The ratio of the SPX to the 10-year Treasury volatility (SPX:10y T volatility) demonstrates a pattern where down-spikes correspond to local minima in the S&P 500 (vertical blue dotted-lines).
The chart below (click to enlarge) shows that the down-spike in the ratio has reached the up-sloping trend-line. This increases the chances of a bounce in the SPX.
The ability of a stock to be above its 200-day moving average can be considered a fairly reliable indicator for positive future returns.
A breadth indicator that measures the percentage of stocks above a specific moving average. Many indicators have been created on the concept of market breadth. For example, a good market breadth indicator is $SPXA200R which measures:
The percentage of S&P 500 stocks above their 200-day moving averages
Figure 1
Interpretation of $SPXA200R
$SPXA200R is a medium to long-term indicator. In general, you can use it to:
Buy - when it moves above 30% from below and
Sell - when it moves below 70% from above
Figure 2. Major corrections have been marked by extended time below the 50% level of $SPXA200R (Source: @DKellerCMT)
More on 200-DMA
In addition to look at $SPXA200R, 200-day moving average (DMA) can be also used in different ways. For example, you can look at:[1]
The direction of 200-DMA
If it's rising, it's a signal of a long-term uptrend, and vice versa for a downward-sloping 200-DMA
In [2], the author has proposed below trading strategy which could potentially produce an annual return of 8.55% :
The system only buys the SPDR S&P 500 when it’s in an uptrend, and it remains in cash when the ETF is in a downtrend.
The system makes any buy or sell decisions every 4 weeks, so trading expenses should be negligible.
The market is considered to be in:
An uptrend if the slope in the 200-day moving average in the SPDR S&P 500 is positive in the past 10 days.
goog_98465206An downtrend if the slope in the 200-day moving average in the SPDR S&P 500 is negative in the past 10 days
The distance of a stock is trading above or below its 200-day
A good way to gauge how extended it is from its "normal" trading range
Especially vulnerable are stocks that are trading far above their 200-day moving average. For example, on 05/31/2017, Apple (NASDAQ:AAPL) is 22.80% above its 200-day, Amazon.com (NASDAQ:AMZN) is at 20.39%, and Alphabet (GOOGL) is at 19.05%.
In [1], Mark Arbeter has shown a Put-Call Chart using $CPCE with 5-day Moving Average to smooth out the data:
Put/Call Ratio
The Put/Call Ratio is an indicator that shows put volume relative to call volume. Put options are used to hedge against market weakness or bet on a decline. Call options are used to hedge against market strength or bet on an advance. The Put/Call Ratio is above 1 when put volume exceeds call volume and below 1 when call volume exceeds put volume. Typically, this indicator is used to gauge market sentiment. Sentiment is deemed excessively bearish when the Put/Call Ratio is trading at relatively high levels, and excessively bullish when at relatively low levels. Chartists can apply moving averages and other indicators to smooth the data and derive signals.
You can read StockCharts article for its interpretation.
$CPCE Charts
5-Day MA
Using similar concept except that we have inverted $CPCE, we have charted $ONE:$CPCE with the data on 10/19/2018 as below:
Frisco is #1 on Money Magazine's "Best Places to Live" List Celebrate at our Upcoming Town Hall Meeting on October 1
There's no place like home and, according to Money Magazine, the best place to live in America is Frisco, Texas!
To make this year's list, Money looked for cities with good schools, strong economies, low crime, and a strong housing market. They also sought out diversity, noting the "economic and cultural benefits it gives a community".
Here's one excerpt from Money's online article about its selection process:
"While there’s a lot to love about Frisco, part of its appeal is the city’s relatively low cost of living compared with its higher incomes and booming job growth. A typical Frisco family could pay off a new home in less than half the time it would take a Bostonian one to do so."
When will stocks peak out? That's the million dollar investment question. Based on The Mad Hedge Fund Trader, who has 12,098 followers on Seeking Alpha, his predication of stock top could be on:
Friday, May 10, 2019 at 4:00 PM EST
His predication is based on the following reasoning:
Because investors are prone to digest deteriorating market technicals and fundamentals over a weekend and then panic at the first opportunity.
Add all this together, and the analyst arrives at his target market peak of
Friday, May 10, 2019 at 4:00 PM EST
In this article, we will cover the following topics:
What's yield curve?
Three types of yield curve sloping
Inverted yield curve
US Treasury Yield Curve
Yield curve represents the relationship between interest rates on bonds of different maturities, but equal credit quality. For our purposes, we'll be discussing the
US Treasury yield curve
One of the most reliable ways of predicting future economic growth has been to look at the difference between
10-year and 2-year bond yieldsor
10-year Treasury Note and the 3-Month Treasury Bill
Steep Yield Curve
Flat Yield Curve
Inverted Yield Curve
The Slope of the Yield Curve
Conceptually, the slope of the yield curve is a rough approximation of the stance of U.S. monetary policy. The Federal Reserve controls the level of short-term interest rates. Markets determine the level of long-term interest rates based on underlying macro fundamentals.
Therefore, the slope of the yield curve can tell us a lot about the market's expectations for economic growth and inflation. There are three basic shapes the yield curve can take:
Normal, upward sloping yield curve
Economy is growing and investors are confident
Steep yield curve
A sharply upward sloping, or steep yield curve, has often preceded an economic upturn
Steep yield curve that is so beneficial to banks and levered bond investments.
Flat yield curve
Warning sign that an economy is under duress
Inverted yield Curve
The economic outlook is very bleak
Inverted Yield Curve Precedes the Recession
Inverted Yield Curve
The Fed's ongoing rate hiking will eventually trigger the next recession. Historically, an inverted yield curve - the difference between 10-year and 2-year bond yields - has been one of the single-best leading indicators of an impending downturn.
At first, rising interest rates INCREASE borrowing dramatically, which will force investors scramble to beat the move. They make up for shrinking profit margins caused by higher rates by increasing size. In this period, you often see
Stock markets accelerate their appreciation
Lots of business soliciting letters from banks or credit card companies. This is already happening in a major way.
When the curve inverts, the bond market is sending a warning sign that the Fed has set short-term rates above what is justified by fundamentals (i.e., it has moved to a restrictive policy stance). The curve has been flattening recently and the current spread between the 10-year and 2-year Treasury note is only about 34 basis points.
When the return finally turns negative, investors then dump EVERYTHING, causing interest rates to explode, igniting a recession. That’s when 10-year Treasury bonds spike to 4%, or even 5%.
However, be noted that―as said by Simon White at Variant Perception in [44]:
The lead time between an inversion and the onset of an actual recession is highly variable, White stated, anywhere from 4 to 6 months to 2 yearsbefore a recession takes hold.
The report failed to mention the most practical of practical issues: It's damn hard for the 3-month to invert with 10-year treasuries when the Fed has artificially held short-term yields closet to zero.
An increase in the Libor, the typical thinking goes, means that banks see lending to their fellow financial institutions as more risky and signals the possibility of financial instability.
While Sotheby's caters mostly to people who have too much money lying around that they feel the need to spend it on paintings and pricey tchotchkes, in the past the stock's performance has been cited as a relatively good predictor of the business cycle.
St. Louis Fed Director of Research Chris Waller discusses two reasons why: if people expect real interest rates to fall (which is usually viewed as a pessimistic outlook for the economy) and/or if they expect inflation to fall.
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Watch out — if you have your roof newly replaced, read further because you could have a potential gas leak issue in your hand.
It has happened to me and it could happen to you too. In some older houses, it has their gas line attached directly under the roof while roof contractors could have used nail guns in the replacement. Then the chance is high that you could have a potential gas leak problem.
Other factors contributing to damaged gas lines include:
Pipes becoming exposed after extreme weather
Ground shifting, or
Normal wear and tear.
How to Recognize a Gas Leak?
You can detect leaking natural gas in a number of ways:
Smell
the distinctive odor (e.g. rotten egg smeall) that make natural gas detectable
Listen
A hissing or whistling sound near a gas appliance or a roaring sound near a pipeline
Look
Blowing dust
Bubbling water
Dead vegetation near a gas line
If you notice a patch of dead vegetation in your yard, it could be the result of a damaged gas line leaking onto the surface and affecting your vegetation.
What if You Smell Natural Gas?
If you have ever smell natural gas, leave the area immediately and tell others to leave, too. Here are the Do's and Don'ts:
Leave any doors open
DO NOT turn on or off any electric switch: this could cause a spark, igniting the gas.
DO NOT use a cell phone, telephone, garage door opener, doorbell or even a flashlight.
DO NOT smoke, use a lighter or strike a match
Have heard a true story that someone has died of this scenario
DO NOT start or stop a nearby vehicle or machinery
DO NOT try to shut off a natural gas valve
Once you are safely out of the area, call 911 and Atmos Energy at 1-866-322-8667 (or your local Gas Company). Atmos Energy will send a trained technician immediately to investigate at not cost. Do not assume someone else will report the leak.
A friend of mine turned 68. I asked him what's changing? He sent me following lines：
Yes, I am changing. After loving my parents, my siblings, my spouse, my children, my friends, now I have started loving myself.
Yes, I am changing. I just realized that I am not “Atlas”. The world does not rest on my shoulders.
Yes, I am changing. I now stopped bargaining with vegetable and fruit vendors. After all, a few dollars more is not going to burn a hole in my pocket but it might help the poor fellow save for his daughter’s school fees.
Yes, I am changing. I pay the taxi driver without waiting for the change. The extra money might bring a smile on his face. After all he is toiling much harder for a living than me.
Yes, I am changing. I stopped telling the elderly that they've already narrated that story many times. After all, the story makes them walk down the memory lane and relive the past.
Yes, I am changing. I've learnt not to correct people even when I know they are wrong. After all, the onus of making everyone perfect is not on me. Peace is more precious than perfection.
Yes, I am changing. I give compliments freely and generously. After all it's a mood enhancer not only for the recipient, but also for me.
Yes, I am changing. I've learnt not to bother about a crease or a spot on my shirt. After all, personality speaks louder than appearances.
Yes, I am changing. I walk away from people who don't value me. After all, they might not know my worth, but I do.
Yes, I am changing. I have learnt that it's better to drop the ego than to break a relationship. After all, my ego will keep me aloof whereas with relationships I will never be alone.
Yes, I am changing. I've learnt to live each day as if it's the last. After all, it might be the last .
Yes, I am changing. I am doing what makes me happy. After all, I am responsible for my happiness, and I owe it to me.
Major automakers on Tuesday posted lower new vehicle sales in April as consumer demand continued to weaken following a lengthy boom for the industry.[7]
Consumer spending accounts for about 70% of gross-domestic-product growth. When real income increases, the consumer spend more. When interest rates increase, the consumer spend less—because it costs the consumer more to borrow, so they step back from buying.
If consumer spending in the U.S. economy starts to struggle, it will start to show up in the corporate earnings of companies on key stock indices that are currently able to buy back their own shares and cut expenses to make their numbers appear better.
At the market top, we need to monitor consumer spending closely. When consumers are cutting back on discretionary purchases to preserve other spending, a market top could be forming and a recession could be imminent.
Personal Savings
Today, personal saving in the U.S. is sliding faster than at any time during the last 42 years, even plummeting below the previous record lows from 2000 and 2006.
Non-Home Wealth
When savings drop, people consume more than they earn. If this happens over a period of time, people not only consume wealth, but simultaneously eat away at the rainy day cushion.
In the current recovery cycle, we have seen a steady rise in the proportion of U.S. households with no wealth. Based on the latest data, it shows that more than 30 percent of all U.S. households have zero or negative non-housing wealth.[4]
Credit Card Delinquency Rate
If you don't have either income or savings, borrowing is the only option left for marginal spending. People get hooked on debt when rates are low. But when rates rise as it happens now– it becomes too much to manage and it shows up in the statistics.
In Q4 2017, we have seen that delinquencies on US credit cards have surged and eclipsed the ’07 Lehman Moment’.[3]
Subprime Auto-Loan Delinquency Rate
Not all subprime loans are cut from the same cloth. The 90+ day delinquency rate for subprime auto loans originated by banks dropped after the Financial Crisis and has since remained fairly steady.
In contrast, the 90+ day delinquency rate for loans originated by auto finance companies has been soaring since 2013. In Q3 2017, it hit 9.7%. This 9.7% is the highest delinquency rate since Q1 of 2010. And, it first hit that rate on the way up during the Great Recession in Q3 2008, during the Lehman Moment. A year later, it peaked at 10.9%.[6]
Bum bum bum bum bum bum bum bum Bum bum bum bum bum bum Bum bum bum bum bum bum This is my winter song to you. The storm is coming soon, It rolls in from the sea My voice; a beacon in the night. My words will be your light, To carry you to me. Is love alive? Is love alive? Is love They say that things just cannot grow Beneath the winter snow, Or so I have been told. They say were buried far, Just like a distant star I simply cannot hold. Is love alive? Is love alive? Is love alive? This is my winter song. December never felt so wrong, 'Cause you're not where you belong; Inside my arms. Bum bum bum bum bum bum bum bum Bum bum bum bum bum bum Bum bum bum bum bum bum I still believe in summer days. The seasons always change And life will find a way. I'll be your harvester of light And send it out tonight So we can start again. Is love alive? Is love alive? Is love alive? This is my winter song. December never felt so wrong, 'Cause you're not where you belong; Inside my arms. This is my winter song to you. The storm is coming soon It rolls in from the sea. My love a beacon in the night. My words will be your light To carry you to me. Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive? Is love alive?
Sunshine on my shoulders makes me happy Sunshine in my eyes can make me cry Sunshine on the water looks so lovely Sunshine almost always makes me high
If I had a day that I could give you I'd give to you the day just like today If I had a song that I could sing for you I'd sing a song to make you feel this way
Sunshine on my shoulders makes me happy Sunshine in my eyes can make me cry Sunshine on the water looks so lovely Sunshine almost always makes me high
Sunshine almost all the time makes me high
Sunshine almost always
In technical analysis, the open and close price of a market/stock price are important. For example, Candlestick Analysis is mostly focused on the relationship between the open and the close. The open reflects the reaction to news overnight or pre-market. The close reflects the reaction after the open. In general, a move higher after a weak open is positive and a move lower after a strong open is negative. As a rule of thumb, you can use Candlestick to:
Look for bullish hollow red at the market bottom
Look for bearish solid black at the market top
In this article, we will discuss the significance of first half hour in the opening and last half hour in the closing of stock trading.
Accumulation and Distribution
Here we will use Accumulation/Distribution as general terms (vs. a momentum indicator), which means whether investors are generally "accumulating," or buying, or "distributing," or selling, a certain stock.
Some analysts use $NYUPV:$NYDNV to identify a major accumulation day (MAD). These are days when up volume on the NYSE is at least 9 times larger than down volume. Similarly, you can use $NYDNV:$NYUPV to determine a major distribution day too.
where dumb money means average individual investors and smart money means big institutional investors and mutual fund companies.
First Half Hour vs Last Half Hour
Mark W. Yusko has also pointed out the significance of trading the first half hour (i.e., dumb money) vs trading last half hour (i.e., smart money):
Furthermore, Liz Ann Sonders has commented that different returns could result from your investments on SPY if you:
Bought on open and sold on close each day
Bought on close and sold on open next day
However, this could not be a winning investment strategy for individual investors because the trading fee you pay will be a large lump sum too.
Wrap-up
In [1], Jesse Felder has explained how Smart Money Index works and what has changed after corporate's buybacks and passive investments via ETFs:
The Smart Money Index simply represents the difference between the first 30 minutes of trading and the last hour.
Due to the corporate buybacks
Considering buybacks are prohibited during the final half hour of trading, corporate demand for equities only occurs early in the day.
Due to the popularity of ETFs
The vast majority of trade volume now occurs during the last half hour of trading as passive and other systematic vehicles perform their daily balancing acts needed to match their benchmarks.
