"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 17 hours Why The Next Oil Boom Will Be Fueled By Blockchain
  • 19 hours 5 Things Investors Should Know About China this New Year
  • 22 hours Is The South Korean Crypto-Drama Finally Over?
  • 23 hours Miners’ Rally? What Rally? Watch Out for More Fake Moves!
  • 1 day Four Percent 10-year Note Yield Will Be a Floor Not a Ceiling
  • 1 day The End Is Near
  • 2 days 5 Record Breaking Gemstones Even Billionaires Can’t Buy
  • 2 days Irredeemable Currency De-tooths Savers
  • 2 days CFTC Offers Bounty For Crypto Pump And Dump Whistleblowers
  • 2 days Have You Been Getting Run Over By This Stock Market Action?
  • 2 days Decision Time
  • 2 days 1 Week Later, Risk Remains ‘On’ as 2 of 3 Amigos Ride On
  • 3 days The Most Polarized Commodity Ever
  • 3 days Commodity Coins and Us: What To Expect From The "Tokenization of Everything"
  • 3 days U.S. Dollar Bull and Bear Markets
  • 3 days GLD May Not Yet Be Ready To Break Out
  • 5 days Permanent Market Support Operations
  • 6 days Bitcoin Was Only The Beginning…
  • 7 days Signs of the Times
  • 7 days Oversold XLE into Seasonal Low
Permanent Market Support Operations

Permanent Market Support Operations

The greatest flaw in central…

Decision Time

Decision Time

Last week, I mentioned that…

Stock Barometer

Stock Barometer

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend. Our goal is to…

More Info

Signal Time

5/7/2014 5:51:40 AM

Good morning Traders,

The barometer has issued a sell signal, placing us in Sell Mode. Accordingly, close your long position and go short the market. We will evaluate another trading day to see if we should leg into some PUT options in our options service - as well as issue some covered calls to take advantage of the a potentially weaker period in the market.

The action in the markets is potentially concerning - dollar dropping and bonds rallying - and bonds are normally right. Here are some charts to digest:

This time we will start with the barometer. We have gone through a period of chop and are looking for resolution. While I would be surprised to see the head and shoulders pattern play out, it is too potentially profitable to ignore.

Daily Stock Barometer Primary System Chart

And since it is Wednesday, we start to get updates on our weekly indicators:

Investors Intelligence % of Advisors Calling For a Correction Chart

As with any indicator, they never work all the time. The key is to look for periods where they reach a peak or trough and could align with a market reversal. Look for a confluence of other signals and you increase your odds of calling a top or bottom...

Equity Put/Call Ratio Chart

The EPCR turned lower, though from a lower level. Now it can go much lower, but it suggests to me that any sell off here could be sharp and short lived.

And finally, another reading of the barometer, which we use when the market speeds up a bit - noting that the barometer is a hedging tool to capture mid term trends.

NASDAQ Barometer Efficiency Chart

The stock market is due for a correction, we have been looking for a 9 month cycle low coming in around May 19th. The potential is there. Absent any sell off here, our forecast would be for the market to put in a late July top and top and deliver a bottom closer to the 20 week cycle low in October. You can subscribe to get all our charts, cycles and forecast for only 9.95/month - updated every weekend. Visit our site to learn more.

Regards,

 

Back to homepage

Leave a comment

Leave a comment




Don't Miss A Single Story