Market Prediction For Semiconductor Stocks This Holiday Season

The semiconductor stocks ETF (SOXX) is confirming a likely pullback for the week ending September 29, 2017. If semiconductors do pullback next week, we will be setup for a sweet trade where we go long semiconductor stocks in mid-October.

Trends in the Internet of Things and AI have captured consumer demand. FANG and other tech giants are dominating everything. While Microsoft, Google, and Apple get all the attention, it’s the semiconductor manufacturers that are quietly having a very strong year. SOXX is up more than 27% so far in 2017 which is more than double the performance of the S&P 500.
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Russell 2000 Index Prediction Signals Pullback Coming

The Russell 2000 index prediction was very accurate last week as the Russell followed the predicted path (green line) very closely last week as seen in the chart below.

Russell 2000 Index prediction shows market down week ending September 29, 2017

The Russell 2000 is predicted to pullback next week and retest its $140.89 support level by mid-October. Sometime in late October, we will be looking at going long the Russell 2000 index in anticipation of November and the start of the best 6 months of the year for trading.
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Equity Put Call Ratio Chart Rising Ahead Of Pullback

The Equity Put Call Ratio chart shows that the level of put buying is starting to rise ahead of the predicted market pullback for the week ending September 29, 2017.

The Equity Put Call Ratio is an indicator that shows put volume relative to call volume. Put options are used to hedge against market weakness or bet on a decline. Call options are used to hedge against market strength or bet on an advance.
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Transportation ETF Outperforms Prediction On Hurricanes Catalyst

The Transportation ETF XTN outperformed last week’s market prediction. The buying across the transports sector was stronger than forecast putting transports into a more supportive role for the S&P 500 last week.

Transports have been under-performing the S&P 500 so far in 2017. Year to date the S&P 500 is up about 12% while the Transportation ETF XTN is up about 10%. Airlines are struggling, trains have improved some, and shippers (UPS, FedEx) are doing ok.

Transports generally tend to do well in the last three months of the year. Transports tend to bottom at the end of September or first part of October, then uptrend through mid-December from an increased level of packages, shipping, and people traveling for the holidays.
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S&P 500 Market Prediction Spot On, Getting More Bullish

The S&P 500 market prediction was spot on from last week. The market closed the week flat right on top of the green drawn prediction line from last week as seen in the chart below.

S&P 500 market prediction update for 9-23-2017

I look at a lot of indicators and I ponder if that indicator supports or contradicts the move on the S&P 500. I will be posting a series of articles looking at each of these indicators shortly. The bottom line is that the stock market prediction has gotten a little more bullish over the last week. I have updated the prediction path on the chart above.
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Delta Airlines Stock Does Candle Over Candle Reversal

Delta Airlines stock has formed a candle over candle reversal on the chart. The large players volume is uptrending and the CMF has just broken above the zero line.

Five years ago, Delta Air Lines bought a refinery to protect against the risk of high crack spreads. In the wake of Hurricane Harvey, Delta’s move now looks brilliant as it totally insulated itself against crack spreads, something their competitors did not do.

Hurricane Harvey has pushed the crack spread up more than 100% at the beginning of September. The crack spread has since come down but it is still at a very elevated level as the chart below shows.
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Liberty Tax Swing Long Seasonal Setup

Time to look at publicly traded tax preparation stocks ahead of the end-of-year tax season. A stock that looks like a compelling swing long setup is Liberty tax.

Founded in 1997, Liberty Tax, Inc. is the parent company of Liberty Tax Service. In the U.S. and Canada, last year, Liberty Tax prepared over two million individual income tax returns in more than 4,000 offices and online.

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