The last 24 hours we have seen some disruptions on our website. Most notably something about a blunt “you’re not a subscriber” message. Wow if you know me this is for sure not my style. This occurred after we locked down the site with our new upgraded platform and we were slammed overloading our server.  I have personally returned everyone’s email who inquired with a sincere apology.  It’s all fixable and I have our programmers hard at work to correct this ASAP.  Trying to coordinate five different programs into one site can be a challenge and we are confident it will be all be resolved today.  We thank you for your patience.  

As far as the markets go, they gapped down on the open and have bounced off the lows.  This wasn’t capitulation but what I call “Hope Capital LLC” buying.  I have been asked too many times recently “What level to buy?”  Yesterday’s big down day had moderate volume was a sign of potential ahead for lower levels.  Speaking of lower levels, the major indexes have not broken the October lows on a closing basis.  The Nasdaq is close and could today.  This would enable wave 3 of 5 on the downside wave pattern we are following.  I’d love to give the all clear but this will take time to work out.  It will be worth is as the amount of things that will turn into buys will be abundant.  

I’ve been bearish on retail with the thesis of tougher comps and pending guidance cuts since the Summer and today there were many retail companies reporting weak earnings and guidance including Target who’s CEO declared in August that it was “The best consumer environment in his career.”  The stock is getting whacked 11% today and down 23% since his comments.  The issue is the consumer is slowing quickly and year over year comps are really going to be tough to beat as those previous quarters had the new tax law benefits.  There used to be a narrative that when crude and gasoline prices drop it “benefits the consumer like a tax cut” and one should see that reflected in prices of retail stocks.  It’s a little early to tell as the lower prices in energy have yet to be felt in a positive way.  Coming up is is Black Friday and Cyber Monday which could see muted returns vs the last few years.  

The G20 is next week and everyone expects Trump/Xi headlines of “working together” and some nice handshake photo op pictures.  The next potential positive coming from “Hope Capital LLC” could be if the Fed goes on hold in December for a rake hike.  Odds are still high for the hike but a little further downside in the equity markets or even a weak jobs number could see a pause.  These are all in the “hope” category and we know hope is not a strategy.  Until then I remain very cautious as a break of October lows still looks highly probable.  Today’s note has a deep look at all the major US sectors to give you an idea of where we are on the charts.  

US EQUITY MARKETS

S&P bullish sentiment is at

S&P Daily

S&P 500 60 minute tactical 

VIX Index does not look like there has been capitulation yet as it isn’t even as high as October

Nasdaq bullish sentiment is at 13% 

Nasdaq 100 Index Daily

Nasdaq 100 60 minute tactical time frame

Dow Jones Industrial Average Daily

Russell 2000 Daily

TRADE IDEAS

TRADE IDEAS:  STOPPED OUT:  LONGS ALL 2.5% WEIGHT  FEYE,  SHORTS ALL 2.5% WEIGHT:  GS, DXC

NO NEW IDEAS.  WILL LIKELY PUT TESLA BACK ON SOON AND MIGHT TAKE PROFITS IN AMAZON WITH ONE MORE PUSH LOWER.  SEE CHART BELOW

FOCUS OF THE DAY – ENERGY STILL UNDER SIGNIFICANT PRESSURE

Crude bullish sentiment is at 21%

WTI Crude.  I was concerned the other day about the start of this secondary Countdown which I’m glad I was as the trend is very very strong

Brent Crude

STOCKS I AM WATCHING TODAY – AMAZON, NVDIA, APPLE

Amazon really moves and trying to pick off day trades in this is tough.  It nearly has downside exhaustion signals but in wave 3, I would say it will be a trade into another short lived wave 4 bounce followed by a lower low wave 5.  

Nvdia is a semi company with tons of inventory with businesses that are in decline or slowing.  Crypto market = dead.  Data storage centers = slowing rapidly, gaming = slowing.  I’m not covering and I’d like to short more as this will be a multi quarter slowdown.  

Apple is a great company but they are now under the VWAP on TWO quarters of buybacks or that’s my guess on where the average price of the company buyback.  

US SECTOR FOCUS

Technology XLK ETF

Financials XLF ETF

Industrials XLI ETF

Consumer Discretionary XLY ETF

Consumer Staples XLP ETF

Energy XLE ETF

Healthcare XLV ETF

Materials XLB ETF

Utilities XLU ETF

Energy XOP ETF

Transports IYT ETF

Retail XRT ETF

Biotech XBI ETF

Semiconductors SMH ETF

Homebuilding ITB ETF 

MLP’s AMLP ETF

Gold Miners GDX ETF

EUROPEAN MARKETS

Euro Stoxx 50 Daily still looks terrible making new closing lows

Euro Bank Index nearly making a new low too

European Volatility 

US BONDS

Bond bullish sentiment is at 73% and getting into the elevated territory

US 10 year yield down a little again today

HONG KONG

Hong Kong and China failed at trend line and put another downside number on the Countdown to 9 of 13

DEMARK SCREENS – Daily  Upside/Downside Exhaustion Signals For November S&P 500 Universe

Daily/Weekly DeMark upside/downside exhaustion signals (Sequential and Combo)  updated daily

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