Opportunities on the long side

Thomas Thornton, Hedge Fund Telemetry info@hedgefundtelemetry.com

1/2/2019

As the year ended, the pervasive bearishness with the media and self congratulatory tweets by people who “called the top” are in full swing.  I’m more interested in looking for the opportunities that have clearly have opened up with this pullback.  Energy stocks have been crushed 40-50% with the beat down with Crude in the past quarter and they are heading into the most bullish seasonal period from January – May.  Get long the ETF’s or individual names that you know.  Apple is the premier company in the world that has been hit down from $230 to $155 for various reasons.  They have one of the stickiest products in the world that people are addicted worse than a drug.  The iPhone isn’t a drug and it’s not going to kill you but will help you communicate, buy things, navigate, take pictures, videos, and is stronger in computing power than the mainframes that sent the first man to the moon.  I want to buy it here.  Banks were the last culprit in the past financial crisis due to massive leverage across the board with way too many big money center banks that had no regulatory oversight.  Today it’s better, not perfect but risk is risk and bad things can happen.  There isn’t as many risks with Bank of America and Goldman Sachs to name a couple.  Goldman has this Malaysia scandal and Rolling Stone is out with the story now (like it’s breaking news) after the stock was down 45% off the highs.  I’d say the bad news is priced in and this won’t end Goldman Sachs.  I want to buy these here.  

Some stocks and sectors haven’t hit bottoms yet and they still have some dues to pay when earnings are announced starting in the next two weeks.  It’s going to be a year with wider dispersion with a lot of opportunities on the long side with companies, sectors, and global markets that have been beat up pretty bad.  I like Emerging Markets and I didn’t last year.   China and Hong Kong could be out performers after terrible years but it just might take a little time into Q1 to tell.

I’m excited about 2019 and expect to have another awesome year.  I’m looking to put out more frequent but shorter notes rather than one per day.  I’d like to hear your thoughts. 

US EQUITY MARKETS

S&P bullish sentiment is at 30% and at the highest level in several weeks

 

S&P 500 Index daily with some Trend Factor price targets higher.  Also on day 4 of 9 with green Setup 

S&P 500 Index 60 minute tactical time frame should continue higher

Nasdaq 100 Index bullish sentiment is at 28%

Nasdaq 100 Index daily on day 4 of 9 with green Setup

Nasdaq 100 Index 60 minute tactical time frame shows a couple hundred points higher potential

Dow Jones Industrial Average Index daily 

Russell 2000 IWM ETF daily.  If the green Setup completes 9 consecutive closes higher than 4 previous closes then the pending red Countdown will cancel

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%.  Holding  energy with wider stops for seasonal move soon.  No changes today

Crude Thoughts

Crude bullish sentiment is at 27% and will likely continue higher later today

WTI Crude Futures looks good

EUROPEAN MARKETS

Euro Stoxx 50 bullish sentiment is at 17%

Euro Stoxx 50 Index daily watch for a move over 3000

German DAX Index daily will have Setup 9 tomorrow 

UK FTSE 100 Index bullish sentiment is at 40% and moving higher

UK FTSE 100 Index daily still looks like a buy

CURRENCIES

US Dollar bullish sentiment is at 61%

US Dollar Index daily wave 4 on the upside is ahead

Euro bullish sentiment is at 35%

Euro Spot daily big move today but doesn’t change much

British Pound Sterling bullish sentiment is at 25%

British Pound Sterling daily big move today

US BOND MARKET

Bond bullish sentiment is at 85% and remains extreme.  

US 10 Year Yield drifting a little lower.  2.62 is the risk level for the recent 13

US 30 Year Yield getting closer to downside exhaustion 

US Investment Grade Corporate Bond ETF is a long with upside Countdown in progress

TLT US 20 year + ETF is a short with upside Countdown 13’s

GOLD 

Gold bullish sentiment is at 44% and at the highest level in 7 months

GLD Gold ETF daily should see a pullback with Setup 9 tomorrow

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 TOTAL FOR DECEMBER 

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.  UNREAL AMOUNT OF DOWNSIDE COUNTDOWNS

 

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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