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Our Proprietary US Share Market Index Measuring the degree of Overbought Securities

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Posted by Martin Armstrong - Armstrong Economics

on Tuesday, 03 April 2018 07:51

usoverbought-Index-2018

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Martin Armstrong has been consistent in forecasting higher prices for stocks, arguing that the market is no where near as overbought as the majority think. Martin just published this proprietary chart above going back to 1915 that makes the case that the market was far more overbought when capital was flooding into the US in the past than it is today - R. Zurrer for Money Talks

QUESTION: Where does your overbought index stand on the stock market?

ANSWER: This Index is proprietary. It peaked at 12.55 during October 1919 as capital had flowed to the United States due to World War I. The Index then declined thereafter into the August 1921 bottom at 10.40. From this point, the Index rallied into October 1925 peaking at 13.16, fell back for 15 months bottoming again in October 1927. The final rally lasted 14 months peaking at 12.95. The bottom came in July 1933 about 13 months after the actually low in nominal dollar terms during June 1932.

In nominal terms, the Dow tested the 1,000 level in 1966, 1968, and 1973 and again in 1980. We can see the shift in trend that came following the historical low in 1981. The core of this index is capital flows so it tends to reflect just how capital flees and concentrates moving relative to US assets. Looking at the most famous bull market of the Roaring ’20s, the duration was 97 months which we exceeded from the 2009 low in April 2017. The 2009 low was 6469.95 and the January high was 24,741.70. which was a rally of only 282% – not anywhere close to the Roaring ’20s.

This index is proprietary and it affords us a look at the asset class from a global perspective. This is part of the reason we have been warning that the bull market is by no means overbought and the bulk of forecasting out there has made this the most hated bull market in history because they look only at the nominal index without placing it within its global context.

...also from Martin: Market Talk- April 2, 2018

 



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Stocks & Equities

Todd Market Forecast: Very oversold & Sentiment Extremely Negative

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Posted by Stephen Todd - Todd Market Forecast

on Tuesday, 27 March 2018 17:04

Mr. Todd is preparing to buy the plunging Stock Market short term unless it breaks an important level. Today he has also switched from bullish Gold & Silver to Bearish - R. Zurrer for Money Talks

Published @ 3:00pm PST Tuesday March 27, 2018

DOW - 345 on -1031net declines

NASDAQ COMP - 211 on 1564 net declines

SHORT TERM TREND Bullish

INTERMEDIATE TERM Bearish

STOCKS: Here are the factors in today's selling. Nvidia backed away from driverless cars and this caused a drop of 7% in the stock and that infected other high techs. Then interest rates dropped sharply and this caused trouble for the banks which like higher rates.

And of course, there is the old reliable Facebook which was down over 5% for the session and is now 22% below its high.

Another point. The end of the quarter comes on Thursday and we'll probably see a lot of choppy action as institutions rearrange their portfolios for the quarterly reports. Of course, computer driven algorithms are a factor and are probably the reason for the extreme point action.

I'm sticking with a short term bullish posture. We're very oversold and sentiment is extremely negative. However it's important that we hold the closing lows of Friday.

GOLD: Gold dropped $11. The dollar was higher and the yellow metal was overbought.

CHART: The S&P 500 is doing a retest of the early February lows. This is a support zone since it arrested the last big decline. Most technical measures are oversold and we have a very high put call ratio. It should resolve to the upside unless we have entered a bear market. I'm not of that opinion, but it does require close attention.  

toddmktforcast

www.toddmarketforecast.com

BOTTOM LINE:  (Trading)



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Stocks & Equities

Tyler Bolhorn: Two Stocks That Really Stand Out

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Posted by Tyler Bollhorn - StockScores

on Tuesday, 27 March 2018 06:41

Tyler's has found two stocks, a marijuana stock that after decling for 5 months is ready to move and a powerfully moving biotech stock. He also reveals some more trading rules in this weeks StockScores newsletter.    - Robert Zurrer for Money Talks

Screen Shot 2017-09-19 at 2.00.45 PM

perspectives commentary

In this week's issue: 

 

  • Stockscores’ Market Minutes Video – Plan the Trade, Trade the Plan
  • Stockscores Trader Training – How to Be a Better Trader
  • Stock Features of the Week – Abnormal Breaks

 

Stockscores Market Minutes – Plan the Trade, Trade the Plan



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Stocks & Equities

Fed Action Casts Shadow on Bullish Case for Stocks

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Posted by Paul Rejczak - Sunshine Profitsits

on Thursday, 22 March 2018 07:18

Screenshot 2018-03-22 07.22.15

The market is in the middle of two possible future scenarios. The first a break of the February lows, the latter a break of the January highs in both the S&P and the Dow Industrial Average (Nasdaq 100 has already made new highs above January. With market confidence at extreme fear, analyst Paul Rejczak makes the case for a lower opening followed by a bounce - R. Zurrer for Money Talks

Fed Action Casts Shadow on Bullish Case for Stocks

The main U.S. stock market indexes lost 0.2-0.3% on Wednesday's following relatively brief rally after the FOMC's Rate Decision release. The S&P 500 index continued to fluctuate within its short-term consolidation. It is currently around 5.2% below January 26 record high of 2,872.87. The Dow Jones Industrial Average lost 0.2%, and the technology Nasdaq Composite lost 0.3%.

The nearest important level of resistance of the S&P 500 index remains at 2,740-2,750, marked by Monday's daily gap down of 2,741.38-2,749.97. Yesterday's daily high of 2,739.14 confirmed the importance of that resistance level. The next resistance level is at around 2,775-2,780, marked by last Wednesday's daily high. On the other hand, support level is at 2,695-2,700, marked by Monday's daily low, among others. Potential support level is also at 2,650-2,670, marked by previous local lows.

We can see that stocks reversed their medium-term upward course following whole retracement of January euphoria rally. Then the market bounced off its almost year-long medium-term upward trend line, and it retraced more than 61.8% of the sell-off within a few days of trading. Is this just an upward correction or uptrend leading to new all-time highs? The market is still in the middle of two possible future scenarios. The bearish case leads us to February low or lower after breaking below medium-term upward trend line, and the bullish one means potential double top pattern or breakout above the late January high. Monday's sell-off made the bearish case more likely again. You should take noticeof a breakdown below potential rising wedge pattern. This over month-long trading range looks like an upward correction following late January - early February sell-off:

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Stocks Set to Open Much Lower



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Stocks & Equities

GOLDMAN SACHS: These 16 stocks are poised to maximize tax savings and crush the market in 2018

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Posted by Businessinsider.com

on Wednesday, 21 March 2018 07:33

 

rtrjc46Wide-reaching corporate tax cuts have stock investors wondering which companies will benefit most. Goldman Sachs has singled out the 16 companies that offer the most reinvestment growth, a characteristic of companies that have historically outperformed the market - R. Zurrer for Money Talks

How does an investor decide which companies are poised to benefit most from sweeping tax cuts that benefit most everyone? Listen to Goldman Sachs, of course.

The firm has developed an index of stocks called the High Growth Investment Ratio Basket, which is designed to include companies whose share prices are most likely to get a boost from tax reform, given their past use of excess capital.

Goldman's basket includes not just the companies who have most heavily reinvested money into capital expenditures and research & development, but also those set to generate the highest return on it.

For context, the median stock in the index has reinvested 81% of its trailing three years of cash flow from operations, compared with just 13% for the average S&P 500 company, according to Goldman. The firm also forecasts that basket members will offer 18% cash return on capital invested, compared to just 12% for the broader benchmark.

Without further ado, here are the 16 stocks that best fit the bill, arranged in increasing order of three-year growth investment ratio:

Click HERE for Slides 1-16

 

 



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