MrJohnRoss' Account Talk

[MrJohnRoss]

A bit of a black swan event today with investors finally waking up to the problems at Deutsche Bank (DB).




Note the massive down volume on today's rout. About 11X the normal volume on a drop of 6.67%. Just seems like yesterday that problems like this were shrugged off, and the market just kept climbing higher. Perhaps investors risk appetite is waning? Harumph.

Meanwhile, the S&P isn't looking all that well either:




Higher volume on today's drop, which isn't a good sign. Looks like prices are having trouble clearing that 50 DMA.

Meanwhile, WTIC was up another 1.66% today, but it didn't help. WW, you share my opinion as well; the oil glut is not going to go away anytime soon, IMHO, but there's plenty of manipulation to get prices to bounce around for those in high places to capitalize on.

Two of the oscillators I track have now switched to the bearish camp, and my composite system now reads -1, a mild sell signal. As such, I will most likely head to the sidelines tomorrow, unless we see a large rally early on, which is highly unlikely.

Good luck!

 

[airlift]

A bit of a black swan event today with investors finally waking up to the problems at Deutsche Bank (DB).


View attachment 39556

Note the massive down volume on today's rout. About 11X the normal volume on a drop of 6.67%. Just seems like yesterday that problems like this were shrugged off, and the market just kept climbing higher. Perhaps investors risk appetite is waning? Harumph.

Meanwhile, the S&P isn't looking all that well either:


View attachment 39557

Higher volume on today's drop, which isn't a good sign. Looks like prices are having trouble clearing that 50 DMA.

Meanwhile, WTIC was up another 1.66% today, but it didn't help. WW, you share my opinion as well; the oil glut is not going to go away anytime soon, IMHO, but there's plenty of manipulation to get prices to bounce around for those in high places to capitalize on.

Two of the oscillators I track have now switched to the bearish camp, and my composite system now reads -1, a mild sell signal. As such, I will most likely head to the sidelines tomorrow, unless we see a large rally early on, which is highly unlikely.

Good luck!

MJR, excellent analysis. What kind of a morning rally, even if it is unlikely, would persuade you to stay in the S Fund? Thanks.

 

[MrJohnRoss]

With the Dow up 165 points, and the problems at DB swept under the rug (for now), everything's coming up roses. DB up 14% on the day on massive volume:




Decided to stay at least one more day, as the first trading day of the month is statistically positive due to 401k money pouring in to fund managers coffers. We'll see if it pans out.

Also, the oscillators I track are all very near their signal lines, so it's difficult to tell which way this train is going to roll. Right now, we sit at +1, a mild buy signal.

Mr Tran and the Nasdaq are both looking strong, so that's to the bulls credit. WTIC continues to climb as well, which is adding fuel to this rally (pun intended).

Good luck!

 

[MrJohnRoss]

MJR, excellent analysis. What kind of a morning rally, even if it is unlikely, would persuade you to stay in the S Fund? Thanks.

Thanks airlift. It was a surprise, but a complete market reversal of today's strength was enough to keep me in the game at least one more day. Best of luck to you!

 

[MrJohnRoss]

Mr Market continues to climb the bearish rising wedge.




Prices have stayed within the blue box (roughly 4% range) since early July. It's been very difficult to get a read on the market with the oscillators so range bound.

Short term charts provide better trading opportunities, but have also been subject to whipsaws. (Hi WS!).

Mr Tran continues to look strong, as does WTIC, so those are positives for the market. There's still some uncertainty about DB, which is a cautionary flag for stocks, especially banks and financials.

Overall, I'm not expecting any huge market moves up or down until we get a catalyst, such as a Fed rate hike, or blowout earnings from a major company.

Composite system remains at +1, a mild bull signal, so I'll continue to hold the S Fund for now.

Good luck!

 

[MrJohnRoss]

We're now getting close to violating that lower trend line that's been in place since February. That would be a big bearish signal.




Stocks may continue sideways in the blue box, bouncing around, but I think a lot of technical analysts are watching that lower trend line. It could also indicate a failure to re-capture the 50 DMA.

PM's got hammered today with the strengthening dollar and weaker Yen. JNUG down 31% today. Yowza.

The oscillators I track are very near the zero line, but technically read +1-1-1 = -1, a bearish sign, and the +1 is barely positive. Another down day for the markets could move the needle to the fully bearish position, so we'll see how things shake out tomorrow.

Good luck!

 

[MrJohnRoss]

Just when things look like we're going to go lower, we get a day like today, and the market gets a reprieve.




The 60 min chart is showing the range bound market between (roughly) 2120 and 2195. Right now, we're about smack dab in the middle of that range.

Perhaps we'll get some surprising job numbers on Friday that will move the market hard one way or the other. Otherwise, I just don't see what will cause a big move in either direction. Bah humbug.

Oil was up again today, but could be running into resistance very soon. PM's look like they may have formed a bullish hammer formation. We shall see.

I might expect a slight upward bias in the market tomorrow. Composite system is reading +1, but is honestly almost too close to call.

Good luck!

 

[MrJohnRoss]

We remain in the box, but the oscillators are looking more dicey.




Prices are having a difficult time getting above that 50 DMA, which is not a good sign. We closed today literally on that bottom uptrend line. Yikes!

Utilities are trying to make a stand to keep from sliding any further. Mr Tran is looking fairly decent, but the Nasdaq appears to be losing momentum. It's a mixed bag.

PM's were crushed this week with the rising greenback blamed as the prime culprit. JNUG was down over 40% this week. If you're bored with stocks going nowhere, JNUG and JDST might get your heart pumping.

It was surprising to see oil rise in spite of the strong dollar, with WTIC up 3.25% this week. It may run into strong resistance in the 50 - 51 area just above where we are now, so we could see a topping process soon.

Weekly charts all look bearish for stocks, IMHO.

My guess is we see lower prices next week, unless we see stellar earnings. Composite system remains at -1, but could go a full -3 sell signal on another down day. Monday could be a make or break day on whether I stay in any longer.

Good luck!

 

[MrJohnRoss]

Another day, another reprieve for the markets. Just when you think it's going lower, it goes higher.




Once again, we're toying with a number of technical aspects. First of all, we broke above the 50 DMA, only to settle back down below it. We bounced off of the lower trend line, which means we live to fight another day. Smack dab in the middle of the 4% box, so no clues there. Most of the other oscillators are as close to flat as possible.

Earnings should start coming in tomorrow, beginning with AA. Good earnings should lift the market higher, and any big disappointments could cause it to go in the dumpster.

Oil had a big day. WTIC up over 3% today, with a big bullish engulfing candle. See below:




The next test is the 51.67 high from early June. If we break that convincingly, we could be off to the races. That could be another catalyst for stock prices to move higher, and not just oil companies.

Composite system is now reading +1, but is barely moving the needle either way. I'll stay in for another day, and see how tomorrow pans out. Hopefully we'll get some good earnings, and the market continues to move higher, but we shall see.

Good luck!

 

[MrJohnRoss]

Just when the market looks like it's going to move higher, we get a day like today. There were a lot of reasons for today's sell-off. (Unfortunately, there's a glitch in the upload string, so I can't post a chart).

First off, AA reported earnings much lower than expected. The market dumped the stock (-11%), and it cast a pall on other companies about to report earnings.

Secondly, the dollar shot up significantly, which was due to rising interest rates. This will also hurt multinational corporate profits, so more selling ensued.

Third, we've now broken through that lower trend line, which is a red flag, which caused more selling. So we've basically got a snowball gaining traction.

Not surprisingly, today's action threw all my oscillators into negative territory, so the composite now reads -3, a strong sell. I will follow my system, head to the sidelines, and live to fight another day.

Good luck!

 

[MrJohnRoss]

A bit of a short term oversold bounce today. (Sorry, still not able to upload a chart). WTIC is hitting resistance as expected. The 51.60 area looks like pretty sold resistance, at least for right now.

Treasury yields continue to climb, as does the dollar. This is continuing to put pressure on PM's, and could be why oil is weakening as well.

On a side note, that P.O.S. CEO for Wells Fargo, Stumpf, (that f stands for something), gets to "retire" with a golden handshake of $137 million smackeroos. It's no wonder people are sick and tired of the Wall Street 1% big whigs.

<end rant>

Composite system remains solidly bearish at -3. Dow futures are down -97 as of this post, and the Nasdaq and S&P are down even more on a percentage basis. We'll see how tomorrow shakes out.

Good luck!

 

[MrJohnRoss]

A rough day for the market at the open, but it staged a pretty decent recovery. (Sorry, still can't upload any charts to tsptalk).

Both the S&P and the VIX have penetrated their BB, so we could see a short term technical bounce.

Nasdaq looks like it's beginning to roll over pretty fast, and Mr Tran isn't very far behind.

UUP is taking a much needed breather, so commodities got some reprieve, but I think there's more pain to come in that sector.

Composite system remains at -3, a strong sell.

Good luck!

 

[MrJohnRoss]

Markets ended the day basically going nowhere.




The S&P lost almost 21 points for the week, and is now firmly outside the lower trendline, and falling further away from the 50 DMA.

The PPO, which was attempting to get back into positive territory, has fallen back into the negative, and is also heading lower. The Stochastic also crossed below the 50 line earlier this week, which is usually the first sign of market deceleration.

The chart below shows the percentage of S&P stocks above their 50 DMA's:




I've shown this chart before, but it should be obvious that market internals are not doing too well at this point. There are a number of other charts that I hope to post this weekend that also confirm the markets deteriorating condition.

Composite system remains at -3, a strong sell. BTW, glad to see that the upload feature for tsptalk is back in business. Thanks Tom!

Hope everyone has a nice weekend!

 

[MrJohnRoss]

Very little time to post, so just a quick observation.




The S&P is looking like it may break below the 2120 level soon, which would put it outside the bottom of the box that it's been in since early July. The Nasdaq and Mr Tran look like they're rolling over as well.

The chart of WTIC (below) is sure looking like it's going to fail the test of 51.67. Rising oil prices have been a positive for the market, esp for the energy sector (obviously). A failure to clear that resistance could be a negative for the market in general.




The dollar had a slight pullback today, but is still on a tear higher, which hurts commodities.

Gonna keep an eye on treasury yields and the dollar, as I think they're key to the market at this time. Earnings season has been a mixed bag, so you never know what tomorrow may bring though.

Composite system remains at -3, a strong sell.

Good luck!

 

[JamesE]

Thank you for the thoughts John. Hey, is that huge rounded top you posted awhile back still in play?
Also, a lot of folks thinking a little bit of a rally here. I tend to agree because I just don't think the market makers are going to let this thing fall ahead of elections.
If we happen to get a decent bump this week, I'm looking for the door...

 

[MrJohnRoss]

Thank you for the thoughts John. Hey, is that huge rounded top you posted awhile back still in play?
Also, a lot of folks thinking a little bit of a rally here. I tend to agree because I just don't think the market makers are going to let this thing fall ahead of elections.
If we happen to get a decent bump this week, I'm looking for the door...

Thanks for the reminder James. Here's a chart of the rounded top that I posted about a month ago...




Of course, please don't take the blue arrows literally, they're just an approximation of what I thought might likely happen a month ago. (Possibly a return lower to the rounded top pattern, followed by a relief rally before the big fall happens later this year or early next year).

It could still play out in that approximate scenario. I think you're correct in assuming things should go smoothly until after the election, but afterwards, when the Fed will be forced to raise interest rates in December, things could start to get a bit dicey.

Today seemed like just a minor bounce off of the lower BB (on the daily chart) on it's way lower in the intermediate term. However, Rob Hanna, whose opinion I respect, has shown a study where 20 day lows (like Monday) are often followed by decent four day rallies, so we have to keep that possibility in mind. On the other hand, today's gap higher could very likely get filled in the next couple of days, which would require the market to head lower. It's still a choppy market folks.

Meanwhile, my VIX system generated a buy signal, as the VIX fell almost 6% today. That puts the composite system at (-1-1+1) = -1, a mild sell/hold signal. I will hold cash at this time until the system shows a buy signal.

Good luck!

 

[MrJohnRoss]

The markets appear to be attempting a bit of a rally off the bottom of the 4% "box".




Perhaps the 4% trend will continue a few more weeks until the election is behind us. We're getting some surprise earnings to the upside, which is fueling this mini rally.

Oil (WTIC) also looks like it may break long term resistance, currently just under 52. A breakout now appears imminent, which is another positive for the bulls.



I was surprised to see my PPO system generate a buy signal today. That now puts my composite system at (+1+1-1) = +1, a mild buy signal. As such, I am heading back into equities as of the close of business tomorrow.

Good luck!

 

[MrJohnRoss]

Today was a "spinning top" kind of day, showing indecisiveness.




On the one hand, there have been a lot of good earnings surprises. On the other hand, the $USD continued to climb today, which hurt commodities, notably WTIC. A drop in oil hurt the energy sector, which tripped up the market. There really isn't a big catalyst to move this market strongly in either direction.

Mr VIX, (below), continues to show complacency.




I'm anticipating that the markets will float higher for the time being, possibly through the rest of the month, with occasional fits and starts to keep everyone guessing.

Composite system remains at +1, a hold/buy position. Was glad to see the market come down a little bit today to allow a slightly better entry price. Dow futures are down about 33 as of this writing, but we'll see how things finally shake out come tomorrow morning.

Good luck!

 

[MrJohnRoss]

Nice pop in the markets today. Nasdaq looks especially strong:




Big gap higher at the open, and closed very near the HOD, both good signs. The other items to notice are the solid move back above the 50 DMA, and the Stoch crossing above the 50 line, both bullish developments.

The S&P also gapped higher at the open, but has yet to cross above it's 50 DMA. It's now been 32 straight days that the S&P has been below the 50 DMA, but above the 200 DMA. According to a Marketwatch article, this warns of a possible end to the uptrend that's been in place since February. I'm not so sure about that, but we shall see.

The strengthening dollar is still a concern, as is the failure of WTIC to get above the $52 area.

Never the less, my composite system is now reading a bullish +3 after wavering the last two days, so I'll remain in stocks... for now.

Good luck!

 

[MrJohnRoss]

The market looks like it may be forming a bearish descending triangle at this point.




The good news is that the last few days have been forming a series of higher highs and higher lows, so we may also see a breakout above that upper line and the 50 DMA.

The bad news is that we're once again right on the fence with the oscillators, and a strong down day could send the composite into the negative. As it stands, we're still at +3, but just barely.

Good luck!