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Showing posts with label bubbles. Show all posts
Showing posts with label bubbles. Show all posts

February 6, 2020

After a long time and another crazy market


Crazy markets and bubbles in process:

It has been quite some time since we wrote up our thoughts on where we are on the markets and the latest news.

We have been steadfast in our commentary that this market is a bubble which has grown bigger after Trump's election. Stocks were moving up exponentially and some still are - and we are seeing this in primarily the software companies and this sector is trading at unheard of valuations.  Majority of these stocks are trading at valuations that are reminiscent of the dotcom stocks..

Just go check the list and price/sales ratios of some of these companies - check stocks like TEAM, NOW, ZS, OKTA, SPLK, ADBE, SHOP and many others in this sector. The list is long and we will publish a table of these so you can see this crazy bubble behavior.

Take a look $TSLA - stock moves over $100 per day. Stocks like $AAPL have moved over 80% in less than a year and yet many other big cap tech names are moving in an exponential fashion. This is all a result of the Fed, PBOC, BOJ and ECB money pumping into the system - revenue growth is less than 10% - eps growth YoY is stagnant - yet stocks keep moving up.. Low interest rates and the Fed put are going to make this bubble much bigger - we expect the Dow to go to 40000 and NASDAQ to cross 10000. So for now the tagline is - Just Keep Buying - not a single Fed member has uttered the words bubble - at least Greenspan had the balls to utter the words 'irrational exuberance'. At present, we are way beyond irrational exuberance uttered words with EV/S (Enterprise value to Sales) ratio at the highest level in history along with P/S (Price to Sales) ratios of many companies at unheard of levels - just take a look at PAYC - trading at over 27 times revenue - and the Fed bobble heads - say valuations are little high - I think these guys smoke pot together in a room and get high - Yellen/Bernanke have taught Mr Jay (we cal him Jerry from Tom and Jerry) that bubbles are good and to keep pumping..the money spigot...

So if you ain't making money in this market - guess who is the monkey.. The Fed is giving a hand to everyone to make insane amount of money and if you do not see it - its your fault.. Stocks are being traded by the machines and have become insanely predictable... Go check our site in the screener section and why we run certain screens - these are to quickly identify stocks that we can trade..

Here are the links - we have a multiple technical screener and a single dynamic screener:

https://trucharts.com/drpScanner.aspx
https://trucharts.com/Scanner.aspx

The big industrial stocks are crumbling but everyone in the DOW is moving to stocks like UNH, MA, AAPL and MSFT. Stocks like CAT, DE are trading at reasonable prices - but not from a fundamentals perspective. Make a list and trade it.. hold for a day or so and then sell it.. This is not a buy and hold market. We will do a video and post it on youtube channel and publish the link in an upcoming blog post.

Here is a suggestion - look for stocks trading at RSI (Relative strength index less than 30). Or Bullish MACD crossover stocks.

We are now providing free real time quotes and charting on our site. Check it out and for a small annual fee you can get access to our technical alerts.

https://trucharts.com/StockCharts.aspx - for charts and company detailed data.

Now time to make some $$$$..

Good luck trading.


November 18, 2018

Our latest thoughts on markets, Bubbles, Housing, NVDA



Our thoughts on housing, NVDA, ALGN and bubbles:



Written on 11/01:

Housing Correction coming, Bubbles, and how we held our NVDA short for over 2 years - patience is a virtue in the markets - what stocks look vulnerable and why we think HD is going to less than 50.. Well, what we expected finally happened - fortunately we were prepared for this big move down and we think more is coming - we used our indicators to monitor and these were confirmed once the move down was triggered.  We believe this pullback and move down could last longer than anyone thinks. Bear market rallies are fierce and vicious, and these tend to fool the ones who are still hanging on to their hats, praying for the move up so they can liquidate their positions which were acquired a lot higher. Unfortunately praying and hope are not the answer. 

We have shown here our short portfolio and our long/short portfolios below..

We know that there are some impeccable indicators that clearly show we were approaching a top in the markets - here they are: AMD stock - Masayoshi investing money like it grows on trees (which we guess is partially true), and ETRADE ads on TV showing trading can make one a billionaire.. Very standard ads - we live in a world where we are easy to forget the past, and repeat the same mistakes in a different form at a later time with a different group or generation of folks.. It is called wash, rinse and repeat - the big guys know it and they play the game well. Suck in everybody - make them high and drunk - then kick them out onto the road.. Works perfectly.. been there done that.

We have been warning for several weeks now that we are experiencing one of the most massive bubbles ever - ridiculous valuations - excessive risk taking with no regard for risk. Eventually someone has to pay for all this money printing. We believe the Fed has realized there is a massive bubble in stocks and is focused on pricking the bubble. Well, they are succeeding. Not a single soul and crackhead on TV has uttered the word bubble - CNBC, Bloomberg - you name it - all these assholes come on TV acting like they are gods of the stock market - everyone of them is a pump and dump ass.. Trust us - we know this very well - when one analyst came out and pumped up NVDA - all the asses on TV said it is going higher.. It is the most expensive semiconductor stock in the world - trading at over 15 time P/S - there is ZERO justification for that and guess what my favorite top of the market indicator did - that Masayoshi idiot invested in NVDA. We had shorted it all the way up at every 20% move and then also bought the long term puts. Agreed that we missed this bull run - but sometimes you have to use your gut and sit through it - trust us - we have learned patience from markets. And this mistake will never happen again.. We know how to manage such a situation much better next time around. BTW - whatever happened to that analyst - did he get fired - nope - we know that in these firms, the firms will be short the stock, and then their analysts will come and put a buy on the stock while the firm is shorting at the same time.. It is a well known technique/practice - but will never get out to the public - well now you have it.  Another one of our favorite shorts and overhyped stock ALGN - what a joke - company does 2B in revenue and market cap was over 35B - how does this make any fucking sense.. (We are allowed to cuss in our own blog!!) - I can tell you people lost their shirts in this stock as it dropped over $80 in a week and over $170 in 4 weeks. Margin calls are running around the trading desks.. We were long ALGN puts right before earnings.

Housing in Bay area - here is our open prediction - a 30% correction is coming.. We said it and are putting it in writing.. There is a 100% stocks to housing correlation in Bay Area and once all of the stocks come back down to earth - so will housing prices - we are already witnessing price reductions of over 100K in a week for eager sellers.. Unheard of again - where people were jumping over each other to overbid and paying top price of over 200K-300K on average over asking - now there are no buyers - whoever is out buying - is going to regret it very soon.. Just a 20% reduction in price will instantly eliminate all your equity.. It is coming - wait and watch. This is the main reason we think HD stock has to go to 50.. all the days of renovation and flipping are coming to an end.. The SALT and HELOC deductions will devastate the Bay Area - watch - Trump knows it. Prices are coming down in NY, Denver, Australia, Hong Kong, Canada, UAE and India.

We are short and stay short NVDA, ALGN, NOW and many more overhyped and overpriced stocks. We will buy when there is blood on the streets.. It is unfortunate that many people will end up losing (wise ones will sell and take their profits) while all the suckers who are still drunk and high at the party will be stuck with a big shock.. It is also unfortunate that the Fed and all Central bankers have made the world (along with China) addicted to bubbles.. They have not learned that human behavior does not change just because of a single or two  incidents (2000 and 2008 crash) - people will take more risk when money is flowing like water.. No one is talking about all the pension funds, government liabilities, and many more government entities that will suffer consequences of bubble markets - it is sad and it would have been better had the Fed and central bankers had taken a more gradual slow and steady approach - we might have been in a much better position. Yet they do the same - wash , rinse and repeat.. So take profits while you are up - and do not end up crying later..

We will be announcing an amazing offer for equity trading from our site directly very soon - an unbeatable offer - that will rock your brain.. It is coming - stay tuned.. and keep checking our site..which will also be completely revamped.. 

Also check our call on Chinese Yuan to USD targets on our twitter handle @trucharts where we post our trades and our previous blogs. 

BTW - sell AMZN and we are short NFLX.

Short portfolio link on Twitter handle - (@trucharts)

      https://twitter.com/trucharts/status/1063793651552182272

Long portfolio:


Good luck trading..

Founder/CEO/Team at Trucharts.com   


August 26, 2018

Do we keep buying or sell here..

Trucharts Blog 8/24/2018

Do we keep buying or sell here...


Such a conundrum buy or sell. Stocks keep moving up on the Nasdaq - this is very reminiscent of the 2000 bubble - the Dow Jones moved up first, stagnated and then the NASDAQ took over. We are seeing so much froth - in all stocks and at prices that are exhibiting absolute bubble characteristics. But yet stocks keep moving up - and we believe this may be driven by FOMO and central banks seeing the US economy as strong and buying stocks - think about that central banks buying stocks. Never has that happened in the history and ever since central banks have been in existence - money printing has become the norm and no longer an exception. Risk metrics are being thrown out the window and the predictions are getting frothier each day as if there will be no event that will kill this bull market. Valuations for all metrics are at the highest ever and yet there is not a sign of even a single bear on TV. Just run a check on price to book and price to sales along with PE screeners and you will see what we see as the most frothiest market ever. Every deal is getting funded and VCs are raising funds at an unprecedented levels. Everyone is an investing genius when all assets are moving up.. Very typical behavior at the top of bull markets.. You can never call a top until all leading stocks start breaking down.


Anyway - that was a short treatise on our thoughts as to where we are in this stage of the longest bull market in history. We are witnessing one of the biggest bubbles - and we do not know when or how this will end. In this market a $10B market capitalization is considered to be very low. Companies like VEEV, NOW, ALGN, and many others have revenues of no more than $2.2B but their market caps exceed over $78B - total annual revenue for these companies - $4.7B - so the multiple is - 16.59 - so for every dollar in revenue - people are willing to pay $16.59 - hmm - and the Fed says there is no bubble or folks come on TV and say - it is all great - bubbles are made this way.. 


On another note - marijuana stocks CGC and TLRY are trading at P/S of over 150 - so people are paying $150 per ever $1 of revenue - TOTAL MADNESS.


But these thoughts aside, we know this is an excellent market for trading and making money on a short term basis and also by the use of options or intra day or even from day to day trading. We are seeing machines doing a lot of the trading based on very elemental trading signals and this tells us that fundamentals do not matter - no matter what anyone is saying - there is froth, technical trading and money is being made at a frantic pace..


Using options or put spreads for stocks that are moving sideways or are in an uptrend is a very good way to generate income on your portfolio - candidates for these type of spreads would be CAT, DE, EA, IBM, ATVI, MNST, QCOM, INTC


No charts this week but checkout some new features on our site like our dynamic screener at with multiple options for screening:

http://www.trucharts.com/drpScanner.aspx

Our single variable scanner at:
http://trucharts.com/Scanner.aspx

We are planning to go long BIDU, EA, QCOM and INTC. We are heading into the AAPL announcement in September so you can be long stocks supplying to AAPL - like IDTI, INTC and others.

Good luck trading - check out our buy/sell signals on our page http://trucharts.com/Stockcharts.aspx

Subscribe and get access to all our features along with notifications..

Good luck trading.

Trucharts Founder

July 22, 2018

Our thoughts on the Tech Bubble and the everything bubble

The EVERYTHING Bubble:

It has been a long time since we published our last post. We have had a huge Trump rally since the election and the markets ramped in straight line. The FANG stocks have been the biggest contributors to the gain in the S&P along with the small cap indices hitting new highs.

Stocks like ALGN, NOW along with many others are trading at valuations that defy even the loftiest imaginations. ALGN is trading at a PS ratio of 18.8 (that is we are paying 18x times for every dollar in revenue - absolutely mind boggling numbers).  In addition, there is no shortage of companies being funded by VCs at valuations that put the 2000 bubble to shame. Just recently DoorDash received a funding of 535M - that is over HALF A BILLION DOLLARS for a company that delivers food from restaurants.

Think about it - $535 M!! These mind boggling numbers are all a result of the non stop money printing from the Central Banks - the Fed, BOJ, ECB and the PBOC along with many other central banks. This is reminiscent of the 2000 bubble but above and beyond that. Real Estate is in another bubble - and everyone thinks that this will never stop or prices will never move lower. We all know that is not possible - there are limits to everything - simple motto - nothing goes up forever and nothing goes down forever.

Many of the DOW stocks are in downtrends - check stocks like CAT, DE - http://www.trucharts.com/stockcharts.aspx?tick=CAT
http://www.trucharts.com/stockcharts.aspx?tick=DE

The DOW is being held up by stocks like AAPL, UNH, BA and MSFT. Jeff Bezos has now become the richest person on earth - in a span of 2 years is net worth has moved over 100B - Bill Gates is not even close - think about it - one guy's net worth has crossed over 150B!!! Just in a span of less than 4 years. And yet the TV bobble heads are mesmerized by all of this - not a single talking head wants to say it is a bubble - SNB (Swiss National Bank - yes a bank) along with BOJ are buying stocks - when did banks start buying stocks - unheard of - yet folks it is happening.. Just take a look at some of the exponential charts we had exhibited in our last article and many of these stocks have been moving sideways but still at lofty levels. NVDA still trading at 13 times sales.. No revenue growth in many companies - yet the stocks keep trading at these lofty levels - that is called a BUBBLE.

We have central banks that are enamored by bubbles and bubble behavior - it is like being drunk and high - that feeling lasts only so long. Then we will get to the hangover. Stock buybacks are shrinking the pool of shares available and thereby help companies do financial engineering to goose up their EPS. But this is now a trading market and no longer a investing market - we strongly suggest keeping tight stops at the 100d SMA or 10% below the 50d SMA. Try to take some profits and have at least 30% in cash ready to invest. This has been a crazy market and it is now time to take some money off the table and wait for everything to unfold. We still like gold as a hedge - it has been moving in a tight range between 1200 and 1350 - we would nibble into gold and invest 15%-20% of investable assets.

SP500 has been moving sideways in a consolidation pattern and we have to wait and see what happens in terms of a breakout or breakdown. But is very tradeable - specially ETFs like SPY and SSO, along with the QQQ'. Rates will be going higher, so bonds should be moving down. Sell NFLX and look to short the semiconductors ETF SMH. The FANG stocks - are racing to the TRILLION dollar market cap - just think the FANG stocks are worth over $4.1T!!!

We will all be witnessing history here.. Keep your eyes and ears open.. but always learn when it is time to say - yes I have made a very good return and now it is time to take it to the bank..

Check out our site - our screener is excellent and also do subscribe - checkout our pages - we offer features above and beyond other sites:
http://www.trucharts.com/stockcharts.aspx
Subscribe
Dynamic Screener

Good luck trading..

Founder/CEO (trucharts.com) - Co-Founder (Jetstox.com)

November 12, 2017

Kink in the market's armor - Is the pullback coming from these lofty levels??



Kink in the market's armor - Is the pullback coming from these lofty levels??


Are we starting to see a kink the market's armor. Was the 1 year anniversary of the election a mark of a short term or a long term top? What should we expect going into the end of the year and heading into 2018?

Exponential moves in many stocks as been very characteristic of this move in the markets. There has been narrow leadership and everyone, just like in the year 1999-2000, has been loading up in tech stocks and tech stock funds. It seems like we never learn from previous bubble manias and even though we are truly in a bubble with stocks trading at valuations not seen since 2000 and even the market multiples for many metrics above and beyond 1929, 2000 and 2007, none of the analysts (who by the way are in no way responsible for their recommendations) are NOT telling their clients to take profits and wait for better prices. Short covering has also extended many of the popular stocks and obviously the FAANG stocks along with some others in the market - keep flying high. Financial engineering, stock buybacks and earnings manipulations have become a way of keeping prices elevated. The level of complacency is unbelievably striking - there is no respect for risk. 

Every person you speak to thinks that there will never be a financial crisis or a major pullback in the markets. Personally, I believe in simple math and that there is always a reversion to the mean and trust me the mean is way below where the markets are. Typically 50d, 100d and 200d SMA are very critical in determining where the markets should find as support levels. Bubbles in real estate (many house flipping shows on TV - similar to 2007),  bond bubble (scares the shit out of me) and along with the stock bubble is mind numbing. The funding of startups day in, day out, is also a stark reminder of the days of 1999-2000. Startups that will vaporize and end in total losses will be the norm soon. 

Everyone thinks they are an investing genius and there is no way they will lose - that is when you have to take a contrarian view of the markets. Folks willing to fund companies like SLACK (nothing unique), WeWork, and many others at valuations that make your head spin has become norm and every next investor is trying to better up the next one by showing who is boss. This is NOT normal. 

The Fed and central banks around the world will be responsible for the next pullback and it will not be pretty. Market capitalizations of many companies are at mind boggling levels and unheard of. Some market capitalizations dwarf GDPs of certain countries and yet everyone thinks we are going higher. We think it is a serious time to start looking into taking profits and buying some protection in certain high flying stocks and sectors (semiconductor being at the top of the list).  

We suggest looking at puts for Jan 2019 for stocks like ALGN, ISRG and some other high flying stocks like RACE, NVDA and many others. Keep an eye on HYG and JNK - these are he ETFs related to the high yielding and junk bonds - these are pulling back and have a very good correlation coefficient to the market indices. 

Consumer debt is at all time highs - credit card debt is now at over $1T - yes that is a T.... Car loans, housing debt and HELOCS, student loans are at all time highs. We are a world in debt and it is all going to end badly.

Debt/GDP ratios for China is at a staggering 280% and going higher - and other nations debt/gdp ratios are also at staggering highs - all this debt has been created in one decade. The central banks have managed to print so much money that it dwarfs everything we have printed in over  100 years - they have managed to do it in 10 years - that tells you why we are in a bubble. Japan markets are being driven higher because the government is buying stocks - can you believe that - government buying stocks!!! it is the quintessential final nail in the coffin or basically giving up on the basic equations of economics - normal market cycles and following simple rules of the law of numbers and laws of supply/demand and demographics.


Charts for: DIA, LRCX, ALGN and NVDA below: EXPONENTIAL MOVES NEVER END NICELY. We recommend taking profits aggressively.
DIA LRCX chart


Here some article links for your reading:




Yearly subscription is only $180 and you can also get access to our automated trading algorithms and if you enter your portfolio - you will get portfolio emails at end of day indicating the technical picture of your stocks and whether these are buy, hold or sell. Only for paying subscribers.


Good luck trading.

CEO/Founder - Trucharts.com




December 9, 2015

Happy Post Thanksgiving Blog - Markets and where these are headed going into 2016?

Happy Post Thanksgiving Blog - Markets and where these are headed going into 2016?

Started writing the blog in Hong Kong and now continuing to write in Singapore (a truly amazing city - so clean - it is like spotless). Still writing (now from Singapore lounge - Hong Kong airport is soooo much better).. 

Schizophrenic markets controlled by Central Bank speak and driving us crazy.. Down one day and up another just because of Central Banks (specifically Draghi - he is becoming such an annoyance) - Eurzone economy sucks - just suck it up and go home. What a waste of time. Well we had two days of trading on the downside and after the stupid huge ramp on Friday, because of options expiration and Draghi speak, we still expect the markets to stay range bound due to Q4 seasonality and technically weak. Energy stocks are crashing and our theme has been consistent on the energy stocks - stay away from these and our target for oil was between 35-60 - now we are at the low end of this range - tough to say where it goes - commodity complex is crashing and I was told that folks who bought real estate in many places (folks who were in the commodity business) are trying to dump their real estate holdings to pay off debts and get liquid. The COMMODITY boom is way over.. What happens to gold?? This will be tough sledging for gold with rate hikes coming. Negative interest rates in the Eurozone - who ever thought we would have negative interest rates - these are truly amazing times and the printing binge is not ending - then Saudi Arabia just secured financing for the tallest building in the world - Who the fuck wants to live in Saudi Arabia other than the fu%$$ng Arabs in such hot weather and crappy place. Having lived in the Middle East for a long part of my life - I hated every minute of it there. Someone's ego needs to be stoked - Alwaleed Bin Talal!! Ridiculous - this country is going broke and they are worried about tallest building in the world. Such BS..These people will never learn - they are here to just stoke their stupid egos.. 

Finally able to write freely after the stupid censors and blogging restrictions, 2 days of overcoming food poisoning in China - makes you wonder how is this country going to really move into the 21st century if it blocks freedom of speech, gets away with human rights violations and yet we welcome it everywhere - sounds too hypocritical to me. But, the progress in China is unbelievable - they keep on building - i think I counted over 500 cranes (since I was bored) in the taxi from Dongguan to Shenzhen. Crazy. There is no stopping the real estate train in China - not happening..Who knows where and how this will end - but right now it keeps chugging along. Travelled to India on this trip another crazy place with so much traffic, pollution and no control - and yet people keep talking about the Indian economy growing - where - it is predominantly driven by real estate, black money and infrastructure sucks, loans are defaulting and banks keep lending. The world is going crazy with the carry trade and there is no telling what the outcome is going to be. Right now everyone is acting like a drunken sailor and there is non stop money printing going on with no end in sight. Sounds like the good old Roman empire days..Well thanksgiving was great for the markets and black Friday looked good except online buying was even stronger. Then Yellen spoke and we had two down days right after that markets bounced on Draghi speaking.

It is typically a strong part of the year for the markets so you would have to buy the dips here - in strong stocks, typically Q4 is the best performing quarters and with quite a bit of under performance this year for many funds including hedge funds, we would expect a run on stocks going into the end of the year primarily in the big names that are holding the markets up - what we call the Trojan horses - AMZN,NFLX,GOOGL,FB,BIDU,BABA, and many others in this list and also top names that are underperforming this year will be picked up just to show good or at par performance relative to the markets - so our position would be to go net long here in the big names and ULTA also fits into that list. We stated in our previous blogs and on twitter that we liked the tobacco stocks(MO and PM) and LLY. We were net long the market with these stocks and these performed well for us. We have been short puts on YHOO - we like the idea of the sale of the core business - stock could go to 40.

Please do check out our site for our great buy/sell signals - we have been posting the charts on twiiter (follow @trucharts) - we have some amazing buy/sell signal strategies and we followed them for the energy stocks and that saved us a ton of money - specially stocks like SDRl, RIG, XOM, CVX and XLE. 

For 2016, we expect huge challenges for the markets due to lowered earnings and there is lot of technical issues with the markets that do not suggest a higher market - narrow breadth, leadership and overvaluation in many sectors - tech specifically. We would stay in some consumer staples with dividend stocks and stocks which have proven earnings power and options for hedging.  AAPL going into Q1 still looks good - but we would would hedge our position. Watch VIX closely - whenever it shoots to 30 - 40 range - start buying and we would sell biotech here - biotech bubble is over. Good luck trading.

Trucharts Founder/CEO and team
BB

November 1, 2015

Best October Market Rally, Do you Buy, Sell or Hold?

Best October Market Rally, Do you Buy, Sell or Hold?

Trucharts.com Blog update week of 10/26/2015


Well again due to some business commitments we were unable to update our weekly blog for over two weeks now. We are finally back and updating our readers on what has transpired and with all the financial media going nuts over the best October rally, we have to sit back and see what to do next and plan for Q4. Check out our site for the best buy/sell signals for stocks and just apply it on BABA stock and you will see why we went long at 62.. Go tot the stock charts page and click on the Trucharts Trading Strategies bar - seen in red below and you will get the different trading strategy options to apply to the chart - (please read our disclaimers - please do your due diligence and consult with your financial adviser before making investment decisions) - this is for information purposes only. We offer this to our paying and free subscribed users only. You can try this on VRX and you will see it generated a SELL signal around 220.



There is no doubt that the rally was expected. We had discussed this in our last blog and our updates via twitter (twitter handle: @trucharts) and on facebook at (https://www.facebook.com/truchartscom-273554162830234/) - we expected S&P to reach around 2100, DJIA to reach around 17800 to 18000 and that is exactly what the indices did during the October rally and with earnings season in full force - markets responded to stocks with good earnings. We believe that this is a short lived rally and even if we hit new highs, we would sell into the rallies. Markets are not significantly overbought yet so we expect some sideways movements in the indices. The Fed spoke (amazing) and now that they realize they are well behind the curve in raising rates, the again tried to spook the markets by indicating a possible rate hike for December. Markets are in bubble mode - real estate along with it and it is not just here but all around the world. We have bubble blowers and Central banks printing money while earnings from companies are drying up and not even meeting lower estimates. The Wall Street gang plays this game beautifully, lower the estimates and when the companies report slightly better results, the street starts their cheering. One has to look through the numbers - but from a technical trading point of view you just have to be ready to trade based on the earnings announcements. Here are some charts for the S&P , DJIA and a chart we pulled from a very interesting article on M&A activity which typically tends to peak around market tops.

ADDED: Another good read:
http://www.zerohedge.com/news/2015-10-31/quick-bull-vs-bear-case-8-charts

Link to article: http://finance.yahoo.com/news/ubs-beginning-end-bull-market-131106708.html 

Source Bloomberg/UBS:


From the charts below for SP500 and DJIA we expect sideways movement and possible new highs into Q4 due to a typically strong Q4 season for the markets and we would lighten up into this sideways and possible upward movement. We would not hesistate to write covered calls on long positions. We have done that already for many of our accounts. Many tobacco stocks appear overbought, so we would either sell these or hedge with puts or reduce cost basis via covered call strategy. We are long PM and LLY. Our MRK position got called away.

As you can see the MACD is getting extended as is the RSI reaching overbought conditions. But we expect this to last for sometime with minor pullbacks and sideways movements.


 

We would lighten up on biotech stocks and health insurance companies. We believe that Obamacare is a total disaster and will very likely get repealed if the GOP takes the White house. The premiums are unaffordable and we are seeing several co-ops going out of business due to high costs and then the insured are being put into a situation with no coverage and high costs. We believe this will not end well and there will be a new wave or change in the healthcare system in this nation. The current scenario is not sustainable and is designed heavily in the favor of insurance companies and drug companies. We also think these insurance companies may have reached a peak in their earnings cycle. Our net portfolio is short tech stocks. AAPL seems to have peaked and we do not expect any major move in AAPL - we still like NFLX - as Q4 is a strong season for them.

Good luck trading.

Trucharts team

October 11, 2015

Do you buy or sell now!! Markets where are they headed for Q4 and our favorite stocks - Trucharts.com Blog week ending 10/9/2015

Trucharts.com Blog - week ending 10/09/2015

Do you buy or sell now!! Markets where are they headed for Q4 and our favorite stocks - Trucharts.com Blog week ending 10/9/2015

Well the title says it all - what do you do now that we have had this wonderful rally this week - the move (to us was expected) has been decent and we had stated the markets would move higher after the retest and elevated VIX. So now the VIX is trending down, material stocks have been up, gold has been moving up, right after the Fed announcement and energy moved higher. Markets moved higher as junk bond yields recovered from an oversold condition - be mindful - there is a very high correlation between JNK (etf) and the markets. This is the correlation related to the appetite for riskier assets - specially high yield junk bonds. Based on the charts for DIA and SPY - included here below - we expect the markets to go higher as technicals are still trending higher - see the MACD, RSI and the 200d SMA looks like where we could be headed which would be 17500 for DJIA and 2050 for the S&P500 - these would pose as high resistance for the indices and huge overhead supply. We believe this is just a bounce from an oversold condition with weakening fundamentals, remember earnings drive stock prices. But there are signs of bubbles everywhere and we would be taking profits and sell into the rallies.

Here are weekly charts for DIA and SPY:

 

Now we are heading into the earnings season for Q3 and forecasts for Q4 - we will have to see what the companies say. From FACTSET news we learned that it would be the first quarter since 2009 for back to back declining earnings quarter over quarter. In addition, FACTSET noted that forward P/E is around 15.9 vs average of 14.1 (5 year). We expect big declines in energy sector along with impact to companies earnings with global exposure due to strong dollar. Well Ms Yellen is going to make it easier by driving down the dollar with the Fed's non stop money printing and ZIRP. We have deleted the earnings calendar and estimates from our site due to very low usage. We will try to see if we can get this data from some other providers. You can check our realtime news page which has an earnings section and dates for reporting.

If you own a position in TSLA - please be mindful - this stock on weekly chart looks like it headed a lot lower and has formed a nice topping pattern. It is at a very critical juncture - the 100 week SMA. Here is the chart:


Charts for gold miners and GLD are looking good for the short term - trend is higher - good for some short term trading. See chart for GLD here - not convincing enough for me. Volume is not strong - but looks like it could go to 50w SMA around 113.


Here is a chart for BABA - we went long at 62.7 based on the buy signal from our site and will close the position soon - very likely this week. As you can see the buy signal was strong and stock is still heading higher - a very unique feature from our site. Please read DISCLAIMERS on our site and our site policies. We always strongly recommend you do your own due diligence and if have never invested in stocks - these are very speculative stocks and trading inherently is not for the risk averse. Please consult your financial advisor before making investment decisions - our recommendations are meant for seasoned traders and experienced professionals.

Please make sure you are aware of holdings in your portfolio and the earnings reporting date - this is available in Yahoo and buy some cheap protection via puts maybe 10% below the current stock price - to limit your risk.


We were also long MO and plan to stay long - strong chart and did a breakout on this past week to a new high from a consolidation pattern.

Now on to our favorite stocks for trading this week and ones we will be taking positions in. These are the stocks we will be trading this week:

http://www.trucharts.com/stockview.aspx?TICK=VRX
http://www.trucharts.com/stockview.aspx?TICK=LLY
http://www.trucharts.com/stockview.aspx?TICK=MO
http://www.trucharts.com/stockview.aspx?TICK=YUM
http://www.trucharts.com/stockview.aspx?TICK=AAL

Please take some time reviewing these charts above and monitor these stocks. There are many others but we try to limit our choices to what we think have the highest probability of making money.

Please also take some time to review our site and do subscribe - as we said for all the services we provide, we know we offer the best value for money. We cannot survive if we do not have paying subscribers and we need your support to make the site a sustaining entity. People do not work for free and we do not get anything for free. But our users use our site entirely free and do not take advantage of what we truly offer to help you make money in stocks. 

Again your support is very critical - it is a mere $9 per month. If you cannot afford that then please do not trade stocks. You pay that much in commission and will very likely lose money also.

Good luck trading.

Trucharts team and Founder/CEO





September 27, 2015

NASDAQ,DOW and SPY where are these headed? What to do with your portfolio? Trucharts Weekly Blog

Trucharts Weekly Blog

NASDAQ,DOW and SPY where are these headed? What to do with your portfolio?


Sorry that we were unable to publish our blog last weekend due to some family commitments. Well the Fed speech impact was short lived and then volatility picked up in the past week and the biggest standout was the biotech sector which had driven up the NASDAQ to its 2000 highs and everyone on TV was still bullish on biotech sector. As much as we like some stocks in the drug sector and the biotech sector, the valuations were not justified - in addition, we were seeing heavy insider selling in many companies. Many biotech companies with no revenues were showing exponential charts and if you recall how we warned about exponential charts - these always are a bad sign of things to come. Just check out some of the high flyers in the biotech sector. We were also seeing weakening technical signals in the ETF IBB when it was hitting new highs.


Check these stocks:

www.trucharts.com/stockview.aspx?TICK=BLUE
www.trucharts.com/stockview.aspx?TICK=ICPT

and then there are many more in this sector that would move on the smallest drug news. Absolutely ridiculous. We have been saying to keep and eye on the 50 week SMA for ETF IBB (which we have been short), and sure enough once it broke the line in the sand it cascaded down and now it is a pure short. We are stil short but we are long BIS (short ETF) which closed for the first time above 50 week SMA - here is a comparison chart (IBB vs BIS). Check the BIS volume - highest ever.

We also have the chart here for the buy/sell signals for IBB on weekly chart - see below (this feature is provided to our registered/subscribed users). We think IBB is headed to around 260 - 280 range. There will be margin calls on folks who are long biotech stocks.

  



Now where do we think the markets are headed - gold moved up after Godmother Yellen spoke on Thursday that rates would rise in 2015 and markets were up in on Friday early and then pulled back later in the afternoon. We believe the institutions are moving into the comfort of consumer cyclicals, staples and high divided yielding stocks in sectors that are still strong. We are concerned that we may see dividend cuts in the stocks of oil companies - just a guess - but with oil down - there is no way these companies can sustain such high payouts. In addition, we expect massive layoffs and the oil states economies will be affected (Texas, Louisiana and others). We like NKE after their earnings report. We hav been playing with NFLX and are short FIT/GPRO (valuation too high). We expect the DOW to stay range bound 15000 - 17000 for some time here, SPY is headed to around 1750 - current price is 192.85. We would be very careful here - SPY and DIA have broken 100 week SMA. 

China slowdown has now shown up in 2 major equipment suppliers - JOY and CAT. CHina is definitely slowing down and we have to see if they are headed the way of Japan. In addition, the central banks are still running loose with money printing and it seems to be helping the top 1% only. Brazil is going to the dogs with its credit rating cut. The rates for 10 year bonds in Brazil have shot up to 16% - want buy some Brazil debt - anyone? We would stay away from these stocks. We like gold stocks - but we need to see high volume breakout - we are not there yet. We encourage to write covered calls on your positions - that is what we have done and that has protected our portfolio. The trend is down. The ony thing in favor of the indices is the RSI is oversold - but needs to consolidate. Here is weekly chart for SPY:





Check out our site features at the best subscription rates in the industry and on the web:


Good luck trading.

Stay nimble.

Trucharts Team and Founder/CEO


September 3, 2015

Why bubbles exist and monetary policy is still easy!!

Why Bubbles exist and monetary policy:


Read this and see why we have bubbles everywhere - one day the fat lady will sing and (it happened in 2008), and the chicken will come home to roost. Thanks to the stupid Fed (Greenspan, Yellen and Bernanke) are all to blame and the US government was towing the line with Fannie And Freddie Mac which went bankrupt.. Unbelievable and now we are in another stock and real estate bubble in USA and many countries around the world due to the easy monetary policies.

http://www.businessinsider.com/worldwide-monetary-policy-in-one-chart-2015-9


Also watch this video - unbelievable - http://www.youtube.com/watch?v=JYTyluv4Gws

From a trading perspective - we are still net short and our AMBA short worked very well, along with IBB short - we like this trade - long AMGN, short IBB. We are short tech stocks still - PYPL,INTC,SWKS.

Trucharts team

August 30, 2015

Fed Speak - What to do with your portfolio this week and market direction - UP or DOWN!

Fed Speak - What to do with your portfolio this week and market direction - UP or DOWN!


We just went through one of the most volatile weeks in the markets since the dog days of 2008-2009 financial crisis. Is China slowing, what is the Fed going to do and is the world headed into a recession? So many questions and the answers are not very clear. From a volatility perspective, the VIX hit the highest levels on Monday last week when the DOW traversed over 4500 points - this has never happened before - there were huge opportunities to buy at the lows that day and make a huge profit - volatility is truly a trader's gift and an easy way to generate some very quick profits - if you are a technical trader it becomes even easier. You have to make your preferred stock list and watch those only else you will not be able to choose during big market moves, like the one we had last Monday 8/24. We did make money as we were net short into the market and would have really preferred to get into some stocks that tanked at the open - we knew that the  markets would bounce - since it was an oversold condition and markets did rebound into the end of the week - just go check some of the low prices for some of the top stocks on 8/24. Several stocks opened down over 20% and then recovered very nicely. That is why you have to have cash set aside for trading on volatile days - because the returns can be magnificent. 

Markets rebounded over 1000 points on the DOW late into the week and many stocks bounced off the lows - there was short covering and some buying buy the big funds since they saw this as a huge buying opportunity - we saw the fund managers discussing this on TV. Volatility numbers are still high and we would expect volatility this week also. Major trend-lines have been broken and we have to test the trend-lines and the previous support levels (which are now resistance levels) for all the indices.

Fundamentally we do not think the economy or the tech stocks have bottomed - China slowdown and the issues/headwinds they are facing from their bad loans, high debts, exports slowing, over capacity are going to have repercussions around the world. US economy is still strong with the jobs numbers still ahead of the 200K/month magic mark and we think the Fed sees this and is ready to pull the trigger in September. We still suspect whether the Fed will actually raise the Fed Funds rate in Sept. We wil have to wait and see - from our perspective we do not think they have the 'guts' to do it. 

China intervention into their stock markets was one of the worst ideas and then they have been so reactive to every little piece of economic news, that they are acting like a 2 year old's in a candy shop. Lowering RR ratios, cutting interest rates, injecting cash, and so many others drastic measures, it makes one wonder what really is going on in China. 
Is it really that bad!!

There was The Jackson Hole meeting this weekend and the Fischer indicated that the Fed would move towards hiking rates. They know there is a bubble and they are trying to defuse it before it becomes bigger and then they are left with no tools to fight it. We will just have to wait and see with the numerous number of crazy commentary on CNBC and Bloomberg non stop about the Fed's plans. It is getting really ridiculous!!

As we write this futures are down - we expected that heading into Mondays' - typically weak in recent weeks.

Anyway, we expect the markets to consolidate here within a 500 point range - with a topside target of 17000 and low of around 16000. S$P500 to be range bound between 1920 and 2040 range. NASDAQ which was primarily up because of biotech stocks should start seeing some pullback. 

Use this opportunity to lighten up on tech stocks - fundamentally there has been no change in their outlook and forecasts - the trend is down and we expect it to stay that way. With Apple's event coming Sept 9th, we expect that the tech stocks may stay range bound here. We like SLAB for short term trade. We are short AMBA (earnings on Sept 1),SWKS,INTC,PYPL and MU. Our shorts did well for us during this downdraft. We were discussing topping action in the markets and we were ready for it. Long NFLX. We use options to hedge all our positions.

Commodities - oil bounced - expect that to be short lived - we are heading into the slowest season for oil - post summer time. Still some money to be made from short term trading here - check out chart for USO and OIL. Possibly very oversold - should go up for short term. Gold Bounced - we are keeping a close eye on this - as it is tied to the dollar - but with the weaker currencies abroad, we think gold can shine - wait and see.

Here are the charts for DIA daily and weekly - Daily chart shows an oversold condition and weekly is not oversold yet. Watch these carefully along with the VIX. We always trade stocks which have underlying options and are very liquid. We like DIS for short term - looks oversold. Do not like biotech - short IBB.

 

 


Please check out our site and provide us your feedback and do check our lowest subscription rate in the industry for all the features we offer. Here are some links and thanks for reading and visiting/supporting our site - we are entirely self funded and still losing money but trying our best to provide our users a good experience to make sound and good investment decisions - we offer the automated buy/sell signal strategies for users to see if the stocks in their portfolio is a buy or a sell. Trust me it has saved me a lot of grief in stocks like RIG.SDRL,USO and many more. I am so glad we have that feature.   

We would love to get subscribers so we can keep the site going and it is the price of 2 lattes at Starbucks per month. 

For subscription visit: http://www.trucharts.com/truCharts_Services.aspx

For features we offer visit: http://truchartscom.blogspot.com/p/why-is-trucharts.html


Good luck trading. Stay nimble.

Trucharts Team/Founder/CEO

August 16, 2015

Is the bull run still intact - Markets ended below 50 day? Are you buying or selling? AAPL, NFLX, and the top horsemen

Is the bull run still intact - Markets ended below 50 day SMA? 

Are you buying or selling? 

AAPL, NFLX, Biotech and the top horsemen


What a week - but we ended the week with the market averages closing below their respective 50d SMAs. Looks ominous and then we had 5 days of non stop news of the Chinese Yuan devaluation - we had stated that this was the only option left for the Chinese and we do not think this is the end  the devaluation - the Chinese Yuan is headed to 6.8-7 relative to the USD. The currency is too strong and with the commodities in a complete crash scenario (from the slowdown in the Chinese economy), the Chinese government has to stimulate their exports by driving down the currency - just like all the other nations in the Pacific Rim - look at Japan.  

Markets moved sideways with minor moves up and down but still ended below their critical averages. We have been saying the markets have been going sideways with many 3 digit moves and topping action. Narrow breadth, narrow leadership, big stocks breaking down and a very high number of stocks below their 50d SMAs. Earnings have been lackluster and so have the forecasts. 

Investors and hedge funds are hiding in the high fliers and the consumer discretionary stocks - which are also starting to show some weakness. Some of the auto parts stocks are doing very well because of strong earnings reports. Dividend stocks are performing well due to the obvious benefits - although we think the dividends from the bigger oil players are at high risk of being cut due to the drop in oil prices and falling margins/profits. We would sell all the big oil stocks here if you own them and move money into cash or some other stocks like REITs and some of the other big industrial companies whose earnings look strong or are not affected by the commodity crash. Oil is headed lower and this creates a huge dilemma for the world over and especially the Middle East nations that rely heavily on oil exports for their economies. We are short HAL.

We have been saying to take profits in the tech sector after Micron (MU) and INTC earnings - this seems to have been the perfect call. Earnings were flat and forecasts going forward were lowered and sure enough all the semi stocks are being beaten down. We were short BABA into the earnings report, along with IBM - both of these shorts worked well for us. Sell AAPL and TXN. We are still short AMBA and SWKS and are looking to short MU.

Now let us look at the Biotech sector - especially the ETF IBB - it closed below the 13 week SMA for the first time in over 15 months and is starting to show technical weakness. We were short and did make money on some of our short calls and short puts. We are still staying short the IBB ETF and expect support for the short term at 50 week SMA at around 340. We think this could be the short of the century (our opinion entirely). Here is the chart:


You can clearly see support at the 50 week SMA.
We still do like AMGN - one of the only high dividend paying stocks in this sector. We would wait to go long AMGN.













We still like the REITs even though we think interest rates are going higher primarily the apartment REITs - with rents going through the roof - we think this will force the Fed to raise rates - rent is one of the components of the inflation index.

We expect the markets to test the 13 weeks SMA this week - around 17800 for the DOW and with the Greek Bailout approved by the Greek parliament - we would expect to see some bounce in the markets. 

Check the weekly charts with 13 week, 50 week, 100 week and 200 week SMA for all the indices on our site - you can use the big charts page at: http://www.trucharts.com/bigcharts.aspx

We have shown here below amazing results from our backtest strategy for IBB using the SMA cross with 14 day exit for 2000 bars - it showed a profit of over 211% - Amazing - we have the the snapshot below for part of the runs - an amazing number of profitable trades, just run the backtest feature and you can see for yourself with the numbers on the left hand side in the snapshot below.


Here is a chart of stock TRMB with our automated buy/sell strategy showing clear buy/sell signals on a weekly chart - a feature that is only offered on our site - to registered members only. This automated buy/sell signal could have made you money and saved you a lot of grief. I hate to say it - we do not believe in buy and hold - that is for sissies.

Good luck trading.

Trucharts team

August 9, 2015

Is the bull run over or is it just a correction? AAPL, Biotech, Industrials - what and where are the markets headed in this swoon?


Is the bull run over or is it just a correction? 

AAPL, Biotech, Industrials - what and where are the markets headed in this swoon?

Trucharts.com - Weekly Blog update

Hi to all our readers and viewers. We did not publish a blog last weekend due to some family commitments. 

Finally got back to the markets and sure enough - excitement all week - DOW was down seven days in a row. The Dow Jones, AAPL, NASDAQ, BIOTECH, Technology, Semi-Stocks and many indices were down for the week. Oil crashing, commodities crashing, China markets down (over $4T valuation wiped out), gold was down - then bounced, earnings were spotty and big energy stocks are being abandoned. With oil crashing, energy companies margins and earnings will be headed downwards. 

Narrow breadth and leadership in the markets were the key points we discussed in our previous blogs as being the indicators and signs of a topping market. We had several huge 3 digit moves and these type of moves are very characteristic nature of topping markets and this is exactly what we were observing. We had also indicated through our facebook and twitter page to sell into any rallies or going short certain stocks. 

A fight between the bull and the bears and short covering were driving stocks like CMG,GOOG,AMZN,NFLX and the top horsemen of the markets higher. The DOW component stocks are being hammered down and we think the DOW has definitely topped out. Revenue growth in companies in the S&P500 were unimpressive and EPS were primarily inline and forecasts were either lower or inline. We will have to wait to see how this plays out. We had also indicated to be short the semiconductor stocks after the INTC and MU earnings report and this played out very favorably for us. We are still short INTC,AMBA and SWKS. QRVO news was terrible and many other companies reported inline and their forecasts were below analyst estimates. We think this will impact AAPL earnings next quarter - the Apple watch and Apple Pay are also not performing well. We prefer to be short the AAPL suppliers and would lighten up on any technology positions on any rallies in this sector.

Now the Biotech stocks - these are the stocks that have helped the NASDAQ run upto new highs (eclipsing it's old high from the 2000 bubble). These are starting to show signs of fatigue from the huge run-ups and for the first time in over a year the IBB etf closed below it's 13 week SMA. We need to see it stay below this 13 week SMA for another week and if it does, we can expect it to go the 50 week SMA at around 320. We are short IBB. We are also seeing some stocks in this sector dropping from their bubbly highs. 

We had to close our TWTR position - we think this stock is headed lower. We had hedged the position with puts so we were able to handle the loss. We went long NFLX.

The averages have definitely broken some trendlines along with some major averages - we think this a bad sign and expect some volatility in August going into the September Fed meeting. Jobs report this past week was 215K but that was still above what we call a critical threshold of 200K jobs per month. Real estate is in a bubble mode and as are stocks and both these sectors will have to correct - stocks are already correcting and it is definitely a stock picker's market.  

UPDATE: We forgot to mention the number of new highs has been contracting sharply and therefore stocks hitting new lows is rising. Media stocks tanked last week and many of these broke major trendlines, and there has been major insider selling in all stocks. These are all signs that we have topped out after this 7 year bull market run. We would highly advise to take profits and sell any rallies.

As for China - the country is now in control of their markets - but we think this will be a futile exercise and the country is mired in over capacity, high debt, real estate bubble and still has a strong currency - we think they need to devalue the Yuan to gain over their rivals in the Asian subcontinent. Shadow banking is a huge problem in China and we have to see how the party handles the situation and not letting the markets run freely.

Let us see some of the charts we have discussed above along with the indices charts:


  1. AAPL Chart support at 105 - expect a bounce after MACD and RSI turn. Short.
  2. DOW Jones support at around 17000
  3. IBB headed to around 330-350 range - Short
  4. NASDAQ support at 50 week SMA.
  5. NFLX still looking strong
  6. SPY - support at 50 week SMA


 

 

 


Interesting articles for reading this week:

http://www.peakprosperity.com/insider/93862/why-china-extremely-vulnerable-now
http://www.zerohedge.com/news/2015-08-08/12-trillion-fat-finger-how-glitch-nearly-crashed-global-financials-system-true-story
http://www.newsmax.com/TheWire/legionnaires-outbreak-new-york-city-bill-de-blasio/2015/08/07/id/669061/
http://news.yahoo.com/chinese-dragon-losing-shine-foreign-firms-035151394.html
http://www.huffingtonpost.com/buck-wargo/boomerang-kids_b_7912484.html?ncid=txtlnkusaolp00000592
http://finance.yahoo.com/news/150-watch-terrifying-apple-luxury-184402938.html
http://www.businessinsider.com/made-by-china-is-what-chinese-consumers-want-now-2015-8?r=UK&IR=T
http://finance.yahoo.com/news/irresistible-china-stock-trade-keeps-160001314.html
http://www.businessinsider.com/r-china-producer-prices-slide-to-six-year-low-in-july-2015-8
http://www.businessinsider.com/factset-q3-eps-estimates-sp-500-prices-2015-8
http://www.businessinsider.com/the-worlds-seventh-largest-economy-is-in-a-downward-spiral-2015-8

Good luck trading.

Trucharts Team