Good morning Traders,

Friday’s price pattern was a bearish evening star, but we have earnings from
a FANG stock so anything goes today.  Let’s take a look at a 1-3 month
expectations for the Nyse and Nasdaq and then analyze the Nh/Nl data:

Nadsaq 1 month

nyse one month

Nasdaq 3 month

Nyse 3 month

As they say, life is like a box of chocolate and you never know what you’re
going to get.  No one can predict the future, but we use the past to keep
our expectations in check.  When indicators get to these levels, markets
are expected to be flat or lower and more so on a one month basis.  If we
remain in a bull market (as evidenced below) on a 3 month basis, there is rarely
a bad time to buy!

Nasdaq Net New Highs New Lows

Nyse New Highs New Lows

We moved the above two indicators back to 2011, to capture the two most
bearish moves from 2011 and August 2015, January 2016.  These make some of
the best long term buy points – but they’re far and few between.  I do
expect something similar this year as the 2009 Bull Market turns over.

With the Net New Highs/lows at a peak, as the line moves lower, it’s
important to understand that we’re still seeing break outs – just fewer and
these are more likely to collapse and retreat back into the base (from a stock
basis).  In a normal / neutral market, the lines should move on both sides
of the scale.  And in a bear market, for the most part, these lines will
remain below zero.  It takes moves like that to make me more bullish – as
I’m currently bearish and can only see minimal upside and maximum potential
downside for the future.  We remain Short on this retest of the previous
highs on the Qs and are looking for a 3-11% move lower from here.

That means we’ll be out with our top 500 covered calls and top stock PUT
options soon as we get more confirmation of a bearish move.

Regards,

www.stockbarometer.com

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QQQ Seasonality

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QQQ Seasonality

Gold Seasonality

USD Seasonality

Bond Seasonality

 

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Citigroup Panic Euphoria

The below chart represents Cumulative ETF money flow.

We’ve been monitoring money flow into this group, causing a narrowing or market breadth, leaving the stock market vulnerable.  Visit our site www.stockbarometer.com to learn how to profit from the coming market move.

This is significantly strong, but on a contrarian basis, it can be bearish. Visit our Facebook page below to see our Roc view. Access all this data on our website below.

ETF Money Flow

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The below chart represents ETF money flow. A significant change that is taking place in the financial markets is the shift of money into ETFs and the money leaving equity funds. This is significantly strong, but on a contrarian basis, it can be bearish. Visit our Facebook page below to see our Roc view. Access all this data on our website below.

etf money flow

This is one of our 300 market timing indicators to help traders and investors identify potential buy and sell points.

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The signal from the Citigroup Panic Euphoria Model – is potentially showing bearish activity for 2017. Subscribe to the Daily Stock Barometer (links below) to find out when to sell the stock market – AND access this data!

citigroup panic euphoria model

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The signal from the ECRI – Economic Cycle Research Institute – is potentially showing bearish activity for 2017.  Subscribe to the Daily Stock Barometer (links below) to find out when to sell the stock market!

ECRI

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As the markets set up for a positive looking year end, this weekend’s update on the Citigroup Panic Euphoria Index is raising more caution:

citigroup panic euphoria index

Interpreting the citigroup panic euphoria index requires some subjectivity as the key is when it crosses below its moving average and gives a signal.  Consolidations can occur which delay the signal.  But at the end of the day, the buy signal is getting long in the tooth.  Raise your stops and get ready to position short.

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The relationship between stocks and bonds is key to interpreting and predicting future price action.   The view is that the bond market is so much larger than the stock market, that money flowing in and out of bonds causes movement in other vehicles, such as stocks.

Take a look at the following momentum chart of the QQQ versus Bonds (in the form of TLT) :

QQQ Bonds TLT RSI

What you can see is initial peaks in the relative action cause markets to pause.  The second peak – whether it’s higher or lower, tells you if momentum is shifting.

Where are we now?  We’ve had our initial peak in Stocks bouncing relative to Bonds and we’re working on the second peak.  We at www.stockbarometer.com expect a bearish divergence to set up the next move lower in the markets.  Bonds will bounce, gold will bounce and risky assets will fall.  But this action will ultimately set up the next best buying opportunity for the stock market!  So stay tuned!

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Traders be on the look out for a top forming this week. This is one of our 300 market timing indicators to help traders and investors identify potential buy and sell points.

Nyse Crash Hindenberg Omen

For the above signal from the Hindenberg Omen to be valid, we need to see the McLellan Oscillator to be negative…it is:

McLellan Oscillator

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