July 27, 2018
Mark Newton CMT, Newton Advisors, LLC- Contact: firstname.lastname@example.org
S&P 500 ETF Trust SPDR (SPY)-
282.91, 282.49, 281.47, 276.28-.52, 275.62 Support
283.93, 284.53, 285 Resistance
LINK TO TECHNICAL WEBINAR from yesterday- https://www.youtube.com/watch?v=YoiTNDUL7As
SPX - (1-2 Days)- Bearish- Technology should be in the process of peaking and risk/reward looks poor for Equities into next week at current levels. However, trend will need to show more damage for any sort of meaningful pullback to get underway. Still avoiding Tech and Financials, favoring Healthcare and Energy- UNDER 2879 would lead down near 2800. Today should prove important for a change of trend. The next 24-48 trading hours should shed some light as to the effectiveness of thins scenario.
SX5E- EuroSTOXX 50- Bearish- Prices have been rallying for a full month and now just below Triangle resistance from late January. Expect stalling out and downturn in SX5E- 3650 is a stop for Shorts
HSCEI- Mildly bearish- Pullback possible after 4 straight days of gains and evidence of bottoming process at work. expect some backing and filling, but this is likely buyable into next week
Trading Longs: VXX, QID, SOXS, DG, K, XOP, NBIX, LLY, BAX, AEE, TSG, TWLO, SSTI, TIF, BURL,VEEV, KFY, ETSY, ACN, ADP
Trading Shorts: SMH, ON, LRCX, AMAT, ON, LUV, ALK, AAL, GE, VOD, VIAB, NFLX, FITB, EBAY, XLK, OIH, MDR, SMH, AMBA, PCAR EWJ
Long XRT with targets at 52, with stops at 49.50
Long XLP with targets 54.60-55, stopping out under 52.07
Long XLV targeting 89, and raising stops to 86.35
Short IYT, with targets at 185, stops at 195.90
Short XLF with targets at 26-26.50 and stops above 28.20 on a close (CLOSE)
Short SMH with targets at 96.10 & stops on shorts at 107.84- Press shorts under 103.71
Looking to buy Gold at 1200-1210 late this week, and buy GLD at 113.50-114.50
Upside should prove limited-
The Equity trend has been positive for a full month. Just in the last couple weeks we've seen evidence of breadth non confirmation and some signs of Technology stalling out, most notably with Semis and FANG stocks turning lower (FB, NFLX taking the lead, while AMZN is UP in after-hours trading Thursday thus far) Investors have pressed their bullish bets as sentiment has grown increasingly more positive, while today lies 180 calendar days from our January peak, a cycle that can't be taken lightly given the degree of importance in the high from late January. While DJIA has followed through higher, above June highs in the last couple days, we've seen sectors like Financials and Industrials both get up to key areas of trendline resistance. Overall, it should be right to sell into Tech, Financials and Industrials Friday into next week, while favoring Energy to follow-through higher and also increasingly favoring commodities to work again after a dismal June and most of July. Counter-trend Sells appeared after Wednesday's close in the S&P 500 Information Technology sector (Demark) and while this still needs to be confirmed, the upside for Tech after this recent snapback looks poor from a risk/reward basis.
The key technical catalyst which should be watched carefully in the next 24-48 hours is whether Treasury yields start to turn down sharply, as this has occurred prior to several other market pullbacks. Financials have reached "DO-or-DIE" resitsance, and should likely stall out and turn down as well. While AMZN is up in post-market trading on Thursday, the stock had shown quite a few signs that gains could prove limited near-term, so keeping an eye on this for possible reversals in Technology and continued pullbacks in Discretionary also looks important. Overall, the next 3-5 days does not seem ideal to press long bets, but longs should be still concentrated largely in Energy and Healthcare.
Additional charts and thoughts below.