caught the contagion from Emerging Markets and soon it could spread to the US.  Some market leading stocks like Amazon and Google are now well off highs.  Energy stocks look weaker and banks continue sideways to slightly down.  Three are pockets of strength in rails and some retailers and even a few in tech that look decent. (FEYE is one I like in tech).  Now is not the time to be adding more on the long side and my call has been to raise some cash, tighten stops, and to look for hedging opportunities.  

I hope everyone has a great weekend.  I'm still deep into our new website design and hope to have it launched next week.  Thank you for all the support as we couldn't do it without you.

  • US Markets - Sentiment and indexes starting to turn lower after upside exhaustion signals and elevated sentiment
  • Hedge Fund Telemetry Trade Ideas - No changes today
  • US Unemployment Report with DeMark Indicators suggests the low unemployment is within a quarter of turning
  • Tesla Update - A look at the stock and the bonds
  • Oil Service ETF - Downside DeMark exhaustion but in wave 3 it's not a great buy
  • Currency Update- I have a mixed view on currencies with USD
  • European Market Update - Continued downside and looks like contagion has hit Europe now
  • Global Market Update - EEM holding support barely
  • Asian Market Update - Nikkei reversed after upside exhaustion and looks lower
  • Crude Update - Sentiment is dropping and price should folllow
  • Gold Update - Still nothing to do here
  • Bond Update - Tight range in US 10 year with defined upside and downside support levels
  • DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600 - Seeing a lot more downside and upside signals in the US
US Markets


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 66%


SPX Futures turning a little and should get to the 50 day at 2828 and then the DeMark TDST 2817


Nasdaq bullish sentiment is at 57%


NDX Index is nearing the 50 day but I feel this time it will break


Dow Jones Industrial Average consolidating
 
Hedge Fund Telemetry Trade Ideas


Trade Ideas - No changes today
 
US Unemployment Rate


This is the monthly chart of the US Unemployment rate and it currently is on month 11 of 13 with a second downside Countdown.  This has been pretty accurate on the upside and downside.  I has been most accurate on the downside when under 5.5%
 
Tesla Update


Tesla is getting hit today and has a green Setup 9 so a pause could happen but if a new low breaks a red Sequential Countdown will progress to 13.  I am not covering


Tesla bonds are at a new low today 83 cents.  This is really what people should be concerned about
 
Oil Service ETF


OIH has a red Sequential Countdown 13 today however it is in wave 3 of 5 on the downside so expect a shallow bounce into wave 4 and then lower into wave 5.  The other energy ETF's XLE and XOP still have downside Countdowns in progress
 
Currencies


US Dollar bullish sentiment is at 42% and this is now down from a peak level of 96% where I said to watch for a pullback.  I am mixed on the USD right here with not a solid read


US Dollar Index


Euro bullish sentiment is at 51% and now Euro sentiment is higher than USD for the first time in a while


Euro Spot


Chinese Yuan coiling
 
European Markets


Euro Stoxx 50 continues to fall like it caught the contagion from Emerging Markets


German DAX same story


UK FTSE is at support with green TDST and wave 3 price objective.  Green Setup 9 is likely on Monday.  Watch for a small bounce into wave 4


Banks in Europe has been on my do not buy list for nearly a year.  A new low today
 
Global Markets


EEM Emerging Markets ETF trying to hold lows
 
Asian Markets


Nikkei bullish sentiment is at 60%. Watch for a break of 50%


Nikkei continues to drop after the recent upside DeMark Sequential Countdown 13 and green Setup 9


FXI sideways and trying to hold lows
 
Crude Update


Crude bullish sentiment is at 70% and continues lower after reaching 90% recently


Crude has support at 64-65 zone
 
Gold Update


Gold bullish sentiment is at 24%


Gold remains weak with out any momentum
 
Bond Update


Bond bullish sentiment is at 76%


US 10 year with another green Setup 9 and we usually see these in tight ranges.  Watch for breakout 2.995 and support 2.8098 both DeMark TDST levels.  Very well defined range


TLT should have a green Setup 9 Monday.  118.57 is support.
 
DEMARK SCREENS - Daily, Weekly, Monthly Upside/Downside Exhaustion Signals

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:   BRK/B, COL, CR, DTE, DXPE, EGL, IRBT, LEN, LMT, RF, SWK, TGT, VVC
DAILY DOWNSIDE 13:   ACOR, BAS, ICON, IDCC, ONE, POWI, RGA, SLAB


DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN:   ARQL, BELFB, DXPE, MPC, REGN
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP:   AGCO, PBCT

Updated: 9/4/18
WEEKLY UPSIDE 13:   AWR, CA, DHR, DRI, FOR, GRMN, LLL, MA, MANH, NDSN, NFLX, PTC, SHOO, SIVB, STI, TDC, TXRH, WRLD
WEEKLY DOWNSIDE 13:   CHS

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:   FINGB  SS, SAF FP
DAILY DOWNSIDE 13:  AALB NA, PARG SW, BLND LN, EN FP, ING FP, ITRK LN, KOMB CP, PUB FP, UTDI GR

DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN:    DSV DC, AHT LN, DLG GR, KYG ID, REP SM
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP:   AA/ LN, BARC LN, EMG LN

Updated: 9/4/18
WEEKLY UPSIDE 13:  CBG LN, DSY FP, FGR FP, SECUB SS, SOBI SS
WEEKLY DOWNSIDE 13:  NONE

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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