News & Press

The wild swings on the $SPX ended up with a slightly higher finish than last week. The Nasdaq was down a little. Friday had a big hammer candle. A hammer candle is a market open near the top of the candle, goes lower during the day, then reverses and closes near the highs again.

Many of the momentum names have come down 50%. Is this their low? Or is this just the beginning of the move down? Optimism is always warranted with big 4% intraday swing. Very hard to be short with that price action too. Energy and financials continue to be solid.

The US senate passed the 1.9 T stimulus bill this weekend, so it should probably be signed by President Biden sometime soon. Next is a $3T infrastructure bill. Hard to comprehend how trillions can be spent so fast. The spending ignites the Bitcoin bulls, who talk about the currency printing debasing the world, but the same debasing continues to deny the gold bulls a bid. Gold had a tough week, failing to rally even in a rocky market.

I could sit in a waffle house all week, waffling back and forth between bullish and bearish. With the stimulus backdrop, can it possibly pay to be bearish? Conversely, we haven’t broken the analogy to the 2000 market top. A break above the downtrend lines will get everybody bullish. My Schnell Strength indicators started to bounce. Money showed up with volume on Thursday and Friday, creating the hammer candles. I lean into being an optimist. I bought stock on Friday after sending out my article to look higher, not lower. Conviction level is about as good as the one-out-of-two-popping odds of Orville Redenbacher, the popcorn king. Last week I was all bearish, but seeing that second hammer candle, suggests the buyers are there.

Summary: I have added to my oil positions on the back of the extremely bullish OPEC announcement and bought a few stocks Friday as the Schnell strength indicators improved. The market is hard to judge here. It is definitely not the wind-at-your-back investing moment. If you’re a market technician, right now it’s a pretty confusing control panel. Spin the dials, and we’ll see what happens. Let’s hit the charts.

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• By ClearWater Private Wealth
• March 8, 2021

The rotation away from momentum names was on full display the prior week. The trend continued as the Nasdaq was one of the weakest indexes in the world again. The big drop in the markets (NDX down >4.9%) suggests more caution. While you may or may not watch the videos each week, try to watch the video up to the 40-minute mark. I mentioned the expensive price multiple times this week.

I continue to be distracted each week by subtle positive moves, but the underlying for the market looks so risky. The areas I liked last week were down the least, but they were down, with the exception of energy. Issues like: market price action this week with a big down percentage overall, the drop in Tesla that fell 16% in two days before a buyer stepped in, lots of 10-week moving averages breaking on the high-flying names, the weakness of all of the big-name tech stocks; is definitely concerning.

 The US vaccination rollout is greater than 20% of the eligible population. JNJ’s vaccine was approved over the weekend. America will have 3 vaccines for distribution, so March should be a massive month for vaccination. We also saw the 1.9T stimulus get rolled through congress, following the $900B in December, and now the infrastructure bill has a nod of $3T. WOWZA.

Interesting Reading.

Two Questions I Have. When Everyone’s A Genius. Jay Woods Former NYSE Board Member on GME.

It’s been two weeks since my Two Questions I Have article. So far, that marked the recent market high. The charts are playing out like they should if I am right. This newsletter focuses on that data. The article When Everyone’s A Genius is also relevant. The market rallied extravagently when we all saw the economy cratering. But not only did it rally, it became one of the most expensive valuations of all time, with little hope of a damaged economy keeping up. Another question of mine is : While the economy improves, will the stock market suffer, to bring valuations back into line with market prices?

From all the success with the ARK investing group, it sounds like the world can go to infinity and beyond. Unfortunately, they have already pushed pricing there (infinity), well in advance. When Tesla plummeted, they stepped in and started buying in the $600’s. The real question is: Where were the rest of the buyers? Tesla has dropped 30% in 4 weeks, and it has been 3 weeks since they announced they will accept Bitcoin for cars and hold $1.5B in Bitcoin in the corporate treasury.

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• By ClearWater Private Wealth
• March 1, 2021

The market continues to change its center axis. During the worst parts of the pandemic, the market was rewarding the high-tech names. The Nasdaq was one of the weakest indexes in the world this week. The rotation to Industrials, materials, energy and finance seems to be bringing those sectors forward. While the indexes might not have been advancing this week, the old economy names were. As the strength index weakens again, my focus is on the global commodity boom.

The US rollout is on pace to have 20% of the eligible population vaccinated with one shot this week. The vaccine results from Israel are very promising and provides real hope for the rest of the world. Isreal has vaccinated 47% of their population. The number of cases, hospitalizations and deaths are dropping fast. This doctor has positive news for the summer. The vaccine is a bridge to brighter days. JNJ’s vaccine could be approved in the next few weeks.

Crude oil hit new highs this week, but settled back to close down slightly on the week. Gasoline and Diesel moved higher as Texas refinery closures will put pressure on finished product availability. This has happened before during hurricanes. Frozen pipes are a bigger issue, but these big refineries will be back up as soon as possible. While the oil market may pause here, we don’t have enough new drilling globally to stop the inventory slide. The inventory trend is tightening, and continues to point to lower supplies.

Financials had another big week on the back of the move in yields. Broker/dealers soared. The KBE bank ETF broke to new 5 year highs. As the move in yields still has room to move, this might be a nice area to think about as it breaks above recent consolidation. I covered this off on the video.

Copper and industrial metals had a big week as the industrial ETF XLI and transports broke out to new highs as well. This area looks fantastic. Agriculture looks good too. The materials ETF XLB showed a big pop on Friday.

Summary: I continue to like the commodity trades as that matches with the inflation the Fed is trying to create. The backdrop in the USA is bullish, as things are improving. It also sounds like more stimulus is coming. The indexes took the week off in the USA, but Asia continues to lead globally. Asia is the biggest buyer of commodities. Let’s hit the charts.

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• By ClearWater Private Wealth
• February 22, 2021

The market soared through the presidential election, the storming of the capitol, the second impeachment, and the subsequent finalization of that 3-month period. Amazing in hindsight. Since the first day of November, the markets have been very bouyant. The Nasdaq volume, particularly bouyant. Record setting in fact. Again! While the Nasdaq volume and price continues to soar, the $SPX had it’s lowest volume since August, with the Christmas and Thanksgiving period lower * but we see those periods as normally low volume. The current rift between large cap volume and Nasdaq bizarre volumes goes into my analysis as cautionary for the current memes of clean-tech and biotech. We might also find the news media focusing more on the economy, rather than the gamification of stocks here.

The US rollout is going extremely well now, with a 7-day average of 1.66 Million/day (11Million/week). Just to help understand how good that is, the Canadian population is increasingly frustrated, falling to #52 on the world ranking for vaccine rollout. Tim Horton’s, the Canadian Coffee company, used to have an annual promotion called “Rol-l-l up the rim to win”. The Cdn vaccine rollout is now a joke as the picture suggests. Congrats for the rollout speed in the USA. I think the strong performance of the US vaccine is supplying the continued strength in the markets even at high sales/stock price ratios.

Crude oil made another new 52-week high and energy was the top sector of the week. While I am bullish liquid energy (oil, gas, diesel, natgas) over the near term, I am also bullish over the annual time frame as long as we don’t get a new virus strain that roils the world. A dramatic shortage of capital is constraining new drilling as old reservoirs deplete. This will eventually balance (2022?) but currently it looks very supportive of higher prices. So does OPEC throttling production.

Financials had another big week on the back of the move in yields. Broker/dealers soared. The KBE bank ETF is close to new 5 year highs. As the move in yields still has room to move, this might be a nice area to think about as it breaks above recent consolidation.

Summary: I continue to like the commodity trades as that matches with the inflation the Fed is trying to create. The backdrop in the USA is bullish, as things are improving. It also sounds like more stimulus is coming. Happily, the political focus will diminish for now.

I spent the Sunday with the family for Valentine’s Day. That created a newsletter delay. Let’s hit the charts.

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• By ClearWater Private Wealth
• February 16, 2021

The market took a while to break down, but in it’s first week of correction we are already close to the levels when the early warning triggered from the SSIH. The market confirming the SSIH breaking down is comforting but not richly profitable. It’s avoiding the carnage. When the market keeps pushing higher as my strength indexes fall, it makes me ponder a lot more about my work. The 49% level last week looked terrible, only to watch the market make higher highs Monday. By weeks end, we wiped out all of the gains for 2021 and the group of charts I rely on confirmed the break. The SSIH data spoke as bluntly as the cowboy on a sunny day. “Careful. We’ve seen these storm clouds before, even though we are currently in the sun.”

Last week’s move into tech was short lived as big names that popped up, all pulled back. However Tesla, which marginally (2%) followed the big surge up the week of the 15th, dropped 13 % from an all time high ($900) this week. Tesla has been a market darling but it has a lot of weak attributes on the chart after a significant run. I have put a daily chart of Tesla in the newsletter, as the change of character on the chart suggests Monday’s high might be a significant high. I don’t own it so its easy for me to say. These story stocks can be good
indicators of major changes.

Anyone who had a great year in 2020 expects the good times to continue. The way I analyze data, I don’t see it being as smooth as that, but I do expect a big commodity run in 2021.

The index breakouts from around the world starting the month all failed by the end of the month. That is a daunting view of global weakness. The challenge is for the vaccine to get rolled out. While the US is vaccinating 1.25 Million a day, Canada has no vaccine available and it appears to be at least another 2 weeks for a minimal shipment. This will be the next area of concern, as some countries are vaccinating quite quickly while others have no access to vaccines. This drags out the recovery.

Summary: I will continue to protect capital. As the SSIH drops even lower, it validates my bias. We are now looking for the market to turn up as all three are below 25, but quite frankly, I expect it to take a little more time for the correction. I’ll move to shorter timeframe scans to help us find buyable dips like the early November low. Let’s hit the charts.

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• By ClearWater Private Wealth
• February 1, 2021