Three Fed Chairman Walk Into A Bar

Thomas Thornton, Hedge Fund Telemetry info@hedgefundtelemetry.com

1/4/2019

Back in December, I expected a “dovish hike” which is what we got but the “balance sheet roll off” comments were not welcome by the markets and led to some deeper selling.  Today Ben Bernanke, Janet Yellen, and Jerome Powell were interviewed together and it was one comment about the balance sheet that the Fed wouldn’t hesitate to change the balance sheet roll off policy.  Bang!  Equities ripped and bonds continued lower.  Bond were already going lower after a blowout headline Non Farm Payroll number.  I don’t really like the NFP number and focus more on the Unemployment Rate as I like the survey structure better.  There is a lot of mixed data with some strong jobs data but the ISM Manufacturing report yesterday was weaker… much weaker.  This is one report I focus on very close each month.  The Services report will be out next week and since the services component is bigger in the US, let’s keep an eye out for it.  Below is the monthly chart I show of the monthly US Unemployment Rate and as you might recall last month there was a downside DeMark Sequential Countdown 13 and this month there is a price flip up.  This is big.  

The equity market continues to whip around and I remain positive overall for a bounce or more while I have tried to focus more on out of favor markets, sectors and stocks.  

By the way, I don’t have a punch line for the Fed Chairman joke… Perhaps we are the punch line.  Trade well.  

US EQUITY MARKETS

S&P bullish sentiment is at 20%

 

S&P 500 Index daily could see wave 1 of 5 appear soon

S&P 500 Index 60 minute tactical time frame still has 2617 as wave 3 target

Nasdaq 100 Index bullish sentiment is at 14% and dropped hard yesterday naturally

Nasdaq 100 Index daily still has some upside price targets and could see upside wave 1 of 5 soon too

Nasdaq 100 Index 60 minute tactical time frame choppy and tough.  Whips the best of us

Dow Jones Industrial Average Index daily 

Russell 2000 IWM ETF daily 

IWM 60 minute has some upside wave 5 target at 138.68

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%.  NO CHANGES TODAY.  HAPPY TO HAVE 10% IN CASH AGAIN FOR NEW IDEAS. +3.3% YTD

And now for some very bearish long term charts

US Unemployment Rate has a price flip up

Consumer Confidence with a price flip down.  This has peaked

TLT Trap and Two ways to play it

TLT VWAP from 1/2/19 start of the year now shows the price below and it’s significant because inflows into TLT were MASSIVE.  This means people are caught long  and wrong here.  

TLT with recent upside Countdown 13’s   

TTT levered ultra short if you want to get long with some added spice

SECTOR FOCUS – Some buyable ETF’s

IBB looks good and I am sorry but this one landed on the cutting room floor last week and I didn’t post it. But this now looks to have a bottom in and a pullback needs to be shallow (wave 2 of 5 up) and that’s when we want to buy

KRE starting 5 up waves 

XLK looks buyable here

XME looks good

Energy Thoughts 

Crude bullish sentiment increasing to 36% and it’s bullish coming from 4%.  WTI looks higher and energy high yield spreads could be moderating which helps the risk on trade

Emerging Markets Look Buyable

Emerging Markets ETF can make a move from here

Brazil can work higher into wave 3 target

Hong Kong higher low I like it

FXI Hong Kong China THIS might be the move that finally sticks

EUROPEAN MARKETS

Euro Stoxx 50 bullish sentiment is at 17% and I expect this to move higher tonight

Euro Stoxx 50 Index daily looking good

UK FTSE 100 Index bullish sentiment is at 40% and increasing which is bullish

UK FTSE 100 Index daily starting to work

CURRENCIES

US Dollar bullish sentiment is at 63%

US Dollar Index daily still drifting lower

Euro bullish sentiment is at 31%  

Euro Spot daily could work higher

British Pound Sterling bullish sentiment is at 23%

British Pound Sterling daily trying to turn higher but more work needed

US BOND MARKET

Bond bullish sentiment is at 93% and this is just way too extreme

US 10 Year Yield with a big price turn today

US 30 Year Yield with the downside Sequential Countdown 13 we have been expecting 

High Yield vs Investment Grade ETF Ratio Chart

GOLD 

Gold bullish sentiment is at 57% the highest in quite a while

GLD Gold ETF daily should pull back here

GDX Gold Miners ETF daily nearing wave 3

DEMARK SCREENS – Daily and Weekly Upside/Downside Exhaustion Signals 

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 in this beta stage.

Daily for January and Weekly for past 4 weeks below

 

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.  

Home | Terms Of Use | Contact
© Hedge Fund Telemetry. 2018. All Rights Reserved.