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Posted 26 March 2019 - 04:42 PM
Good finish by the BULLS after a mid-day swoon.
Black line is 50ma
Magenta is 200ma
Getting closer
Both ST and IT went long with stops at SPX daily close 2809 and 2801 respectively,
As one of the best ever Q1 winds down and then another earnings season approaches, I am looking for a retest of the recent DAILY SWING HIGH made on Thursday last week and then ..... ??
I still think this market has another deep decline coming.
Member
Posted 26 March 2019 - 09:28 PM
Forgive us for harping on Friday's yield curve inversion for one more day. But, historically, the event has been a reliable recession indicator and stocks have reacted accordingly. After past inversions, economic expansion turned to contraction about four to six quarters later.
If the curve remains inverted for an extended period and the relationship holds up again this time around, it suggests that a recession is set to appear right before the 2020 presidential election, Barron's' Ben Levisohn observed today. Who does that presumably serve?
We don't claim to be politics experts here, but we can certainly look at past situations and draw parallels to today. And Deutsche Bankstrategist Alan Ruskin did just that. As Ben wrote:
Two examples stand out: Ronald Reagan’s win in 1980 and Barack Obama’s victory in 2008. In both cases, the yield curve had inverted meaningfully, and the economy had slipped into deep recessions by the time of the election. In both cases, the incumbent party lost. “On both occurrences we know, that at the time of the election, the economy was in unusually poor shape, almost certainly encouraging the Reagan 1980 and Obama 2008 wins,” Ruskin writes.
A flat or steep curve doesn't have any meaningful predictive power, according to Ruskin, with both incumbents and challenger candidates winning.
An inverted yield curve's far-out predictive power is interesting, however. “Currently, the curve’s message is rather simple and suggests that come the 2020 election, the electorate may well be demanding new economic ideas in the face of a slowing economy, that in turn may produce more ‘out of the box’ thinking than in traditional campaigns," Ruskin writes.
Read Ben's full report here.
Member
Posted 26 March 2019 - 09:31 PM
Bear pattern
The Russell 2000 rallied for almost two weeks, then failed on Friday and set a lower low. That triggered a classic failed bear market rally attempt.
Historically, that hasn’t meant much in the shorter-term, but over the medium- to long-term, risk tended to be higher than reward. These were not slam-dunk sell signals, especially in the shorter-term. Up to a month later, the Russell’s average return was higher than a random return. But by two months later, it turned sour.
Curve worries
There is no shortage of warnings following the inversion of the yield curve last week. One of the direst is from Dr. John Hussman, with a signal suggesting an imminent decline.
Using his conditions, the signals were highly negative for stocks over the next 9-12 months, but the signal was not robust. Even a slight modification of the rules drastically changed some of the outcomes.
Confident traders
The smallest of options traders spent 39% of their volume buying speculative call options last week. According to the Backtest Engine, a reading that high since the financial crisis led to an average return of -2.3% in the S&P 500 over the next three months.
Lotsa bears
Nearly a third of S&P 500 stocks are still at least 20% below their peaks. There have been two other times since the financial crisis when more than 50% of them hit that bear market threshold. By the time the S&P rallied 20% off its low in 2012, only 18% of stocks were in bear markets. In 2016, only 12% were.
https://www.sentimen...d-curve-warning
Member
Posted 26 March 2019 - 09:33 PM
FEAR = GREED, it's all NEUTRAL
https://money.cnn.co...fear-and-greed/
Bouncing either side of the zero line:
https://www.marketin...llan-oscillator
Member
Posted 26 March 2019 - 09:45 PM
Utilities are screaming, which "must be" bad news for stocks. New 1 year closing high and up at least 26% over the lowest close of the past year. But is it bad news for $SPX? Um...maybe? Sometimes? Not necessarily?
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Posted 27 March 2019 - 07:05 AM
Investors pay to lend Germany money for 10yrs. #Germany sold 10y debt at neg yield for 1st time since 2016. Govt sold €2.4bn in 10y Bunds w/ avg yield of -0.05%, lowest since Sep2016. Fin Agency received 2.6time more bids for the debt than it accepted in a sign of robust demand.
Member
Posted 27 March 2019 - 07:06 AM
More #China doom & gloom: China's industrial profits shrink most since GFC as economy cools. Profits notched up by China’s industrial firms in January-February slumped 14.0%. https://reut.rs/2OpIpAg
