Month: July 2021

The markets sudden bounce at the 50 DMA on the SPX was more than I expected, and it was a big bounce, which surprised me. Technology names literally soared. SNAP was up 30%, Moderna up 22%. ROKU up 18% to be close to a breakout. The large cap names ripped higher. I have the charts of Alphabet and Facebook in the newsletter. They looked like they were part of the blue origin capsule, rocketing higher.

A few commodities had big bullish pushes. Natural Gas broke a 15-year downtrend and Lumber bounced after being chain-sawed 29% last week. Lithium and rare earths migrated higher, but it is a disparate group with some of the names not participating at all.

The dollar has some bullish signals going on, weighing on commodities generally. The dollar broke out to new highs over the range of the last three weeks and broke the longer-term downtrend line. The PPO has moved into positive territory and the cycle lines suggest a big move ahead for the dollar. I’ll cover more on this on the monthly conference call.

Here are the details:

Dwight and I will host the August Conference Call on July 29th. Click on the link to join at 5 PM EDT, Thursday. Password = energy

An abundance of oil names will report this week. We continue to have oil inventory data coming in shorter than expectations, but the oil names haven’t responded. We’ll see if the big test of support for crude oil down to $65 was enough and now we pump the next leg higher.

Summary: Technology names dominated the tape this week. Consumer discretionary also did well. It is the period to be lining up for the second half surge in retail. With a huge number of companies reporting this week, we’ll see what is going on and the optimism for the 3rd quarter should still be there. The noise in the trading room this week won’t be about the Seattle Kraken hockey draft, it will be the Federal Reserve meeting.

To continue reading click the link below…

• By ClearWater Private Wealth
• July 26, 2021

The initiation thrust of July 9th, turned out to be a dud. The market sold off Thursday and Friday. While the percentage down was relatively small, the damage under the indexes was very obvious. After JPM reported on Tuesday, not much positive happened. We migrated lower and even the large caps started to be sold.

The dollar is at a key inflection point. It has not broken out yet, but it is definitely impacting the commodity trade broadly. I covered commodities on the video, but not as much in this newsletter. The commodities look challenged at best, and as I look at rest of the market crumbling, I just want to turtle away and protect capital. For those interested, three sectors have rising PPO’s on the daily charts. Utilities, Consumer Staples and Real Estate. All the rest gave sell signals in the last few weeks. The SPX gave a PPO sell signal on Friday as well. With negative divergences everywhere, hunkering down for a few weeks looks like the course of action.

The dollar didn’t go anywhere it hasn’t been in the past few weeks, but it closed at the top of the price range, rising from the bottom of last week’s price bar.

The big banks couldn’t find buyers showing up for work on their earnings results. I locked in some profits on tech and some energy. I continue to be amazed at the selling in energy stocks, but I really don’t need to ride them all the way down. I’ll just buy them when they turn back up. For now, holding cash appears prudent.

Summary: The SPX index had new closing highs on Monday and new intraday highs Tuesday and Wednesday. Outside the big index, selling was abundant. The Nasdaq 100 60-minute chart finally broke its’ uptrend. Commodities look questionable, and with so many sectors giving PPO sell signals, it looks like a good time to roll away from this rally based on my indicators.

To continue reading click the link below…

• By ClearWater Private Wealth
• July 19, 2021

The indexes bounced up and down this week alternating days. Ultimately, we finished on the highs. In the breadth work on the video, I mentioned there was an initiation thrust suggesting renewed enthusiasm on Friday.

The dollar is at a key inflection point. It would appear to me to be trying to roll over lower. That would be my bias, but it has not broken down yet. It is trying to break trend line resistance to the upside. If that stalls and reverses lower, I expect a big resurgence into the commodity related trades. Stay tuned on oil, industrial metals, gold, silver, rare earths, and lithium as examples.

The dollar seems to be a light switch here, with lots of trades pivoting around it currently. It traded in the same range as last week for the most part. A declining dollar seems to help the $SPX stock market rally easily, whereas a rising dollar gives us a slower, more laboring rise.

The big banks start the heavy reporting season this week. The financial charts look ready to turn back higher, so that could be the interesting sector for the week.

Summary: The indexes are continuing to hit new highs. The wobble this week was a small problem, but we bounced back down on the Put/Call ratio as it was hitting a level where most market turns higher start from. Interestingly, we hit the put/call ratio very close to new highs.

To continue reading click the link below…

• By Greg Schnell, CMT, MFTA
• July 12, 2021

The markets surged forward all week. The Quad witching date (more info below) marked the low, and we have been racing higher from there. After the SPX made a new 4-week low, scaring most investors, it’s been a run for the roses higher. While breadth is still thin, it is improving. I expect that to continue into what should be a robust reopening against weak comps from a year ago. However, in a linked article, it would appear, it’s not just strength against good comps. It’s very strong data from the few who have reported so far, period. That’s as fundamental as I get investing, as the charts have been shouting that for weeks.

The dollar is at a key inflection point. It would appear to me to be trying to roll over lower. If that happens, I expect a big resurgence into the commodity related trades. While oil has been on the front burner, the oil producers have lagged. FCX pulled back 25% from the highs in May. That’s a lot! I also showed another big picture trade setting up in Gold. There is a complete section of this report discussing the technicals. I could probably find another 10 charts to say why it looks bullish to me, but the bottom line is I want to be very ready with buy orders ready on the best gold names if this is going to happen!

OPEC has us frozen in time for the weekend, but it would appear to me to be very bullish. They are suggesting an increase of 400,000 barrels per day, for each month until December. That wouldn’t handle the shortfall in America, let alone the global inventory declines. I interpret it as bullish. Pardon me if my bias is showing! Even the Whitehouse noticed higher oil prices this week due to squeezing producers to not produce. To my knowledge the Canadian PM hasn’t noticed the rising price.

The dollar seems to be a light switch here, with lots of trades pivoting around it currently. A declining dollar seems to help the $SPX stock market rally easily, whereas a rising dollar gives us a slower, more laboring rise. While not evident each and every day, some charts below highlight what I see going on. You can decide if you agree.

Summary: The indexes are breaking out to new highs, let’s pick our spots. Technology, communications, healthcare, discretionary, industrials, financials, energy all look good. What’s not to like?

To continue reading click the link below…

• By ClearWater Private Wealth
• July 5, 2021