S&P 500 and NASDAQ Still Below 200-Day MA

Posted on by The INO.com Team

Hello traders everywhere. All three indexes are looking to post weekly gains on a nice little rally that happened this week. They were all looking to close above their respective 200-day MA's, but it looks like the S&P 500 and NASDAQ will fall just short, while the DOW is trading above it once again. Could the 200-day MA be the line of resistance for the two indexes? The last time that the indexes traded below the 200-day was back in December of 2015 and that trend lasted until March of 2016. We could be in for a rough close to the year if history holds true.

As we stand in early afternoon trading on Friday the S&P 500 is looking at posting a weekly gain of +2.3%; the DOW stands at +2.3% and the NASDAQ checks in with an increase of +2.7% even as Apple Inc. (APPL) missed earnings and is putting pressure on the tech sector losing roughly 6% on the day.

s&p 500

The U.S. Dollar and Gold continue to track each other consistently and are both relatively unchanged on the week. On the opposite side of trading, crude oil has dipped to its lowest levels in six months issuing a new red monthly Trade Triangle indicating that long-term trend has turned negative. Oil is posting a -6.6% loss on the week making this four straight weeks of declines. The reason for the drop is an abundance of oil in the world market which is relieving tensions over the coming Iranian sanctions by the U.S. Continue reading "S&P 500 and NASDAQ Still Below 200-Day MA" →

Amazon's October Drop Hurting ETFs

Posted on by Matt Thalman

Most recent data shows 246 different Exchange Traded Fund’s owned more than 24.7 million shares of Amazon.com (AMZN). But, the companies recent 20.9% decline in the month of October alone, (Amazon opened October trading at $2,021 per share and closed the month trading at $1,598 per share, or a 20.9% decline) has certainly had an effect on not only those 246 different ETFs and their investors, but also those investors whom may have directly purchased shares of the company. Furthermore, due to its market capitalization, it was a very heavily weighted stock in some large ETFs, which makes its recent decline even more painful.

Some of the hardest hit ETFs over the last month was the SPDR S&P 500 ETF Trust (SPY) because Amazon was its second, now third, largest holding and SPY was the single largest owner of Amazon stock. ProShares Online Retail ETF (ONLN) had 22% of its assets in Amazon as of late, while the Vanguard Consumer Discretionary ETF (VCR) and the Consumer Discretionary Select Sector SPDR Fund (XLY) both had more than 20% of their assets in Amazon.

Throughout the ETF world, there where eight different ETFs which had more than 10% of their assets in Amazon in recent weeks. Most were in the consumer discretionary sector, but a few internet focused ETFs such as the Invesco QQQ ETF (QQQ), and the First Trust Dow Jones Internet Index ETF (FDN) had more than 9% of their assets in Amazon. Continue reading "Amazon's October Drop Hurting ETFs" →

Spooky October Comes To An End

Posted on by The INO.com Team

Hello traders everywhere. Happy Halloween! I hope that everyone has a safe and fun time with your friends and family. While the stock market currently has the best two-day gain since June of 2016 to close out October we need to remember that overall this has been a terrible month.

Even with the first back to back daily gains of October the S&P 500 will lose roughly 6.4% posting its first monthly loss in six months. -4.6% is the number for the DOW this month, while off the lows the month this is the first monthly loss in three months. The DOW is the only index of the three to have a green monthly Trade Triangle in play still, but our key level to watch is a touch higher at 24,122.23 where a red monthly Trade Triangle will trigger. The NASDAQ has suffered the most losing 8.6+ on the month, that will give the NASDAQ back to back losing months, which last occurred in March of this year.

October

Of the instruments that I watch daily the U.S. dollar and gold the only two to have a positive month with the dollar gaining 2.2% and gold having its best month in eight months posting a gain of almost 2%. On the flip side, crude oil is having its worst month since 2015, losing nearly 10% on the month. Continue reading "Spooky October Comes To An End" →

Monday Morning Market Rally Fades

Posted on by The INO.com Team

Hello traders everywhere. The Monday morning market rally in the U.S. market faded as we entered afternoon trading with evaporating tech gains leading the way which leaves the Nasdaq on track for its the worst monthly loss in ten years. The NASDAQ had been up as much as 1.7% on the day before Netflix (NFLX), and Amazon (AMZN) collapsed, both falling over 3% on the day.

However, the S&P 500 and DOW are back in positive territory for the year, if only just and albeit off their session highs. Although the stock market is in positive territory, for the most part, the S&P 500 hasn't had back to back daily gains all month, and that's been rare for the DOW.

If this Monday morning market rally can make it to the end of the day will it continue into tomorrow? Or will the pattern repeat?

Monday Morning Market Rally

Key Events On Tap This Week:

Continue reading "Monday Morning Market Rally Fades" →

Gold Stocks Will Benefit From Cyclical Change

Posted on by The INO.com Team

As we have noted over the many years of the gold sector’s bear market, the gold miners will not rally for real until the real sector and macro fundamentals come into place. Those fundamentals do not include commonly promoted inflation, China/India “love” trades, a US dollar collapse or especially, war, pestilence or any other human misery than economic. The more astute gold bugs do not fall for that.

The gold miners are counter-cyclical as they leverage gold’s performance (whether positive or negative) relative to cyclical assets and markets. Hence the handy picture showing the key fundamental items with the 4 largest planets orbiting the golden sun being the most important.

macro fundamentals

So the 3 Amigos (of the macro) were saddled up last year in order to guide us to the point of macro change. Linked here is the most recent update from October 19. In this post let’s look at just one macro fundamental indicator among several important macro and sector fundamentals; the ratio of gold to developed stock markets.

As a side note, the macro fundamentals indicate whether the larger economic cycle and investor sentiment backdrops are right for the gold sector and the sector fundamentals that we track indicate whether gold mining companies are likely to improve, operationally. The gold stock sector is a real value now, assuming the turns in stock markets are for real, unlike the February spike down. Continue reading "Gold Stocks Will Benefit From Cyclical Change" →