Another Yield Curve Warning for Stocks

Two steps forward…in order to accommodate a big step back. We’ve seen it countless times in the lead-up to Fed meetings, GDP reports and, lately, jobs data. With May unemployment expected to top 20% (it’s unofficially already there) after another 7.5 million joined the jobless ranks……the market’s caretakers put a 58-pt cushion into the market.  … continue reading →

Update on DJIA: Mar 18, 2020

In our last dedicated update on the Dow [see: July 2019 Update], we noted the intersection of a number of overhead resistance features in its chart and offered some thoughts on its downside potential if it managed to reverse. Note that our 18974 target represents a backtest of the red channel from which DJIA broke … continue reading →

The Storm Finally Arrives

After weeks of gathering clouds, the storm we’ve been watching has finally arrived. S&P futures are lock limit down just a few points above our next downside target. Not surprisingly, all of our other targets across currencies, commodities and fixed income have either tagged or exceeded our next downside targets, with more to go once … continue reading →

Decision Time, Again

We start this morning’s post with a peek at the Russell 2000 as it perfectly illustrates the dilemma facing the broader markets this morning. Up until September 2017, RUT followed a well-defined rising channel shown below in yellow.  Like all channels, it was defined by the tops and bottoms along the way. The only problem: … continue reading →

Because Appearances Matter

It’s not too surprising that there’s been a firm floor under oil and gas prices, given the upcoming Aramco IPO.  But, isn’t it funny how CL has popped above its SMA200 every single day this week, even in the wake of dismal inventory data? Just like it’s funny that ES, which pretty obviously should have … continue reading →

A Broken Record

Though it is getting a little monotonous, I’ll never get tired of saying that we’re about to tag our next downside target. The past two weeks of downside have been a great recruiting tool for chart patterns and this website in particular. A note to prospective members…we’re currently offering auto-renew monthly subscriptions at half-off the … continue reading →

The Slope of Nope

As a chartist, I’m often struck by how similarly the stock market acts at important tops and bottoms.  By “important tops” I’m speaking of those which precede large corrections or even crashes.  So, with apologies to Tim Knight’s excellent Slope of Hope… In 2000, SPX retraced a Fibonacci 88.6% of its initial drop before falling … continue reading →

Buy, Machines, Buy!

I was on the road yesterday, so I listened to CNBC on XM while tooling around town. I lost count of how many pundits sounded downright angry about how the market was melting up. “It makes no sense!” they cried, citing countless statistics from plunging retail sales to plunging earnings expectations. Not one of them … continue reading →

If at First You Don’t Succeed…

Yesterday’s setup for the e-minis looked pretty straightforward: a drop through the 200-day moving average and backtest of the 2.24 Fibonacci extension at 2729. Futures had already dropped through the 200-DMA and were heading south when the dismal retail sales data dropped. I hedged my bet, redrawing our daily downside target to include the 10-DMA … continue reading →