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Stocks & Equities

Dot Com Bubble Do-Over?

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Posted by Chris Vermeulen - The Gold & Oil Guy

on Tuesday, 15 August 2017 06:35

Our recent analysis suggests we may be setting up to repeat history in an odd and dangerous manner.  As market technicians, part of our job is to work with numbers, find patterns and attempt to predict future price moves in US and Global markets.  As you can imagine, it is not always easy to accurately predict the future.  Still, we take on the challenge and truly enjoy being able to find and share trading strategy concepts with our ActiveTradingPartners newsletter.  As such, we are sharing this recent technical research data with your today.

Recently, the ActiveTradingPartners research team identified a unique pattern in the VIX that allowed us to accurately predict the June 29 VIX Spike nearly 3 weeks in advance.  Also, on July 30th, we predicted a big decline in the NASDAQ during August. It also allowed us to know that VIX Spikes were possible on other future dates – such as the most recent date near August 4th.  Even though the current VIX Spike did not hit exactly on the August 4th cycle date, the actual VIX Spike move happened only two trading days after our predicted date and the VIX has rallied over 90% from recent lows.  Sometimes, analysis like this allows us to know months in advance that a cycle or critical event may have a higher probability of happening.  This allows us to plan and profit from our research.

Today’s research correlates to the recent price moves in the XCI index (Computer Technology), NASDAQ and US Majors.  The premise of this research is that the past 4+ years have resulted in a global investment in Technology firms as a result of lower ROI in most other sectors.  This focus on technology investing is uniquely similar to the XCI Index DOT COM rally from the late 1990s and early 2000s.  We are attempting to verify our presumptions and analysis by using core technical analysis techniques as well as fundamental price analysis.

We’ll start by looking at the price activity leading up to the 2000 DOT COM bubble burst. Initially, our analysis focused on the similarities in price action setting up this price move. The Accumulation, Exuberation/Pause, Hype and eventual CRASH phase. In 1995, the Accumulation phase initiated after a nearly 95% rally from 13+ months earlier (1994 – 462 days total). Currently, the Accumulation phase initiated after a 100%+ rally from 13+ months earlier (2009 – 427 days total). Subsequently, the Accumulation phase lasted 1057 days resulting in a 238%+ advance in 1998. The current Accumulation phase lasted 1456 days resulting in a 77%+ advance in 2014. Interestingly, the 1998 advance totaled 472.50 pts while the 2014 advance totaled 594.00 pts – resulting in a 125% advance size increase.

The Exuberation/Pause phase in 1999 lasted 252 days and resulted in a 207.19 pt move (+31.51%). The Exuberation/Payse phase in 2016 lasted 889 days and resulted in a 288.26 pt move (+21.15%). The more recent phase took 3.5x longer (time) to result in 139% greater price advance (which was actually a reduced percentage move of only 67% of the 1999 advance.
I advanced the term WEEKS where is should have been days.

Many analysts may be quietly stating, “all of this can be attributed to relationships of percentage values vs higher price valuations”, which is of course true.  Our attempt at dissecting these moves is to try to understand the propensity and strength of any future moves.

Lastly, the HYPE phase lasted 39 weeks in 2000 ending with an advance of 895.23 pts (+97.94%) from the PAUSE/FLAG breakout in 1999.  The current HYPE phase lasted 53 weeks ending with an advance of 674.54 pts (+40.26%)  from the PAUSE/FLAG breakout in 2016.  The resulting current HYPE price advance is 25% lesser than the 2000 move and results in a nearly 60% decrease related to the total percent swings.

2000 DOT COM – XCI Index Chart

XCI 2000 DotComBust Weekly F



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Stocks & Equities

The Divergences Are Now Appearing!

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Posted by Chris Vermeulen - The Gold & Oil Guy

on Friday, 11 August 2017 06:38

The loss, of the leadership of the banking and financial sector, BKX ETF:( http://etfdb.com/index/kbw-bank-index/), is now a major warning signal which is what is required in order to move the SPX much HIGHER, at this time!  

bank1

The divergence which is currently being seen between the Dow Industrials and Dow Transportation indexes will be coming into play in the upcoming weeks.



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Stocks & Equities

No Clear Direction As Stocks Trade Along Record Highs

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Posted by Paul Rejczak - Sunshine Profits

on Thursday, 10 August 2017 07:37

Our intraday outlook is bearish, and our short-term outlook is bearish, as we expect downward correction. Our medium-term outlook remains neutral:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral

The U.S. stock market indexes were mixed between -0.3% and 0.0% on Wednesday, extending their short-term fluctuations, as investors continued to take profits off the table following some negative geopolitical news, among others. The S&P 500 index has reached new all-time high at the level of 2,490.87 on Tuesday, before reversing lower. The broad stock market gauge bounced off resistance level at around 2,490-2,500. The Dow Jones Industrial Average lost 0.2% yesterday, as it extended its Tuesday's move down off new record high. The technology Nasdaq Composite lost 0.3%, as it was relatively weaker than the broad stock market again. The nearest important support level of the S&P 500 index remains at 2,460-2,465, marked by July 19 daily gap up of 2,460.92-2,463.85 along with yesterday's daily low of 2,462.08. The next level of support is at 2,450-2,455, marked by June 19 local high. The support level is also at 2,430-2,435, marked by July 12 daily gap up of 2,429.30-2,435.75. On the other hand, level of resistance is at 2,485-2,490, marked by all-time high along with previous local high. The next resistance level is at 2,500 mark. There have been no confirmed negative signals so far. However, we can see medium-term overbought conditions and negative technical divergences. The S&P 500 index trades within an almost month-long consolidation, as we can see on the daily chart:

1

Futures Lower



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Stocks & Equities

Fooled by Randomness

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Posted by Tyler Bollhorn - StockScores

on Tuesday, 08 August 2017 07:42

Screen Shot 2017-08-08 at 7.48.09 AM

In this week's issue:

 

  • Weekly Commentary
  • Strategy of the Week
  • Stocks That Meet The Featured Strategy

In This Week's Issue:

- Stockscores at the Toronto Money Show
- Stockscores' Market Minutes Video - Do You Know Who is Winning?
- Stockscores Trader Training - Fooled by Randomness
- Stock Features of the Week - Stockscores Simple Weekly
-
Stockscores at the Toronto Money Show
I will be doing two presentations at the Toronto Money Show in September, one free and the other a Master Class that you can purchase a discounted ticket to until August 17th. For more information on these two presentations, click here.

Stockscores Market Minutes - Do You Know Who's Winning?
Traders need to know what is working best now and that is often not answered best by the performance of the market indexes. This week, I look at the importance of knowing who is winning in the market, my regular market analysis and the trade of the week on TEVA. Click Here to Watch
To get instant updates when I upload a new video, subscribe to the Stockscores YouTube Channel

Trader Training - Fooled by Randomness
We have all heard the story about the King who asks a group of blind men to feel an elephant and report back on what an elephant is. Each feels a different part and as a result, each has a very different perception of what the elephant is. They fail to accurately understand the Elephant because each does not touch the entire animal.



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Stocks & Equities

VIX At Record Lows

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Posted by Martin Armstrong - Armstrong Economics

on Monday, 07 August 2017 07:12

VIX-600x413Having watched the VIX break the psychological 10 level once again today, it looks comfortable in single digits having digested Fridays NFP’s report. YTD, it remains down around 25% but with volumes so low, we must ask the question – does this indicator still warrant such attention! As traded volumes decrease and market participants walk to the side, we watch a rally that still no-one has especially as we hit record high after record high. This has been the most hated bull market in history and still investors watch the DOW setting records daily.

One of the main reasons the fear cage is at such levels is precisely because people have missed this rally! If you don’t own it – why hedge? The velocity of money is also telling us that we are in a period of deflation and with the misunderstanding of QE only just distorting the picture. Yes, there are scary stories of geopolitical concerns but when the asset bubble is in the bond market, why fear the stock market.

So is the VIX the calm before the storm? We certainly need a good scare to get people convinced they were right all the time and its really a bear market that keeps going higher – you can’t fool them!

....also from Martin: 

US Share Market Broad Overvaluation Index – One of the Best Leading Indicators We Have Ever Created

 



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