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Showing posts with label Monetary policy. Show all posts
Showing posts with label Monetary policy. Show all posts

June 20, 2017

Fed meeting, gold, tech stocks and where we are headed


Fed Meeting - Fed stance, Gold and Where markets are headed


So the Fed meeting was over last week and they raised the rates by 0.25bp. In addition, indicated that they need to start winding down their balance sheet. Whoa!! Is Grandma Yellen and the Fed waking up to the scenario that they are the primary cause of the bubble - well surprise, surprise - they and all Central banks have co-ordinated this massive bubble and they have no idea how to truly unwind it. Stocks are trading at ridiculous valuations and at levels above the 2007 peak. The 1999-2000 peak was a real bubble of truly massive proportions - but we are now in an all out massive bubble in all assets except gold (maybe).

Tech stocks are valued at the highest EV/Sales ratio, high PE's and the insiders are cashing out. Does that sound familiar? Right now machines are trading and there we believe will be the catch 22 and the main risk. We can tell via our intraday charts when machines kick into the trades. Right now machines are running the show and there is very little human intervention. In addition, complacency is running at lows and we expect this to stay this way possibly through the summer.

We had predicted that the DOW stocks would hit new highs and many of the big names are hitting new highs. Our prediction of Dow 21500 was met this week and we do not see any reason for now that would not allow it to move higher.

We trade on technicals and these seem to be working very well - as we think the machines are programmed to work on technical signals. This is another reason to use our reports page to identify stocks that meet certain technical criteria.

So which stocks do we like - and how does one protect your portfolio.

Based on our analysis, we are seeing a move into the Dow component stocks and big names. We still like AAPL as it is cheap 0 but we would wait for a nice pullback before taking a position. We like BA, MDT, JNJ, CAT and DE. These are looking strong. 

We would take profits in tech stocks as we thinkthe tech cycle and bubble is over and although we may see signs of a rebound - we would sell into the rallies. There is definite rotation going on and tech is not the place to be at least for the summer or until the IPHONE 8 announcement happens. We are short NVDA and will stay short. We are long puts on NVDA also. 

We believe that the Fed is on a tightening and liquidity draining from the system and this will result in a profit taking in tech stocks as these are overvalued on all key parametrics - except for AAPL. In addition, please keep tight stops at around 8% to 10% or at 5% below 50d SMA depending on your buy price.

Check out our site - we offer AI based trading algorithms with clear buy/sell signals, end of day technical reports which work great to find good stocks to trade or buy.

We do not like gold as the Fed is in tightening mode and draining liquidity.

Good luck trading. 

Check out our site tour youtube video at -  

June 7, 2017

S&P and all indices at records - Wow Trump did have a huge impact on markets. Where do we go from here?


Welcome to the era of Trump and record high markets:

First of all, I wanted to apologize from being away so long from writing my blogs. Due to personal medical reasons, I was unable to keep my blog updated.

Well, we are definitely in the record books for sure. All indices at all time highs, financials were up, airlines up - everything is and has been going up. Financials did pull back from their highs after the Trump agenda does not seem to be materializing. But tech stocks - unbelievable run - all semi stocks, NVDA, AMD and many others are trading like it is 1999. Many amateurs are jumping into the market and let me tell you, I lived through 1999-2000, cashed out at the top - and this is looking like deja vu all over again - maybe to slightly smaller extent. Stocks are trading at sky high valuations and nobody cares, the media just keeps priming the pump and the bubble - along with the Fed.

It has been a nice run and we are still not seeing any real technical weakness - except in the financial stocks. AMZN, GOOG, FB, NFLX (or FANG stocks) along with TSLA are trading at valuations that are the GDPs of many nations combined together. I think it is getting crazy - but make hay while the sun shines. There is no regard for risk or risk aversion and therefore one as an investor or trader needs to make sure they have their stops in place. This is a good time to have one foot out the door. 

There is no question that this is a liquidity driven bubble, the Fed and all central banks are driving this bubble with no regard for the debt and market valuations. You can tell you are in a bubble when the markets and certain stocks bounce back to new highs even on bad news - mind you there has really been no real growth in revenue - there has been financial shenanigans and financial engineering to create wonderful rosy outcomes. Huge stock buybacks, and setting expectations low with the analysts community - and then during earnings season beating the estimates - sounds like a nice scam to me. But the SEC is powerless entity and they just play along. 

Anyway, we think there is still room at the top. With all this talk (no action) about tax reform, health care reform, infrastructure - well Mr. Trump does not seem to get that this is not like erecting a skyscraper - or just making a golf resort - this is the government and the government does not run like a business - and you cannot run it like a reality show - he just loves showmanship. Anyway, back to the markets.

So we like the following stocks - AAPL, WDC, PANW, INTC, QCOM - there are many others, but we are being opportunistic in our trades and watch for new highs and breakouts. We also look at the technical end of day reports from our site at www.trucharts.com/marketreports.aspx - look for RSI less than 30, improving RSI, TC Positional Buy signals and MACD crossover reports. 

The unemployment picture is not looking good - debt at consumer level is at record highs and this is already impacting the retail sector - obvious from the store closing and stock prices. Leadership is narrow and housing is looking like a major bubble - rides along with stock prices. 

We are in a bull market and heading higher into the IPHONE 8 season and going long AAPL is a good trade. Keep good stops and wait for our next update soon.


Good luck trading.

Trucharts.com
Founder







July 25, 2015

Market Turbulence - Earnings Season and - What to expect next week - Trucharts.com Weekly Blog Update 7/25/2015

Market Turbulence - Earnings Season and - What to expect next week - Trucharts.com Weekly Blog Update 7/25/2015

What a turbulent week - all that excitement from the Greek bailout last week and with the onslaught of earnings season we ended the week down. In the prior week when the markets broke the 200d SMA on Greek news, the markets were oversold - but we indicated in our blogs that the markets were exhibiting topping action with bad breadth and narrow leadership. In addition, we stated that the semi sector was weak and heading into a major slowdown after the news from INTC. Sure enough the semi sector stocks are in a downward trend and we the earnings forecast was not strong. 

We believe the semi sector was being driven by the mobile market and that seems to be slowing down. All markets mature - just like the PC market - we are seeing the growth curve reaching a saturation point - we can expect that AAPL and companies that supply to this industry will be experiencing major slowdown in the coming years. Everyone talks about the next frontier being the automotive industry - but compared to the mobile phone market it is too small and also experiencing a slowdown. The Windows XP phase out last year was also a factor in last year's ramp in the semi stocks. But INTC is headed to 25 - they way overpaid for what ALTR was offering. A very stupid move by INTC.

AMZN and GOOG, along with NFLX - we think these caught the shorts off guard - so it was a huge short covering rally in these stocks. NFLX looks very bubble like. 

We had recommended shorts on AMKR, INTC and TSM and all these worked well for us. We were short AEM and closed that position (earlier then we wanted). Just check in our previous blog entries on where we recommended AMKR and INTC as shorts. 

We went long BIDU,CYBR,WBA,UA,LLY,V - positions in LLY,WBA and UA were called away because of our buy-write strategy - these stocks moved up very nicely. Check the charts at: www.trucharts.com/stockview.aspx

We are currently short SWKS and AMBA (over-hyped and over-valued). 

Earnings from capital equipment industries like UTX, CAT, JOY and many others seems to be pointing a slowdown in the industrial sector in China. China news has not been positive and the government intervention into the stock markets is not a good sign. We expect further turbulence in the Chinese markets. China slowdown is also affecting the Aussies and New Zealand economies - yet their housing sector is in bubble mode - because of the low interest environment. We will have to watch and see how this plays out. 

We believe that China is playing a numbers game and trying to put on a good face on their economic issues - huge debt problems, slowing housing sector, falling stock markets, consumer slowdown, and shadow banking issues. China still needs time to truly grasp the knowledge of free markets and banking. When you can print your own currency at an unlimited pace - there will be long term implications.

We are seeing folks piling into consumer discretionary sector - we will have to wait and see how this plays out - we still like V and some of the consumer discretionary stocks. We are long MO which is set to report earnings next week. Next week is going to see a huge set of earnings from the biotech sector and also companies such as FB,LNKD and many others. Check the earnings page with calendar and mouseover charts on our site at: 

Now let us look at some charts for the indices and stocks mentioned above (weekly charts):

Chart for AA show our automated buy/sell signals and you can see where AA was a great short - excellent signal.

SPY has not closed below 50 week SMA - very critical support, Dow Jones closed belwo 50 week SMA, INTC headed down, IWM (Russel 2000 ETF) has critical support at 50 week SMA, IBB critical support at 13 week SMA:

 

 

 

 

Good luck trading from Trucharts team. Hedge your positions.

Best of luck and happy trading.






April 3, 2015

Jobs? Jobs? - what happened and what will the Fed do now??

Free Stock Chart - Trucharts.com - Technical Analysis, Predefined Scans, Screener.


JOBS JOBS and JOBS:

We are getting some good rest today from markets being closed for good Friday - but the job news for month of March was terrible - only 126000 jobs created versus the estimate of 248000 (BTW - that, as you can see, is a HUGE HUGE MISS) and Feb jobs report was revised down to 254000 from 295000. Stock futures dropped on the news - we will see what happens on Monday to the markets. Gold was up on the news - anticipating an accommodating monetary policy. It looks like the weather did impact this number, and the slowdown in the oil patch hiring affected this number. It also looks like the country has stopped hiring waiters and bartenders - there are only so many restaurants you can open!! 

There is still a huge shortage of workers in the tech field and there are numerous jobs in the tech industry as is evident by the poaching going on in the tech industry and the abundance of openings (due to shortage of talent & experienced workers).

We still think the Fed will still stay on path for a rate increase in Sept - we think this is going to happen. This jobs report was very likely a one month blip and we will have to see 3 continuous months of this type of job creation numbers to see a trend and comment on the Fed response. We still think rates have been too low for too long and the Fed is very concerned about the bubbles in the economy. Have a happy Easter weekend.

We went long MO on Thursday - check the chart at - chart for MO


UPDATED:


Other stocks of interest for next week: EXPE, SO, M, PHM, and TWTR and you can check other stocks on our Reports page at www.trucharts.com/marketreports.aspx


Trucharts Founder/CEO