Markets - What to do now? BUY,SELL,IGNORE,HOPE & PRAY

Markets - What to do now? BUY,SELL,IGNORE,HOPE & PRAY - Trucharts.com Weekly Blog Update - week ending 8/21/2015

Well we finally are getting some excitement in the markets.. Before we get into the gist of our discussion today after the amazing week we had - where the DOW plunged over 1000 points and VIX (volatility index) moved up finally, we would like to list the key viewpoints we have been discussing in our past blogs regarding the market action:

• There has been sideways movements with triple digit moves every week (9-12 weeks)
• Markets have been exhibiting very clear topping action
• Narrow Breadth, narrow leadership, New Highs and New Lows ratio skewed to the downside
• Oil and commodity complex crashing (we said oil dropping was a big deal)
• China - China - China - over mired in debt and capacity in all sectors
• WE HAD STATED THAT CHINA WILL HAVE NO CHOICE BUT TO DEVALUE AND THAT IS EXACTLY WHAT THEY DID - IT WAS THEIR DEFACTO STIMULUS AND WE EXPECT FURTHER DEVALUATION OF THE YUAN - headed to 6.7-6.8 to USD range
• Transports sector down
• We have been saying sell into any rallies, take profits and hedge your positions
• DO NOT listen to the talking heads on TV - it is all BS
• NASDAQ was being buoyed by the biotech stocks and these were going to breakdown and were the new darlings of Wall Street along with the big internet names 
• Earnings and Revenue forecasts were lower for the next qtr from many sectors -specially the tech sector
• Valuations in many internet stocks like FB,PYPL,etc were at ridiculous and lofty levels along with the valuations being given to companies like UBER etc in the private placement
• INTC and MU earnings were key and we had stated that the semi-sector was headed for a major slowdown. We said short INTC,AMBA,SWKS,HAL and MU 
• We had hedged our longs with covered calls to reduce cost basis 
• IBB ETF closed below 13 week SMA the week ending 8/14 for the first time in over 15 months

Well now everyone is wondering what next - what are you going to do with your portfolio - Well guess what - we are staying on the same viewpoint and thesis - Sell into rallies, take profits and short IBB (could be the best short). Markets will bounce - but these will be short lived - you can expect more volatility in the next few weeks. You will see clearly below in the charts below that major trendlines have been broken for all indices and the close below major moving averages is a big concern to us. We still like the INTC,MU,AMBA short and are shorting IBB/GILD. We were long NFLX - but with a covered call strategy. We will close half our position and wait for a better entry point. We will look to buy some index ETF on any bounce - target range for DOW is first support 16000 and then around 15000. We think PYPL could be another great short - we are short PYPL.

You can also use our BUY/SELL automated trading strategies on the stockview page to see where sell signals were generated and try to see which stocks in your portfolio are on a SELL signal - do this on weekly and daily charts for your stocks.

Here is the page: www.trucharts.com/StockView.aspx

Here is the image of trading strategy box on the page above: You have to click to expand the box:

Here are some charts we would like to show this week - look at the trendline and averages - these are weekly charts - please look at RSI and MACD - these are headed down:

 

 

       

Good luck trading, take profits here and now, and sell into any rallies and wait for better entry points. DO NOT LISTEN to the talking heads on CNBC.

We love documentaries and our recommendation for this week is an amazing documentary on smart meters and why you should not allow these in your neighborhood - we live a world of tyranny and corporate corruption and power: You can see this one on AMAZON or YOUTUBE.

Take Back Your Power

byJeffrey Armstrong

Trucharts Team/Founder/CEO

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: 

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

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.