I’m sorry I have not been able to post for a few days. I did a presentation at the Orlando MoneyShow on Saturday and left my MacAir’s power cord behind. After learning that these cords are $80 USD ($100++) in Staples, I decided to wait for the fine folks at MoneyShow to purolator my cord to me at the condo I’m renting. Just got it Wednesday afternoon, so lots of catching up to do.
At the MoneyShow, I presented my Bear-o-meter and my short termed timing system. Both of these systems are covered regularly on this blog. Because the show was on Saturday, I updated my charts for the close on Friday for the various components of the Bear-meter–along with a fresh reading of the short termed timing system. Something amazing happened.
For the first time I’ve seen, the Bear-o-meter went to its maximum bullish reading of 8 on Friday. Actually, it exceeded it (measuring 9 out of 8 – an impossible number so I bring it back to 8 for the study). This is the most bullish I have ever seen the indicator.
The Bear-o-meter moved from a reading of “5” (bullish/neutral) in early January then “3” in mid January (neutral/bearish) to “8” last week (extremely bullish)!!
Positive changes occurred in the smart/dumb money spread, the VIX, the put/call ratio, and the percentage of stocks above their 50 day MA’s.
The short termed timing system, which went “bearish” on January 29th (the day that the markdown began) is now in bullish mode Its signal occurred on Monday of this week when the bullish hook on RSI and stochastics occurred.
It was frustrating not to be able to post this blog on Monday – given these two powerful bullish signals. A few people heard about these signals early by attending my presentation in Orlando. Whatever the case, the market remains in “buy” mode at this time. This includes the TSX broad market via an ETF, which you can see is coming off of a deeply oversold position. After illustrating a nice reversal candle (“hammer”) on Feb. 9th the index looks positioned for at least a snap back.
At ValueTrend, we invested 7% (of the 17% cash) we had been holding last week. We’ve been bidding on a couple of new positions right now, and we are looking to invest the balance between now and the end of the month.
Now that’s the kind of news I like! I’ve been reading John Murphy’s blog through Stockcharts the last few days and his charts would seem to agree with yours. His charts do show response to expected interest rate increases with REITS and Utilities showing decline.
At some point the utilities and REIT’s, telecoms, etc are going to become too oversold. Already I am reading some sentiment data suggesting that their weakness is overdone. Yes, they are rate sensitive. But if the rate increase is already built into pricing, and then the rates don’t rise quite as aggressively as the market has built in–the rate sensitive sectors will rally
Sorry you left your power cord behind. I thought you picked up everything after your presentation last Saturday. But I also belief that REIT’s, Utilities and any stock interest rate sensitive is way oversold, and is due for a really good rally. Why? Because down here in the good old U.S.A. our economy is slowing down big time. Just check out this chart, which is the Citigroup Economic Surprise Index.
And while I agree, that a important bottom has probably been reached, my vote is we get a retest first.
Keep up the good work.
Thanks Tony–yes, I have written about the tendency for markets to bottom – or top–in complex formations (see my book Sideways). So whether its a “V” or a double bottom or H&S reversal or rectangle or whatever…I do believe we saw about the low point when the S&P hit just over 2500 (which was one of my original targets-per a prior blog). That could be tested again. Or not. We shall see.
BY THE WAY, AT TODAY’S (FRIDAY) CLOSE, THE XLU (UTILITIES), XLV (HEALTH CARE) AND XLP (CONSUMERS STAPLES) ARE LEADING THE $SPX DEFENSIVE-OFFENSIVE GAME. I ALSO READ THAT AT SOME POINT THE YIELDS ON US 10 YEAR BONDS HAD BECOME “PARABOLIC” AT 2.90% (JUST LIKE THE MARKET IN DECEMBER, THEY SAY). STOCKCHARTS TEAM SEES THE TLT (US 20 YEARS) GOING DOWN TO SUPPORT AT 114! THE DEFENSIVE COMPONENTS OF THE $SPX (XLU XLP XLV) ARE ABOUT TO CROSS THE 50 LINE RSI (ON THE WAY UP) AND SCORE A POSITIVE SIGNAL ON MACD AS WELL. AM I RIGHT?
JP–like I mentioned to another reader–the defensive and interest sensitive sectors look pretty good–seasonally they turn up after around April or May–but that is a guideline. So yes, I am watching them. I dont hold any utilities yet–but I do have 5% in consumer staples.
Hi Keith. I went to send a package that i was returning to the USA by UPS and it was going to cost me $59.00. it was only 2 lbs and 36 x 30 x 1 thick. originally it cost $11.00 to have it sent to me from the USA. I thought it was totally ridiculous to have to pay that much to return it. so much for our free trade. !!! I wonder how much the money show had to pay to ship your computer cord down to you.
Kim I had my power cord shipped within the USA to my rental unit here in Florida so I dont know what they paid. I suspect very little
But to your point–I ordered some bike shoes (Louis Garneau which is a Canadian maker out of PQ!) – they were cheaper to get shipped to my USA address from Canada than to get shipped to my Canadian address. And not just a bit cheaper–I’m talking $100 less for the same shoes to be shipped to the USA from Quebec– from a Canadian company!
Lots of jubilation and popping of champagne corks celebrating the end of this correction. Im not so sure.
Markets typically bottom in complex bottoms so we may be in for a further test or two.
How much would it cost to ship Trudeau down to the USA and have him stay there permanently.
Better yet, send him to an ISIS controlled region. Then he can explain to them that the reason they do those heinous acts is not because of a violent ideology, but because they have felt excluded (that is what he said in a press interview 2 years ago-the reason behind terrorism). Peoplekind, unite!