Tomorrow night’s big “main event” dinner with President Trump and President Xi at the G20 is what everyone has been waiting for and expectations and hopes are high for at least a cease fire in the tariff war.  Nobody is expecting an end to the tariffs currently in place and consensus is that they will agree to more talks while putting off any further increases for a period of three to six months.  That is the market friendly outcome yet it still leaves corporations with a lot of uncertainty going into 2019.  Both leaders are similar in that they both have big egos and have a lot riding on this politically and with Xi having an increased need to resolve the dispute for economic reasons as China’s economy continues to show signs of economic weakness (China’s PMI missed estimates and is right at the 50% level near contraction).  Sunday will be a big news day with responses from both sides possible after the dinner.  Argentina is two hours ahead of Eastern Standard Time. 

Seeing video today of Russia’s Putin and Saudi Arabia’s MbS meeting at the G20 is something if I was short crude, I’d cover.  No question, they look like they are on very friendly terms and a crude production cut ahead is more than probable.  

I’ve been leaning more on the bullish side of neutral for the past week and expect further gains albeit likely a lower high bounce.  What continues to concern me is the lack of liquidity and depth of market in the futures and ETF’s markets.  I have a few charts below that illustrate what’s going on.  

I hope everyone has a great weekend and thank you for all of your support.  We are making progress on the site each day.  If anyone finds a bug or has any issue or suggestion, please let us know.  Thank you again!

US EQUITY MARKETS

S&P bullish sentiment is at 37% and continues to move up

 

S&P 500 Index daily continues up and could face a test at the 50 day soon

S&P 500 Index 60 minute tactical time frame has some short term upside exhaustion.  I could see a pullback later today as traders take down some risk ahead of the G20 weekend

Nasdaq 100 Index bullish sentiment is at 40%

Nasdaq 100 Index daily does not have a red Countdown and possibly has made a top that could take a while to surpass

Dow Jones Industrial Average Index daily could see a lower high

Russell 2000 IWM ETF daily stalling today

TRADE IDEAS

Hedge Fund Telemetry Trade Ideas Sheet.  Equity ideas both long and short with one week to six weeks average holding period.  Sizing at inception is either 2.5% or 5% of AUM with stops set between 5%-10%.  

ADDED LONG 2.5% SIZE: APA, EOG, ADDED SHORT 2.5% SIZE: ESRX.  DOUBLED LONG TO 5% MAX SIZE:  NOV, X, FCX, HAL.  ADDING A LOT OF ENERGY AND MATERIALS LONG EXPOSURE

FOCUS OF THE DAY – Liquidity in S&P Futures 

Liquidity has been been historically poor in 2018 vs 2017.    Any size order can really move futures down hard.  That day will be ahead.  

STOCKS I AM WATCHING TODAY

Tesla is at the top the range and is up on some “leaked” email from Elon Musk talking about 1k Model 3’s being produced in a day.  It’s going to be times up soon. 

Whirlpool is quietly up 7% on the Trade Ideas Sheet. 

EOG holding recent lows after both Combo and Sequential Countdown 13’s.  Adding a 2.5% sized long position

Apache on day 12 of 13 with Sequential.  Adding a little early with a long 2.5% sized position

Express Scripts has a Sequential Countdown 13 at wave 5 price objective.  Adding 2.5% short 

SECTOR FOCUS – ENERGY

Crude bullish sentiment is at 18%

OIH Oil Service daily not yet with downside Countdown 13.  

OIH weekly has two recent downside Combo exhaustion signals seen last at the lows in 2016

XLE Energy ETF did get the recent daily downside exhaustion Countdown 13

EUROPEAN MARKETS

Euro Stoxx 50 bullish sentiment is at 22% and still sluggish at low levels

Euro Stoxx 50 Index daily  A move over the 50 day would be a real positive.  

German DAX Index daily has just zero momentum. 

UK FTSE 100 Index bullish sentiment is at 46%

UK FTSE 100 Index daily 

CURRENCIES

US Dollar bullish sentiment is at 79%

US Dollar Index daily up a little today but the recent upside Countdown and declining sentiment off extreme levels suggest a pullback or “time out” is likely

Euro bullish sentiment is at 23% and starting to increase

Euro Spot daily 

British Pound Sterling bullish sentiment is at 18%

British Pound Sterling daily

British Pound Sterling weekly is right at support.  

US BOND MARKET

Bond bullish sentiment is at 73% and remains elevated

US 10 Year Yield

US 30 Year Yield

US 2 year/10 year yield curve – Flattening continues

IEF 7-10 year ETF nearing upside wave 3 price objective

GOLD 

Gold bullish sentiment is at 26%

GLD Gold ETF daily 

GDX Gold Miners ETF daily 

Bloomberg Automated Technical Pattern Recognition Screens

ATPR identifies when major chart patterns are just starting to form, alerting investors to nascent shifts in sentiment.  For more information on this strategy please email us and we will send a detailed explanation.

US Stocks

European Stocks

DEMARK SCREENS – Daily Upside/Downside Exhaustion Signals for November

Daily/Weekly DeMark upside (sell signals) /downside (buy signals) exhaustion Countdown Sequential and Combo “13’s updated daily.  Currently we are only screening the S&P 500 universe and daily in this beta stage.

 

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.  If you would like more detailed information on the DeMark Indicators, please email us.  

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