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The US Trade deficit with China in July set a new high of $393 billion up from $375 billion. This is a large number that will take a lot to move lower. President Trump continues to make random comments of "another $267 billion" in tariffs on "short notice if I want." China has done very little in response as they would rather respond to actual tariffs rather than hear about proposed tariffs. For President Trump to pass more tariffs, it will take more than a unilateral decision on his part. China knows this and they know there are midterm elections in November, so they can play the waiting game. Some companies in the US are getting quite concerned as Apple said over the weekend "Our concern with these tariffs is that the US will be hardest hit, and that will result in lower US growth an competitiveness an higher prices for US consumers." Boeing is down today due to the fear of tariffs and if China responds as they could, Boeing would be a likely target with Apple. China is also in a difficult position with their economy slowing and their stock market nearly at new lows. Their hand is not as strong as it has been in the past but they have a lot of levers they can pull to put the squeeze into the US consumer. As of now,
there are no talks scheduled and what talks that have taken place has not set up any framework for resolution. Trump and Xi will meet at the APEC and G20 meetings however nothing should be expected from those meetings without the lower level meetings bearing fruit. There is not end in sight.
The US equity markets started off the week in the green after 4 down days however there is some fading happenings into midday. Leading stocks such as Amazon, Apple, and Boeing are weighing on the indexes. Breadth has faded from highs. There still is quite a bit of chasing happening with stocks that have been momentum trader's favorites. AMD, Tesla, Amgen. Risk remains high with market sentiment now drifting towards the mid point of the range. When it breaks 50% the majority of people are bearish and that's when steeper declines happen. I do believe the China trade war is the biggest potential negative catalyst and that investors in US stocks are
ignoring the risks. Stay very nimble, tighten stops, have a decent amount of cash on the sidelines.
The new website is nearly complete. I have a little more work on formatting the new sentiment charts and hope to have it launched this week.
US Markets - Sentiment continues to drip lower while Commitment of Traders data shows specs still very long
Hedge Fund Telemetry Trade Ideas - No changes
Consumer Staples - I like this sector long
Apple, Amazon, Boeing - Companies that could be affected by tariffs
Energy stocks still at risk lower
Berkshire Hathaway Update
Ali Baba Update
Currency Update - tight range on everything
European Market Update - Euro stoxx 50 bounced a little but still looks lower
Global Market Update - EEM new low. Stay away for now
Asian Market Update - New lows in Hong Kong
Crude Update - Small bounce today but I feel
this goes lower
Gold Update - No man's land
Bond Update - Mixed picture
DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx
600
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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 63%
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S&P Futures has room on the downside to 2817
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Commitment of Traders shows speculators added last week to the long side. Still crowded
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Nasdaq bullish sentiment is at 52%
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NDX Index at the 50 day. I expect it to break lower
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Dow Jones Industrial Average consolidating.
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IWM Russell 2000 drifting lower after recent upside exhaustion signals
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Hedge Fund Telemetry Trade Ideas
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Consumer Staples - I like on the long side
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XLB Consumer Staples. Upside potential
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Coke needs to make a new high to follow the higher lows in the past 4 months
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Apple, Amazon, and Boeing - Companies that could be affected with tariffs
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Apple is coming down today on tariff fears. They have an iPhone reveal this Wednesday and everyone basically knows what they will be showing. Long are the days of Steve Jobs who brought surprise and sizzle to those presentations
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Amazon has room to the 50 day at 1854
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Boeing has made a series of lower highs recently and there is a downside DeMark Countdown in progress. 304 is the downside wave 3 price objective. Support at 334.64
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| Energy Stocks still seem vulnerable to downside
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72.64 is support on the XLE
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Berkshire Hathaway Update
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Another upside Sequential and Combo Countdown 13's. Looking similar to January
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Nearing wave 5 price objective at 152.43
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US Dollar bullish sentiment is at 48%.
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US Dollar Index stuck in tight range. Wider range is 92.58 as support to 96.64 as resistance
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CoT showing large speculators still long the USD but slowing rise
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Euro bullish sentiment is at 43%
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Euro Spot has a range of 1.1367 as support. The DeMark upside Countdown remains on day 3 of 13 to the upside.
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Cot data shows speculators moved back to the long side after a short few weeks net short. Too early to tell what will happen next
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Yuan still weak and no rebound at all. I could see this dropping through 6.90 sometime this week
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Euro Stoxx 50 still not a buy
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EEM Emerging Markets ETF continues lower with China, Brazil and notably Tencent and Ali Baba weakness. Shorter term look breaking support
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Nikkei bullish sentiment is at 55%
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Shanghai Composite nearly at new lows
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Nifty 50 breaking down after another upside exhaustion.
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Crude bullish sentiment is at 73%
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Crude bouncing today but still see it lower
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Cot data shows larger speculators still overweight crude
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Gold bullish sentiment is at 21%
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Gold still in no man's land
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Cot Data shows large speculators net short gold with the highest short exposure since 2001
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Bond bullish sentiment is at 68% and drifting off highs
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US 10 year yield has an upside DeMark Countdown which is counter to the CoT data
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CoT data shows large speculators are set up VERY short. This has potential for a short squeeze
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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 1500 Universe:
DAILY UPSIDE 13: ABM, BF/B, CPRT, CRL, HAS, MDT, TDY
DAILY DOWNSIDE 13: ADI, DO, FMC, GHC, MSM, NR, NWSA, PES, PTEN
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: DOV, FAST, GRMN, MNST, MRCY, MSCI, TYL
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: AOS, CFR
Updated: 9/10/18
WEEKLY UPSIDE 13: BRC, CIEN, EBS, ESRX, POOL, TXT
WEEKLY
DOWNSIDE 13: NONE
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: AKZA NA, YAR NO
DAILY DOWNSIDE 13: ICOV GR, ATC NA, BOL SS,
FR FP, ILD FP, INF LN, KGF LN, OMV AV, RPC LN, RRS LN, SMIN LN, SPD LN
DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN: HAS LN, HNR1 GR
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP: ING FP
Updated: 9/10/18
WEEKLY UPSIDE 13: IPN FP, LISN SW, SRT3 GR
WEEKLY DOWNSIDE 13: MONY LN, RPC LN
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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