A weekly Saturday night financial show that attempts to predict market direction for the week ahead by looking at a variety of technical and fundamental indicators.
No institutional buying or selling was detected on the tick last week.
The LIBOR rate, very high rate, favors the bears.
The New York Stock Exchange percent of stocks above the 50 day moving average is at 66.7%, that favors the bulls.
The New York Stock Exchange percent of stocks above the 200 day moving average is at 58.6%, slight advantage to the bulls.
Transports have really swung back over the last week, but folks, I think, what we’re looking at is a resistance line, right in here, and another one right up in here. So we’ve got some tough resistance coming up for transports to test. Um, really transports of gone absolutely nowhere. This a giant sideways pattern. We’ve got a bearish AROON spike up, which is slightly bearish, but we’ve got the PPO rising breaking above the zero line, which is bullish. Overall though folks, this is a sideways, price trumps everything else. The bulls and the bears are just too evenly matched. We have to look at these resistance levels up at $65.25 is the first and then the major natural resistance level of $66, mark those levels. If transports can break above those levels and then maybe come back and test them, and they become support, then that would be bullish for the market but for right now, too close to call, bulls bears too evenly matched, no signal.
The S&P 500, the TSI folks has finally taken off. The TSI has finally started to move to where we’re getting some left off above that zero level. So that looks absolutely awesome. This is something, this is a strength level that we have not seen previously on this chart. We also now have a Parabolic SAR buy signal. We also just broke above the 50 day moving average and the CTM has moved into the green area and this green area is an uptrend. I’m not convinced though enough that the markets high enough above this level here. The other thing I don’t like is that the SOFI AI says that, that the market is overbought. I think what I’d like to do because so many of these breaks above the 50 day moving average have resulted in these headfake’s here. I think what I’d like to see this do is come back test the 50 day moving average and then bounce higher off of it. That’s kinda what I’d like to see, and then the 50 day moving average, you know would extend out here, something like, like this, this is the move that I’d like to see, okay, come back test that 50, the 50 day moving average becomes support, and then boom, we get another breakout higher move above this high. That would give me some confidence that the S&P 500 really has some staying power here. This chart clearly favors the bulls but we’re in an, we, we’re just trying to nail the week to week moves, right, just the next five days and to me this, this is to extended, this is too big of a move up here. SOFI AI is giving the market overbought, market could stay overbought for a little bit, but man, with all these bombs going off and things over in Syria.
I mean that’s the thing guys, this is why we want to know the news, the real news right? It’s not about what we think about Trump, we like Trump, we don’t like Trump, we like Russia, we don’t like Russia, we like Iran, we don’t like Iran. You know and trolls are just people that are petty, small minded, will say oh, well you think Iran is so good, you’re siding with Iran over Israel, just stupid stuff. I just block them guys because their just trolls, they’re not traders, right? As stock traders we’re trying to figure out what the news is really going on so that we can make important judgment calls and I think, I think, that what Trump is doing, I think that this alliance with Israel, the US, and Saudi Arabia, and what they’re doing in Syria is bad. It’s dumb, naïve, and bad and it’s gonna result in attacks against us. I have no doubt. Now where those attacks are, I don’t know. But I think that we could easily see the oil supply chain disrupted and we could see oil spike up even further than its $71 area. I think we could see oil maybe even go up above $100 per barrel you know if, if, if things keep escalating the way that Israel wants to keep escalating things. So, you know this is what, you know and, and I shouldn’t say just Israel, the US, Israel, and Saudi Arabia, that’s the alliance here and so as long as these three parties have got together and their hell-bent on, you know, trying to take over and re-map the Middle East, you know, and reestablish governments in countries that are more friendly towards the US, as long as that’s the goal and that’s the game plan that, that, that they keep doing, then I think they’re just gonna make the, the situation worse. So we’re likely going to see higher priced oil. But in that kind of environment, where a counterattack could come at any time, chasing the S&P 500 up on such a big move to me is, is foolhardy. I think we have to be more careful and we have to say okay, good, good chance with all the drama going on with all the Trump drama, that good chance that we could end up getting a pullback, and then, so where would it need to go to retest? That’s why I think, see how you change your technical analysis based upon what you know? I mean if things were just all so great and everybody was getting along, and you know, oh yeah, the US and Israel and they’re sticking it to Syria, and nobody likes Syria anyways, and Iran got, man they got slapped down and put in their place, and you know if you believe what the, what you read in the mainstream media, and you think that this is almost over, then you would say in your TA oh breakout, look at the TSI, look at the CTM, look at the Parabolic SAR, retook the 50, here we go, yeah and you start getting crazy, buy, buy the breakout. This is the breakout, buy, buy the breakout. See how it changes the way that you do this chart and then you say well I think this is gonna be the next target then, right, if you start thinking so bullish. So this is why folks, don’t misunderstand my commentary on what’s really going on in the world, and then try to extrapolate oh well you either like Trump or you don’t, or you’re a Republican or you’re not, or you’re a Democrat or you like Iran or you don’t, or you like Russia and you, you know it’s nothing about that. It’s understanding the news and what’s really going on beyond the mainstream media lies. Be, beyond on the propaganda. We have an inside route to what’s really happening, and then we could better make investing decisions, so we can make a lot more money. That’s the goal anyways. I don’t know if we can, you know hit it, but that’s the goal. Alright guys.
On the S&P one hour chart, man that looks bullish folks. That looks absolutely awesome. So what really drove a lot of this, I mean look at this. There’s our buy signal right there, there’s our buy signal. Look at that folks and it’s still holding. We’re still under this, this buy signal, very bullish folks and that happened back on May 7, very very nice. Look at, look at the CTM, boy that was in a strong uptrend zone in here for, for like a little bit huh? But it’s it still could pop back up into that, I mean that looks extremely bullish. We absolutely love this for, for stock trading. I think what partially drove this is a very nice initiative out of the White House about keeping or about pushing down pharmaceutical drug costs.
[Alex Azar White House Speech]
“…blueprint. What the President and I talked about today, so you just have a sense where, where we’re going here. There are four major problems that we face. The first is high list prices for drugs. The second is government rules that get in the way of plans getting good deals for our senior citizens in our Medicare program. The third is for countries free riding off of American innovation. And the fourth is high out-of-pocket costs, especially for our seniors.
So you heard from the President today that this administration has already made a lot of progress in this regard. So in, in the first year and a half in office, the FDA has approved more generic drugs than ever before in history, saving $8.8 billion in the first year. We also change Medicare’s reimbursement rules to bring down the out-of-pocket spending for senior citizens saving them, $320 million out-of-pocket on the drugs that they buy each year. That work and the work that were laying out now in the President’s blueprint, it’s focused on four strategies to help fix this very complex problem that we face. First increased competition. Second, increased and better negotiation. Third, incentives to actually lower list prices. And forth, lowering out-of-pocket costs.
So first it’s crucial that we have more competition in the prescription drug markets. That means we need a vital and vibrant generic drug industry and generic drug market. We need to foster and nurture a new competitive bio similar generic drug market, those are the generics essentially for those really complex expensive biologic medicines. We need to foster and nurture that. We also have to get after Pharma companies who engage in anticompetitive practices and try to block the entry of generics or bio similar products to market by, for instance, blocking access to their product so they can’t do the studies they need to do in order to get approval of an affordable generic or bio similar market. So were to go after all of these kinds of abuses.
Second, we’ve got to bring more private-sector negotiation and better tools to our Medicare program so we get the best deals. The part D drug discount program for senior citizens is now 15 years old. I was there when we created it and helped to launch it. And when we did it, it was that it was it it’s still a great program, but it had the best tools. It was the best at negotiating great deals for our senior citizens and really was able to drive tight formularies that were very efficient and that’s what’s helped keep the cost of that part D drug plan down below forecast and constantly low premiums throughout its time. But over 15 years as so often happens so often happens with government programs, it got frozen in place. And the private sector kept adapting and learning especially after the economic crisis in 2007, how to control drug spend even better, okay? Part D stayed more static. We need now to bring the same tools that are available to the private sector to those part D drug plans so they can negotiate better. We need to unleash them so they can drive great deals for seniors. We also have another part of our program, a major part which is called part B. These are the drugs the physician administers. I mentioned those in the Rose Garden. Those are, these right now are paid basically on a list price plus a markup. They send us a bill, we write a check. There is no negotiation involved in that at all and the President has proposed in his budget, and we are reemphasizing, we’ve got to figure out ways to move those drugs, especially the high cost ones into the private part D drug plan negotiations so that we can get a deal and start getting bargains on that for our seniors and for taxpayers. We need to look at other mechanisms and you’ll see that in the blueprint and some other ones that also help us negotiate better deals there for those plans.
Third, and this is a very complex area, right now we have to bring incentives to lower list drug prices. Okay right now every incentive in the system is to increase and have high list drug prices because everybody in the system, except the patient and the taxpayer, is wetting their beak along the way. They’re getting up, they’re getting a percent of that list price. List price goes up, list price higher, everybody makes more money along the way so that, it’s just the math just works that way. We need to try to flip the incentives backwards so that financially it makes less sense to increase prices. So one of the things we’re going to do, the President and I talked about this in the Rose Garden, is that we’re having the FDA look at how we can require in direct to consumer TV ads, that you have to disclose the list price of your drug. We believe it’s an important part of fair balance that if you’re telling the patient, activating a patient to have a discussion with their doctor about a drug, telling them all the good things that drug can do for him, it’s material and relevant to know if it’s a $50,000 drug or $100 drug because often that patient is gonna have to bear a lot of that cost. In addition, we have in Medicaid and Medicare, some key incentives that we can turn around list prices. As part of Obamacare, one of the deals with the Pharma industry was capping the statutory rebates on drugs in the Medicaid program at 100%. We’re going to work with Congress to look at overturning that cap on rebates. That again will make the math work so that when you increase your list price, it’s gonna cost you more money if you’re a pharma executive thinking about raising prices. We’re also proposing, we want to think about some really creative ideas of, in our programs, of reversing those incentives. So right now, in our drug discount program, if you have a drug that fits into one of these protected classes it’s almost impossible for the drug plan to negotiate and get any kind of discount from you. Well, that’s, everybody gets that. What if instead we say you only get to be in that protected class if you haven’t raised your list price in the previous 18 months. What if we say you can be exempt from these specialty tiers where you, where the patient has to pay a lot out-of-pocket, but only if you haven’t increased your list price in the previous 18 months. So a lot of tools like that.
The other big area we have to look is the entire system of rebates that we have with pharmacy benefit managers. We are calling into question today the entire structure of using rebates as the method of negotiating discounts in the pharmacy channel because right now every incentive is for the drug company to have a very high list price and to negotiate rebates down, often in a very nontransparent way. What if instead we said no rebates, flat price, fixed price in the contracts, take away this whole, what’s called the gross to net spread, that removes that and makes people indifferent to what the list prices is in, in that system, and takes away the incentives where even the pharmacy benefit manager makes money from higher list prices.
We also have a real issue that we’ve got to look at which is the role of compensation for pharmacy benefit managers. They’re taking it now from both sides. They’re getting compensated by their customers, the insurance companies, but they’re also getting compensated by the drug companies they’re supposed to be negotiating against. They’re getting rebates and keeping some of the rebates. They’re getting administrative fees. Should we move to a fiduciary model where the pharmacy benefit manager works for the insurance company or the individual and only is compensated by the insurance company or individual, for bid renumeration from the pharma, from the pharmaceutical company so that it’s all completely on one side there, complete alignment of interests and then finally, how do we lower out-of-pocket drug costs?
Well as the President talked about it, we’re gonna get rid, we’re going to get rid of these gag rules. Okay right now some pharmacy benefit managers are telling pharmacists you’re not allowed to tell the patient that if they pay cash for this generic drug, it would be cheaper for you than if you run it through your insurance. We think that’s unconscionable and in part D we’re gonna work, we’re gonna work to block that.
We also think it’s a right that when you’re sitting there with your doctor, you ought to be able to know what your out-of-pocket is for a drug you’re gonna be prescribed under your precise drug plan and you oughta have that information and you oughta have information on what competing drugs are that your doctor’s not prescribing and what you would pay out-of-pocket for that, and that ought to be across the part B plan and the part D plan. Let me give you an example. You’re in with the doctor. This doctor has an infusion clinic, okay, as part of their office. Okay, so they write you a drug that might be an infused drug. You might have a $300 co-pay for that. Well, wouldn’t you like to know that if the doctor instead wrote you a self injectable drug you’d have a $20 co-pay?–and you can at least have an informed discussion. So we think that kind of informed consumer on out-of-pocket will also help drive real savings in the system. So these are just some of the measures. There over 50 actions that we have in, in the blueprint, and this is again not”
What I did not know, I had no idea that pharmaceutical companies were going to other countries and trying to sell drugs there and these socialist or communist countries would say you’re not gonna be able to sell the drug here unless it’s below a certain price. So that’s why this idea that all these other countries have these socialist healthcare systems and their so good, it works out so good there. Well that’s really a lie because what happens is that it’s the US and it’s the US healthcare payer that’s subsidizing all these other countries. How? Well these big companies they go, let’s just say Merck or Johnson & Johnson, they go to a different country to sell in there and let let’s say China says oh you can’t sell this drug here for anything more than this price, otherwise we won’t let it in, and they don’t care folks. They don’t tell their people that they aren’t allowing that drug in. They just don’t care. They’ll let their people die from not having the, the medicines. Okay so these companies figure, well some sales in China, you know, that’s so cheap like this, that’s better than no sales, so they go ahead and they agree, in order to operate in that country because that country will say well then you’re not gonna be able to sell here unless you sell the drug for underneath this price, otherwise we’re gonna block you out, out of our markets. So the company says okay, they give in, they sell the drugs in that country at below cost, but then what do you think they do? What do you think that company does? They raise the prices in the countries that they can to offset what they’re losing in these other countries, i.e. the US consumer is paying the higher cost of healthcare that’s helping subsidize health care in other socialist countries. So just amazing. I did not know that. So it was a very enlightening press conference. If you heard that, this was just one little aspect that I understood. It was, it was a complex system, but Trump put in a guy that’s extremely smart that actually ran his own pharmaceutical company, so he knows why, I mean, and they have plans for dealing with all sorts of things like, even if a, so what’s happening is that these, these pharmaceutical company’s will, will, will contact a pharmacy manager and then they’ll say we’ll sell you these drugs here and we’ll give you a 30% discount if you sell our drug here, and then the pharmacy manager says okay, deal, and then they just raise the price of the drug 30%. So and, and then and in that way it, it offsets the cost and who is actually having to pay that more, it’s the consumer that’s having to pay that more, so they’ve got plans in place to cramp down on that, I mean it’s, it’s, it was pretty awesome. At first healthcare stocks sold off and then they just exploded higher so very nice moves.
Whenever Trump does anything with the local economy here in the US, I think he’s a lot stronger. He knows how to put the right people in. When it, when he deals with the economics here at home, he’s good and that’s why and, and we kinda knew that. We kinda knew that Trump was weak on foreign-policy, but we wanted an America first, right? This is what we were hoping for. We wanted to get the, the, the economics side so we put somebody in there that would be really good on jobs, on the, on the local, on the US economy. But when it comes to foreign policy, it’s just my opinion, President Trump is a train wreck, okay, and if, if nuclear bombs start going off, the America first agenda isn’t really going to matter much. So that’s what we have to watch out for. Yeah it was great to put him in there, that’s why I’m for, for, when it comes to Trump, I’m for him getting out of everything, pulling our troops out of everywhere, not focusing on anything overseas, stay the heck out of it because Trump is not a guy that’s capable of handling peace and dealings with other countries and, and getting along. He’s, it’s not his personality. He’s got that tough guy attitude and that’s gonna, and, and we’re already seeing it, it’s creating more conflict around the world, right now the Middle East but it will be another hot spot next, you know, with Trump twitter trolling and just he’s, he’s not good with foreign-policy. That’s just my take. Okay so that’s where I think the big risk to the stock market and the S&P 500 comes from, not from the economic policies that he’s doing here at home, which so far have been really good guys, but the risk to the stock market comes from what Trump is doing, and the alliances he’s forming, and the schemes he’s working with his Generals, overseas. That’s where we could really end up having our stock market be hit because it’s all fine and dandy right now, it’s all high-five good job when things are going the way that you want them to go, but often in war things don’t go the way that you want them to go, by definition that’s really war. So it’s all great and high-five now and the stock market’s looking good now but one little misstep, they strike back, this goes bad, things go wrong, and we could see the stock market really plunge guys.
The equity put call ratio has fallen back down to a low level, this favors the bulls. This is the first time we’ve seen this since March.
QQQ, I basically feel the same way I do about QQQ that I do the S&P 500, we’ve just had too many of these breaks above that turned out to just lead to the market going back down, right? So how do we know that this is gonna stay, right? How do we know that this has got staying power, yeah retaken the 50 yeah, but what does that mean, right? This could easily roll back over. So for me, I would rather say well I want to see now QQQ pullback and test the 50 day moving average now and then boom, bounce off of that 50 day moving average, that, and then breakout, and it go higher than this previous high here. That would give me confidence that we’re gonna take a run back at the March high and really probably the year high. Okay, so that’s what I really want to see the, the, the market do. I don’t trust chasing this kind of move up. I don’t say, yeah doing, let’s get bullish for next week yeah, and they get all crazy, and you go buying in, when the markets already gone up this much. I just don’t like it. The SOFI AI again is giving that the market is overbought. With these, with bombs and missiles flying over capitals, and bombs being dropped, I mean the market could pullback at any time. So sideline ratings until we get a pullback and test of the 50 day moving average.
The Russell 2000, on the other hand, to me, and you guys can argue with me on this and I wouldn’t argue back right, but to me, the, this looks more bullish than the S&P 500 and the NASDAQ okay. We’ve already cleared some of these lines here. We did come back and test the 50 day moving average and look at that. Granted we got this break here, but it’s messy, it’s sloppy, it’s dirty, but it, the 50 day moving average did hold and now we’re lifting back up off of it. That’s very nice. Look at that man, we’ve taken out that previous high already, bullish on the PPO, bullish on the Force Index. Man, I have to say the Russell 2000 favors the bulls and thinking about it, to me, that makes a lot of sense because the Russell 2000 are generally small-cap companies and small-cap companies are generally domestic companies that are not tied so much to overseas and therefore we see these companies, smaller domestic US companies, starting to outperform. Now the key is that they have to outperform at a rate greater than the cost push inflation wave that’s currently hitting us. That’s the key and and I think that small caps can in fact do that. So this chart favors the bulls.
The Ichimoku on the Russell 2000 clearly favors the bulls. You know back in March and April was a little dicey there with the blue line, you know, breaking underneath the red line but since taking it back, now we’re getting some space between the red and the blue lines, green cloud, this chart favors the bulls.
Home construction ETF still trading underneath it the 200 day moving average. We’re so close to a burial cross of the 50 day moving average crossing underneath the 200 day moving average. I mean that’s an ominous chart pattern folks. We kinda have this, I mean you’ve got this base right in here, okay and then you kinda have this downward slope here, almost a descending triangle. So I’d like to see this downtrend line broken you know it, and, and that would happen if we broke above the 200 day moving average and really we could take out the 200 and the 50 day moving average in really one day, that would be awesome, because they’re so close. So I’d like to see a breakout, the ending of this downtrend, a break above the 200 and the 50 and then I’d like to see it rise up a little bit and then actually come back and test that 200 day moving average, you know it would be about right in here, and then boom, it will, it would hold and then we get a bounce off of it, and then the bounce off would exceed the previous high and to me that would get us bullish, that would be a bullish pattern, okay, but for now, this is underneath the 200 day moving average. Granted it’s so close to the 200 day moving average, but look at this though to I mean, at its best we could say that this is a giant sideways pattern. Okay so overall folks, I give this chart a slight advantage to the bears.
SOXX really came on strong too but again, I think it’s the same story. Look at, look, here we are above the 50, look at what happened the last time we went above the 50. Okay, so, and and here we we even had a bigger break above the 50, but look at what happened. So see this move here? This is what I would like to see. See how it came up, broke above the 50, tested and then it held and it took another leg up and passed this previous high, that was bullish and we only got, you know, a little bit of a move out of it, but, but we were able to be bullish back in early March and then that all changed, everything changed, it broke down. To me, we still don’t have confidence that we can get some kind of bullish move like this, you know, we just don’t know. We want to see this come back, test the 50 day moving average, and then boom bounce off of it, okay, and clear, clear these peaks of course, and make a run back at the March high, that would be very bullish and this chart could easily do that. What I don’t want to do though is chase. This is an unbelievable move up. We don’t want to chase anything. We always want to buy on some type of pullback and really some type of consolidation. If we got a good, I mean, let’s say that it didn’t bounce up and run. Let’s say it came back and let’s just say that it chopped out in here, hey, as long as it’s consolidating in here, that’s great. Okay then we can look at the large players volume and see if large players are accumulating in this consolidation channel. That would be very bullish and then we’d have a clear support level to watch and we had, and we’d have a clear resistance level to watch. What we don’t want to have happen is another one of these. We get, oh gap down, break down, and it falls all the way back down and comes back down to test its 200 day moving average. Again, each time this does this it’s very damaging to the bull’s psychology folks. For now, I have to say sidelines rating. We have to get some resolution off that 50 day. The chart’s just are not strong enough to give the advantage to the, to the bulls.
Dow Transports, giant sideways pattern still, no signal.
Parabolic SAR buy signal this last week, big surge up, took out it’s previous high, this chart has a slight advantage to the bulls.
S&P 500 advance decline percent chart, boom big breakout above the previous high. Parabolic SAR buy signals. This chart clearly favors the bulls.
XLF just like the other major indices yeah, it’s retaken the 50, let’s see a pullback. Let’s see if the 50 day moving, if 50 day resistance back in here now become support and we get another leg off of it. Until then, we just don’t know if the break above the 50 day moving average is gonna last or if it’s going to fall back underneath like it did back in February and March so no signal.
S&P retail ETF. TSI still very weak, chopping out sideways. No signal.
10 year yield, moving up after breaking out of the bullish flag channel. So let me just kinda mess, just kind of messily draw this for you guys. I know it’s going to be kind of ugly but here we go. So we had this kind of channel in here. We had this gonna channel in here. So here we had this big run-up then it went into a bullish flag pattern, and then from the bullish flag pattern, we did, we got a breakout right here and then, it’s now ran up and now it’s consolidating at a higher level, so definitely bullish on the 10 year treasury yield. What’s interesting is that the, the big bullish move up resulted in a big move down in, in the S&P 500 earlier, but now we’re kinda chopping out sideways and the S&P 500 is going up. So, still it’s so strong, I don’t feel good about this. If, if the 10 year yield broke down and then the S&P 500 went up, that would give me more confidence but folks, this could consolidate and take the next leg up and bam just like that we would have an inverted yield curve and then that would make the S&P 500 go back down. I just don’t trust this upward move with the 10 year yield still being that strong and we’re threatening this inverted yield curve. So I’m gonna give a slight advantage with the price action on the, on the 10 year treasury yield rate relative to the S&P 500, I’m gonna give a slight advantage to the bears.
For the week, money came out of bonds and it went into stocks big-time, that favors the bulls.
Biotech’s are definitely looking more bullish in here. We have to see what happens off that 200 day moving average resistance that it looks like it’s gonna come up and test. Back here, the 200 day moving average acted as resistance. Let’s see if we can breakthrough it this time. Money flow’s got this nice uptrend to it. The PPO broke positive. But again, let’s wait for the 200 day moving average. No signal.
The US did better in the global currency wars this last week. The US beat the Chinese barely, the British, and the Canadian dollar. However, the Japanese and the EU beat us. So it kinda puts us right in the middle between how we did in, in the currency wars, but definitely not as bad as we’ve seen over the last few weeks where the US, you know, is always up on top, right, and so we’re, we’re just getting crushed in that. We’re definitely not seeing that, we’re seeing a little bit of weakness in the US dollar. Not enough of a signal guys. We’re right in the middle, sandwiched in there with these other countries. No signal this week.
S&P High Low index, blue, rising, favors the bulls.
For the week financials did the best, followed by technology and then the S&P 500. The worst performing was defensive utilities and consumer staples, so this chart, the sector rotation over the last week, gives an advantage to the bulls.
High beta stocks to low volatility stocks, we’ve got the start of a move down, which would be bearish. When this moves up, high beta stocks are outperforming lower volatility stocks which is bullish. But this is not enough of a move to really signal that we’re going to get a downward zag on this zigzag indicator. So we, we need more kind of confirmation to see what’s gonna happen. Do we keep going and take the next leg up or is this a top and do we take a break down? If, if we get a hard breakdown that would definitely favor the bears. So no signal right now, but looking a little bit bearish, looking like this is kinda stalling out here over the last three days.
SPY with the PPO, green histogram bars, favors the bulls.
The VIX short-term futures, complete breakdown over this last week, awesome looking stuff folks, this favors the bulls.
Looking at the VIX short-term futures in the 60 minute timeframe, you can see that man, this, this went bearish. This went bearish back, let me see, you can see that this really went bearish, right back in here, back on May 7 it looks like so that would’ve been on Monday of last week. That’s when this really started to break down. It really broke down here, but then we had a bullish cross on May 4, Friday. So between Friday and Monday it was like, okay, is the VIX going to rally here? If the VIX rallies here, definantely going to be bearish, but it didn’t happen. It didn’t rally. It gave a fake little headfake on the, on the moving averages here, that is the 13 hour and 30 hour moving averages, an broke back down, so we got another you know, boom, sell signal again, and that has held ever since. So we’re nowhere near getting a buy signal on the VIX yet. So this, even though the SOFI AI says that the market is overbought right now, the VIX certainly is not supporting that view.
The VIX midterm futures, big breakdown, same thing, strong downtrend favors the bulls.
Folks, the rating for trading next week is sidelines because the market is overbought short-term. I think we need to pull back a little bit, form a higher low, but things are definitely looking much more bullish over this last week.
Watch the 50 day moving average breaks on the S&P 500 and QQQ. We really need to see if the market can hold above the 50 day moving average, maybe come back and test it, and then the 50 day moving average becomes support and it takes another leg up off of that. We, we need something to convince us that this is just not gonna be another headfake above the 50 day moving average and then it rolls over and breaks back down underneath the 50 day moving average and falls all the way back down to test the 200 day moving average. That’s been the cycle. So that’s been the trend and so you just assume that it’s going to continue until proven otherwise. So we need to be proven otherwise. So we need that test. Until that happens, I’m not drinking the Kool-Aid that the S&P 500 has broken back above the 50 day moving average, wo hoo, this market favors the bulls going into next week. Can’t do it folks. There’s too much geopolitical risk out there right now.
[Gerald Celente Audio]
“But not the people in Europe, or in China and Russia, nope. They don’t think it’s such a good deal. Here’s the headline in the New York Times: Trump Abandons Iran Pact He Long Scorned. Isn’t that great. Oh, he long scorned it. So he decides for all the rest of us and the democracy of the United States. All we are, are little slave boys and slave girls oh yeah, and that’s not racist, it’s black and white and all colors. Yeah, what a bunch of crap that we got this Presidential reality show clown. I scorned it so I decided it. And guess what folks, the mainstream media yeah take a look, this story is out of the news today. Hey did you hear about Stormy Daniels? Oh you know that guy Cohen. Yeah, that’s the garbage that they’re spewing out and that’s why you subscribe to the trends journal and if you want to know more of Trump abandons Iran pact he long scorned and what it means, the only place you’re going to find in detail is in your trend alert. Trend alert Trumps war will crash markets and much much more. This is just the beginning. Already it’s been reported that an hour after Trump made that speech, Israel fired missiles into Syria, hit an Iranian base, and killed over 15 of them according to the reports. This thing is building.”
Sofi AI says the market’s overbought right now. Sidelines rating. Alright you guys, thanks for listening. Love you, and talk with you soon.