Saturday, August 16, 2014

* Preparation: Must Know for the Week to Come; Must Know from Last Week

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Summary of Momentum
At the beginning of last week we saw momentum rebound from an annual low and we were staring consumer economic data for July dead in the eye. While the consumer numbers were not good, every measure of momentum ticked up again.

We are now out of official bear territory for market internals.

Last week was the week of the consumer:
But there were bumps...

U.S. Treasury yields hit their lowest in 14 months on Friday after Ukraine said its forces had attacked and partly destroyed a Russian armored column that entered Ukrainian territory overnight.

Source: Reuters via Yahoo! Finance Wall Street Week Ahead: U.S. stocks a safe haven, even after panic selloffs.

We also can see rather transparently the impact of monetary policy and how it is making risk, even in government yields, very... not equilibrium:

What Could Move Markets this Week
From that same source we have:

An escalation of the conflict in eastern Ukraine will likely bring stronger economic sanctions against Russia from Europe and the United States - and harsher retaliation from Moscow.

Business sentiment is already on edge in Germany as Europe's largest economy deals with reduced trade with Russia. An index of Russian equities (.MCX) has dropped 6 percent for the year so far. Against that backdrop, U.S. stocks - backed by earnings - still look like the best option for investors in developed markets.

On the economic front there is more data (details in the body)
* Housing Starts
* FOMC Minutes
* Initial and Continuing Claims
* Existing Home Sales
* Three Big Earnings (details below)

Last Week: Must Know
All Stock Indices: Up for the second week in a row.

Data provided, Yahoo! Finance, Charles Schwab optionsXpress

Note the technology heavy (and MOMO heavy) NASDAQ and NASDAQ 100 were significantly higher.

The momentum "issue" has become mixed (which is better than imploding).

* As of Friday: 42% of stocks are now trading above their 50-day MA
* As of six-weeks ago: 79% of stocks were trading above their 50-day MA (annual low)

We'll get to the 200-day MA stats and chart a bit later, which is my favorite indicator.

Chart of the Week: SPX into and out of the Internet (and Biotech) Bubble of 2000.

Data by Yahoo! Finance

I hope neither to convince you of a bull market or a bear market.  I hope to numb you to the 'click here!, click here!' news stories and show you what a real bear market turn looks like (at least the last two) and remind you, it takes a long time.

Last Week: Phenomena We Must Know
* SPX - What a Bull Market End Really Looks Like & Why 'Click Here!' Headlines are Garbage

* Zillow (Z) - Misrepresenting User Base? Is Option Market Under-pricing Risk... By a Lot?

* Netflix (NFLX) - The Volatility Phenomenon is Old, Is it Still Relevant? And Why a Tweet Put Me in a Bad Mood... For No Good Reason.

* Treasury Markets Abruptly Distorted by Monetary Policies

Last Week: Stats Must Know
Momentum collapsed two weeks ago,but did show a recovery for the first time in a while.

Provided by

Compare the numbers from 'last week' to 'today.' Everything looks is 'better' in a week, but...

* As of Friday: 53% of stocks are now trading above their 20-day MA
* As of six-weeks ago: 75% of stocks were trading above their 20-day MA

* As of Friday: 42% of stocks are now trading above their 50-day MA
* As of six-weeks ago: 79% of stocks were trading above their 50-day MA

But this is the big one...

* As of Friday: 51% of stocks are now trading above their 200-day MA
* As of six-weeks ago: 70% of stocks were trading above their 200-day MA

Here's the 200-day MA that I focus on.

Provided by

In four weeks it had gone from an intra-day high of ~70% to 46% which had obliterated a new annual low. The last two weeks have taken us away from the collapse and back to sort of 'even.'

Last Week: Must Know Headlines:
Industrial production rises, but consumer sentiment dips

Fed's Bullard still sees first rate hike in March

Stock Market Experts Are Overlooking One Big Risk

U.S. jobs rose since 2008 crisis, but pay is 23 percent less - report

This Week: Must Know
This week there is a good deal of economic data and retail is still on the radar in terms of earnings.

Below you will find all that we need to prepare for the week to come. All data and images for this report are provided by Charles Schwab optionsXpress.

This Week: Economic Calendar
This week we can focus on the consumer, both with respect to economic data and, as we will see, in earnings.Wednesday is a big day.

Partial List of Noteworthy Earnings This Week

HD, LOW & TGT are bellwethers in many ways.  Those earnings reports could be market moving.

This is trade analysis, not a recommendation.

Legal Stuff:
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1 comment:

  1. Thank you for sharing your insightful work. very helpful