Moving Averages and High Low Index Signals

Key moving averages and the high low index of the S&P 500 is signaling patience for those of us who are sitting back in cash.

The S&P 500 High Low Index is in a free fall which suggests that it’s too early to go long a stock for a V bottom bounce:

The NYSE percent of stocks above the 200 day moving average is also still in a free fall:

The NYSE percent of stocks above the 50 day moving average doesn’t look much better:

At least the NYSE percent of stock above the 50 day moving average is showing signs of consolidation rather than a free fall.

Ideally you should be in cash right now and looking for a swing long entry. Do not be quick with the buy button. You want further evidence of consolidation or a basing pattern before taking that swing long entry.

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Stocks With Bullish Money Flow 11-21-16

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3% GDP Growth For Q3 – What a Not Funny Joke

Both the Fed and Wall Street analysts are forecasting a 3% GDP growth rate for Q3. After yesterday’s release of many economic reports, I would put the GDP growth rate for Q3 at 1.5% at most. Let’s look at yesterday’s economic releases on the charts.

The NY Empire manufacturing index came in at -2%. That number is -84.53% lower than a year ago.

empire-manufacturing-chart

All the major components of the Empire manufacturing index are contracting.

empire-components

The Philly Fed survey beat, coming in at 12.8 which is an increase of 455.6% from a year ago.

philly-fed-index

However, employment is still contracting.

employment

Industrial production fell by -1.1 percent for the 12th straight month of contraction.

industrial-production

The Daily Shot makes the observation that the improvement early this summer was in part helped by utilities cranking on all cylinders to keep the air conditioners around the country running. As that contribution subsidies, we are back to the downtrend from the Spring.

Here is the manufacturing component of the US industrial production (year-over-year).

industrial-production-manufacturing

US retail sales fell in August and are continuing to slow.

us-retail-sales

Inventory growth continues to slow just like retail sales.

us-business-inventories

Most of the charts above, I went back five years on the data. Let’s look at what the S&P 500 has done over the last five years and compare performance.

spx-chart

The S&P 500 is up nearly +90% over the last five years while the U.S. economy fundamentals have deteriorated over that same time frame. Folks, that’s the Federal Reserve’s monetary policy propping up the stock market and creating a huge bubble in securities.

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