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

www.trucharts.com/stockview.aspx?TICK=PBYI

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:

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

Good luck trading.

Stay nimble.

Trucharts Team and Founder/CEO

Markets - Up and Down - What to do now - BUY or SELL?

Markets - Up and Down - What to do now - BUY or SELL?

Happy Labor day to all.

Well what do we think of the markets here and the direction. We stated in several blogs that markets were exhibiting topping action and we told our readers to take profits, sell rallies and reduce exposure or go short the semiconductor and biotech sector. We have been following this advice in our own portfolio. We have been net short since late June.

Markets have been bouncing from the recent crash and everyone was getting excited. This tells us that the people are still not scared enough and the folks on CNBS (got this of the web and I love it) are still very bullish in light of the market action. The VIX is still elevated and the ISEE call put ratio is still biased towards more put buying - we have not seen such a long string of the ISEE C/P ratio trend towards put buying. Markets dropped on Friday heading into the Labor day weekend. 

Major ETFs reflecting the DOW (ETF: DIA) and others have closed below their respective 100 week SMA. This is definitely not a good sign. We think the markets are headed lower to the 200d weekly SMA and maybe to the next support of 15000 for the DOW. We still recommend lightning up on your positions and take profits in any rally. Companies earnings forecasts are not strong and many are even lower than consensus forecasts. Just take a look at DE. JOY and the semi companies. Stocks are driven by earnings and stocks with their downward movements are indicating lower earnings coming in the future. Corporate buybacks and earnings number rigging along with Fed liquidity was what was driving the markets. You can expect short term rallies due to oversold conditions - but the trend is still down and we would wait before going net long. Insiders have been selling stocks at a rapid pace and they were doing so when the markets were topping - Major insiders in the biotech sector and semi sector dumped a lot of stock at the peak - this tells us that they got extremely rich and do not anticipate any higher prices - the markets were priced to perfection and the markets had gone up without even a 10% correction for over 3 years. We have shown some of charts below.

This past weekend the finance minister for China said that the China stock bubble had burst and this tells us that the Chinese government reactions and intervention in their stock markets is not working - and guess what happens - the Chinese citizens promptly move their money into real estate - the cycle never ends. We will have to wait and see how all the events play out in China. 

China is definitely slowing down and this is the world's second largest economy. They are mired in over capacity and nit driven by internal consumption. We think this is impacting the world economy and the commodity complex as China is the biggest consumer of the commodities.

Housing prices are again up in the US and heading into another bubble and we think this is definitely in the back of the Fed's thought process and with unemployment hitting the 5.1% well within the target range of full employment for the Fed - we think there is going to be pressure on the Fed to raise the Fed Funds rate. We have now the highest rate of employment participation (that means majority of the employable folks have stopped looking for a job).

From a stock perspective - we would not go long any of the semi stocks - we like SLAB possibly - but be mindful - you can take a position if you do not mind averaging down. We would hedge all our positions by selling covered calls and or you can sell puts if you want to own a stock. Now for shorts (be mindful we do not recommend shorting for amateurs - this is for experienced folks) - we still think IBB offers the best shorting opportunity here along with AMBA stock. We are short IBB and AMBA (since 115). Even though some of the indicators are oversold on a daily basis, the weekly indicators are not oversold yet.

We recommend watching this documentary (on youtube) on how OIL controls the world and how the "SEVEN SISTERS" control the world's oil: https://www.youtube.com/watch?v=XtYOjMmEMeg - it is called the 'Secret of SEVEN SISTERS' - unbelievable. 

Check out our buy/sell strategies automated on your portfolio to see if your stock is still a buy or sell signal - try this on weekly and daily chart. Use the Stock charts page to check this. 

As we said last week - we are self funded and would like to get more subscribers so we can look for an investor to help us take the site to the next level - we would like to ask our readers and users to subscribe - it is a measly $9 or $15 per month to get the best feature set on the web and we know this since our returning user base is engaged on our site for more than 12 minutes a session. We use very minimal budget for marketing - we use our funds primarily for development, paying salaries to our developers, and servers, news/data feeds. 

Here is the link to the subscription service page: http://www.trucharts.com/truCharts_Services.aspx 

Here are the weekly charts along with our trendlines drawn:

 

 

Good luck trading.

Trucharts team/Founder/CEO

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

Greece, Markets and Dow Jones below 200d SMA - Mid week update - Blog Trucharts.com Stock Blog

Mid Week Update - Trucharts.com Stock Blog - Will Grexit be a reality and stocks to trade and China stock markets

SEO stuff: 

Stock Charts Free - Trucharts.com - Technical Analysis, MACD, ETFs, Dividend stocks, Charting, Free Charts, Stock trading, Hot stocks, Trading Strategies:

What a week - sorry, we could not post over the weekend and then we had huge market movements in China, US and then the Greek referendum. 

China markets were down over 30% and the Chinese government made or passed laws to arrest folks who were aggressively short selling, then increased margin leverage, forced brokers to plead a measly 120B Yuan to buy stocks, banned companies from selling their own stock and I am not sure when this list will end. Well in response to all these wonderful government interventions, the markets rebounded yesterday to the tune of 200 points and everyone was getting excited. We are non-believers of this rally and think it will still take its own course eventually - we believe the China growth engine is slowing due to their shadow banking and debt problems of the state owned entities. We expect the Chinese GDP growth to drop to below the 7% number and the Chinese are very concerned. We stated that the world is mired in overcapacity and China is at the root of this overcapacity. We expect a slight bounce in the markets here, but the downtrend should resume - timing not clear. When you are minting a billionaire everyday, you will eventually have more billionaires than anywhere in the world... Bubbles, bubbles and more bubbles and the Chinese government does not know how to handle bubbles - amateurs. And they have been printing money non stop - this will come to haunt them someday.

Now Greece - well the referendum passed with an overwhelming NO to the Eurozone and it is not clear what the Grexit will look like - we believe the Eurozone members Germany and France are extremely concerned about the future of the Euro zone if they allow Greect to exit - this is called dismembering - if one falls will others follow - Italy, Spain, Portugal and who else!! That is the reason the Eurozone leaders are scrambling to prevent Greece from exiting - we still expect that this is inevitable.. 

US markets - We stated in our previous blogs that the markets were exhibiting topping action and sure enough we had the markets trying to hold levels of 18000 for the DOW, 2100 for the SP500 and the 5000 level for NASDAQ. This topping action was ongoing for 4-6 weeks with 3 digit moves every other day. Eventually the markets broke down and now the earnings season is in full bloom. Markets broke 200D SMA for DOW and we are closely watching the 17700 level now as resistance and 2070 for the SP500. VIX is elevated and we have to be on our toes. 

We had earnings report from Micron, which were lower than forecast and their outlook was grim. AMD re-enforced the slowdown in the PC markets and we expect the same from the overall semi sector. We stated to go short INTC or SMH and overvalued stocks such as AMBA, SWKS, NXPI and AVGO. We believe INTC buying ALTR was a desperate move from INTC and they paid a hefty premium for this. And as did AVGO buying BRCM for a hefty premium. There is no questions there is a major slowdown in this sector and we do not expect any major driver for this sector. Overcapacity is a definite issue and the phone markets are getting severely saturated in China and India.

Some good reads from this and the past week:

http://www.marketwatch.com/story/why-beijing-cannot-let-its-bull-market-die-2015-07-05?siteid=yhoof2

http://finance.yahoo.com/news/zeroing-empty-homes-china-throws-developers-lifeline-210739138--sector.html

http://www.zerohedge.com/news/2015-07-04/feds-full-normalization-will-crush-casino

http://www.zerohedge.com/news/2015-07-05/volatility-confusion-reign-pboc-intervenes-chinese-stocks-surge-then-tumble

http://www.zerohedge.com/news/2015-07-06/tumbling-futures-rebound-after-varoufakis-resignation-most-china-stocks-drop-despite

http://www.zerohedge.com/news/2015-07-05/hillary-ropes-everyday-reporters-creates-media-spectacle

http://www.zerohedge.com/news/2015-07-05/china-crosses-rubicon-stock-bailout-bofa-says-pboc-risks-hurting-its-credibility

http://www.zerohedge.com/news/2015-07-05/nightmare-euro-architects-coming-true-jpm-sees-grexit-base-case-split-eurogroup-comi

http://www.bloomberg.com/news/articles/2015-07-05/china-brokers-dust-off-wall-street-s-playbook-from-crash-of-1929?cmpid=yhoo

http://www.huffingtonpost.com/stacey-alcorn/inside-the-tank---mr-wond_b_7726504.html?ncid=txtlnkusaolp00000592

http://www.bloombergview.com/articles/2015-07-02/china-s-boom-has-world-bank-worried?cmpid=yhoo

http://www.bloombergview.com/articles/2015-07-04/ritholtz-s-reads-401-k-s-are-horribly-flawed

http://www.fool.com/investing/general/2015/07/01/greedy-drugmakers-change-could-be-coming.aspx?source=ihpsitota0000001&lidx=2

http://finance.yahoo.com/news/big-banks-spending-even-more-than-vcs-on-future-of-finance-145337246.html

http://finance.yahoo.com/news/chinas-stock-market-crashing-chinese-095900183.html

We are long BIDU,CYBR with covered calls written and short INTC,SWKS,AMBA. We went long WBA today for a short term trade. 

We recommend that you hedge your positions by buying some put protection and selling some covered calls. 

Check out some new features on our site and help us spread the word - we rely on word of mouth advertising - we focus our funds on driving development of our site. 

Here are some charts for DIA, SPY, and QQQ - weekly: 

 

Keep an eye on 50 week SMA for all the above symbols - these are critical support. In addition, watch IBB to see if it closes this week below 13 week SMA - if it does - it is ripe for a short.

Best of luck trading.

Trucharts team.

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