S&P
500 Index (SPX) Chart Analysis
Last week:
"After the prior
week's gains, this was more of a consolidation
week though it started with a solid
decline on Tuesday. The selling was
attributed to the 10-year treasury close
over 3%, putting pressure on stock investors
to exit equities for the safety of yields."
This week:
The midweek announcement that a meeting
with North Korea to arrange denuclearization
of the peninsula resulted in a selloff.
This is a news driven market for sure.
But still the major indexes managed to
end the week with fractional gains. For
the S&P 500 Index that was + 0.31%.
Since the SPX broke above its long-term
declining trend resistance line, as well
as its 200-day moving average line, the
index has traded mostly sideways.
Breakouts or breakdowns from pennant
patterns, as seen in the below daily chart
of the SPX, typically point to the direction
the stock market will now take.
Pennant patterns tend to have a five
wave pattern. The early May lows were
the wave five of a clearly marked five
wave Elliott Wave pattern. Wave five to
the downside was followed by the breakout.
Midweek the NYSE Advance-Decline Line
reached a new bull market high. The indicator
closed slightly off that high for the
week. This indicator tracks breadth and
as such is extremely important.
New hoghs for the A-D line means it is
not just a few powerful companies pulling
the market up, but most of the companies
are advancing in the broad NYSE which
has 1600 stocks.
During the week the Nasdaq 100 Index
(NDX) posted a bullish trend continuation
day on Wednesday.
The early morning selloff lows were lower
than the previous day's trading range
and the rally closed higher than the previous
day's highs.
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That pattern is typically followed by
more gains.
Note that the NDX also had five waves
within a pennant pattern before breaking
out in early May.
During the week small caps closed at
another new bull market high.
The 10-year Treasury yield rose 8 basis
points during the week to 3.08% which
pushed it above its late 2013 peak near
2.03%. TNX is now trading at the highest
level since the summer of 2011.
That level is seen as bearish for stocks
as it offers competition for investment
funds and it is guaranteed.
Yet the stock market still closed with
gains for the full week.
Regularly
Followed Weekly Charts
NYSE Advance-Decline
Line
Market breadth again reached new bull
market highs. This is a huge positive
for stocks.
Interestingly the A-D line also formed
a five-wave pattern and each down wave
ended with a higher low. Each up wave
has had a higher high.
There were pennant patterns in all the
major indexes as well as this A-D line.
All the breakouts are to the upside.
The Nasdaq 100 Index Advance-Decline
Line closed with a solid gain and is
poised to break out to new highs.
A breakout to new highs is likely for
this indicator in the weeks ahead.
CBOE Volatility
Index (VIX).
The CBOE Volatility Index (VIX) closed
almost unchanged for the full week at
13.22.
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trend, which ever
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timing strategies MAKE
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BOTH advancing & declining
markets. No more
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No more upset
stomachs.
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This tells us that investors are turning
bullish. They do not feel the need
to cover their positions with insurance
in the form of options.
Extreme bullishness is contrarian
bearish. We are not there yet but it
is something to watch.
Market Internals
The NYSE percent of stocks
that are trading above their 200-day
averages pulled back this week losing
about 1.0%.
By the close on Friday
56.35% of stocks were trading above
their 200-day average line.
Sentiment Indicators
These are contrarian
indicators. Typically, when advisors
are mostly bullish, the markets are
near a top.
Note that these numbers
are from a week ago. They reflect
the preceding week's sentiment.
The
number of bulls remains high. Remember
that those who are neither bullish
nor bearish have bullish positions
and really should be considered bullish.
Add bulls and those not specifically
bearish and you get 80.8%
with at least some bullish market positions.
Fibonacci Support
/ Resistance Levels
We are now looking at "support
levels" from the correction lows.
Fib support levels on the weekly chart
are as follows; the 38.2% retracement
support at 2470, the 50% retracement
support at 2346 and the critical 61.8%
retracement support at 2222.
Market Moving
Economic Reports Released this Week:
After slowing at the outset of the
year, the national activity index --
led by manufacturing and employment
-- is back at its expansion best, posting
a 0.34 in April following a sharply
upward revised 0.32 in March. The 3-month
average is at 0.46 vs March's 0.23.
Manufacturing activity in the Fifth
District saw robust growth in May,
with the Richmond Fed Manufacturing
Index rising sharply to 16 after plunging
into contraction territory with a minus
3 reading in April. Leading the stronger
than expected rebound in May were shipments,
up 23 points to 15, new orders, up
25 points to 16, capacity utilization,
up 23 points to 19, and the number
of employees, up 6 points to 18
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nights as your
investments are
consumed by a volatile
Wall Street?
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trend trading services.
Our trading plans
are unemotional
and are always
invested with the
trend, which ever
way it is headed.
Fibtimer's
timing strategies MAKE
MONEY in
BOTH advancing & declining
markets. No more
sleepless nights.
No more upset
stomachs.
We profit year after year after year. In fact, we have been timing
the markets successfully for over 25 years.
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Sales of newly-constructed homes dipped
in April, the Commerce Department said
Wednesday. At a 662,000 selling pace,
April was 1.5% lower compared with
March, but 11.6% higher than a year
ago.
The PMI's service sample popped back
up to its prior highs while the manufacturing
sample inched up to yet new highs.
The services PMI, driven especially
by a rise in backlogs, rose more than
1 point to 55.7 to indicate the strongest
rate of monthly growth in three months
and above the 55 mark where it has
appeared several times over the past
year.
Existing-home sales ran at a seasonally
adjusted annual 5.46 million pace in
April, the National Association of
Realtors said Thursday. Sales of previously-owned
homes fell 2.5% from March to April
and were 1.4% lower than a year ago.
It was the second-straight month to
chart a yearly decline.
Initial jobless claims rose 11,000
in the May 19 week to a higher-than-expected
but still very low 234,000, lifting
the 4-week average by more than 6,000
to 219,750. Despite the week's rise,
claims are still sizably below levels
in April which points to strength for
next week's employment report.
Tariff-related price inflation may
be driving up dollar totals in the
factory sector which, based on the
April advance durable goods report,
has gotten off to a very strong start
for the second quarter. Forget the
1.7 percent headline decline in the
month, one due entirely to an understandable
swing lower for what have been very
strong aircraft orders.
A downgrade in the current assessment
pulled down the final May reading for
consumer sentiment to 98.0 which is
8 tenths lower than the May flash and
a full point under Econoday's consensus.
Current conditions fell to 111.8 vs
113.3 at mid-month and down from 114.9
in April. The decline hints at weakness
for May's job market and in turn for
May's consumer spending as well. Expectations
also eased, to 89.1 from 89.5 at mid-month
and 88.4 from April. This declines
hints at less confidence in the jobs
and income outlook.
Conclusion:
Last week the stock market consolidated
its previous week gains but this week,
even though there were several bearish
news events, the market overcame the
news related losses and closed higher.
Ten year treasuries hit 3.08% midweek
and President Trump announce the summit
with North Korea had been canceled.
None of the bearish news events kept
stocks down for long.
The SPX portion of this
strategy is BULLISH. Aggressive traders
should be in the Rydex Nova S&P
500 Fund - RYNVX (or other bullish
S&P 500 index fund or ETF such
as SPY or RSP).
S&P 500 Index (SPX) Daily Chart
S&P 500 Index (SPX), Weekly Chart
Nasdaq 100 Index (NDX) Chart Analysis
Last week we wrote:
"The Nasdaq 100 Index
(NDX) lost ground this week, closing down -1.24%.
Though it is not what we wanted to see, it
nevertheless leaves the NDX well above its
declining trend resistance line as well as
above its 50-day average line."
This week:
The Nasdaq 100 Index (NDX) pushed higher this
week gaining +1.38%.
The index had a bullish trend continuation day
on Wednesday. Lower lows than the previous day
and closing with higher highs than the previous
day.
The NDX Advance-Decline Line also closed at
a new bull market high. This is extremely positive
for coming weeks.
Similar to the SPX, the NDX is also trading
mostly sideways since rallying early in May.
The bullish trend continuation day may be pointing
to more gains ahead.
Fibtimer HALF
PRICE Offer!
Get
Our Full Reports
Every Weekend
plus Updates Every Trading Day
These FREE reports are
great, but getting our timing signals daily is
what you need to beat the market!
only
$12.25 monthly for
full year
Bull & Bear
Timer
10 Year Results
Fibtimer Timing + 288.9 % |
3
Year Results
Fibtimer Timing + 59.2 %
|
1
Year Results
Fibtimer Timing + 35.5.%
|
Sleepless
nights as your investments are consumed
by a volatile Wall Street?
Consider Fibtimer's
trend trading services. Our trading
plans are unemotional and are always
invested with the trend, which
ever way it is headed.
Fibtimer's
timing strategies MAKE
MONEY in BOTH advancing & declining
markets. No more sleepless nights.
No more upset stomachs.
We profit year after year after year. In fact, we have been timing
the markets successfully for over 25 years.
Join us and start winning!
We
are currently offering HALF
PRICE to new and returning
subscribers.
--- only
$12.25 monthly for full year
Special
HALF PRICE Offer - CLICK
HERE NOW
|
|
MACD on the daily chart remained bullish during
the week and closed at 65.75.
On the weekly chart MACD remains in bullish territory
and is closing in on a bullish crossover.
We have posted Fibonacci retracement "support" levels
for the advance from the February 2016 lows. Those
Fib support levels (weekly chart) are; 38.2% at
NDX 5995, 50% at NDX 5593 and 61.8% at NDX 5200.
Conclusion:
Last week tech stocks consolidated their strong
early May gains. This week the index again pushed
higher with a solid +1.38% week gain.
There are many indicators which have turned bullish.
Expectation is for the NDX to follow suit and move
higher over coming weeks.
The NDX portion of this strategy
is BULLISH. Aggressive traders should be in the
Rydex NDX 100 Fund - RYOCX (or other bullish NDX
100 index fund or ETF such as QQQ).
Nasdaq 100 Index (NDX), Daily Chart
Nasdaq 100 Index (NDX), Weekly Chart
|