US Stock Markets

So markets have been down for a while. How much? And is it over? What do the charts say:
(Remember you can click on the image to embiggen)

Looks to me like not over yet. It could be the start of the bottom, but “bottoming” is a process not an event.

USA Stock Indexes 2018

USA Stock Indexes 2018

First off, we still have an inverted SMA (Simple Moving Average) stack. Furthermore, we have RUT the 2000 including smaller stocks, under SPY the 500 biggest. Classical down market weakness. Nasdaq QQQ has dropped the most, always back to the SPY line, so Tech is not your savior.

Volatility / Volume is still high, with lower volume on the up trend at the very end.

MACD is strongly below the zero line and still red on top. That’s a down market that has not yet reversed.

DMI is still strongly red on top, though the red line has just crossed the black ADX line, so a bottom could be “soon”, just not yet a confirmed bottom.

Confirmation is when price crosses the SMA stack, the stack resumes normal order, and prices return to it from above but fail to penetrate it.

So the way I read these charts, it’s not over yet, but maybe soon. So time to start watching for “bottom action”.

Emerging Markets doing better?

With China getting whacked with the “Exploitation Is Over Clue Stick” and Brazil having Election Derangement Syndrome, the answer is “nope”.

EEM Emerging Markets 2018

EEM Emerging Markets 2018

Pretty much just steady down. Periodically returns to the SMA stack then falls away again. MACD regularly below zero so when it is “blue on top” that’s just a return to trend from below. We do have a “failure to advance” to the downside in the last two down moves in end October / December, so it might well be “bottoming action”. Not yet confirmed. Volume having nice bottoming spikes, but still decreasing volume on the up run at the end. MACD and DMI both still red on top and MACD still below zero; so for now it’s still a bear market until those change. The black ADX line is below 25, so strength of move weakening as the red line drops, so again down momentum breaking, but not yet broken. We need both blue and black lines rising and crossing the red line for confirmed up momentum building. For now, I’m still out of “Emerging Markets”.

When You Piss Off Your Customers With PC:

How’s that FaceBook In Your Face working out?

FaceBook 2018

FaceBook 2018

Not so good.

So I guess it isn’t a good strategy to piss on 1/2 your potential (and present) customer base and call them names…

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Economics - Trading - and Money and tagged , , , , , , . Bookmark the permalink.

16 Responses to US Stock Markets

  1. John F. Hultquist says:

    Regarding Facebook: A recent report was about the share buy-backs, much of which was for many companies funded by the Repatriated Dollars via the tax law changes. The fact, but not the plan, was to buy high and spread those dollars around. Now with the slump, it appears they will buy low in a bid to reverse that. If I was the owner of a big big wad of Company shares, I’d vote for that.

    We have some general mutual funds. I could likely check to see if these sold some shares when the stocks were up. Index funds would not benefit, or not much. Mostly I don’t pay much attention. Last summer I finally got the stock-bond ratio to barely flip to bonds, and many of the stocks pay dividends. Being more actively involved takes much time.

    I’m currently reading a book by Timothy Egan about the Dust Bowl (before, during, after) titled “the Worst Hard Time.” We’ve got it easy when compared to living in a hole in the ground or a sod-walled shack.

  2. Another Ian says:

    John

    Around that era

    R. Douglas Hurt “The Dust Bowl: An agricultural and social history”. Nelson Hall, Chicago.

  3. jim2 says:

    MTMGA! (Trump will do it, just wait and see ;)

  4. Another Ian says:
  5. Graeme No.3 says:

    Another Ian:
    Never been there but my father (an engineer) was interested in what he saw. He said that there was a layer of hard rock and digging was below that level. Meant that the roof stayed up.
    Underground houses seem to becoming more popular again in the Adelaide Hills, less for climate control – although they do that – but as fire proof dwellings. If I had that sort of money I would build one, but then why go underground if you can build earth embankments.

  6. chiff says:

    The best market timer over the last 50 years has called a bottom. He’s also looking for new all time highs….Dow 40,000 + in an inflationary boom. Been with him for years now.

    http://wolanchuk.com/

  7. chiff says:

    Don’t know how to resize that chart. sorry

  8. H.R. says:

    @chiff – “inflationary boom”

    I hadn’t thought of that. There’s been little inflation come out of the current wage increases because the tax cuts covered a lot of the increases. However, I’m expecting some inflation to eventually kick in due to the onshoring that’s happening.

    Anyhow, as I mentioned to you on the other thread, I’m not too concerned about my portfolio’s value as much as I am concerned with dividends. Business and revenue look good so I’m sure my dividends will continue in good health. But I won’t complain if he’s right again and we hit DJA 40,000. 😁

    Is this the same guy that predicted Dow 15,000 when the market was at 8,000? He was right, but off a few years. So long as he called it for the right reason – quantitative easing – then he has a good reason to claim guru status.

  9. chiff says:

    He went long at S@P 675 a few points from the bottom claiming this was a generational low and that we are in an Elliot wave 111 up that will leave most investors behind. He posts on Traders-Talk blog as Da_Chief. Very arrogant to say the least but he’s the best I’ve ever come accross.

    http://www.traders-talk.com/mb2/index.php?/topic/170682-rare-nesting-of-kitchin-cycles-and-its-effect/

  10. Another Ian says:

    Facebook news

    “Mark Zuckerberg’s 2019 Resolution: More Political Censorship on Facebook”

    https://www.breitbart.com/the-media/2019/01/01/mark-zuckerbergs-2019-resolution-more-political-censorship-on-facebook/

  11. John F. Hultquist says:

    H.R.,
    “I am concerned with dividends.”

    I’ve said here and elsewhere that I do not have the time and resources to examine companies, thus leave such things to folks who do. With an index fund the managers are supposed to own a stock or representative basket from the index.
    Take GE, for example. A smart person might have picked up on the issues with the Company and left early. An active manager of a non-index fund could do that. GE had been a good company to own for many years. However, I found out about its problems after it imploded. Even now, I haven’t bothered to determine what impact its demise has had for us. I’d have to look at a couple of funds, over time, to see how it worked out.

  12. John Robertson says:

    Would be most revealing to see the stock trading behaviour of company insiders,what a great ploy to downgrade your stock price so you can buy really cheap.
    Otherwise business suicide by arrogance?
    Thing is the demonstrated arrogance of both facebook and google management would imply they believe they are above the law in every way.

  13. John Robertson says:

    Sorry comment was referring facebook stock decline.

  14. Terry Jay says:

    From Ken Fisher: https://www.usatoday.com/story/money/columnist/2019/01/06/stock-market-dow-outlook-2019/2471620002/

    Hedge fund liquidations driving stocks in December.

  15. H.R. says:

    @Terry Jay – Hmmmm…. That’s no doubt true for some of the decline, but I’m not sure it explains all of it.

    That is some good news, for the percent that holds true.

    Thanks.

  16. Steven Fraser says:

    Graeme No. 3 wrote “If I had that sort of money I would build one, but then why go underground if you can build earth embankments.”

    My great-great grandfather (farmer in Ontario) built his family home into the side of a hill, so that 2-stories had Southern exposure, and only the top story had Northern. Though I never saw it, I think the result was much like you describe with embankments.

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