I am using the title today from the name of the Sex Pistols album which had one of the big songs “Anarchy in the UK” as it feels timely.  The word Bollocks is derived from a 14th Century English term which has grown numerous useful applications within today’s language:  1. Term of exasperation, often at having made a mistake.  2. Exaggerated truth or blatant lies. 3. Unfathomable rubbish; corporate management speak, e.g. ‘blue-sky thinking’, ‘touch base’, and ‘thinking outside the box’. 5. Poor or bad effort.  

The current situation in Great Britain with Brexit, Prime Minister Theresa May, Conservatives and Labour really defines bollocks.  Complete s— show mess.  Sterling is plummeting and it’s likely Theresa May is going to get a no confidence vote as her plan with the EU has received strong backlash from her own party with important resignations in cabinet today. It’s chaos. The Conservative party is imploding and there is the potential for hard left Labour leader Jeremy Corbyn could come to power.  This would not be a market friendly development.  One other thought is that if Corbyn is in power a new referendum could happen.  I’m no British authority and I’m trying to be brief but these are the reads I’m hearing from my clients in the UK.  By the way, I’m taking the family to London for Christmas holiday so I’m OK with Sterling dropping.  Let me know if any of you would like to meet up.  

In the US, everything you hear on business television is basically bollocks too.  Many pundits, who loved them at the highs and likely never managed real money remain bullish as ever as this is a “healthy correction” “head and shoulders bottom” “retest” “Apple is a buying opportunity” bla bla bla.  There has been no capitulation and it’s incredibly orderly despite the major market cap loss in the past 6 weeks.  Liquidity remains very thin and when this breaks lower, the holdouts will run for the exits.  That’s capitulation and when that happens Americans will be crying bollocks.  

US EQUITY MARKETS

S&P bullish sentiment continued lower and is at 14% bulls

S&P 500 breaking the October lows is likely

Nasdaq bullish sentiment is at 21%

Nasdaq 100 does not look like a head and shoulder bottom formation 

Dow Jones only really has about 500 points lower or 2% before it is at a recent closing low

Russell 2000 same story

TRADE IDEAS

NO CHANGES TO RECENT TRADE IDEAS.  USING 5-7% STOPS FROM COST ON EVERYTHING.  Those that could be voted off Alpha Island soon WHR, ITB after more horrible housing company reports

CREDIT SPREADS

Credit spreads are widening 

ANARCHY IN THE UK

FTSE 100 bullish sentiment is at 26% slightly positively diverging

FTSE 100 did get a downside DeMark Countdown 13 yesterday  however there is a secondary Countdown on day 10 of 13.  Remember the first Countdown started in September after the green Setup 9 and this second one if from the Setup 9 in October and silently counted until the first Countdown completed.  For more DeMark education – please let me know 

British Pound Sterling bullish sentiment is at 16% and should be lower later on today’s reading

British Pound Sterling only on day 7 of 13 with downside DeMark Countdown

SECTOR FOCUS – RETAIL

US retail sales for October came out today a little better than expected and Bloomberg headline looks a lot different than from the reaction in prices today.  XRT Retail ETF down nearly 2%

“Retail Sales Set Stage for Buoyant Holiday Season”

Amazon is down nearly 2% 

Walmart reported earnings today that beat on the headline numbers

Macy’s reported a few days ago

Target…

JCPenny achieved reaching the downside wave 5 price objective of 1.05 today.  This one won’t be with us in a year.  

ENERGY SECTOR

Crude Futures bullish sentiment is at 9% up from 4%

WTI Crude bouncing today but for me needs more work ahead to get back in long

Brent Crude 

Natural Gas bullish sentiment is at 96% and that’s a bell ringer sell

Natural Gas is down 17% back under 4 (this chart taken earlier) I will want to buy this on dips

Unfortunately I’m not in the camp who wants to buy energy stocks yet.  

EUROPEAN MARKETS

Euro Stoxx bullish sentiment is at 24%

Euro Stoxx 50 continues to trade poorly

French CAC Index looks like a new low is ahead

ASIAN MARKETS

Nikkei still holding support.  I expect it to break lower

Shanghai Composite trades OK despite the downside DeMark Countdown in progress

Same with the Hang Seng

CURRENCIES

US Dollar bullish sentiment backed of a little to 85% and continues to remain in elevated zone

DXY Dollar Index up today but no red Sequential 13 yet

Euro bullish sentiment is at 11% 

Euro spot should work a little lower with this Countdown

US BONDS

Bond bullish sentiment is at 63% and has been increasing

US 10 year yield 

GOLD MARKETS

Gold bullish sentiment is at 15%.  And has been depressed under 40% since May.  Look at the rips higher each December to January

GLD continues sideways and I stepped off the trade for now.  I’ll probably revisit next month

Gold Miners also going sideways in a sloppy fashion.  

Bloomberg Automated Technical Pattern Recognition Screens

For more info on this strategy, please email me

DEMARK SCREENS – Daily, Weekly, Monthly Upside/Downside Exhaustion Signals for November

Here is the S&P 500 daily signals for November.  We are working on putting this on the site and when we do we will include Euro Stoxx and other time periods.  

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