This week I was over at the Nasdaq in Times Square discussing the current market environment with Frances Horodelski on Canada’s Business News Network. The weight of the evidence is suggesting a cautious stance up here after all of our upside targets have been hit in recent weeks. Remember, we’ve been bullish stocks, globally since late January, and in the U.S. since early February. When our upside objectives are hit, it’s time to reevaluate. That’s what we’re doing now. [Read more…]
Why We’re Back To Tactically Fading Strength
From the desk of Thomas Bruni @BruniCharting
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The weight of the evidence has been building in favor of the bears over the last week or two, making the US equity weakness this week anything but surprising. Throughout the duration of this post I’ll outline the evidence that I’ve been noticing over the last two weeks and what it means for us as market participants moving forward.
Yen Strength – The Yen broke out structurally late last year and hasn’t looked back since. Tactically my upside targets were hit this week, but structurally this market has a lot more room to run. Given the high negative correlation between the Yen and US equities, this should continue to be a headwind for equity markets going forward. [Read more…]
[Chart Of The Week] The Best Market Neutral Trade In the U.S.
We’ve had a heck of a rally in stocks over since late January, led by emerging markets, energy and metal stocks. Starting in mid-February the U.S. and other developed nations got the memo and started to play catch-up. We couldn’t be happier with the performance of the stock market since then. But over the past couple of weeks all of our upside targets have been hit; all of the U.S. Indexes and sectors and about 90% of global indexes. So I’ve therefore been pretty neutral towards stocks since late last month, but I finally turned more bearish earlier this week.
Here is a market neutral trade that I think is definitely worth paying attention to. Whether you’re bullish or bearish, this breakout is not something we should ignore:
[Premium] Weekly Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- At What Levels Do We Want To Be Short The U.S. Stock Market?
- Gold vs S&P500 – What Side Are You On?
- The Trade In Financials And Technology
- How Low Can U.S. Interest Rates Go?
- The Best Way To Profit From A Rising U.S. Dollar
- How Will This Yen Rally Impact Global Equities?
- Where Do We Take Profits In Biotechnology?
About That Massive Breakout In Kiwi
From the desk of Thomas Bruni @BruniCharting
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From the Brazilian Real and Australian Dollar to the Turkish Lira, many global currencies have been gaining significant traction relative to the US Dollar over the past several weeks and months. These currency moves have also had significant impacts on the equity markets of their respective countries as they tend to be positively correlated.
Last week the New Zealand Dollar joined that group by breaking out across multiple timeframes.
Here’s Why General Electric Is A Short
I think there is a nice shorting opportunity in General Electric that we can take advantage of this month. There’s nothing better than making money when a stock is falling. The reason is because stocks tend to move a lot faster on the way down, than on their way up. It’s the old, Escalator Up & Elevator Down behavior.
The way I see it, $GE hit our upside target of $31 last November, so there’s been no reason to own it. This target is based on the 161.8% Fibonacci extension of the massive consolidation throughout 2013-2015. Here is a weekly chart showing prices getting up there, pulling back in December and January, and now more recently rallying back up towards that $31 level and beyond: [Read more…]
The Trade: Buy Twitter and Short Facebook
It is very difficult, if not impossible, to put all social media stocks into one category. We do our best with ETFs like $SOCL, but they can be heavily skewed by certain stocks and it ignores others with smaller market caps. Also, what does a company LinkedIn have to do with Yelp or Yahoo? I think we need to be careful grouping them into just one category, and keep in mind that they are all individuals with their own problems as well as their own unique positive qualities.
The reason I bring this up is because yesterday afternoon, Michael Santoli tweeted out a mystery chart asking followers whether it was a buy or sell: [Read more…]
[Premium] My Favorite Large-Cap Stocks To Short Today
It’s been a while since I laid out a bunch of short ideas. As you guys know, I’ve been really bullish since late January. But hey, upside targets get hit, sentiment shifts, and things eventually change. Here are a list of Dow Components that I think are good shorting opportunities today: [Read more…]