Technical Macro Overview

Our Technical Global Macro Overview



These are just my technical views and are not to be considered as investment advice. 

Past performance has no bearing on future results.
For informational and educational purposes only, not a recommendation to buy or sell any securities. Please see our Disclaimer.

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Following are my observations only, and is for informational and educational purposes only. Nothing here is a recommendation to buy or sell any securities or make any investment decisions. My views and/or positions can change at any time with no notice.

10/18/2019 PRE-MARKET NOTES
The recently inverted yield curve has received alot of press and online discussion, as many have predicted a very certain  recession and associated bear market, but the stock market is the greatest predictor of future stock prices. There could always be an economic slowdown, recession or bear market, as these are a part of any normal economic and market cycle, but I will continue to take my clues from stock market action to keep me on alert, instead of economic data or predictions. Trading at or near 52 week or longer highs, and in some cases, all-time highs, this week, are names in semis SMH, KLAC, AMAT, TSM,  home construction ITB, XHB, DHI, PHM, MAS, BLD, heavy construction JEC, commercial vehicles DE, trucking JBHT, banking JPM, railroads KSU, and retailers TGT, TJX, ROST, DG, and DLTR.  The message of the market for now is very clear - these are not the price signals of a weakening economy. These stocks could top out at any time, and the trend could start to reverse. If and when they actually do, this will show up clearly in the charts. Until then, the markets are sending a very clear signal of strength.  

U.S. Treasuries TLT and Utilities XLU, are the two most oversold groups in uptrends on my screen, both with rising moving average support below. If these longer term uptrends are going to continue, they should start to turn up in the next few days.  

10/16/2019 AFTER THE CLOSE
Home builders and home construction continue to top the technical momentum list, with ITB, XHB and many stocks in the group making new 52 week highs. These continue to be a focus group for me, and while in the short term they could consolidate, the longer term strength is noteworthy.

SPY, QQQ, ASHR, FXI, and VGK are at the higher end of their daily range, and while I am not predicting any consolidation, some could be expected over the next week or two. I am technically bullish on U.S. stocks with SPX over 2800.

Many software stocks sold off sharply today, and that group still has many broken down charts, that now that they have had their technical bounce, as discussed in my 10/09/19 Macro note, will see if they can hold their recent lows. NOW failed exactly at the 275 level that I discussed online last week, as did SHOP at the 350 range, also into it's 50d sma. I am monitoring this group for a pullback, but only in the stronger names.

Semis are still the strongest tech space on my screen, although after their new all-time high, could consolidate, which would be buyable for me. 

I added Utilities to the oversold pullback best ideas list today, oversold above the rising 50d sma. The 100d sma is a key trend gauge here.

Eurozone banks have been showing new technical strength over the last week, and many of those are very high on the momentum list. They are at the top end of their daily range, but have cleared their 200d MA and are constructive here. 

I dialed back some exposure in QQQ over 193, from the 182 buy point two weeks ago. 


10/16/2019 PRE-MARKET NOTE

New 52 week or all-time highs yesterday in semis (SMH), home construction (ITB), homebuilders (XHB) and leading names JP Morgan, Home Depot, and Taiwan Semi. Bullish technical price action in leading industries and large cap leaders.

Two weeks ago, markets registered oversold, yet above the key 2800 SPX level and the rising 200sma. Markets are not yet technically overbought, but are closer to the higher end of their daily range. For now, any pullbacks above 2800 continue to be buyable, and key focus areas are still semis, software, home construction and REITs. Financials have been improving, Eurozone banks have had major rallies this week, and utilities are consolidating in their uptrend. Utilities (XLU) are in a continuation buy zone, nearly oversold and 1.1% above the 50d MA, and 3.6% above the longer term trend gauge, the 100d MA. The 200 day moving average has turned up in diverse groups including Eurozone banks, regional banks, and China internet names, among many others.

Price action and moving average trends in many sectors/industries continues to be bullish technically, and any consolidation over the next week or two would be constructive, though not necessary.

Gold miners (GDX) broke below the 100 day moving average today for the first time since the late May breakout and the group continues to be under pressure. I booked gains and closed out GDX and am still holding GLD. 

10/13/19 THE WEEK AHEAD

Equity indices finished last week in the green, with SPY +.65% and QQQ +1.29%.
10y UST yields spiked up to 1.75%, TLT was -3.80% and Gold closed the week -1.64% at 1488.

The trend for now in the indices continues to be higher, with higher lows, above the rising 200 day moving average, and pullbacks continue to be buyable above the 200day MA. In tech, semis continue to be the strongest group, and application software had a few new highs last week as well, as that group is stabilizing for now.

The steadiest, low volatility uptrends for now on my screen, as a group, continue to be in REITs and Utilities. Home construction is acting well, as are many discount retailers, on the new 52 week high list. China is improving slightly with the 40 week MA in KWEB turning up and ASHR also turned up and holding the 200sma test last week. 

USTs bounced sharply off 1.51 on the 10 year, and longer term 1.90 and 2.00 are key resistance levels. As long as yields stay under 2.00, the trend in bonds is higher. If 2.00 is breached, then the longer term trend higher in bonds will be under pressure.   
 
Gold and miners have been weakening, with a bearish 20/50 sma cross down. Key levels for both are the rising 100sma and on Gold itself, 1400 is the key longer term support line for now. 

Strongest groups of interest: Home construction/builders, semis, software, REITs, utilities, discount retailers, and consumer staples.
Current ETF positioning: Long QQQ, XLRE, ITB, ASHR, TLT, TMF, GLD, GDX, GBTC.  Single stock positions are updated on the Twitter feed. 

 


10/09/19 MID WEEK UPDATE
After reaching very oversold readings on 10/03, many tech names and QQQ turned higher for the last week, and are now no longer reading oversold.  The daily momentum readings I track are now neutral to slighty overbought. After an inital sharp range expansion sell off, a market or stock will often experience a technical bounce. What I look for after the technical bounce and coinciding momentum reversal spike up,  is to see if another leg down starts to take hold.  This is how I entered the max short QQQ position in early November 2018, which I closed on 12/21/18, which is all outlined on the Twitter timeline.      

Many leading tech names, especially in SaaS, have bounced up into resistance, and are still in a rollover cycle of lower lows and highs.  NOW is one of the best examples, with moving averages having rolled over and failing 5 times vs the now declining 100 day moving average over the last 70 days. Many tech stocks have this same price action of either a sharp drawdown, or lower lows and highs. A close above the recent trading range would help to neutralize these downtrends.  Technically, although my position is long, I am neutral on tech here. 

I am continuing to add exposure in  lower volatility uptrends in home construction and REITS, and Utilities are next on the list. The longer term retuns in REITs and Utilities have been very close to that of  SPY, and they are the strongest uptrends on my screen right now, along with consumer staples and home construction. Tech, China and cyclicals have been very volatile and range bound the last few months, while low volatility/defensive names are still in very pronounced uptrends.

As stated last week on Twitter, I am treating tech as a shorter term trade for now, and only using the index ETF and not adding any longer term tech singles positons at all right now.

Regarding the trade tariff news flow 24/7. The media has a job to do, and I get that and respect it. Aside from that, from a trading perspective, other than creating short term volatility,  there is zero trading value in following the trade tariff news, posting about it all day, and trying to game what every news release means or doesn't.

LMT 

 

9/29/19 MARKET WEEK AHEAD, WEEK THREE OF MARKET ROTATION

QQQ was -1.78% for the week and SPY was -.97%.  Under the surface, the split between 3 factors is becoming more evident:

DEFENSIVE AND HIGH YIELD STOCKS
The strongest groups continue to be in lower volatility, defensive names, with higher than average dividend yields.
Utilities (XLU), Consumer Staples (XLP), and REITs (XLRE), continue to trade in steady uptrends, very close to recently printed all-time highs. These groups also have high daily Relative Strength readings.  It is noteworthy that the top holding in the Momentum ETF (MTUM) is Procter & Gamble (PG).  Many funds have a mandate to keep a certain percentage of assets invested, which may help explain some of the strength in staples and utilities, as money is flowing into lower volatility, higher yielding industries. Other groups outperforming and in uptrends are Home Construction (ITB), Homebuilders (XHB) and Aerospace & Defense (ITA). Financials (XLF) are also acting well, and leader JP Morgan (JPM) recently made a new all-time high, this is also a group of interest. 

GROWTH STOCKS
The momentum growth stock weakness continues with the FANG ETF (FDN)  -3.5% on the week and below it's 200 day moving average. SaaS (Software) stocks continue to break down with SHOP, TWLO and CRM, among others, continuing to weaken. Many of these stocks went on triple digit breakout moves over the last 12 to 18 months, and the reversion to the mean could continue. These stocks have unwound very fast and could bounce sharply at any time, but they have broken down for now for my time frame and I am continuing to avoid them, with no exposure to the group currently.  Software ETF (IGV) was - 3.1% last week, is 9% off the highs and is testing it's 200 day moving average. A break below could signal more weakness. In technology, semiconductors as a group (SMH) and the SOX index are near their highs and in uptrends, and QQQ itself is steadier, at 4% off the highs and above it's rising 40 week moving average.  Many tech charts that I analyzed this weekend are weaker than the index itself, and the fact that MSFT, AAPL and GOOGL, which comprise 31% of QQQ,  are near their highs, may be masking some weakness under the surface.  Many tech names are oversold, but in downtrends and below their 200 day moving average, so I am observing the group closely, as it is always one of my key focus groups.   

CYCLICALS
After a sharp rotation two weeks ago, energy services (XES) and industrial metals (XME), my two key focus groups here, have consolidated sharply, but are now reading oversold and holding above their recent lows.  If recent lows hold, then this could prove to be a good reward vs risk scenario going forward, as these groups have sold off extensively over the last 12 to 18 months. If recent lows break, then a bottom is still yet to be found. I have smaller exposure here for now. 

CHINA AND EMERGING MARKETS
These markets continue to trade in a range, and my only exposure here contnues to be China A-shares (ASHR). China internet names, a core group for me, are trendless, and while some names have been showing some promise, the ETF (KWEB) is below it's 200day movng average and there are very few uptrends in the group. 

The best uptrends for my time frame currently are QQQ and Utilities, Consumer Staples, REITs, Home Construction and Aerospace/Defense.


U.S. TREASURIES AND GOLD
10 year UST yields, (TNX) continue to be in a downtrend, closing the week -4.56% at 1.675, and below the declining 200, 100 and 50 day moving averages. 1.90 and 2.00 continue to be key levels overhead. TLT continues to be in a long term uptrend, and is above the rising 50/100 and 200 day moving averages.

Gold closed the week -.57% at 1506, and while above the rising 50, 100 and 200 day movig averages, tradd below and is testing the 50 day fo rthe first time since May. Gold is in an uptrend, and key levels for my time frame are 1500, 1450 and 1400.

CRUDE OIL continues to trade in the $50 to $60 range, clsoing the week -3.75% at 55.91.

**CURRENT KEY FOCUS GROUPS**
US Tech, Utilities, Staples, Home Construction, REITs, Gold & Gold Miners, US Treasuries, Energy Services, , Industrial Metals and EuroZone Banks

SUMMARY

Core positioning is fairly moderate here at 20% USTs, 20% Gold/Miners, 35% Equities/ETFs and 25% cash. I am montioring the rotation in various markets closely, but when high volume sharp range expansion occurs, my best approach is to have less exposure and actvity until key trends start to emerge and/or resume.  

-LMT

 

9/22/19 MARKET WEEK AHEAD, WEEK TWO OF ROTATION FROM MOMENTUM INTO VALUE

Last week was fairly quiet with SPX -.51% and QQQ  -.90% for the week. The rotation out of momentum stocks continued through week 2, as leading momentum names SHOP and ROKU, among others, broke down further. Various Wall Street research reports published charts showing that the divergence between momentum and value factors had reached historic levels, and any reversion to the mean could take some time to work through. Over the last two weeks I have reduced my exposure in momentum names to only two as of now, dialed back net exposure and have rotated money into traditional value spaces, such as energy services, metals & mining, steel and EuroZone banks. If these opening positions start to work, I am looking to add on a scale up basis. I am not looking to add any exposure at all in the momentum stock space currently, as that trend has broken down for now for my time frame. I am not making any predictions, or proclaiming the end of the momentum stock run. It could resume at any time, and there could be very sharp rallies along the way, but for now, with the high volume breakdowns below key price levels and moving averages, I have taken a wait and see approach to the price action there and not looking to actively add or trade these names currently.  

JP Morgan (JPM) traded at a new all time high last week, which is noteworthy in this period of extremely volatile interest rates, which are in a downtrend. Many have tried to make fundamental assumptions about the effects of lower rates and an inverted yield curve with regard to banking stocks, but JPM at new highs sends a clear signal. A core name for me over the years, I am monitoring the money center bank space closely.   Semiconductors (SMH) and Homebuilders (XHB) also continued their uptrends. 

10year UST yields closed the week at 1.755, -7.78%, and just below the declining 50 day moving average. US Treasuries are still in an uptrend and yields are in a downtrend for my time frame, so I am still holding a core long position. Gold and Miners are also still in an uptrend for my time frame, and both are above their rising 50 day moving average, so I continue to maintain my core long positions there.  China A-shares continue to improve and I am holding smaller positions there and in Bitcoin. China Internet names continue to improve, as noted last week, and that group is high on my focus list.  

I am watching the price action very closely in the momentum stock and value spaces, to see if there is continued follow through here. If this is the start of a major cycle rotation into value, and this still remains to be confirmed, than I believe there could be significant upside potential in many cyclical names and out of favor industries as discussed above. I am scaling in so far and will see if price confirms with a series of higher highs and lows.  Also, any pullbacks, which could be sharp, need to hold above recent lows for the longer term reversal process to be in place. 

**CURRENT KEY FOCUS GROUPS**
US Tech, Gold & Gold Miners, US Treasuries, Energy Services, China Internet, Industrial Metals and EuroZone Banks

--LMT



9/16/19 MARKET WEEK AHEAD:  S & P 500, POSSIBLE ROTATION FROM MOMENTUM INTO VALUE, BOND YIELDS, GOLD MINERS AND CRUDE OIL

EQUITY MARKETS
Last week was eventful across many markets. The  S&P 500 (SPX) was +.96% and closed at 3007, less than 1% from an all time high. Nasdaq was +.91% and closed at 8176, less than 2% from all time highs. Under the surface, there were big moves down in high Relative Strength momentum stocks, which have been top performers year to date, while money rotated into some of the year's worst performers, mostly in the "value" stock category. The Application Software group, one of the leaders for the last two years,  had many breakdowns with top performers like  Alteryx (AYX) -21%, Paycom (PAYC) -16% and Shopify (SHOP) - 11% for the week. This group as a whole was weak, although mega cap techs held up well. Of the 20 worst performers last week, with a market cap over $10 Billion, all were positive for the last 12 months. 

Money seemingly rotated into many out of favor names. Of the Top 20 performers for the week, with a market cap over $10 Billion, 19 of those names were down over the prior 12 months. The sharp moves were likely a combination of both short covering and also fresh buying. In either case, the moves were significant with Energy ETF XES +7% and Industrial Metals ETF XME +8%.    

The sharp, high volume drops in the Application Software space are noteworthy and are technically not constructive.  I reduced net exposure and while I am still holding some positions, the exits are not far off. The high volume drops are indicative of big money moving out of the space, at least last week.  In the 'value/cyclical' sectors, I am focused on Energy names, espcially E&P and Energy Services, (XES, XOP, NE, HAL, RIG, SLB), Industrial Metals, Steel, Copper and Aluminum (XME, SLX, COPX, AA, MT, FCX, AKS, SCCO)  and EuroZone Banks such as Deutsche Bank (DB) and SocGen (SCGLY),  both having reclaimed their 40 week moving averages, after falling beneath them in early 2018. From a technical, trend following perspective, the reclaim of the 200 day moving average, after such a long time below, is a key signal. These spaces, Energy, Metals and EuroZone Banks, have all been in major downtrends, so holding above recent lows is key.  

One week does not make a trend, but trends can start at any time, and the high volume, sharp moves in momentum and value names last week could be the first signal. I am monitoring these markets daily and the primary data I am monitoring is how they handle any near term reversals (pullbacks in value and rallies in momentum) and for the emergence of an uptrend of higher lows and highs in the value names, and the beginnning of a downtrend of lower lows and highs in the momentum names.

Another group that is moving higher up my focus list is the China Internet names, with ETF KWEB +2.9% on the week and closing above it's slightly rising 200 day moving average. Many names in this group have reclaimed their 200 day movng averages, and the 200 MA has also turned up in many names, indicating a positive longer term price trend. Focus names include ASHR, BABA, BZUN, EDU, HUYA, JD, KWEB, TAL, TCEHY, VIPS. Noteworthy that China A-share ASHR is also acting well above it's rising 200 day moving average.   

I am still positioned heavily long in Tech, with QQQ near all time highs, Leaders such as Microsft (MSFT) and Apple (AAPL) have been strong recently and Semiconductor ETF (SMH) made a new all time high, which is technically bullish.  Homebuilder ETF (XHB) also made a new 52 week high. Homebuilders and Semis leading is considered a bullish sign.

BOND MARKET
10 year U.S. Treasury Yields spiked sharply last week, up from 1.55 to 1.90, a massive move, and the Treasury Bond ETF (TLT) was -6% on the week. 10s closed strongly, at 1.90, and above their declining 50 day moving average at 1.79, and a test of 2.00 could be in the cards. The 2.00 level was tested often in July, before price broke below it and 2.00 continues to be a key pivot point to watch. I booked partial gains in Bonds last week and dialed back my exposure from any shorter term positions, and still holding my longer term positions. I am watching the 2.00 level closely as the final line in the sand. Weekend news events have pushed yields down to 1.83% currently, 10 year yields have become very overbought on the daily chart and TLT has become very oversold, so I am monitoring for any moves back into the longer term trend here. I am still long in this group as the longer term trend in bonds is higher for now. A close above 2.00 in 10 year yields would put this uptrend under pressure.  

GOLD AND MINERS
Gold closed the week -1.06% at 1499, but still above it's rising 50 day moving average and is oversold on the Daily chart. Gold Miners ETF (GDX) is very oversold as well, and closed below it's rising 50 day moving average. I am still long in this group, as the longer term trend is higher on my charts.  1400 and 1450 are key longer term support levels on any further pullbacks.

CRUDE OIL
Weekend news events have pushed WTI crude oil currently +9% at 60.21, a massive spike from Friday's close. As noted on Twitter, I closed my crude oil short (USO) early last week, and have no positions in the physical here. $60 in WTI Crude is the key price level that I have been monitoring this year, but have no plans currently in this market, other than through Energy equities. 

RECAP
The last week has seen very sharp, high volume moves across the board in U.S. Treasury Bonds and yields, high growth momentum stocks, out of favor value stocks and now Crude Oil. As stated prior, one day or week does not make a new trend, but they can start or end at any time. The high volume moves in equities are noteworthy and something that I am tracking for any follow through. I am also monitoring for any reversal in USTs and Gold/Miners back into the longer term trend, or not. In times of higher volatility, I prefer to reduce exposure and activity until I can get a better read on the market moves.  

**CURRENT KEY FOCUS GROUPS**
US Tech, Gold & Gold Miners, US Treasury Bonds, Energy, China Internet, Industrial Metals and EuroZone Banks

---LMT


9/08/19 OVERVIEW AND PLATINUM BREAKOUT

My core focus groups continue to be Tech, US Treasuries and Gold and Miners (QQQ, TLT, TMF, GLD, GDX).  China Internets (KWEB) are improving, as many names are above their rising 200 day moving averages, indicating an improving longer term trend. The China Internet ETF (KWEB) is trading just over it's flattening 200sma and I am monitoring it closely. The Energy equity space is also holding over recent lows, (XOP,  XES, OIH) and although the space has been in a steep downtrend, recent lows were tested and held and  I continue to believe that the potential reward vs risk continues to be favorable here.

Platinum recently broke out to a new 52 week high and tested the $1000 level last week before backing off.  880 to 920 is key support on any further pullback. Silver has also broken out, and while it is a very volatile market, with sharp pullbacks, the breakout is bullish technically.

The application software space, a favorite for many years, is showing some weakness, with WDAY rolling over below it's 200 day moving average. Other names that are oversold above key MAs but showing shorter term weakness are ZS, VEEV, TEAM and TTD. I am monitoring the group.  SNAP and MTCH are two names of interest here. 

LMT

9/02/19 AUGUST RECAP/SEPTEMBER LOOK AHEAD
August was a very strong month in current open positions, with core positions (over 25% weightings) in US Treasuries and Gold & Miners up nicely. TMF +35%, TLT +11%, GDX +12% and GLD +7%.  Smaller positions in QQQ -1.9% and the crude oil short position in USO was +4.8% as crude oil declined in August.  A small position in GBTC (Bitcoin) was -14% and ASHR - 2%.
Top single stock winners were ROKU +46%, SHOP +21% and AYX +21%. Top losers, which I also exited, were SQ -12% and WDAY at -9%.  The ETF positions had the biggest impact as they are much larger than the single stock positions. 

Coming in to September, I continue to be positioned heavily long US Treasuries, Gold and Miners and US tech. The trend is still up in all three groups for my time frame and I continue to view them as buyable on the pullbacks and breakouts.  I have been positioned long in UST via TLT and TMF since 10y yields were in the 2.50% range in April 2019, and as long as rates stay under 2.00, the trend continues to be down. The key level for Gold is $1,400, which was resistance for over 5 years and now should provide a floor to trade against on the long side. These trends could reverse tomorrow, but my strategy is to continue to hold and trade uptrends from the long side until the trend reverses.

U.S. tech continues to be another key focus area for me, and I am positioned heavier in application software and semis.  The mid to slighlty larger cap names continue to perform better than the mega cap names and FANGs, which have been in a range for a year now. 

China internets and the US Energy sector have moved up on my radar screen/watch list, and I started a small position in an Energy ETF, XES. Many energy names are in downtrends and making twenty plus year lows. I rarely venture under the 200 day moving average, I am not calling a bottom at all, and the group could have much more downside, but the potential reward vs risk math is favorable enough to start a small long position.
If the position starts to work, I will add on the way up, and cut it if it starts to head lower and hits my stop.
My trading process is to add to winners, and cut losers, so I won't be chasing the group down if it continues to unwind.

THE INVERTED YIELD CURVE AND ECONOMIC FORECASTS
Simply stated, I don't trade off the yield curve and pay very little attention to any of them for many reasons:
1. It has no value as a timing tool.
2. It is a very poor predictor of future market direction in the intermediate term, as equity markets have rallied strongly in the past for over 12 months after the curve inverts.
3. I trade each market off it's own chart.

There have been numerous posts and media coverage that an inverted yield curve often precedes a recession and often leads to a bear market. So be it. Recessions and bear markets are a normal part of any business/market cycle. The chart of each market is a significantly better trading tool and timing indicator than the yield curve, so to me, the curve is of no value. When it all goes bad, markets and leading stocks will roll over, break below key levels and moving averages and enter a downtrend. That is what I focus on.

I also see no value in economic forecasts or predictions of what markets will be doing in 12 to 18 months.  Trying to predict future market moves often takes the focus off current price action, which is most important.  I focus on being positioned properly right now, and being on the right side of the big moves, while protecting the downside daily. 

I will continue to trade the uptrends from the long side until they stop working , and then find new uptrends. If there are no uptrends, than I will focus on the downtrends. 

LMT

 

6/23/2019 THE WEEK AHEAD, MACRO FOCUS
The S & P 500 made a new intra-day all-time high Friday at 2964 and closed at 2950. Nasdaq closed at 8031, just below it's all-time high of 8176. Equity markets have been very strong, and while some consolidation could be expected, the primary trend is higher. The key level that I am watching in SPX for my time frame is 2720, which is the March low range.  In U.S. markets I remain focused on tech, primarily software, cloud and FANG names. I have no open shorts or hedges currently.

China A-Shares are one of the few core markets that I track that did not break their 200day moving average in the recent pullback and that market, though nowhere near it's highs, is improving and reclaimed it's 50 day moving average as well. 

U.S. Dollar had consecutive closes below it's slightly rising 200d sma for the first time since April 2018. There are many macro moves under way here, and this is one that I am watching closely.   

10 year U.S. Treasury yields traded through my 2.00 target to 1.97 and closed the week at 2.06.  The trend in rates is lower for now, but the 2.00 level could provide a technical bounce or trigger some profit taking being that rates have plummeted from 2.61 to 2.00 in 60 days.  The consensus view here seems to be that rates have to go lower, but the consensus is often wrong. I am staying long treasuries based solely on the technicals and want to see 2.25 hold on any counter trend rally.

Gold closed the week at 1403, a break out to a 6 year high on increasing volume, which is bullish for the group.  The miners ETF GDX, touched a 21 month high. The entire space is bullish here technically and having established my position from lower in GLD I am tracking this space closely.

Crude oil closed at 57.43 and I closed out the rest of my short position in USO just over the equivalent of $55.

Bitcoin touched over $11,400 over the weekend, and currently at 10,635 is up 33% in the last 30 days. The trend is higher here and over $10,000 is a key technical level. 
   
My current positioning is long equities, with no hedges, long U.S. Treasuries, long gold and long Bitcoin.
-LMT 

6/16/2019 GENERAL ELECTRIC (GE) - HAS THE LONG TERM TREND TURNED HIGHER?
GE stock closed at 10.23 on Friday, up 40% YTD, but still 30% below it's 52 week high. Noteworthy however is that the 10 week moving average has recently crossed over the 40 week moving average in late April, and the 50 day MA crossed over the 200d MA in early June. From a longer term trend following perspective, these crosses indicate that intermediate term price momentum is improving vs longer term momentum, which is bullish.

$11 is the key upside breakout level that I am watching and $9 on the downside is the level that needs to hold.  

6/16/2019 GOLD - NEW 52 WEEK HIGH, BULLISH
Gold traded to $1362 on Friday, 6/14, a new 52 week intra-day high and closed at $1344.  Gold has tested over $1350 on 6 different occasions since 2014, but has yet to break through the $1400 barrier yet. As has beeen my view since my blog from April 2018 (please see thelink below), a close over $1400 could be significant and could trigger a new leg higher.  https://trendtradingsignals.com/blog/are-new-highs-ahead-natural-resources

Many big macro players such as Stan Druckenmiller, Paul Tudor Jones and Jeffrey Gundlach have all recently made very bullish comments about Gold in the last few weeks and each cited their macro views, but I am focused solely on the charts and technicals. 

Along with the 52 week high, the key moving averages that I track, the 20, 50, 100 and 200 day SMA have all turned higher, which indicates an uptrend on multiple timeframes.  This could of course be another headfake and failure before the 1400 level. Key levels for my longer term timeframe on any pullbacks are $1300, $1265 - 1275 (the 200 SMA currently sits at $1267) and finally $1250. Technically, a break over $1400 would be very bullish and the upside from there could be swift. On any weakness, $1250 is the key long term support level that I am focused on.

GDX, the Gold Miners ETF, did close at it's highest weekly close in 16 months this Friday at $23.33. Key upside breakout signals would be at $24 and $25.50 and on any pullback the 200sma is at $20.65 and the key support level that needs to hold is $20. 

Palladium has improved here recently and it's uptrend over the rising 200sma has resumed. Silver is trendless here and Platinum has been weak below it's 200 day SMA.

6/13/2019 MARKETS UPDATE
As noted in my 6/02/2019 update below, the key 2720 level was tested (2728) and held. Equity markets rallied off their most oversold readings since Dec 2018 with SPX reaching 2910. Shorter term momentum is at the higher end of it's range here, and some consolidation could be expected, but not necessary. I continue to be positioned defensively, with many open long positions, primarily in U.S. tech with the SPY hedge still open against it. High relative strength names in cloud, enterprise software and IT services are still the strongest on my screen. I have only opened one long single stock position in the last 5 weeks, and am letting the market work through it's cycle. A close over 2900 in SPX would be constructive, and 2720 needs to hold on any deeper pullback.  The bond market and crude oil markets, my two biggest positions, continue to be forecasting a slowdown, and at some point the equity markets and bonds/crude could signal the same message, one side or the other. 

10 year UST yields currently stand at 2.12, with a recent low of 2.05, very close to the 2.00 level I highlighted on 5/28. The trend for now is lower yields, and higher bond prices. Below 2.00 could signal a new leg lower and 2.25 and 2.35 are key overhead levels on any rally in yields.

Crude oil continues to be weak, testing 50.72 yesterday, but still over the June low of 50.60. $50 is a key level of support, and I scaled a small piece out of the position yesterday, but the trend is still lower. $55 and $60 are key levels on any rally, and a close below $50 could signal a new leg down, at which point support is at $42 to $44.

Key positioning: Long equities with a hedge, long treasuries, long bitcoin and short crude oil.

-LMT 

6/02/19 MAY RECAP AND THE WEEK AHEAD
SPX 2752, NASDAQ 7453, Shanghai 2898, HSI 26901, 10y UST 2.12, Crude Oil 52.74, Gold 1314, Bitcoin 8685
I continue to be positioned defensively going into June. May was a solid month with open max long positions in TLT and TMF(+21% in May),  working well, as well as max short crude oil USO (-9.24%) the last week. Hedged equity positions via SPY and FXI shorts reduced volatility. Bitcoin, GBTC, was a top performer, (+67%) in May.

Treasury yields cratered from 2.50 to 2.12 in May, and the 3month/10year yield curve has inverted, which may indicate the bond market pricing in an economic slowdown. Crude oil has been the next market to follow currently. The China/U.S. trade tariff news seems to have been a catalyst, and while nothing is ever certain in markets, the heightened uncertainty of a new variable is sending markets downward for now.

I continue to be positioned defensively  going into June, and SPX is at a key level, under it's 200 day moving average and a key 2800 level. The next level of interest on any pullback is 2720, the recent March low. I do not see the signals of being technically oversold that were present when I posted the 6 most oversold SPX indicators in December. Markets can reverse at any time, but I am not in the "buy the pullback" mode here from a technical level.   

Bonds are statistically very overbought, but that does not necessarily mean a pullback, but some consolidation would be technically constructive. Crude oil is in freefall, and while snapbacks may happen, is vulnerable to the downside for now. I plan to press the TLT, TMF and USO positions further in the next week or two.

Key near term levels for my time frame:
SPX 2780/2800/2850 on the upside, 2720/2680 on the downside
10 year US Treasury Yields 2.35, 2.45, 2.62 on the upside, 2.00, 1.85 on the downside
Crude Oil 60 overhead, 50, 47.50, on the downside 

-LMT

5/28/19 DEFENSE - WEEK #4
Core accounts continue to be positioned defensively, with a  SPY hedge on open U.S. equity positions, current China equity exposure is limited to long ASHR, with an open FXI short against it and some rare earths exposure. Short term economic slowdown news has started to override U.S./China trade news.  In the U.S., higher yielding sectors such as consumer staples, REITs and utilities are trending higher and attracting asset flow.  My long exposure in U.S. is focused in cloud and tech. I am avoiding China and China tech for now, leaders BABA and TCEHY are both below their 200 day MA and I do not see the same bottoming signals yet that I highlighted in November and December 2018. Basic resources stocks, industrial metals and energy are unwinding quickly, and I have no exposure.

Bond yields continue to break down, with the 10 yr UST yield at 2.28% as of writing this, a new 18 month low. Open positions in TLT and TMF continue to trend higher as a result. The Treasury market seems to be pricing in a slowdown ahead, and the 3mo/10y curve has inverted. I still have 2.00% as a near term level.

Crude oil has broken below the key $60 level that I have been tracking and also below it's 200 day moving average. Below $60 triggered a short position for me, and over $64 would negate this downtrend. As with Treasuries, I will continue to press this position if it starts to work. Bitcoin at $8814, is 76% above the $5,000 buy signal level and is holding recents gains well.

I continue to expect more volatility across the board, but price weakness is prevalent for now in risk markets.
-LMT
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5/14/2019 UPDATE
Posted early pre market. 
Yesterday had the first 90%+ downside volume day on the NYSE all year, a sign of a potential short term wash out. 11 of the 50 Core ETFs that I track have a daily RSI (14) at 30 or lower, the highest reading since late December 2018.  The reward vs risk odds in major indices is starting to improve and while I do not attempt to call market bottoms, the shorter term selling momentum could be washed out fairly soon.  SPX is 1.2% over it's 200 day MA and COMPQ is 1.5% above. I am focused on U.S. Tech, cloud, FANGs on any potential recovery.  

5/13/2019 POSITIONED DEFENSIVELY - WEEK 2

Posted early pre market. Current levels: 
SPX 2852, Nasdaq 7491, Shanghai 2903, HSI 28550, 10 year UST 2.425, Crude Oil 62.57, Gold 1284, BTC 7086
Core Accounts continue to be positioned defensively for risk reduction and downside control. Open long positions, primarily in US tech and China  are offset by hedges via short SPY and FXI. Long bonds via TLT and TMF, and a moderate long position in GBTC which is on a +40% run in the last 10 days.  My view continues to be that short term U.S./China trade news flow will continue to override technicals. Many indices have reached technical oversold levels into key rising Moving Averages, such as SPY, QQQ, KWEB, EWG, and FXI. 

I am not going to try to call the next market move, and the next 5% in either direction would not surprise me, up or down. My focus this week will be the same, not adding any new risk currently and positioned defensively. Any possible resolution in the Trade Deal could lead to a major rally, but I am not predicting any resolution here.
LMT    

____________________________________________________________________________________________________________________________
5/07/19  CRUDE OIL AT A KEY LEVEL

West Texas intermediate closed the regular session at 61.40 and is at a key level just over it's 50 day and 200 day smas which are converging. $60 is a key level that needs to hold, and if that breaks, could lead to more downside. 


5/07/19 SPY/FXI HEDGES
I added a few hedges today via short SPY and FXI ETFs to partially offset potential downside risk if the US/China trade talks unravel. The hedges have fairly tight stops and are not directional trades, predictions or a market call.
It is much easier in my view to recoup potential upside if markets resolve higher than to recoup downside losses.
The current trade issue could have a sharp potential impact on markets if not resolved soon. Once again, not any type of a prediction, just preemptive risk management.  

5/05/19 WEEK AHEAD PREVIEW & US/CHINA TRADE NEWS
This evening, news on the US/China trade talks is that they may have stalled and after some stern comments today from both sides, markets have backed off.  Currently, S&P futures are -2.09% at 2886. Nasdaq futures -2.38% at 7678. Shanghai is -5.19% at 2918.
I don't take any fundamental views on the news, I only focus on how markets react to it. The market rally since Dec. 26 seems to have been in part by, a more accomodative Fed policy on interest rates and the QT timeline,  and second, seeming progresss between the US and China on trade talks. Tonight's development could put the latter leg under pressure.  I will be watching how China markets close vs their current intra-day lows and how US markets trade throughout the day on Monday.  How markets react on this pullback, and if key price levels and moving averages hold or not will tell me what I  need to know.

-EQUITY MARKETS
The S & P 500 (SPX) touched a new all-time high last week of 2954. The Nadsaq Comp. (COMPQ) did as well, at 8176.  I continue to be long US with a focus on tech, cloud, semis and FANG names. Mega-cap tech names such as Amazon, Facebook, Apple and Microsoft continue to outperform. Intel and and Google sold off last week after their quarterly earnings reports.  Small caps, (RUT), made a new 7 month high as well. 
The Financial Sector ETF, XLF, scores the highest on daily RSI at 70.69, to close out the week. JP Morgan, Bank of America and Morgan Stanley are names of interest for me.
China and China internets continue to be a core focus group for me, and the next few days should be telling in that space.  European Financials, EUFN, have started to trend higher, with higher highs and lows and over their 200 day moving average. They also had a bullish 50/200 MA cross last week, which indicates recent strength as the shorter term trend has risen above the longer term trend. 
On the down side, industrial metals, precious metals and energy have all been performing poorly recently, and their price trends have turned down for my time frame, so I have no exposure in that space currently.  Athough they can reverse at any time, they do not fit into my process currently.
My technical positioning on equities is they are in a primary uptrend and above all key rising moving averages. Pullbacks are part of the business, and 2800 and 2720 are two key levels I am watching on SPX. China equities are more volatile, and they are much weaker in tonight's session. 

-BOND AND INTEREST RATE MARKETS
The 10 Year US Treasury yield closed the week at 2.53, up from last week's close at 2.50. Rates are still in a primary downtrend for my timeframe. 2.65 is still the key level that I am watching on any potential uptick. 

-CRUDE OIL
West Texas Intermediate closed the week at 61.94, down from last week's close at 63.30 and is currently trading at 60.53 in the overnight session.  The 200 day MA is at 61.01, the 50 day MA is at 60.67. 60.00 is the key level that I am watching here, and a move below could trigger further downside weakness. 

-LMT
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5/02/19 NOTES AFTER THE CLOSE 
Metals continuing their unwind with GDX closing below it's 200sma today.
Energy stocks and ETFs are notably weak as well. 
Financials ETF XLF at daily RSI of 67.19 is the strongest major ETF that I track, which is noteworthy. Stronger than tech or China.
ASHR and FXI both closed below their 50sma. ASHR first occurence since early January. 
The market is narrowing into t and mega caps. 
QQQ tested below it's rising 20 sma for only the second time since early January. 

5/02/19 MARKET TRENDS
Top trending groups of interest on my screen: QQQ + (IGV, FDN, SMH), ASHR, KWEB, TLT, EUFN
Groups breaking down: Metals and energy, XME, XLE, XOP, GDXJ 
My momentum screens are loaded with oversold energy names, but many are below their 200sma and have fallen back into a failed breakout range or lower. No exposure for me here currently or in metals. 

4/29/2019 GOOGLE  SELL-OFF
Google (GOOGL) hit a new all-time high today at 1296.20, then traded down 7% after hours to close at 1201. 
GOOGL is a core name in the mega cap tech space, and a market leader, but no interest from me in the after hours. The stock is still in a primary uptrend, currently above it's rising 50 day moving average, and could move higher from here, but experience has taught me to avoid high volume drops in after hours trading and wait unitl the next day's trading begins at a minimum.   In the mega cap space,  AMZN, MSFT and FB rank higher for me technically. 

4/28/2019 Weekly Core Markets/ETFs oversold above their 200 day moving average
ASHR 29.08 , COPX 22.00, EEM 43.88, FXI 44.60, GDX 20.78

4/28/2019 WEEK AHEAD PREVIEW
Equity markets remain in a very strong uptrend. S & P 500 notched a new closing high on Friday at 2939.  SPY and QQQ both made new highs during the week as well. My Core focus groups remain: US tech (semis, cloud, FANG),  China Internet, China A-Share, Treasuries, energy and metals. Fully long with no shorts or hedging in place.

From a trend perspective, pharmaceuticals makers and gold miners registered oversold last week. Merck, Novartis and GDX are three names of interest that bounced off their 200 day MA. While pullbacks should be expected and are healthy in the SPX uptrend, the primary trend remains higher. With 10 year U.S. Treasury yields at 2.50%, I am positioned long TLT (bonds) and for a continuation of yields to the downside, which is the path of least resistance below their declining 200 day moving average.  2.65% is a key level that needs to hold on the upside and over 2.75% would neutralize the yield downtrend.

Crude oil continues to be strong over $60, and Gold has been weaker at 1288. Crude oil itself has been much stronger than most oil stocks and ETFs YTD and at some point, the spread should narrow. US Dollar touched a 23 month high, and though overbought short term , remains strong and over it's rising 200 day MA. 

I remain fully long, and as my time frame is intermediate to longer term, I continue to have no interest in trying to call a top any time soon, or question if the move is justified or not.   Both SPY and QQQ have had only two closes below their 20 (twenty) day moving average since early January and both continue higher with a series of higher highs and higher lows.  Mega caps have led US Tech recently, which is a bullish sign with Microsoft, Facebook and Amazon posting strong gains after earnings reports last week. 

China continues to be a core market of interest, especially the Shanghai A-Share market and China Internet names. Leaders Tencent and Alibaba continue to lead the space higher.

-LMT
____________________________________________________________________________________________________________________________

2/03/19 THE FED AND THE U.S. DOLLAR

"Don't fight the Fed" famously said by the great Marty Zweig is a core piece of market wisdom.  Markets are liquidity driven, loose monetary policy usually equates to higher asset prices and vice versa. The Fed signalled last week that they were taking a softer stance going forward for now toward interest rate hikes and possibly QT.  With the "Fed Put" still in place, risk assets have moved higher. The S & P 500 closed the week +1.57% at 2706.

The S & P is 35 points, or just over 1% away from the overhead 200sma, and a test could be possible this week. 2600 is a key support level that I am watching on any pullbacks, but price action continues to be bullish for now. Crude Oil at 55.26 made a 60 day closing high, and does not seem to have alot of overhead resistance until $60. I have no postion currently.  Gold closed at 1322, touched a 9 month high intra-week, and is trending higher over the 200sma as well.  

Of major importance, the U.S. Dollar is sitting on it's rising 200 day moving average. The trend of USD has major implications to most asset classes, not just in the U.S., but also to Emerging Markets equities and commodities.

Core ETFs trending over their 200 sma are primarily in the Emerging Markets space and Precious Metals including EEM, EWH, EWZ, FDN, FXI, GDX, GLD, RSX, SLV and TAN. The "FANG" ETF FDN reclaimed the 200day last week as did the Solar ETF, TAN.

Area of interest for me continue to be Application Software, Emerging Markets, Gold Miners, China Internet, and US tech. From a turnaround perspective, energy services and industrial metals, steel, copper and coal look to offer outsized reward vs risk if markets stay flat to up.   
 

1/22/2019 POST MARKET
SPX closed -1.42% at 2632, and QQQ -2.0% at 161.94. After a very strong bounce from 12/26, some consolidation should be expected. More noteworthy to me was the 3 point move in VIX up to 20.80, off it's 200sma range and very oversold momentum readings. VIX has not closed below it's 200sma since October 5, and has held the last three attempts.    The combination of very overbought indices and major ETFs plus the washed  out VIX is noteworthy and is something I will be tracking closely. No change in positions today.  

1/21//2019 WEEK AHEAD PREVIEW:  SPX STRENGTH AND EMERGING MARKETS TREND
The S & P 500 broke through the 2600 level last week and also over it's 50 day sma at 2625 and closed the week at 2670. The bullish price action continues, and as discussed over the last few weeks, the 2650 level neutralizes the downtrend for now.  Over 2820 would mark a new uptrend, but this level helps to neutralize the downside risk currently.

The 2600 level now becomes the first level of support on any pullback, which could happen at any time. Markets and many stocks have had large recoveries and for now the pullbacks are very shallow and being bought.  I am looking to roll some profits out of SPY from the 240 level and into individual names from here over the next few weeks, as prices dictate, if markets do not unwind.  The smaller trend following short in QQQ stays open as long as QQQ is below the 200sma. Areas of interest for me long side, if prices dictate, are Application Software, Emerging Markets (primarily China and Brazil), and on a turnaround note, Oil & Gas names are still down considerably from the recent highs. Mid to late December, I highlighted XES (Energy ETF) as a key turnaround group, and it has performed nicely, +23% YTD as of this writing.  

Emerging Markets and China - I have been posting the possibility a potential longer term low in China (FXI) and Emerging Markets (EEM) since the end of October 2018, and price patterns are turning up. Brazil Bovespa has already broken out to new all-time highs, although EWZ has not, but is trending higher and held it's 200sma range in the December sell-off. Hong Kong (EWH) just reclaimed it's 200sma last week and is acting well.  Mega cap Tencent (TCEHY) is up over 30% from October lows, is testing the overhead 200sma range, and is a core name in China.  Current holdings VIPS and BILI are +25% and +14% YTD as of this writing. I am looking to possibly add exposure to this group as market conditions dictate.    

Crude Oil closed the week at 54.04, and finally cleared it's 50day sma, the first close above since early October and I closed out the balance of my USO short which started in early November, for a nice winner.  Most risk assets have had a nice rally since 12/26 and although overbought, that momentum can continue or consolidate sideways.

Gold Miners (GDX) are starting to be oversold and testng it's key $20 level, which needs to hold if a new uptrend is getting underway. I am still long. 

Volatility (VIX) is still very low, and a reversal higher is probable from these oversold levels, but momentum has been strong and there are no certainties.   When looking for "oversold" pullbacks in longer term uptrends, VIX fits the bill. I have a small "Long" volatility position here.  

I am still over 50% cash at these levels, but may be scaling some exposure in over the next week or two as prices dictate. The price momentum has been very strong, and Central Banks have been very accomodative over the last few weeks, with encouraging words from Fed Chair Powell and major liquidity injections by the PBOC and the PPT, which is a tool often used to try to stabilize markets. Excess liquidty is usually good for risk assets, and this time has been no different.   

While some type of pullback could be expected, the buying momentum has been very strong and could very well continue higher. As always, I am looking for higher probability entries if and when market conditions dictate.
-LMT
   

01/16/2019 SPX CHALLENGING TARGET RANGE
Posted pre-market. SPX closed yesterday at 2610, finally into my targeted 2600 to 2650 range from the 12/26 low. 2631 is the 50 day sma and also represents the November 2018 low. 2600 to 2640 represents the October 2018 lows, so this range does have some key price levels. NYMO is still overbought at 84, but is working off it's extreme high readings as the index edges higher. Nasdaq (COMPQ) closed at 7023, over it's declining 50 sma yesterday for only the second time since early October. VIX is still washed out for now.    SPY, IWM and USO are still testing their overhead 50 smas and 2650 in SPX is a key level of interest. 

Areas of strength include application software, with CRM notably above it's November and December highs and did not make a lower low in December. NFLX has also cleared Nov. and Dec. highs for now. Brazil (EWZ) is still acting well, above it's 200sma.

I started to scale back into to my USO short this week, below it's declining 50sma with a stop at 11.90. My index positioning is unchanged and I am still over 50% cash.
-LMT 

01/13/19 WEEK AHEAD PREVIEW
Weekly closes as of 1/11/19:
SPX 2596, COMPQ 6971, WTI 51.59, 10y UST 2.70, Gold 1289, VIX 18.19


My current technical overview:
SPY, QQQ, IWM and WTI Crude oil are overbought on their daily momentum charts and all pressing up against their declining 50sma or very close.  VIX at 18.19 is washed out on it's daily chart and NYMO is still reading overbought at 107.19.  While I am not bearish, and try to avoid any directional bias, my technical positioning is a "technical bounce" in a longer term downtrend.  SPY, QQQ, IWM have all made lower highs and lower lows. The 12/26 rally came off deeply oversold conditions, and the bigger the drop, the bigger the bounce. This is how momentum and mean reversion work. SPY and the others are in a downtrend until they are not. Key SPX levels for me are 2450/2500 on a pullback and 2600/2650 and 2820 on the upside.  For now 2650 neutralizes the downtrend and 2820 ends it.

Key stocks JPM, BAC and GS are all overbought in longer term downtrends as well and below their declining 50 day MAs. AMZN and SQ have rallied up to their overhead 200 day MAs and NFLX closed above the 200 day on Friday.  "Overbought" does not mean markets have to pull back.  Markets and stocks can often consolidate sideways and work off their overbought readings. This next week should provide more guidance.  

Earnings reporting season gets going this week and accerlates the week after. Apple, Samsung and Macy's have been early warnings/misses.  Markets have been telegraphing a global slowdown, as China PMI and US ISM have posted weak numbers and German YOY Industrial production came in at -4.6%, it's worst YOY since 2008.   These numbers are noteworthy, but most tend to get caught up in the very short term day to day market moves. Time will tell if these numbers improve or not.  

The combination of very overbought daily momentum readings in many names running up into their declining MAs, coupled with a washed out VIX and overbought NYMO sets the stage for at least some type of consolidation if not more. SPX 2450 to 2500 are levels of interest if there is any meaningful consolidation. A close over 2650 on SPX would be noteworthy to neutralize this recent downtrend. 

More active/aggressive position traders will look to enter shorts in any of SPY, QQQ, or  USO with 5 - 7% stops. If markets are going to pullback here, they should start to in the next one to three days. As discussed last week, straight up or straight down are the easier moves from here. A head fake in either direction to trap some new money and then sharp reversal in the other direction is also a very likely outcome, and one which would be much more difficult for some.

I am not bullish or bearish, and try to avoid any type of directional bias. I use price charts to help me gauge trend and risk/reward scenarios. Positions do not have to be an opinion or a prediction, they can simply be positions based on risk/reward with stops to keep the inevitable losses in check.

For now my index positioning remains over 50% cash, as I have scaled out of my 60% long position in SPY from 240 on the way up, and down to 11% exposure there. My longer term trend following short opened in QQQ from 170 is at 31% exposure currently. Other index positions incude a small short in USO from much higher and long GDX from slighty lower. 
-LMT
 

01/11/2019 TESTING THE 2600/2650 RANGE
After the close on 12/26, I posted 2600 to 2650 on SPX as a shorter term upside target. SPX traded up to 2597 today and closed at 2596. Daily momentum is now fully overbought and the 50day sma is at 2635. As the market showed in December however, at extremes, momentum readings can stay extended for more than one day, but eventually they do revert to the mean. Momentum in financial markets works like an elastic band, the more stretched the reading, the stronger the snap back.  With that being said, the range between 2600 to 2650 could prove to be telling. 

At the close today, over 60% of the Core ETFs that I track register overbought, NYMO is elevated at 114.77, and 
VIX continues to be washed out. Markets could continue higher here, but the odds favor at least some consolidation to work off the high momentum readings.

If the longer term downtrend is going to continue, markets should start to stall out in the next few days. If they do not, a break higher could be expected if sellers are not able to get some traction. From here there are many scenarios, but three are very probable. Two are fairly simple, markets start to decline or they break out further. A third possible scenario, of which there are a few, and one of the more complex ones, would be for markets to make a slight break in either direction, either up or down, bring in new money in the direction of that break, and then reverse sharply. The head fake/whipsaw could provide extra volatility. 

For now, I am staying mostly in cash and slighty net short via QQQ, with some long SPY exposure. 2650 is the "line in the sand" for me to track. 
-LMT 

01/10/2019 MOMENTUM AND MOVING AVERAGES
NYMO closed yesterday at 117.76, it's second highest daily reading in 21 years of data, only January 2009 at 121.86 was higher. VIX momentum closed at 27.41, it's third lowest reading in the last 12 months. SPY is less than 2% from it's declining 50sma and QQQ and IWM are +/- 1% below, all three with near fully overbought daily momentum readings. Momentum can often overshoot in either direction, but the risk/reward scenario has tilted to the higher cash, slightly short side for me for now.  TLT is consolidating on lower volume, but my focus remains on the U.S. indices.
-LMT 

01/09/2019 SPX NEARING 2600 - 2650 TARGET RANGE

The S&P 500 (SPX) has had a clean 9.7% counter trend rally off the 12/26 lows and extremely oversold techncial readings.  As posted at the close on 12/26, I have been tracking 2600 to 2650 for a technical bounce in the longer term downtrend. SPX traded to 2580 yesterday and the declining 50sma is overhead at 2639.  While I stand by my 12/26 view that we are in a technical counter trend rally in a longer term downtrend, I more importantly trade the chart on my screen, so am still long SPY for a shorter term position, but have scaled gains and moved up the trailing stops along the way.  I am open to the facts that the move could continue hgher, and/or the 12/26 low could be the final low in this cycle. A close over 2820 in SPX would negate the current downtrend.  I trade price and defer to what is on my screen.  To follow up on some of the key market indicators that I track:

NYMO - One of the key market indicators that I track, NYMO (which tracks advancing vs declining issues) has gone from deeply oversold, (-109.61 on 12/24)  to highly overbought readings, (+112.98 on 01/09, it's second highest reading on record).  40% of the equity ETFs that I track have now registered overbought, which is high, but not an extreme reading. 

RSI - 12/24, 24 of 30 Major ETFs registered 30 or less, which is considered very oversold. Today that number is zero. 

VIX at 20.47, now reading oversold on daily momentum and at a level which has signalled two sharp spikes over the last 13 months. 

EARNINGS SEASON is starting, and with Apple and Samsung both giving lower guidance, it is unlikely to think that they will be the only two to guide lower or miss estimates.  2019 S & P earnings estimates have also come down shaprly over the last 90 days, and the (P) price often follows the (E) earnings. 

CENTRAL BANKS - The Wild Card in the mix, not reflected on any technical charts, are Central Banks. Last week the Fed jawboned a possible slowdown in their hiking stance and the PBOC cut it's reserve ratio, freeing up an extra $116B into the system.  The Fed also very publicly called the Working Group (Plunge Protection Team, PPT) into play near the 12/26 lows. A very real tool to stabilize markets. Any further Central Bank intervention will usually supersede what is on any chart. 

As noted, I trade the price on the screen, and use SPX as my primary trend filter. I do not make market calls or predictions. Markets go where they go, and rarely do what the consensus expects. They often overshoot in both directions and can run through indicators at extremes. For now SPX is in a longer term downtrend of lower highs and lower lows since mid September, and all key MAs have turned down, which indicates that the price trend is lower for now. That being said, price can continue higher so I defer to what the market is doing and what my positions are doing. In closing, I am still long SPY as a momentum position and maintain a longer term trend following short in QQQ.  A pause here at 2580 to 2650 could be expected and I will evaluate as the market dictates. 
-LMT
 

01/06/2019 WEEK AHEAD PREVIEW- MONETARY POLICY VS THE CHARTS
Marty Zweig famously said "Don't fight the Fed". Stanley Druckenmiller said that markets are liquidty driven. Simply put, loose money leads to higher asset prices and tight money leads to lower asset prices.  Stock and crude oil markets have sold off over the last 60 days in the face of the Fed tightening and QT taking liquidity out of the system.

S&P 500 (SPX, SPY)
The S&P 500, SPX, closed the week +1.86% at 2531. 
On Wednesday, Apple surprised markets with a warning that Q4 sales will miss estimates, which led to a -2.48% day in the S&P on Thursday. 
The S&P 500 traded up 3.43% on Friday after Fed Chief Powell took a softer stance on hiking rates, and the PBOC cut it's reserve ratios by 1%, which should provide and extra $116B of liquidity to the financial system.   The markets reaction to the Fed and PBOC confirms what Marty and Stan have said about monetary policy. 

My view since the Dec. 26 low is that we have a tradeable technical bounce in stocks inside of a longer term downtrend. The 20, 50, 100 and 200 day moving averages have all turned down in the S & P 500 (SPX). The S&P tested it's 20sma on Friday and market momentum is neutral for now based on the data that I track, so an upside test of the 50sma near 2600 to 2650 is my next level of interest if markets continue higher.  The longer term downtrend in SPX does not prevent me from having the shorter term position long in SPY, but I have been scaling gains on the way up.

I expect the higher volatility swings to continue, as markets react sharply to any Central Bank news and Corporate earnings reports start this week. If the markets reaction to the Apple announcement is a precursor, there could be some outsized moves in the cards in single stocks over the next few weeks.

As always, I am making no predictions and am staying open minded to what price actually does. For now I am at over 50% cash and keeping a firm eye on the downside risk.  I still have a shorter term swing long position in SPY and a longer term Trend Following short in QQQ. Different trades and different time frames.

FLIGHT TO SAFETY (UST, TLT & YEN, FXY)
10 year UST yields closed the week -2.81% at 2.65 but tested 2.55, then reversed sharply higher Friday after FOMC. 10s are still in a downtrend below their now declining 200sma. TLT, Treasury Bond ETF, closed the week +.88% and is overbought in an uptrend over it's 200sma. All key MAs in TLT have turned up, and although a consolidation could be expected, the longer term trend is higher for now in TLT and lower in yields.

USDJPY closed the week -1.58% at 108.46, as the Yen index (XJY) blew through it's 200day moving average (sma) to the upside. USDJPY had a "flash crash" as it traded down to 104.80 on Thursday, before reversing higher. A softer Fed stance could lead to a weaker dollar, and Yen is also considered a safety trade in volatile stock markets. FXY, Yen ETF, finished the week + 1.64% at 88.05, and is nicely over it's 200sma for now. From a Trend Following perspective, Yen and Treasuries are in an uptrend and UST yields are in a downtrend.   I have no positions here currently, 

CRUDE OIL (WTIC, USO)
WTI Crude oil closed the week at 47.96, +5.80%, and has come off extremely oversold readings. WTI tested it 's overhead 20 day sma this week, which it has not closed above since early October. Crude made a low recently at 42.36, and the $42 level also marked lows in Crude in late 2016 and early 2017.  USD will likely have an impact of Crude prices going forward, and although I have a scaled down trend following short position in USO from much higher, I am open minded to the fact that Crude may have put in a near term or longer term low. The low is the low for now unless it is broken. I am not taking any counter trend positions in WTI currently.

GOLD AND GOLD MINERS 
Gold closed the week at 1285, +.22% for the week, and at it highest closing level since early June 2018. Gold is currently in an intermediate term uptrend with the 20, 50, 100smas having turned up, and the 200sma is still trending down, but trying to flatten.
The Gold Miners ETF, GDX, closed the week +3.40% at 21.30, and at it's highest weekly close since mid July. GDX is in an intermediate term uptrend  and all key MAs have turned up, with the 200sma slightly up for now.
I do not draw any Macro conclusions between Gold and other markets or try to explain the moves. I have a longer term trend following position in GDX currently.  

-LMT

1/03/2019  THE STOCK MARKET IS THE BEST ECONOMIST THAT WE KNOW
I borrowed that quote from Stanley Druckenmiller from his recent Real Vision interview. He is a well known follower of price action and said that market action is the best predictor of future events. Here is some interesting recent market action:
WTI Crude Oil is -38% over the last 90 days
Bull market leader Apple (AAPL) is - 38% over the last 90 days
U.S. Treasury 10 year yields (TNX) are -21% over the last 90 days
Semiconductor ETF (SMH) is - 22% over the last 90 days
China ETF (FXI) is - 27% over the last 12 months
Homebuilders ETF (XHB) is -30% over the last 12 months
Some fundamental data:
China Factory Activity (PMI) shrank for the first time in 19 months in December.
The ISM Manufacturing Index had it's worst monthly drop in December since October 2008.
The Fed is in a tightening cycle. Thirteen Fed tightening cycles since 1950, Ten recessions ensued. 

For me, price leads the news, and the fundamental data is just confirming what the price moves have already telegraphed. The market data alone is signalling an economic slowdown, as markets are considered forward looking.  Apple warned of weaker than expected sales yesterday, but the stock was already -28% in the last three months before that announcement.  Markets have a way of discounting future events.  Having traded through the 2000 to 2003  and 2008 Bear Markets and recessions, I have learned not to fight the market downtrends. Higher levels of cash, reduced activity and very little, if any single stock exposure work best for me here.  Some key financial markets have spoken loud and clear. Capital preservation is always key, but in weaker economic conditions and stock market downtrends, capital preservation and good defense are more important than ever.  
 

 

 


01/03/2019 SPY COUNTER TREND BOUNCE LOSING MOMENTUM
The SPY "bounce" coming off of extremely oversold conditions, as discussed on this Blog and my Twtter feed between 12/21 and 12/28, may be losing some of it's momentum.  As I have detailed on my Twitter feed, my recent Long SPY position was a shorter term trade to try to capture some momentum reversion to the mean. I kept my longer term trend following shorts in QQQ, USO and NVDA open, as technically,  markets are in a longer term downtrend. The first three to six days in the "bounce" tend to be the strongest and mark the "easier money". Thursday, 1/03/19 will mark day  number six, using the 12/26 +4.96% day in SPY as the recent low.  

The momentum data points that I track are now at neutral in SPY, and offer less of a reward to risk advantage for me.  SPY has still not tested it's declining 20day sma and the broader downtrend is still in place. My longer term trend following shorts from early November are still highly profitable here as well, attributing to the strength of the downtrend currently.  

I am closing half of my long position (avg. entry price is 240.88) at the open on 1/03 and moving up the stop of the rest of the position to breakeven at 240.88, which barring a gap down will result in a small winning trade, not what I had intended, but the hand is what it is. With the technical edge reduced, the risk management process is simple.  Risk more = make more if right, lose more if wrong. Risk less = make less if right, lose less if wrong. In the current market downtrend, I am keeping risk exposure dialed back and am content to give up some potential upside in exchange for less at risk.   

Downtrends trade much differently than uptrends, and oversold bounces in uptrends tend to last longer. 2017 was a period of record low volatility. Volatility returned in 2018 and the markets have now turned down. Trying to trade a high volatility downtrend the same way as a lower volatility uptrend is a recipe for losses. If my stop level at 240.88 holds, then I have a position for any continued strength, if not, the exit will keep me intact and lock in the gains.                                                            

-LMT

01/02/2019 APPLE NEGATIVE GUIDANCE
On the first day of trading in 2019, Apple (AAPL) issued a negative guidance revision after the close and traded down 7.55% to close at $146 even in after hours trading.  The stock closed the daily session at 157.92, -32% from it's all time high, less than 90 days ago, in early October.  The stock has been in a steep downtrend since early November and has not closed above it's declining 20day moving average since then, an indication of a strong downtrend.

AAPL attributed the downward revision to a slowdown in China sales, but the downtrend has been in place for a few months now.  I have no interest in AAPL on the long side at all, and continue to avoid single stocks trading in steep downtrends.  The first level of key support on the monthly chart if $145 breaks down is $125. No predictions on my part, but I am avoiding AAPL on the long side completely here.

Whether it "goes up" from here or not is not my concern, anything can always happen. The combination of a weak stock in a steady downtrend in a weak overall market also in a downtrend combined with their announcement of slowing business conditions does not offer to me favorable reward to risk odds at all and is very weak technically.    


Market Week Ending December 28, 2018
Weekly Closes:
S&P 500 2485, WTI Crude Oil 45.33, 10y UST yields 2.73, Gold 1283.

The S & P 500 came into the week deeply oversold by a variety of metrics, including Stocks over their 200day Moving Average at 15.80, the lowest reading since October 2011, Bullish Percentage Index at 17.00, the lowest since March 2009. S & P 500 Weekly volume on 12/22 closed at 1.026B, the highest since Feb. 2018 and second highest since Jan. 2016, indicative of a short term volume wash out.   The McClellan Oscillator closed 12/22 at 99.55, the lowest since Feb. 2018 and second lowest since Aug. 2015. The Put/Call Ratio reached 1.82 on 12/20, it's highest reading ever. VIX traded at 36.20 on 12/26, it's highest level since 2/2018. The CNN Fear/Greed Index went down to 3, signalling extreme stock market pessimism.

Added to the extremely oversold conditions, were a variety of media outlets reporting on the markets steep drop including the "worst December" so far since 1931, and the worst Christmas Eve trading day ever in the S & P 500.
After a brief new 52 week low on Wednesday, 12/26 the S&P closed the day 4.96% higher, it's biggest one day percentage gain since March 2009.

The S&P closed the week up 2.93%. Markets have worked off some of their oversold conditions and are up 5.87% off Wednesday's lows.  My take going forward is this: Shorter term, the low at 233.76 is the low for now, but not necessarily the final low in this move. I took a tactical long position in SPY on 12/22 and added to the position on 12/26. Long SPY is my largest position for now, with a close stop and 6x the size of my longer term trend following short in QQQ. I am still short USO from early November and long GDX since late December. 

For SPY, I am in the "oversold technical bounce" camp/wait and see mode for now in regards to 233.76 being the final low here. Longer term charts have suffered alot of technical damage. A statistic posted by David Rosenberg is that over the 13 Fed tightening cycles since 1950, there have been 10 recessions. The price action in semis, crude oil, and Treasuires seems to be telegraphing a slowdown ahead.  

I have posted charts this week of the 2000 to 2003 Bear Market which had many sharp counter trend rallies in the context of a longer term downtrend.  With the magnitude of the breakdown in many monthly charts, and the tightening of liquidity due to Fed tightening and QT,  I am staying tactically long and very focused on the risks to the downside longer term.   

 

Market Week Ending December 7, 2018
S&P 500 closed the week at 2633, -4.38% for the week. Nasdaq closed at 6969, down -4.72% for the week.
Crude Oil at 52.61 and 10 year UST yields at 2.85%.

I continue to be positioned heavily on the short side in QQQ, as the market is trending lower with three successive lower highs and lower lows. The 20, 50 and 100day SMAs, have rolled over, and the 50 day SMA has crossed below the 200 day SMA. QQQ is not yet oversold by the metrics that I track.  I plan to continue to trade QQQ with half of the position being more actively managed, scaling in/ out every week or two as market conditions dictate,  and the other core half of the longer term trend following position held as long as the trend is down and stops are not hit.

As I discussed on Twitter on November 25, almost all of the major equity markets and ETFs that I track had become very oversold technically and a rally was to be expected. Markets rallied sharply that week into a favorable Fed meeting and then gapped higher at the open after the G20 meeting announcement. The opening gap last Monday was sold straight down, and the steady weakness through the day on Monday was a sign that the "good news" had been priced in and markets were now technically overbought.

Leading names below their 200 day moving averages include Amazon, Netflix, Apple, Google and Facebook among others. Tech leaders include Microsoft and Cisco, both leaders from the late 90s tech bull run, and both have yet to close below their 200day MAs this year.

The stock market, considered to be forward looking, may be forecasting an economic slowdown, based on the steady downtrends in semiconductor stocks, homebuilders, crude oil, and U.S. Treasury yields, which closed below their 200day MA for the first time in 2018 this week as well. Crude oil continues to be in a downtrend, pinned below it's 20 day moving average, but holding over the $50 level for now. 

Defensive sectors are acting well, and many are in uptrends incuding pharmaceuticals, consumer staples, and interest rate sensitive REITs and Utility stocks. These higher dividend, lower volatility areas do well in an economic slowdown, or period of declining interest rates, as their higher yield and lower volatility makes them more attractive in the current market environment.  

Other uptrends can be found in select Gold Miners although GDX and GDXJ are still trendless and below their 200sma. China and Emerging Markets have been trading sideways here for the last 6 weeks and are holding over October lows for now. Emerging Markets have been outperforming the S & P on a relative basis since late October and I have a few moderate sized long positions in China. 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monday, April 24, 2018
SPX closed the week at 2670, in a intermediate term range for now.
My key groups of interest remain Defense, Energy, mid cap retail, metals and miners.
China and Semis have been weaker, along with Emerging Markets.
Crude oil continues its breakout while Gold has backed off slightly.
10y UST yields are currently at 2.97%.


Monday, April 16, 2018
I am currently at 37% cash. 
I am focused on the 2550 - 2700 range in SPX. Shorter term markets had gotten oversold, the longer term technical picture still displays mixed signals.  
Key groups of interest are Defense, Energy, Mid Cap Retail and Casual Dining, Metals & Miners.
Crude oil is at 3 1/2 year highs and breaking out for now. 
Gold tested 1369 last week, near the top end of it's 4 year range, but has failed the last three times there.
1400 would signal a breakout.
10 yr. yields at 2.83 are testing their 50day sma.  

Sunday, April 8, 2018
I am currently at 52% cash.
The 2700 to 2800 range in SPX from mid Feb. to mid March is now the 2600 to 2700 range and has tested below.
Markets have been oversold, but news flow is still dominant.
The Energy sector has strengthened as well as some pharma names and small and mid cap retail.
I am firmly in wait and see mode for now, but tracking markets daily.
 


Sunday, April 1, 2018
SPX and Nasdaq volatility continues, both are registering oversold on their daily charts.
As long as SPX 2600 and 200d sma hold, any oversold rallies could be strong.
I am seeing constructive signals in many non-tech spaces as well as money currently rotating out, which could change at any time. I will continue to have tech exposure.
Some leading tech names have broken down for now FB,  TSLA, some are well extended AMZN, NFLX.  

My current account structure for now is targeted at:
20% Cash
20% Intermediate Term ETF trades (currently 0 allocated)
10% Mid Cap Ideas (currently at 0)
50% Core Programs
Technology/Internet names are trading of headline news to a degree at this point. Many tech names are oversold, but news flow may impact them as well. 
I expect more volatility, will be carrying higher than average cash and watching key S&P support levels at 2600 and the 200 day moving average currently at 2589.
10y UST yields at 2.74% are below their 50d sma, first since December, and the lowest yield since early February. 


Monday, 3/26/18
SPX gapped higher then held 2600, 2640 and closed at 2658, over 2640 level I am tracking.
Importantly SPX, Nasdaq and many leading stocks registered very oversold, under 20.
VIX also registered short term overbought at 80, which may bode well for stocks near term. 
I put half of my available cash to work in an intermediate term ETF trade.
SPX is currently in a trading range which may invite slightly more active trade management via ETF to
add incremental returns.
I am still focused on high relative strength names in leading industries in Tech, Internet, Financials and Defense, as well as China Internet, being aware of the current headline risk in China names. .  




Sunday 3/25/18 
SPX closed 3 points above the low for the week and just above the 200sma at 2588.
SPX is weak, and getting oversold, but not completely so. Friday was a slow, steady grind lower, but not yet
any climactic high volume panic selling and reversal that occurred on Feb 9.  As a result, I did not add any money at the 200sma test and am not a buyer under 2700 until I get a reversal signal. This could hapen at any time. 
Crude oil (USO) and Gold (GLD) have been trading well technically and are on my tracking list, as is Yen (FXY).
Financials (XLF) closed below their Feb 9 low. Globally, India, Japan and Germany are trading below their 200sma.
10y UST yields at 2.83% have been declining and may test their 50sma soon.
VIX at 24 is elevated, but nowhere near the 40 to 50 blowout range from February.
I am at 26% cash and raised a number of stops in open positions to hard stops in the market.
If there is any further downside testing, I will let the exits work and reevaluate for potential entry signals. 
I do not have any bullish or bearish bias here, or really anytime. Markets are technically weaker here and I am
actively managing risk. 
In the event of a reversal signal, I will be focused on higher relative strength names in Tech, Internet and Defense. 
 



Thursday, 3/22/18 10:30pm
SPX close below key 2700 level at 2643.
Watching next levels of support at 2640, 2600 and 200sma currently at 2584.
Markets not yet oversold. Yields down to 2.81% currently and TLT back over 50sma.
Stops have been moved up on many positions, China names and Large Cap U.S. Industrials names are off the
buy lists for the time being due to political issues.
Focus is on defense and capital preservation.
This is not the low volatility steady uptrend of 2017. 

Sunday, 3/18/18 9:30pm
I am at 11% cash. 
SPX and Nasdaq finished the week lower on lower volatility. SPX currently testing its 50sma and Nasdaq still above it's 20sma.
Volatility has been subsiding as ATRs have been coming in both in the indices and in major stocks, which is constructive.
VIX spent the entire week under 18, and is currently below it's 20 and 50sma.
Tech and Internet stocks have registered very overbought and many were extended well above their 20 day smas. Some tech leaders started to weaken at the end of the week, and some consolidation in that space would be constructve, as many names have had a very strong run .  Software and cloud are still the strongest spaces, although semis have been as well.
Many non-tech areas have registered oversold recently, but picked up on Friday. 
Will see if this is the start of a meaningful rotation, or a one day event.
China Internet continues to be a focus space of mine and the charts are strong, but for the most part not overextended like some Nasdaq names.
10y UST yields have pulled in below their 20sma at 2.84%. The 3.00% level is considered by many pundits to be a pressure point for stocks, so that level is important.

 

Sunday, 3/11/2018 10:00pm
Nasdaq made new all-time highs on Friday, a technically strong sign, SPX is still 2.99% below ATH.
Markets are acting technically stronger,  and I am at 15% cash currently.
10 yr UST yields are at 2.89% and under the 3.00% level.
VIX had it's first close under the 50sma since Jan 12, 2018, also a constructive sign.
High relative strength names continue to act well.  
Tech, internet, software, cloud computing, and Emerging Markets are still core areas of focus for me, and
Financials are starting to break out as well. Energy names have recently cleared their twenty (20) day sma and may be improving as well.  


Sunday, 3/4/2018 2:30pm
Maintaining a defensive posture, currently at 20% cash.
Raised profit stop on FDN (15% position) to a close below 50sma.
Monitoring higher volatility - $SPX weekly ATR has doubled and has had more -1% days in 2018 than all of 2017.
Inverse equity ETFs have triggered shorter term buy signals. 
 Longer Term uptrend is still intact.
10yr. UST yields closed below their 20sma for the first time since Dec. 2017
Tech, software, internet still outperforming and focused on high relative strength names on long side. 


2/28/18 11:15pm
SPX has had consecutive down 1%+ days and back below 50sma.
Nasdaq (COMPX) rallied up to .89% from recent highs and has backed off as well.
I am watching SPX support levels of 2700, 2660 and 2640, in the event of any further pullback.
All longer term MAs still up and constructive so longer term uptrend is intact for now.
Positioned more defensively, no new positions planned and the New Money List is on hold status for now.
Raised profit stop in QQQ long position, if that triggers will evaluate partial FDN long stop.  
Single stock positions and exits remain unchanged. 
Tech, internet and high relative strength stocks still outperforming. 
 

2/25/18 11:00pm
SPX closed at 2747 and up on the week, adding to the prior week's gains.
Reclaimed all key MAs, 20/50sma, VIX down to 16 and many indices, core stocks that I track and ETFs
generated new buy signals in the last two days.
I am continuing to treat the 2532 SPX low from Feb. 9 as the current low and will do so unless it breaks down.
I don't make market calls, but mathematically the low is the low until it isn't.
Key support levels besides the 50, 100 and 200sma continue to be 2680/2700 and 2640 below.
Focus Areas: Nasdaq 100 Tech/Internet, Emerging Markets, China Internet, Aerospace/Defense, Metals& Mining, Financials, and as of 2/25 Energy. Many energy names are coming off of deeply oversold readings and have generated buy signals.
Interest Rates sensitive instruments have also generated buy signals, so I am covering half of my TLT short for now.

2/19/18 (10:30pm)

26% cash currently
SPX up the last 6 days in a row, many oversold markets have worked off that condition.
I may look to allocate some capital this week as conditions dictate.
Areas of Focus: Internet, Emerging Markets, Chinese Internet, Nasdaq 100 Tech, Financials, Aerospace/Defense,
Metals & Mining
Avoiding: Interest rate sensitive issues, bonds, Utilities, REITS, High Yield Bonds

2/12/2018 (8:15m)
Still at 33% cash - and I may scale in gradually over the next few days. 
Today's SPX price action was constructive with an opening gap and no time negative on the day.
SPX closed over it's 100d sma. VIX came down by 11.87% to 25.61, which is constructive.
IF prices hold over last Friday's lows, this would be constructive as well.
I still expect volatility and price discovery as short term technical levels may get tested in both directions. 
Focus industries remain unchanged from 2/11/18 below. 


2/11/2018 (9:00am)
Currently 33% cash, I am targeting at a minimum a 10% cash level until volatility levels recede. 
SPX tested the 200d sma 3 times on Friday, including a test below to 2,532 and reversed higher on increasing volume.
SPX RSI registered under 30 at one point, which is a technical measure of being short term oversold.
Daily RSI had it largest two week percentage decline on record, another sign of possible technical oversold levels.
I have no way to tell if that is the low for now or not. I do not try to even specualte on that at all.
For now, however,unless new lows are triggered in SPX (below 2,532) then it is mathematically the current short term low.
I put roughly half of available cash to work on Friday, after the recovery of the 200d sma in SPX, with stops below.
This is not a market call at all, simply follow my signal based process.
Three potential scenarios from here, in no particular order:
1. Recent lows hold, do not get retested and SPX moves higher.
2. Recent lows get tested, and hold,
3.  New lows break down below 2,532.
The next few days should be telling. Either a follow through up day on higher volume, or a break down to recent lows should provide insights into the sustainability of the recent lows.

I continue to take a defensive approach, have reinvested some capital and still have a high balance in cash.
Any outcome is possible, and technically I would expect more volatility.

Any potential bottoming process could be a V recovery or a multi week base building process. 
Any unwind can happen at any time.
I am focused on building positions, as prices dictate in dominant market leading single stocks and ETF positions as well. 
Focus themes: Nasdaq 100, Emerging Markets, China Internet, Financials, Aerospace/Defense, Next Gen Tech (AI, Robotics, Blockchain) Short bias: Interest rate sensitive instruments/Fixed Income 


2/08/18 (11:35 pm)
I am continuing to focus on defense, not offense.
Cash and patience are both positions. 
The markets have not proved themselves at all this week. 
With profit exits this week in AAPL, JOF, RBS & stops I will be at 54% cash after the open (not including TLT short)
S&P 500 (SPX) closed very weak today, below the 100sma, and 2 points above the 150sma
also at the low for the day and below Tueday's low (both are technically weak signs)
The 200day sma is 2,538 and the 40 week sma is 2,548
Of my three possible scenarios from  Feb 6 on this post below, we are at #3 - bounce and then new lows.
Now with the 200d sma possibly in sights, I am looking at two scenarios:
1. a test and hold on a closing basis
2. a break and or/close below 
The 200d sma is my primary trend filter and any break or close below is a sign of major technical weakness for me.


2/07/18 (8:30pm)

32% cash (not including 19% TLT short)
10 yr USTs yield 2.84% and that seems to be creating a headwind against stocks.
The strongest uptrend on the screen right now is yields. 
Interest rate sensitive Utilities and REITs trading well below 200sma.
The V recovery in stocks did not materialize with gap strength, as it did in June 2016.
Many stocks/ETFs still reading oversold, I am keying in on the 100sma as a possible support level.
If those do not hold, the next level I am watching would be the 200sma.
Voatility still high with VIX at 27.
I expect more volatility and potenitally wide ranges daily.  
Cash and patience are both positions.
$SPX is trying to get sorted out, but no clarity today. 
I do not antipcate any new positions tomorrow.
 

2/06/18
29% cash. 
Many markets/stocks/ETFs registered oversold and tested/held key moving averages on high volume, which is technically constructive for now. 
$SPX $COMPX put in what appears to be a short term bototm at least for now.
3 possible outcomes from here, in no particular order.
1. V shaped recovery
2. Bounce then retest/hold today lows.
3. Bounce then break down to new lows.
There is no way to forecast which outcome will play out.  I started to scale some money back into two positions today.
I am still in wait and  see mode to see how the markets trade over the next few days.
Volatility has expanded sharply and ATRs have expanded rapidly.  
I am planning to evaluate and possibly scale some money in gradually over the next week or so if conditions dictate.
In single stocks I am looking to get into domimant large/mega caps in core industries and also add to some ETF positions. 
 

2/05/18

38% cash due to stops.
Confirmed pullback in effect
I have let stops take me out of positions as they were set and in wait and see mode for now. 
Momentum still not at oversold levels in most markets I track, but much closer.
$SPX currently below 50 sma
100sma at 2,633 is an 8% drawdown from the recent high.
200sma at 2,533 is a 12% drawdown from the recent high. 
Keeping a narrow watch/buy list.  


2/03/18 
S&P 500 in possible corrective mode.
Shorter term momentum not yet worked off.
More downside selling could be expected.
Have all stops in place. 
Have a narrow focused buy list with technical entry levels.
Scale money in when appropriate, use stops.
No activity yet.


2/01/18 - ACCOUNTS OVERVIEW

Current position:
19% Cash (Due to 3 positions exited  vs one new entry) (Does not include TLT short proceeds)
A technical pullback could be constructive. 
At SPX 2,823 (1.02% above 20sma and 4.14% above 50sma)
Raise stops on any non-core or secondary names, look to rotate these into Focus/Overweight markets below, as prices dictate.

FOCUS/OVERWEIGHT MARKETS
Nasdaq 100 / FAANG
Emerging Markets / China Internet
Energy/Oil
Money Center Banks
Next Gen Tech (Blockchain, AI/Robotics)  

MACRO TRENDS
Primary Uptrends:
Equities/US, Europe, EMs, Japan (SPY, QQQ, VGK, EEM, DXJ)
Crude Oil, Euro 

Primary Downtrends:
US Dollar

Neutral
Gold
US Treasuries
US 10 year Treasury yields


 
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