For Monday January 4, 2016 Mon- Friday after 6:00 P.M. Eastern, 3:00 Pacific.
DOW – 276 on 1200 net declines
NASDAQ COMP – 104 on 1600 net declines
SHORT TERM TREND Bullish
INTERMEDIATE TERM TREND Bullish
STOCKS: A drop of almost 7% in China spread to Europe. The German market was down over 4%. It is no surprise that that our market followed suit. A move similar to China by the Dow would be 1200 points. A move similar to Germany would be 750 points.
A burgeoning conflict between Iran and Saudi Arabia probably influenced the markets also.
But the Dow came back from being down 467 points and important support levels held. See the chart below.
GOLD: Gold rose $13. Another rise in the dollar. It was well off the highs.
CHART: For a while, the S&P 500 was below its close of December 18, but at the close, this level held (arrows). This is the main reason we maintained our bullish short term stance.
BOTTOM LINE: (Trading)
Our intermediate term system is on a buy as of August 26.
System 7 We are long the SSO from 62.30. Stay with it on Tuesday. System 8 We are in cash. Stay there.
GOLD We are in cash. Stay there.
News and fundamentals: The PMI Mfg Index came in at 51.2, less than last month’s 52.8. The ISM Mfg Index was 48.2, less than the expected 49.2. Construction spending was down 0.4, worse than the expected rise of 0.7%. There are no important releases on Tuesday.
The first day of the year is rarely indicative of which way the year will go. The first 5 days are a different story. More on that tomorrow.
TORONTO EXCHANGE: Toronto dropped 83.
S&P/TSX VENTURE COMP: The TSX was flat.
BONDS: Bonds were higher.
THE REST: The dollar was higher. Silver was a little higher. Crude oil was a little lower.
Bonds –Bearish from Dec. 23.
U.S. dollar – Bullish as of Dec. 17.
Euro — Bullish as of December 3.
Gold —-Bearish from December 14.
Silver—- Bearish from December 14.
Crude oil —- Bullish as of Dec. 15.
Toronto Stock Exchange—- Bearish since December 8.
S&P\ TSX Venture Fund — Bearish since December 8.
We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.
| Thu. | Mon. | Tue. | Wed. | Thu. | Mon. | Evaluation | |
| Monetary conditions | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 5 day RSI S&P 500 | 59 | 56 | 67 | 55 | 43 | 30 | + |
| 5 day RSI NASDAQ | 60 | 57 | 71 | 57 | 42 | 26 | + |
|
McCl-
lAN OSC.
|
+159 | +98 | +149 | +68 | +32 | -30 |
0
|
| Composite Gauge | 10 | 11 | 5 | 15 | 16 | 15 | + |
| Comp. Gauge, 5 day m.a. | 7.8 | 6.8 | 6.8 | 9.0 | 11.4 | 12.4 | 0 |
| CBOE Put Call Ratio | .92 | 1.30 | .82 | .99 | 1.01 | 1.07 |
+
|
| VIX | 15.74 | 16.91 | 16.08 | 17.29 | 18.21 | 20.70 | 0 |
| VIX % change | +1 | +7 | -5 | +8 | +5 | +14 | + |
| VIX % change 5 day m.a. | -3.4 | -3.8 | -2.8 | +1.0 | +3.2 | +5.8 | + |
| Adv – Dec 3 day m.a. | +1374 | +592 | +266 | -277 | -255 | -1063 | + |
| Supply Demand 5 day m.a. | .60 | .78 | .77 | .62 | .42 | .47 | 0 |
| Trading Index (TRIN) | 1.83 | 1.62 | .68 | 2.86 | 1.22 | 1.29 |
+
|
|
S&P 500
|
2061 | 2057 | 2078 | 2063 | 2044 | 2013 | Plurality +8 |
INDICATOR PARAMETERS
Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( .80 or below is a negative. 1.00 or above is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. – 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative). Trading Index (TRIN) 1.40 or above bullish. No level for bearish.
No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.
