TIgerSoft/Peerless HOTLINE
(C) 2016 William Schmidt, Ph.D.
www.tigersoft.com
william_schmidt@hotmail.com
Current Address
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www.tigersoft.com/64HRL/INDEX.html
Previous Address -
www.tigersoft.com/55HL55/INDEX.html
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HELP
A
Guide To Profitably Using The Tiger Nightly HOTLINE
Introduction
to Tiger/Peerless Buys and Sells.
Peerless
Buy and Sell Signals: 1928-2016
Individual Peerless signals explained:
http://tigersoftware.com/PeerlessStudies/Signals-Res/index.htm
http://www.tigersoft.com/PeerInst-2012-2013/
Explanation of each Peerless signal.
http://www.tigersoft.com/PeerInst-2012-2013/
Different
Types of TigerSoft/Peerless CHARTS, Signals and Indicators
Peerless Signals and DJI
Charts - version 7/4/2013
1965
1965-6 1966
1966-7
1967
1967-8
1968
1968-9
1969
1969-70 1970
1970-1
1971
1971-2 1972
1972-3
1973 1973-4
1974
1974-5 1975
1975-6
1976 1976-7
1977
1977-1978
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1979-80
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1980-1
1981
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1983 1983-1984
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Documentation for
TigerSoft Automatic and Optimized Signals.
How reliable
support is the DJI's rising 200-day ma?
SPY
Charts since 1994: Advisory Closing Power S7s, Accum. Index, 65-dma, Optimized
Signals.
Previous Hotlines -
www.tigersoft.com/55HL55/INDEX.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
1/19/2016
--->
Corrections,Deeper Declines and Bear Markets since 1945.
1/21/2016
--->
High Velocity Declines since 1929
2/12/2016 --->
Presidential Elections Years and Bullish IP21 Positive Non-Confirmations at
Lower Band.
2/12/2016 --->
OBV NNCs on
DJI's Rally to 2.7% Upper Band when DJI's 65-dma is falling.
Earlier
Q-Answers
New
QuickSilver Documentation
(1/11/2016)
Our Different Signals
Better
understand the difference between Peerless DJI-based signals,
the one-year optimized red Signals and
the fixed signals based
on technical developments.
Introduction to
Tiger/Peerless Buys and Sells.
Different Types of TigerSoft/Peerless CHARTS, Signals and Indicators
===================================================================================
===================================================================================
Hotline and Links -
6-8-2016 We still have the Peerless Buy B11 as our
active signal.
But volume remains weak. See the bearish OBV divergence
from Prices in the Hourly DJI chart.
The SP-500 has now
reached its well-tested resistance line and the DJI has managed
to close above 18000. I would think that there will be another
small pull-back in the DJI and the
SP-500. The NASDAQ
and Russell-2000 ETF, IWM, also are nearing
their resistance
levels, too.
Commodites have broken above a neckline in an inverted
head/shoulders pattern. Gold's strength is highly unusual.
Another big move up in Gold would cause a lot of new buying and
short-covering in what I call the anti-Dollar "Gang of 5". The
Fed may try to "jawbone" down these inflationary plays. That may
work with foreign ETFs and YINN, but Oil seems to be in a solid
new uptrend. So, I would continue to hold DIA and UCO.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
(no Bearish... tonight)
The last few days have seen big jumps in our "Gang of 5"
anti-Dollar plays:
1) Commodities,
2) Crude Oil Stocks,
3) Gold stocks,
4) Foreign Stocks and
5) the Chinese major stocks' ETF, YINN.
Recently they have stopped being the "Five Horsemen of
a Deflationary Apocalypse". Their rises were all a very
predictable response to growing expectations that the
Fed would keep rates unchanged a lot longer than previously
expected. The poor May Jobs' Report has reinforced this
view.
Will this Inflation-Loving "Gang of 5" keep rising?
I would watch Gold stocks. Gold Stocks are the leader.
Gold turned up first and gold stocks are the strongest of "Gang of 5".
If Gold stocks are any indication of what lies ahead now for this
Gang of Five, then they all are likely entering a wild phase where
they could go up even faster, provided Gold stocks now achieve
a new breakout.
I suspect the Dollar's weakness will now cause the Fed to do or
say something to try to get the "Gang of 5" to retreat. The Fed's
highest priority is usually to protect the Dollar and retrain the
"Gang of 5". You can see negative non-confirmations by the
Accum. Index as YINN and Foreign Stocks have rallied to their upper band.
Charts of Anti-Dollar "Gang of 5"
| Gold Stocks show broadening price formation
in a powerful uptrend. A breakout would be a "green-light for the whole group.  |
Crude Oil remains in a strong uptrend with
very positive internals and momentum.  |
Commodites show a very Bullish
Inverted Head/Shoulders Bottom.  |
| Foreign ETFs have reached the upper band
where heavy distribution is occurring. This is a Tiger S9 and usually bring a retreat.  |
| YINN has reached the upper band where heavy
distribution is occurring. This is a Tiger S9 and usually bring a retreat.  |
===========================================================================
6-7-2016 Wall Street has to like Hillary's clear victory
over Sanders
in the "big enchelada", California. Still. Sanders got 43%
of the vote. The Fed would be wise to take note and not
cause another big market sell-off or serious recession by
raising rates prematurely, otherwise a true populist will
win next time.
The DJI would now need to close up 1% and the Peerless V-I
would have to fall 9 to turn negative and bring on a "S9V".
A 180 point jump tomorrow seems unlikely. Though breadth
is still very positive and Down Volume
keeps falling, it's not at
all clear that Volume will be high enough to take the
DJI
much past 18000, 62 points away. Note that the Accumulation
Index stands at only +.037. There is still a lot of big money
selling.
But with Peerless operating on a Buy B11 and DIA's
Closing
Power still rising, I think we can expect still higher prices, all
made gradually and grudgingly from the Bears, who have
been unable to produce any
MINCPs again tonight.
Hold DIA and
UCO. The beaten down Oil and
Gas stocks
are getting a good play here. Often they get nice rallies when
the rest of the market is tiring. So, do
Biotechs, but they now
show a red Sell.
Charts: Peerless DJIA
Hourly DJIA DIA
SPY QQQ
IWM
DJI-Utilities
DJI-Rails A/D Line-6000
Stocks
Crude Oil
SOXL TECL
Major Indexes and A/D Lines.
Key Tiger
Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
Short DUG.
Will Donald "Blow" It?
There are no cases going back more than 116 years of a Democrat
succeeding a sitting Democrat in the White House, except by
death (Truman in 1945) or assassination (LBJ in 1963).
Al Gore could not do it in 2000, even after the fantastic stock boom
of the 1990's. Gore did not have the baggage of poor judgment
or personal corruption that Hillary must overcome. But Trump
could "blow" it. He will have to learn some manners now to
appeal to a much larger audience. Can he behave inoffensively
and sound responsible for even a week? The next 5 months?
Was his boorish, iconoclastic behavior all
an act to win Republican
primaries? I suspect so. I
can't wait to hear his next big speech.
===========================================================================
6-6-2016 There is no S9V. The DJI closed only 1.2%
over the 21-day
ma and the V-Indicator has turned positive at +12. So, the
current Peerless signal remains a Buy B11.
Bullishly, the 10-day
ma of NYSE Up-Volume is rising and the ma of Down-Volume
is falling. The Closing Power for DIA
is rising, too. Hold DIA.
I suggested selling BBH and USD/SOXL on today's strength.
Utilities again populate the
602 MAXCPs Bullish ranks more heavily
than any other group. But it cannot be said this is only a defensive
rally. There were 1214 more up than down on the NYSE.
Oil jumped
as did commodities and
oil stocks. I believe this
is a constructive
sign; we do not want world-wide Deflation. The market seems to
agree, though the FED probably has serious doubts.
See below how bullish Crude Oil's internals are. I suggest buying it.
It might retreat a little, but look at how high its Accum. Index readings
are and how its Closing Power is rising. Professions are buying it
away from the Public and overseas' sellers.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
Yellen spoke today and revealed a lot by saying so little. The FED
is in a quandary. If it raises rates, it could tilt decisively down the
monthly Jobs numbers and start a recession. On the other hand,
commodity prices are starting to rise at a pace that gives ammunition
to the Hawks. The market certainly believes that there will be
no rate hike in June and probably none in July.
Usually markets do not uncertainty. So, the rally is telling us
not only is it close to certain that the Fed will do nothing in June
but it approves of the Presidential candidates. Trump is shedding
much of his populist pretensions and Hillary never had them and
will make Wall Street proud of her.
Wall Street, in general, probably considers Hillary the better,
safer, more orthodox candidate. But it's anybody's guess if
she can win. Most of the Sanders' supporters I have talked
with say they will not vote for her. She cannot be trusted,
they say. And her judgment can be easily questioned.
What Will Market Do if Trump
Becomes Next President?
So, let's assume here for a minute that Donald Trump
is going to become the next President. How does the market
react in an Election year when a Republican is going to
come into the White House? Below are the cases.
What are cases when Republican beats Democrat since 1900?
60% odds of a rally to August. But 100% probability
of a bear market the next year based on 5 cases.
1920 - Bear Market because of FED tightening
to end post war inflation.
1921 was sharply down until August.
1952 - 7% May to August rally. Decline to
Nov and year-end top.
1953 was down 10% for 6 months.
1968 - Sidewise until late Summer Rally to Dec 2nd
and then down hard.
1969 started a bear market which did not end until mid
1970.
1980 - Recovery from Bunk Hunt Bear Market and July
breakout followed
a flat period from October to February. Then one more rally until May
1981.
That was followed by a bear market and much higher
interest rates from
mid 1981 to August 1982.
2000 - Narrowing market and sidewise DJI for 2000.
Then followed a bear market in 2001 until April 2003.
Tomorrow, we can consider how
the market and DJI have
behaved when a different Democrat becomes President.
This would seem more plausible is she can first show that
she can bear Sanders in California. On the other hand, if
she were to lose to Sanders by a wide margin, that would
probably show even more vulnerability for her.
============================================================================
6-3-2016
The current Peerless signal remains a Buy B11.
The 10-day
ma of NYSE Up-Volume is rising and the ma of Down-Volume
is falling. The Closing Power for DIA
is rising, too.
I would continue to hold DIA, but since they have red Sell
signals, I would take the modest profits in USD/SOXL
and IBB unless there is big opening up.
The bleak increase
in May Jobs "should" prevent the Fed from raising rates this
Summer, but they may make a mistake here, just as they have
all too often.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
The Bad Jobs' Report for May
Will Surely Prevent Fed from Raising Rates,
but Might There Be A Recession Soon Anyway.
The May Jobs report raises the specter of a recession just
ahead. Larry Kudlow's comments are worth reading about
this.
http://www.breitbart.com/video/2016/06/04/kudlow-on-mays-poor-employment-report-we-are-in-a-mild-business-recession/
With interest rates already low, how much more can the Fed do
to stimulate the economy? Because of the Congressional gridlock
and Obama's indifference to the fiscal benefits of a new Federally
funded Public Works program, there will be no new fiscal stimulus
to help out a stalling national economy this year. By next year,
it may be too late. Manufacturing is weakening and consumers
are tapped out as far as credit goes, So, what will hold the market up?
Manipulated higher profits? More exportinf of Jobs to cut costs?
More share buy-backs and monopolistic take-overs?
| Monthly Jobs' Numbers Red indicates the Number was below the same month a year earlier. P indicates preliminary. |
|
The Jobs Report was terrible.
Only 38,000 new jobs were created,
or 73,000 if you leave out the Verizon strikers. This marks the
6-th month of the last seven that the monthly Jobs numbers were below
what they were a year ago. (Such comparisons allow for adjusting
for Jobs' seasonality and the temporary boost to employment that
comes most Summers.)
That this is the sixth down-month
out of the last seven
brings July 2007 to mind. That is a frightening thought. Back
then breadth was lagging and we got a Peerless S9. Any breadth
deterioration now would add to the risks now. Note in the 2007
chart, there was one last rally to new highs and then two final
head/shoulders tops. Even a rise of Red 10-day Down Volume
over the Blue 10-day Up Volume now could trigger a 10%+
sell-off as it did in 2007. The market needs to keep rising and
appear to shrug off this Jobs' report. Peerless says it can. I
admit to being doubtful!
Also very worrisome, is the extent to which so many Jobs and
new Jobs are part-time (less than 35 hours a week.
============================================================================
============================================================================
6-2-2016 Continue to hold
DIA, IBB
and USD. Up volume
is bullishly rising while Down volume is falling
on a 10-day. All three ETFs have rising 5-day ma
and Closing Powers, too. The market's strength
for the last two weeks suggests the economy will
get good news on the Jobs' front. But too good a
Jobs' report tomorrow, say, above 250,000 for May could
turn out to be too good. Such a number would likely
be seized upon by Hawks who want the Fed to
raise rates in June or July.
The current Buy B11
keeps pushing the DJI up
towards and against the 18000 resistance. Even
though the NYSE A/D line has made new 12-month
highs, the DJI's rally keeps stalling out. Eventually,
after enough failed efforts, I believe it will turn down
just like the DJI did in 1976 after nine separate attempts
to surpass 1000-1020.
Breadth is much better than it was in 1976, also a
Presidential Election Year, but our current DJI chart
shows a still extent head/shoulders and negative V-I readings.
By themselves, these are warnings that the next 2% rally
will probably bring another Peerless Sell.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
Tomorrow's Job Numbers
Perhaps, the Jobs Report tomorrow AM will somehow
bring a jump in the DJI. Eight of the last eleven months have
shown falling jobs' numbers compared to the year before.
I suspect a really nice improvement from last month, in the
neighborhood of 225,000-235,000 new jobs would set off
a rally. It would be a "Goldilocks" number, not so low as
to scare traders into believing a recession is closing in on us
and not so high as to give the Hawks good ammunition to
raise rates.
On the other hand, another weak number,
below 150,000, would be positive in the sense that it should
weaken the case for a rate hike, but it would also make
the economy appear to be weakening just when the FED is
about to decide to do nothing or even raise rates. Lastly, a
really high number could bring an upside spike in the market,
but then there will be 'second thoughts' about how it will
make it easier for Hawks to justify a rate hike.
See the monthly Jobs' table below from the Dept. of Labor.
http://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth
|
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The good news is the Peerless Buy signal,
the rising trendline and excellent breadth.
The bad news is that the DJI has stalled out
on nine separate tests of 18000-18300
and Volume has been low on the current
rally.
2015-2016
1976 suggests this dull, sidewise market could
last until the end of the year because it is a Presidential
Election Year and because the NYSE A/D Line
is stronger than the DJI.
===========================================================================
6-1-2016 I take the current Buy B11,
the continuing good
breadth (There were more than 2000 up then down
on NYSE today.), the fact that the
DJI closed 100
points up off its lows, the continuing strength in
volatile Semi-conductors and stubborn leadership
by many Utilities, all to mean the DJI will go
still higher this June and the Fed will not be
raising rates this month.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
Semi-Conductors strength now
shows that speculative energies
are still present to some degree.
This is not entirely a defensive advance.
Up Volume is now bullishly rising. I think it
is likely we will see a Sell S9V if DJI should
jump up 1.6%. I suspect this will occur on June
16th when FED does not raise rates.
But that is mere speculation. As I warned last night,
we still must watch the DJI. A drop by it below 17400
would probably show that insider-Professionals have
learned that the FED will be raising rates, possibly despite
another weak Jobs' report.
The Utilities remain in uptrends and are unusually
well-represented among our MAXCPs. That shows the
Doves on the Fed are still ascendant and have not yet
been overcome by the Hawks.
===========================================================================
5-31-2016 Different segments of the market are viewing quite
differently the likelihood of a June rate hike by the FED.
Utilities and
NASDAQ stocks are holding up, but the
DJIA is aiming to retest 17500.
For
now
I would still trust the good breadth and the
fact that
the operative Peerless signal remains
a Buy B11.
Hold DIA,
IBB and USD
(semi-conductors) even though
the DJI's bearish head/shoulders' pattern has not been
destroyed by last week's rally and a drop below 17400 would
be quite bearish. See also that the uptrend for DIA's Closing
Power was violated today.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
Buy B11 is active Peerless Signal.
but it looks like there will have to
be another test of the rising 65-dma.
DIA's Closing Power has violated
its uptrend. This is short-term bearish
for DIA.
A FED Rate Hike?
My sense is that a rate hike in June could easily
send the market reeling: the QE bubble cannot be safely
reduced without a much stronger economy and until
short selling is prohibited on down-ticks. The FED
has erred before and could err again on June 15th.
(Google "Blunders" and "Federal Reserve". See for
example:
http://www.federalreserve.gov/boardDocs/speeches/2004/200403022/default.htm
)
It's a good bet, I think, that they could raise rates in June
and that will send the weakening market into a downward spin.
That would, in turn, seriously damage the weakest economic recovery
in years.
Reading about their past mistakes is quite unnerving.
See my recounting the Fed blunder of October 1931
in last night's Hotline. They have always erred on the side of
fighting phantom-inflation. What's more, historically, they
are far more likely to raise rates in a Presidential Election
Year when a Democrat is in the White House.
DJI Head/Shoulders Patterns Can "Trump"
Good Breadth and Bring on Higher Interest Rates:
The Lessons of 1977 and 2001.
It is important, therefore, to note that the DJI can lead the
market down sometimes even when breadth is good when
the completes a head/shoulders pattern. That was especially
true in 1977 and 2001-2.
In 1977, it was the DJI's H/S and subsequent break
in the NYSE A/D Line uptrend that started that year's bear
market. The DJI-30 stocks, in effect, were anticipating much higher
interest rates and Carter's fiscal austerity better than the
A/D Line or NASDAQ did.
In 2001-2002, it was a DJI head/shoulders that was the best
alert to the bear market that followed.
===========================================================================
5-27-2016
The operative Peerless Buy B11
tells us to continue to
hold DIA. I have also suggested
IBB
and USD, Breadth
is bullish now, as the NYSE A/D Line is making new highs
ahead of all the major market indexes. Professionals
are clearly net buyers, in the sense that we see many more
MAXCPs than MINCPs (331 to 40) and the Tiger Closing
Powers are rising for DIA,
SPY, QQQ,
IWM, SOXL
and TECL.
Volume was quite low last week, but prices still rise.
This warns that there will probably not be enough buying
to fuel much of a breakout. So, I suspect this rally will
reverse on a Sell S9V when the the DJI spikes above the
2.3% upper band around the 21-dma. The DJI on Friday
closed 1.0% over the 21-dma but the Peerless V-Indicator
stands at -95. But for now, the 10-day ma of Blue Up-
Volume has risen above the Red Down-Volume. See these
indicators in the DJI chart just below.
With IBB (biotechs' ETF) and USD (Semi-conductors ETF)
I would suggest watching their 5-day ma pivot points. This
means that we should sell them if they close below the QuickSilver
pivot-point posted currently for the next day. Presently,
the 5-day ma for IBB is rising at an annualized rate of +222%
and will turn down only if IBB closes below 266.03, more
than 10-points below today's close. For USD, the 5-dma
is rising at a annualized rate of 399% and will not turn down
tomorrow unless USD closes below 81.25, which would be
a 5.45 decline tomorrow.
Seasonality is bullish for the next ten days, but turns
bearish after than. Since 1965, the DJI has risen 56%
of the time. But after that, it turns down and shows
a small average decline over the next month.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
Deflation's Dangers Are Long
Forgotten
Assuming, a typical person does not read much current news
until he or she is, say, 20 years old, one would have to be 103
years old now to have read much about the severe Deflation of
the Depression. Therefore it is only natural that most economists,
politicians and pundits discuss Inflation almost exclusively.
This partly helps explain why Janet Yellen and the Fed Governors
are always talking about Inflation and predicting its imminent return
to levels that will necessitate higher interest rates. But there are
of course, other reasons why they especially worry about Inflation.
And if we do not understand these reasons, we will ourselves
be prone to underestimate their dangerous proclivity to raise rates
when they should not.
First and foremost, Wall Street wants to be the financial center
of the world. To the extent that the Dollar sinks, hot International
Funds go elsewhere and the Dollar ceases to be the world's biggest
Reserve currency. This is definitely not something the Big Banks
that run the privately owned Fed can allow.
At its extreme, inflation would also be a source of high anxiety
to the Big Banks' main clients, very well-off savers and bond-holders.
Hyper-Inflation would also make it very difficult for the US Treasury
to borrow money. In that event, either the super-rich would have to
be taxed much more or the Gov't would soon need to print money
wildly. So class interest, pure and simple, heavily predisposes the
FED to err on the side of preventing non-existent Inflation, much
like now.
Nowhere was this clearer that when the FED raised rates
and tightened money in the middle of the Depression, all to
protect the Dollar. Arch conservative Milton Friedman makes
the same point in arguing that it was the Fed that turned a normal
recession into a Depression. Here is Ben Bernanke's tribute to
Friedman. http://www.federalreserve.gov/boardDocs/speeches/2004/200403022/default.htm
Not lowering rates fast enough in 1930 and then actually raising
Rates in 1931 caused thousands of small banks to fail, which
in turn led to hoarding, disappearance of credit and Deflation.
So, the Fed's obsession with Inflation is a recurring theme in their
history. Often this obsession has caused much hardship among
stock investors, not to mention the poor folks who have been laid
off from work though no fault of their own. Given this track record,
it must be surmised that the Fed will again error on the side
of fighting non-existent Inflationary forces. This is exactly what
they may do at their mid June FOMC meeting.
So, we must watch the Closing Powers closely for the key indexes
now. This reflects the insider information that key Professionals
are getting from the big member banks that control the Fed.
We also should watch our 4 horses of a Deflationary Apocalypse.
Presently, 3 of 4 are all still in rising intermediate-term trends, but
that could end, especially if the European Central Bank's planned
purchase of 1 trillion Euros worth of mortgages is stopped or
the YINN breaks down to new lows.
Tiger Commodities' Index (MASTCOMO) -
55% of components are still above their 65-dma
Crude Oil (UCO)
75% of Oil/Gas stocks are still above their 65-dma (MASTOILG)
Tiger Foreign ETFs' Index (MASTETFS)
63% of Foreign ETFs are still above their 65-dma
YINN (ETF for biggest Chinese stocks)
24% of Chinese stocks are still above their 65-dma
Why Do
Gold and Silver Appear
To Be Topping Out?
Gold and Silver tend to rise more when Inflation is expected.
The low interest rate environment finally did bring a recovery
in them this year. But now they show bearish head/shoulders top
patterns, Red Distribution and Professional Selling.
Could the apparent Gold and Silver tops be predicting a
savage Deflationary turn? Some say this is inevitable
given the steady fall in US consumer buying as the Baby Boomers
reach retirement and as the Rich gobble up an ever higher
proportion of national wealth and income, but only use it
to buy stocks and bonds, rather than spend it to keep
Consumption high and the economy strong.
Of course, average people are not in the market like they were
in 1929. But an artificial bubble surely exists now because
of the trillions the Fed has pumped into Banks. What will
happen if the FED errors again and raises rates to protect
the Dollar's prestige and international position like they did
in the Fall of 1931? At least then, the NYSE stopped allowing
depressing shorting on down-ticks.
There appear to be good reasons for some caution now.
Small wonder that buying volume is low.
============================================================================
5-26-2016
Peerless is now on a Buy B11. Hold DIA,
IBB
and USD.
Breadth is excellent. The NYSE A/D Line made a 12-month
high ahead of prices for any of the major indexes. Professionals
remain much more bullish than they are beaish. The number
of MAXCPs is 228 while there are only 32 MINCPs.
But volume would appear to be a problem, See how the V-I
and OBV-Pct are quite negative. If the DJI should reach a
point more than 2.2% over the 21-day ma with the V-Indicator
negative, we will probably get a Sell S9V (NNC) from Peerless.
DAILY DJIA Shows Rising A/D Line
and falling OBV. Most likely, the flat
resistance overhead at 180250 will not
breached by much. But we are in a
bullish seasonal period and volume is
usually low before Memorial Day.
===========================================================================
5-25-2016
Peerless is now on a Buy B11. Hold DIA
and IBB
long.
Buy USD (Semi-conductors).
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
Seasonality is bullish. The DJI has risen 62% of the time
over the next week since 1965. Its average gain was +0.6%
in the five trading days following May 25th. In Presidential
Election Years, the DJI does even better, rising 70% of the
time and averaging a 1% gain.
Today, the DJI closed 0.9% over the 21-day ma. Bullishly,
the NYSE A/D Line has made a new 12-month high. This
shows that the advance is carrying more than simply defensive
stocks higher.
Unfortunately, the Peerless volume indicators are not so impressive.
The IP21 stands at only +.08 while the Tiger "V-I" is -94 and
the "OBVPct" is -0.068. This warns us that if the DJI closes
more than 2.3% over the 21-day ma next month, we will probably
get a Sell S9V (based on the VI being negative.)
So, I expect the DJI to have difficulty again getting much past the
round number resistance at 18000, given the low volume.
But, of course, volume and liquidity are naturally low before
a three-day weekend. Monday is Memorial Day, the day we
seek to honor our countrymen who were killed in wars.
The market could surprise us and erupt to new highs. After all,
we have no Sell now.
See how the DJI and SP-500
are now about to challenge their flat, well-tested resistance lines.
Closes above these resistance lines ordinarily bring an exciting
rush of short-covering and new buying for a week or so.
Thus, the excellent Breadth could be telling us to look for a breakout.
But, my sense, is that volume is probably too low for a
real breakout run unless the market is willing to risk a final
speculative and primarily short-covering Summer rally such as
was seen just before the terrible August-September tops in 1929,
1937 and 1987. That could be very dangerous when breadth finally
weakens.
.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
SP-500's Flat Well-Tested Resistance,
as we like to say, "beckons for a breakout."
============================================================================
5-24-2016
Peerless is now on a Buy B11. Hold DIA
long.
The good news is that positive breadth is expanding
and Professionals are bullish many more stocks than they
are bearish. The number of MAXCP is 341 and the number
of MINCPs is only 36.
Good shorts are hard to find.
(MAXCPs are Closing Power new highs and MINCPs are Closing Power new lows.)
The DJI shot up 200 points past its rising
65-dma. We might
attribute some of this strength to reduced liquidity ahead of the
3-day Memorial Weekend. But the market was ready, I think,
for another crack at the 18000 resistance. The internals for the
DJI were not very weak and the A/D Line just would not stay down.
The A/D Line is close again to scoring another new high ahead
of the DJI. This has to be bullishly construed, just as the
successful test of the rising 65-dma is.
Biotechs are turning around after a
sizeable decline. IBB
seems a reasonably safe buy. Semi-conductors (SOXL
and the elite technology stocks in our
Nifty-35 (TECL)
are the likely leaders here, provided the NASDAQ
can keep rising and the DJI,
OEX and SP-500
can
advance past the resistance of their right shoulder apexes.
For the second time in three days, there were 3x more stocks
up than down on the NYSE. So, the
rally holds some
promise to be more than simply a defensive rally that will
quickly fizzle.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
Homebuilders jumped today. They
would probably not do
this if the Fed was actually going to raise rates in June.
Gold
is negatively correlated with the market. So, I take
the sharp sell-off in Gold today to be a sign that the market is less
fearful and in need of a haven for capital. Certainly, Gold
was ready for some serious profit-taking.
Volume Remains Low
To Bring An Upside Breakout.
The main problem now is that volume remains low. In addition,
the 10-day ma of NYSE Down Volule is still above Up-Volume and
both the P-Indicator and Accumulation Index are in downtrends.
We should not expect a market-takeoff based on Peerless.
None of Peerless Buy B11s in the period from mid April to the
end of June gained as much as 6%. So, the likelihood is for
another Peerless Sell somewhere between 18000 and 18350.
Buy B11
from Mid-April to End of June.
Gain at time of next
Peerless Sell.
5/8/1959 .046
5/16/1986 .058
4/23/1993 .025
4/17/2006 .046
----------------------
Avg = 4.4%
On the subject of Gold's negative correlation to the market:
"The value of gold ...depends on
factors such as political and economic unrest,
currency fluctuations and inflationary expectations. Almost universally, those
factors that boost the gold price serve to depress the price of equities."
http://www.gold-eagle.com/article/declining-stock-markets-gold
On the subject of >30% NEM rallies predicting bear markets
in the DJIA.
What Should We Make of This Year's
100% Vertical Advance in Newmont Gold?
I have said that rallies in the Gold Stock NEM often
predict bear markets. Let me amend that a little.
A volatile stock like NEM can rally 20% or 25%
and it is not very meaningful as a predictor of the DJI.
And after it has dropped as much as we saw last year,
it is very oversold and can bounce back a long ways.
In a long bear market, like we saw in 2008-2009,
gold and silver stocks were very depressed. They
were market leaders until 2011 and then fell steadily
until the beginning of this year, while the DJI was
mostly up. So, a big advance by NEM after it is in
a long bear market was NOT a predictor of trouble.
That may save us here.
But the facts remain: there are many cases where
Gold' rise and an advance by NEM of more than 30%
are warning signs of trouble ahead for the market.
Check out rises in 1968, 1971 and 1972-3 before
bear markets and Silvers explosion up in early 1980
before the Bunker Hunt Bear Market of Feb-April.
The 1987 example I high-lighted last week.
Other Cases:
Greenspan was spooked in January 1990 just as he was in
October 1987.
See also that NEM rose from 32 to 43 right before Kuwait
Invasion Bear Market of 1990.
NEM rose from 34 to 46, in the period May to Sept 1997,
right before the DJI swooned 14%.
It rose from 24 to 34.5 in April '98, three months before DJI
peaked and fell 20% from July to October.
It's advance from 17 to 30 in September 1999 was a warning
of the October 1999 sell-off and the start of a much deeper bear
market starting in January 2000.
In May 2001, before the DJI dropped from 19500 to 17500,
NEM rose from 14 to 24.5.
Same thing happened in November 2007. NEM had just
doubled.
There may a handful of false positives, but I trust what I have found
and can explain why it's reasonable to expect this "canary"
NEM to continue to work in a helpful way in predicting the market's declines.
In our times now, the FED is trying not to care about Gold,
but I think they will be over-taken by events which NEM's and Gold's
big rises this year portend.
James Dines often wrote about how
Gold's rises spelled eventual trouble for the market. Maybe some
of you know of him and would pass along what he said about this.
=================================================================================
Recent Hotlines
=========================================================================
5-23-2016 The DJI could not stay above its 65-dma today.
See in the
Peerless chart below see that its closed 2 points below that ma
today. Again tomorrow, I would have to go with the Buy B11
provided the DJI can get back above the 65-dma. Keep in mind that
Seasonality is bullish in the week before Memorial Day
(next Monday), so there is a good chance we will be able to
act profitably on the Buy B11 that was shown on Friday's close.
Traders, notice that the DJI will need to close 38 points above
today's close to bullishly turn up its short-term 5-day ma.
Modest Risk Now.
Look back at the charts of the past
Buy B11.
There are 7 cases where the paper losses were between
1.5% and 3%, This accords with the 44% historical probability
of the DJI dropping below a head/shoulders' neckline after
a Buy B11. So, there is still a 35% to 44% chance of an additional
2% decline.
Modest Gain Potential
When we look back at the Buy B11s from mid-April to the
end of June, we do see that the gains were modest. So, again
I would expect only a limited rally, probably back above 18000
but not above 18300.
Buy B11s
from Mid-April to End of June.
Gain
5/8/1959 .046
5/16/1986 .058
4/23/1993 .025
4/17/2006 .046
----------------------
Avg = 4.4%
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
Some Stock Ideas
Using New "TigerSmart" Optimized Red Buys
So how might we play a brief rally now? The
Bullish MAXCPs
are one way. Buying the highest AI/200 stock in the DJI-30, CAT
would be another. A third way, I'd like to suggest here, would be
be to buy the stocks giving new optimized Red Buys where the
trading system would have gained more than 150% for the last
year. In the next few days I will do a follow-up of these. There
are 11 shown below.
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============================================================================
5-20-2016 Cover short in DIA
and take a long position in it
provided
the DJI can stay above its 65-dma
tomorrow. If it cannot do this, we will have to watch to
see if it can get back above its 65-dma on Tuesday
and act then.
Friday
brought a reversing
Buy B11. This
May B11
has problems and limitations. As for the upside potential,
it seems
unlikely that we will see much more than a nominal new
high above 18300. This is because Buy B11s in May and
June get gains only about half the size of the 10% gains
that the signal typically brings.
It is important to appreciate also that the B11 gains are much
smaller in a Presidential Election when the US is not in a world war.
The three of these gained less than 2% on average.
And there is risk, when a head/shoulders pattern is present, since
the DJI breaks below the neckline (here about 17400) 44% of the time.
This alone should probably get us to wait another day.
But I think we do want to reverse positions on DIA if the
DJI can stay above its 65-dma. There are bullish forces at
work now. First, we do see support
coming in on each decline
below 17500. Secondly, we can guess that
the FED will be
most reluctant to raise interest rates if the May Jobs
Report
is as week as April's.
Thirdly, there ought to be a
bit of a
recovery before Memorial Day. The DJI has advanced
58% of the time over the next week since 1965. The average
DJI gain is 0.8% over the next two weeks. And fourthly, the
Hourly DJI's OBV-Line did not confirm the
recent drop to 17440.
Note the new Buy B11 on Friday. This
occurred because the DJI closed back
above its 65-dma.
===========================================================================
5-19-2016 Stay short DIA.
There was no
Buy B11 signal today because
the DJI closed below its 65-dma by too great a margin. The
presence of bearish head/shoulders patterns in the
DJI and
SP-500 make this market look different from
the one other
case where there was a Buy B11 in May, that was in
1986
when DJI was running upwards and making a string of all-time
highs.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
The Market Is Being Held Hostage by the FED.
. When Fiscal Policy Is Frozen in Political Stalemate,
This Is What We Get!
A weak rally from here may still occur. There may be a
bounce back to DJI-18000 if the the FED does not raise rates in June.
For one thing, because it is a Presidential Election Year, I think
we can expect the FED to be reluctant to raise interest rates. For
another, the April Jobs' numbers showed economic growth was
weakening. To the extent, that Yellen, as a Democrat, chooses
to use her influence, she can say the "consensus" of the next
FOMC meeting is whatever she chooses. Only if she is outvoted,
will rates go up.
So perhaps, the DJI will try to rally again to 18000 from where
it sits now, close to its 65-dma. For us, without a Buy signal from
Peerless, any rally would seem to be limited. And with the
head/shoulders pattern present, there may be other bearish
news which could snag the market.
Overseas' Weakness Again
As it is now, overseas' markets are all significantly below their
65-dma. This calls into question whether their turnarounds can
continue. If they do not soon recover, we could be right back in
a deflationary world economy. How long can the US hold
world's economy up then.
Populism is against any more free-trade deals in this country.
What if the terrible "T" word is used, namely tariffs. If Trump
or Sanders create a populist demand for tariffs, the actual passage
of such tariffs could tip the already fragile World Economy into
a Depression. Many economists blame the 1930 Smoot Hawley
Tariff for causing the 1930s' world-wide Depression.
Let's watch the charts of all foreign ETFs,
in Europe, in the
Developing World, in
Latin America and in
China.
==========================================================================
5-18-2016 Stay short DIA.
Sell any longs if they break their steep
Closing Power uptrends. Every recent rally has failed.
Professionals in New York must be getting tired of seeing
their efforts to support the market be quickly eclipsed
by weak openings the next day. This is because
Asian, European
and Emerging Markets seem to have ended their
recovery.
;
The Head/Shoulders patterns in the DJIA/DIA
and SP500/SPY
are classic. They are flat and they are symmetrical. A clear
violation of its neckline will occur on a closing below 17400.
Such a decline would also break the DJI's 65-dma. The minimal
DJI downside objective would then be 16900-17000.
When the 65-dma is also broken simultaneously,
these Head/Shoulders patterns are quite reliable. I show
hundreds of these patterns in my Short Selling book.
Their reliability is about 80% with stocks in all markets.
What is striking now is how many of the Tiger Indexes
of various sectors also show head/shoulders patterns.
The history of the DJI since 1888 shows at least a hundred
such top patterns. Maybe, maybe, there are ten failures, i.e.
where prices fail to fulfill their minimum downside price
objective. (See the links I posted last night to see many
of these H/S patterns on the DJI.)
See DJIA,
DJI-20, DJI-30,
Commodities,
Foreign ETFs,
Housing,
Industrial Materials,
Natural Gas,
Russell-1000,
Software and
SP-500
The 1987 Lessons of Gold
#1 Gold Big 4-Month Rally Warns of A Big Decline in DJI.
#2 Gold's New Warning: A Big Drop Today. See NEM below
how its collapse in October 1987 coincided with the
DJI's 33% sell-off.
#3 Do Not Look to Gold To Be A Safe Haven.
1987 Peak in Gold and Subsequent Crash
Today, the leveraged Gold ETFs, NUGT and
JNUG fell
more than 25%! This reminds me how NEM collapsed
in 1987 just before the Crash then. It had risen sharply
beforehand. But only when it, too, began a big sell-off
did the general market go over its cliff in October. Not
only that, this case suggests that Gold
and Silver will
not be a haven in the coming decline.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs
Bearish MINCPs
QUICKSilver
“I have seen the future and it doesn't work.”
Zardoz (1971)
I get the feeling that Hillary, Obama, the FED
and the market are all slow-walking toward the
cusp of an avoidable economic debacle. The Federal
Reserve's Helicopter is not taking off again. The
dropping of a trillion dollars into the hands of
Big Banks has run its course. It is not at all clear what can
hold the market up now?
|
More Reading
about Sell S10s: Both Automatic and Judged. Judged S10 - TigerSoft
www.tigersoft.com/judgedS10/index.html
Judged S10 Rules The results
from Peerless using automatic signals are
excellent. But they can be improved if one uses a
judged S10. The judged Sell S10 ...
TigerSoft/Peerless Hotline
www.tigersoft.com/HLZA15/
Oct 3, 2015 -
9/30/2015 The operative Peerless signal
is still the Sell S14. A DJI close below the
well-tested, flat support at 17000 would bes considered
a judged Sell S10.
|
==========================================================================
5-16-2016 We still have an operative Sell S2 to
guide us. Stay
short DIA.
In Presidential Election years this signal has averaged about
a 7.2% decline in the DJI. To reach this, the DJI will need
to close near 16800. Given the positive breadth, blue
Accumulation and the rising 65-dma, such a target seems
unlikely to be reached even given the DJI's head and shoulder
pattern.
We could cover our short in DIA if the DJI drops back towards
that 17500 neckline-support. But, I would just trust that the Peerless
system will tell us when it is time to buy back DIA and
go long. This is still a very defensive market. If that
changes and volume rises more on an advance, we can
then reconsider waiting for Peerless to tell us to buy
again. But right now, let's wait to cover. Buying at the
end of May often works out better.
This may all be mooted since a close near 17450 will likely bring
an automatic Buy B12, which is based on buying when
the DJI closes at a rising 65-dma that has not been
violated for 10 weeks or so.
PE = Presidential Gain if DJI Sold Short
Election Year and this position was
closed on next Peerless Buy.
=========================================================================
19480615 PE S2 193.2 .05 perfect
19481022 PE S2 189.8 .061 perfect
19560409 PE S2 518.5 .079 perfect
19560802 PE S2 521 .075 perfect
20000425 PE S2 11124.82 .049 perfect
20000906 PE S2 11310.64 .095 perfect
20001030 PE S2 10835.77 .060 Very small Paper Loss
20040902 PE S2 10290.28 .038 Very small Paper Loss
-------------------------------------------------------------------------
Avg = 7.2%
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs Bearish MINCPs
QUICKSilver
Warren Buffet bet $1.1 Billion on Apples's stock
in the first quarter. He is not prone to make bad investment
decisions. He has friends on the FED. They must have
told him that they would not be raising rates. But now
he is down about 17% on that investment already. Was his
timing just bad? Perhaps, tech stocks are just out of favor
temporarily and this announcement will be the catalyst that
they need.
Let's keep an eye on AAPL and TECL, the leveraged
ETF for techs. Specifically, we will need to see
their Closing Power downtrends be violated with
them above their 65-dma. Until that happens, I
would assume the risks are judged by Professionals
here to be greater than the potential rewards.
AAPL To be a false breakdown, AAPL will need to stay
above its support-line shown below for a week.
TECL looks ready to challenge 40 again if its Closing Power can
break its downtrend and it can close back above its rising 65-dma.
A strong day tomorrow would do that.
==========================================================================
=========================================================
Older Materials
=======================================================================
----------------------------------------------------------------------------------------------------------------------------
4-28-2016 I take the operative Peerless signal to be a Sell S2.
DJI and SP-500 bulls must now fight off quickly appearing
head/shoulders patterns. Just because these are small
patterns does not make them less significant. The DJI's
neckline at 17780 is important to watch now. This is
50 points below the neckline support. If that support
does give way, way, I would expect the DJI next to decline
to the support of its rising 65-dma.
The DJI has slightly penetrated its 21-day ma. With the
current annualized rate of change of the 21-day ma now below
+.07 and the current IP21 below +.07, this mvg.avg.
will probably give way. So, therefore, will the neckline
at 17780. (Key Values DJI Chart).
We remain short DIA. A retreat to the DJI's lower band
near 17250 would then seem to be the most likely next
scenario. It is also possible that we will see a deeper
decline, though still bounded by the broad trading range,
15700-18000. The best earlier examples of such
broad trading ranges are those of 1956-1957, 1986 and 2000.
We will need to get another Peerless Buy signal to buy
DIA.
The Rise of Gold Stocks
Is A General Market Warning,
I am also concerned by how big advances in Gold
and Gold stocks can cause the FED to tighten rates.
Just before the October Crash of 1987 saw NEM,
a key gold stock, rise 125% in 11 weeks, It peaked
on 9/15/1987. Two weeks later we got our most famous
Sell S9. Five weeks after the Sell S9, the DJI was
down 33%.
The "Nifty-35" May Be Topping Out,
One of the reasons that the DJI is declining is the
fear that tech stocks will start to break down following
APPL's lead the last few days. Now at 94.83, it is
nearing important support at 93.
Charts: Peerless DJIA Hourly DJIA DIA SPY QQQ IWM
DJI-Utilities DJI-Rails A/D Line-6000 Stocks
Crude Oil SOXL TECL
Major Indexes and A/D Lines.
Key Tiger Software ETF Charts
Bullish MAXCPs Bearish MINCPs
QUICKSilver
The New Boom in Gold/Silver Stocks
Another reason for the recent decline in blue chips and
many defensive stocks is that they've simply had very
good runs and now it's simply time for some profit-taking.
Some of that money is being shifted to the very hot
gold and silver stocks.
As you know, mining stocks declined throughout 2012,
2013, 2014 and 2015. That's a long bear market by
any measure. Since the beginning of this year, they
have been springing back,
With interest rates very low, the EURO and the Dollar
look suspect to "Gold-Bugs". The mining stocks' up-trends
are outstanding. High performance funds cannot ignore
them. It has been an across-the-board mining stock rally,
but it is the smaller mining stocks that are now rising the
most steeply.
Because of how far they came down, I believe that they
could still rise a lot more before they reach significant
and over-powering resistance. See JNUG's weekly chart
below. This is the bullish leveraged ETF for smaller miners.
It is now 152, In theory, it may not face key resistance until
it reaches 600!
How Darvas Would Trade Them
In 2009 and 2010, many of the same stocks also made
big advances. But there is a big differences now.
In the earlier period they rose more gradually, rising up
and down from a steadily rising 65-day mvg.avgs.
Here they are rocketing upwards. Traders have to
use the rising 5-day ma and 10-day ma as points to buy
and they must also be prepared to buy the breakout-
new highs. Such breakout-buying is hard for most
people. But it must be used when extraordinarily
bullish news has excited both big money and increasing
numbers of speculators who do not want to be left out
of the action. Rallies like this seldom last longer than
a year. But they can be profitably traded.
This is the type of market favored by devotees of the
box system of Nicolas Darvas. As long as the floor of
each higher price-box is not closed below, folks using
the original Darvas system simply stay long after buying
on a breakout. See the boxes in the Daily JNUG chart
below.
( https://en.wikipedia.org/wiki/Nicolas_Darvas )
Daily JNUG
The new B15's appearance is problematic mainly because
of the amount of overhead resistance in the DJI and the
bearish looking head and shoulders patterns that we
see now in the QQQ, NASDAQ, OEX, SP-500
and even the DJI. AAPL reported poorer than
expected earnings after the close today. Because
of its huge size, a much lower opening by AAPL
will almost certainly bring a test of these indexes
necklines. It will also mean the DJI will again test
its rising 21-dma. If these necklines are broken, I
would think the DJI will have to test its lower
band.
There is another problem with today's Buy B15.
Buy B15s seldom occur in April or May. There has been
only one B15 in April. True, that brought a big gain in 1995 and 1996.
But it also occurred after the DJI had already made a very bullish
flat topped breakout into all-time high territory. The
DJI is now 3% below such a breakout. The overhead resistance needs
to be eaten up before any April or May Buy B15.
The single May B15, in 1999, did occur above resistance,
but
because of how late it occurred in the ordinarily bullish
November-May period, it immediately brought a significant
paper loss. The DJI back fell to the lower band
And there is one more problem with taking seriously this
Buy B15 that we got today. This problem arises from the
market's typical behavior in a Presidential Election Year.
Breakouts in April or May just do not go anywhere in
these years. One has to go back to the wild and highly
speculative 1928 April and May breakouts to see them
succeed. Since then, any April or May breakouts have
proven to be failures.
So, we need to be cautious about taking this Buy B15
at present. It could succeed, I surmise. But that would
require the FED to go along with the zero-Discount rate
in Europe. We need more evidence that this is what they
will do.
Let's watch to see how these head/shoulders patterns
play out. At present, I would stay short DIA and avoid
most long positions, except for some foreign ETFs and
some of the strongest oil/gas stocks among the Bullish MAXCPs.
If these head/shoulders patterns are completed, they
should be treated as Tiger S5s. If the DJI completes
its head/shoulders, that, too will be a Tiger Sell S5.
My thinking right now is simply to change Peerless
so that Buy B15s simply cannot occur in April or May
in a Presidential Election Year.
The market is waiting.
I think it is waiting to see what the European Central Bank
and the Fed continue to do. Until Professionals jump
on the bearish side and DIA's Closing Power breaks its
uptrend and the NYSE A/D Line breaks its steep uptrend,
any decline will probably be limited.
The outcome of US Presidential Primaries will probably be Hillary
Clinton vs Donald Trump race. If so, Wall Street looks to be safely
in control for another four years. That will work to hold
the market up, too. Only a sudden rise in US interest rates would
pose much risk to the market. Because it's a Presidential Election
Year and the FED remembers 2008, they will probably be very
cautious and leave rates unchanged.
| QQQ
|
| NASDAQ-100 |
--------------------------------------------------------------------------------------------------------------------------
4-26-2016 The operative signal remains a
Peerless Sell S2.
However, short-term support is apparent. The Closing Powers for DIA.
SPY and QQQ are still in uptrends. So is the NYSE A/D Line.
Let's watch the QQQ now. It could forming a little head/shoulders
pattern. You may remember that we noticed a similar pattern
in the Dow Jones Utilities as it tested its neckline similarly.
It has not broken its support. Fed watchers, apparently,
have not decided whether there will be a June rate hike.
This is a highly
reliable Sell. 2/3 of the cases have
PE = Presidential Gain if DJI Sold Short
Election Year and this position was
closed on next Peerless Buy.
=========================================================================
19480615 PE S2 193.2 .05 perfect
19481022 PE S2 189.8 .061 perfect
19560409 PE S2 518.5 .079 perfect
19560802 PE S2 521 .075 perfect
20000425 PE S2 11124.82 .049 perfect
20000906 PE S2 11310.64 .095 perfect
20001030 PE S2 10835.77 .060 Very small Paper Loss
20040902 PE S2 10290.28 .038 Very small Paper Loss
-------------------------------------------------------------------------
Avg = 7.2%
================================================================================
4-20-2016 Today brought a reversing Sell S2 from Peerless.
This is a highly reliable Sell. 2/3 of the cases have
occurred in a Presidential Election year. The average
decline by the DJI when reversed with a Peerless
Buy is 7%. See the list of S2s further below. S2s
are based on the DJI approaching the upper band
in certain months in the 4-year Presidential cycle
with significantly weakening internals.
While our internals now are not negative, the DJ Utilities
quickly completed a bearish-looking head and shoulders
today. Fear must be returning that the FED will raise rates
in June. See these charts further below.
Peerless Sell
S2s since 1928| PE = Presidential Gain if DJI Sold Short
Election Year and this position was
closed on next Peerless Buy.
=========================================================================
19321111 PE S2 68.0 .135 perfect
19350909 S2 132.5 .033 Very small Paper Loss
19430920 S2 141.8 .071 perfect
19480615 PE S2 193.2 .05 perfect
19481022 PE S2 189.8 .061 perfect
19560409 PE S2 518.5 .079 perfect 19560802 PE S2 521 .075 perfect 19600614 PE S2 654.8 .058 perfect 19670918 S2 938.74 .084 19710907 S2 938.74 .103 20000425 PE S2 11124.82 .049 perfect 20000906 PE S2 11310.64 .095 perfect 20001030 PE S2 10835.77 .060 Very small Paper Loss 20040902 PE S2 10290.28 .038 Very small Paper Loss 20070919 S2 13815.56 .062 20160520 PE S2 18096.27 ---- ------------------------------------------------------------ Avg = 7% |
The Four Horsemen of The New Inflation
With EUROs
now borrow-able very cheaply,
Gold
and
Silver are rising very
fast. Perhaps, much too
powerfully, if the US Fed
decides to break away from
its own cheap money policies.
For now, the rush into
mining stocks is the hottest
game in town. Until we
see clear signs of Professional
Selling, continue to be
represented in this group, as
well as Foreign ETFs,
especially
LBJ and
BRZU.
Oil and
Gas Stocks have
also turned around. Look at the
recent jump in
Commodities
generally. All we need now for a
complete reversal from our four
Horsemen, will
be for
YINN to get up past $16,
its overhead resistance,
just a few pennies higher.
=================================================================================
