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.

Watch these charts closely this week..

Trucharts.com Blog Week ending 6/12/2015:

Watch these things and charts closely this week..

We did not have a chance to write a complete weekly blog last week due to some family emergencies. Finally got over these and now back to writing and watching and trading the markets this week. 

We are sure you must have been noticing the past few weeks how the big market players have been holding the DOW at 18000, SP500 at 2100 and the NASDAQ at 5000 - rigging - you have to wonder. Every week (for the past six weeks), there has been at least one day a week for a positive 3 digit move in the markets and then we have several - what we call - consolidation days - and then we have had news on Greece everyday impacting the moves in the indices. It is becoming like a same story different day.. Still there has been no resolution on the Greece situation, and then we are seeing some news today that the Greeks have not come forth with a solution that pleases the IMF and the Eurozone. Let us see how this unfolds.

Now back to our markets and China - an amazing bubble brewing there in the markets. A billionaire is made everyday and the three drop out due to improper financial conduct by their respective companies - just take a look at Hanergy as an example. 

We think the underlying fundamentals are weak and many stocks are exhibiting weak technicals, and in addition, we think the tech stocks are looking weak. We strongly recommend taking profits in this sector.

Here are some charts from our markets we are watching closely this week. Keep an eye on the 13 week SMA, the 50 week SMA and the 100 week SMA. Amazing support levels for all the ETFs below.

Charts Weekly: 

Check the chart for:

CVX at critical support - we think this could go to 90.
DIA going to 50 week SMA?
IBB at 13 week SMA - still looking good - still not closing below 13 week SMA.
IWM - Russell 2000 ETF - still strong
MMM - heading to 50 week SMA - should be a good buy point for a bounce
SPY- at week SMA - great support here.
TXN - at 50 week SMA - looking weak - may bounce here
XLK ETF - technology starting to show weakness. (See INTC chart below)

 

 

 

 

 

We are long BIDU,CYBR,TWTR,Z, and short AEM,AMBA. Closed DTEA, LLY and UA this week for a good profit.  

IPOs to watch this week: Fitbit - Wednesday - FIT.

Critical earnings this week:

Adobe Systems (ADBE), FedEx FDX, Oracle (ORCL), Darden Restaurants (DRI), Kroger (KR), CarMax (KMX), and KB Home (KBH), DTEA on Tuesday.

Check out our special subscription offer - just $90 for the whole year. The best deal of any technical and stock charting website on the web. Here is the link: 
http://www.trucharts.com/truCharts_Services.aspx

Check out the results of our backtest feature - the fastest on the web: This is for IBB ETF with a 8 SMA crosses 12 SMA and exit is 11 days after crossover - the short needs to be optimized - but the long strategy shows a 174% return.

Was it a market Correction? Or the start of something bigger?

Market Correction or is the market going to crack here?

Markets on Friday pulled back and broke the 50d and 13d SMA from the wedge pattern we discussed in our last blog. The NASDAQ closed above its 50d SMA. Here are the charts with critical short term trendlines. We expect support for SP500 around 2048 area and for the DOW around 17450. For NASDAQ, around 4850. These will be short term critical support areas. 

There was news on new housing starts which was not good heading into the peak home buying spring season and the housing stocks - check (www.trucharts.com/stockview.aspx?TICK=LEN as an example). Then we had news from Greece and possible default, then the news of the slowdown in China growth and the stock market bubble - investors opened over 4.8M accounts in one week - think about that number 4.8M in one week - Wow!! China is experiencing the same bubbles we had in the US - stocks bubble, housing bubble and then now again stock bubble. There are bubbles brewing everywhere and now for the first time San Francisco median price crossed $1M - this is what happens when money printing machine is running non-stop.

Check the trendlines for the DOW, SP500 and NASDAQ. Watch the levels closely. We have been in a sideways consolidation pattern after the breakout in Oct of 2014. There have been breakouts, but the markets have still been in a sideways pattern. Support for DOW is around 17000, SP500 support is at 1980 area.

With the earnings season in full force there have not been too many surprises - PM raised forecasts and the tech companies have had lackluster earnings - even the forecasts have been muted. We think this is the peak of the tech cycle. 
We are looking to short XLK (www.trucharts.com/stockview.aspx?TICK=XLK) 
and/or SMH/IPGP (www.trucharts.com/stockview.aspx?TICK=IPGP) for the short term. 

There is a another set of earnings barrage coming next week and the week after - IBM, AAPl, TWTR, YHOO and many more - check this link on our site for the earnings calendar: http://www.trucharts.com/EarningsView.aspx?qst3=qstthisweek.

Our all long portfolio was down only 0.1% on Friday even though the markets were down over 1% each and our long/short portfolio was up 0.5% on Friday. We hedge all our positions and our TWTR position was called away on Saturday. We are long MO, USO, BIDU, TWTR. Short positions are AEM, IBB and SNDK position closed on Saturday.

Check out our special susbscription rates for full access - our features are bar none the best of the web - we are aware of other sites that charge just $35 per month for the real time news feature. Here is the link to our subscription page and our site features:

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

http://truchartscom.blogspot.com/p/why-is-trucharts.html

Good luck trading.

Trucharts Team