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Crude oil breakout bullish near-term, but Energy stocks have largely not followed suit all year

April 23, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2900-2, 2892-3, 2872-7

Resistance: 2915-7, 2923-5, 2945-9



Monday Technical Video 4/22/19 highlighting SPX, Oil, VNQ

https://youtu.be/jUWq0Kw2mAo



Thursday Technical Webinar Link - 4/11/19

https://youtu.be/Cn1P4hiKm-M



My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html





SPX - (3-5 Days)- Bullish barring a close under 2877. Upside target 2945-50



EuroSTOXX 50- Bullish- Upside targets at 3600



HSCEI- Neutral- Some signs of stalling, but trend won't turn bearish until 11553 is violated



Trading Longs: HES, WHD, XOP, USO, WIX, PEP, KO, TSCO, MAS, TRP, QSR, THD, FLT, PCAR

Trading Shorts: VNQ, SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE



Equities have been sideways now for the last 4-5 days, showing little to no progress in SPX, as this index along with NASDAQ Composite and the DJIA have not yet joined the NASDAQ 100 back at new high territory. Yesterday's main technical development concerned the breakout in WTI Crude oil which looks to help Crude make further progress. Energy stocks responded and were Monday's best performing sector and look likely to benefit a bit more from this Crude surge in the near-term. However, this sector has performed largely in-line with SPX, higher by 19.57% and Energy as a group has underperformed other sectors like Technology, Industrials, Discretionary, and Communication Services. While Exploration and Production stocks look attractive, others within Oil Services and Integrated oils have underperformed dramatically, making selectivity important.



Meanwhile, REITS took another leg down, and IYR, VNQ underperformed as STIC, RLGY, RHP, CLNY, WRI, SKT, MAC, REG, KIM were all down 2.5% or more. This latter group still looks likely to weaken further in the days and weeks ahead, and investors should hold off from trying to buy dips.



Overall, a more difficult tape near-term with a few signs in the last week of short-term breadth having dropped off a bit, and groups like Healthcare are primarily responsible, proving to be a definite drag on broader market performance given their 13.3% weighting in the SPX. However, until there is evidence of SPX dropping down under 2877 on a close, markets still have the chance of pushing higher, and some type of proof of weakness will be necessary to avoid.







ACTION PLAN- 



Long XOP with near-term targets at 34.50, stops under 31.75



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long XLB with targets at 61 and stops on daily closes under 56.80



Short IWM for a move down to 151 from 155.2- Stops above 157.4



Long Copper for a move up to 308-310



Additional charts and thoughts below.

below.gif

S&P's plodding along continues, which has been a source of frustration for both bulls and bears alike. For those newly involved, S&P has not yet broken out to new highs such as what's happened to the NDX. The hourly pattern here remains choppy and despite being upward sloping, a break down under last week's lows of 2889 in S&P Futures or 2893 would likely prove negative to Equities in the near-term. We'll use 2877 as being the key area to stop out trading longs, while movement back above 2915.75 should allow for a final push up to 2945-50 area, where this should stall out into early May. For now, insufficient reasons from a price standpoint to be too negative, but some upward acceleration here in both prices and breadth/momentum would be a source of comfort to bulls, as markets have been churning with no change of trend for the last 4-5 trading days.

days.gif

Energy has begun to show a few signs of life in the last couple weeks, but it was Crude's breakout of the 8 day range in both WTI and Brent which helped XOP on Monday. This Exploration and Production ETF looks likely to follow through higher up to 34.50 in the short run. Energy has not really shown much outperformance to the broader market despite Crude's sharp rally in recent months. However, with regards to XOP, this does seem likely to gain some momentum after the technical breakout of this base which had been in place since January of this year. A breakout of this consolidation range should bode well for some strength out of XOP, and this ETF is favored over both OIH and XLE for outperformance within Energy.

energy.gif

REITS have begun to trend down very sharply in recent days and further underperformance out of this group looks likely. The VNQ, the Vanguard Real Estate ETF, when plotted vs SPX, has broken down under the lows of this triangle pattern it had formed back in December 2018. While stretched after the last couple days of losses, no evidence of this bottoming here is in place. Thus, additional pullbacks and underperformance for the group as a whole is expected in the days/weeks ahead.





Happy Good Friday- Europe showing very good recovery-

April 19, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2900-2, 2892-3, 2872-7

Resistance: 2915-7, 2923-5, 2945-9



Note : No regular report today given Good Friday holiday for NYSE, so I wanted to show a few charts of Europe and Dollar that were encouraging. Have a good holiday weekend for those celebrating, and we'll resume next Monday morning with the weekly report



Thursday Technical Webinar Link - 4/11/19

https://youtu.be/Cn1P4hiKm-M



My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX





SPX - (3-5 Days)- Bullish barring a break of 2900- Gradual waning, which is largely Healthcare related, but Tech, Financials and Industrials are all still positive and ETF's of these sectors have moved to new highs for 2019 and in the case for XLK and XLY, new all-time highs. Above 2915 is bullish for a move up to 2945-9. Under 2877 important for the bear case.



EuroSTOXX 50- Bullish- Europe has been stronger than SPX lately and move up to 3600 likely



HSCEI- Bullish- Movement back to the highs now looks to result in further strength near-term and right to be long and buy minor dips. Under 11423 is negative for further weakness



Trading Longs: WIX, HRS, PEP, KO, TSCO, TEAM, FCX, LYB, CMCSA, MAS, TRP, QSR, THD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE

Looking back at last week, we saw some promising developments with XLY, XLK pushing back to new high territory while XLI moved back to new 2019 highs. The NASDAQ 100 actually pushed up and made a new all-time closing high while DJIA, CCMP & SPX are promising in this regard that new highs can likely happen sometime this year. Healthcare has been the big laggard in recent weeks, showing a rather capitulatory decline and indeed important at 13.3% the second largest sector for SPX. For now though, the strength in sectors like Industrials and Financials have helped to bail out Technology, which itself has not been all that weak of late. Overall, insufficient weakness this past week to be all that negative heading into late April from a price perspective, but sentiment is sounding a clear warning now in getting very optimistic and something to watch carefully.



Looking abroad, Europe has rebounded in a very strong fashion in recent days, with DAX recovering its damaging technical position, while indices like SXXP and SX5E have both made promising near-term breakouts. As discussed in recent reports, the monthly momentum breakdown globally will be problematic this coming Fall and into next year. However, near-term, the strength of this comeback since December 2018 has been remarkable and something which for now has been a rally unable to fade, outside of picking spots to try to sell into (which I've tried a couple times in recent months)



Outside of equities, the commodities rally has proven difficult to trust given the US Dollar strength, which managed to build last week (and will be highlighted briefly below) Meanwhile, Treasury yields attempted a brief bounce last week, but yet held exactly where they needed to (on US 10YR ) before softening on Wed/Thursday. The Yield curve meanwhile has shown little to no real evidence of breaking the neutral consolidation that has been in place most of this year.



I'll list a couple European indices with brief comments and then the US Dollar chart which is growing increasingly stronger in recent days. Have a nice holiday weekend, and my technical coverage will resume with the Weekly Technical Perspective on Monday morning.





ACTION PLAN- 



Long XLF with targets at 28-28.50



Long XLB with targets at 61 and stops on daily closes under 56.80



Short IWM for a move down to 151 from 155.2- Stops above 157.4



Long Copper for a move up to 308-310



Additional charts and thoughts below.

below.gif

SX5E, the STOXX50, is important to highlight given that Europe has moved up at a slightly quicker rate than US lately. Its breakout a couple months ago of the larger downtrend was seen as constructive, technically, and after a few weeks of consolidation, started to turn back higher sharply. Near-term this remains quite bullish with not much resistance until near 3600. Therefore, this remains a tough index to fade on gains right now, and Europe, similar to the US, is still quite bullish technically, with little to no real technical damage since it bottomed last December.

decemb.gif

The DAX, or German Boerse, has made remarkable progress lately in getting back up above not only former lows like the SPX and other US indices have, but also in now exceeding the larger downtrend from the highs made in early 2018. This is a very positive near-term development. So, despite being near-term overbought, the pattern has gotten structurally better for DAX technically and should be able to carry this higher to 12750-13000 without too much trouble.

trouble.gif

The Dollar should be on the verge of a larger move given the constricted trading in recent months, and given the downward bias of the 8 year cycle from 2016 highs, i had thought this would start to trend lower. Well the near-term technicals have actually been quite bullish for USD lately, so it's important not to get too negative too soon and let this move play out. Any rally above March highs that takes out this intermediate-term trend will let this pattern push higher into the Summer, which could be near-term damaging for EM , China and commodities before a larger bottom.

Healthcare showing capitulatory decline, while Transports partially offset

April 18, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2900-2, 2892-3, 2872-7

Resistance: 2915-7, 2923-5, 2945-9



Note : No Weekly call or daily videos this week, as I am travelling out of the country. Normal service will resume next week. Thanks for your understanding.



Thursday Technical Webinar Link - 4/11/19

https://youtu.be/Cn1P4hiKm-M



My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX





SPX - (3-5 Days)- Bullish barring a break of 2900- Gradual waning, which is largely Healthcare related, but Tech, Financials and Industrials are all still positive and ETF's of these sectors have moved to new highs for 2019 and in the case for XLK and XLY, new all-time highs. Above 2915 is bullish for a move up to 2945-9. Under 2877 important for the bear case.



EuroSTOXX 50- Bullish- Europe has been stronger than SPX lately and move up to 3600 likely



HSCEI- Bullish- Movement back to the highs now looks to result in further strength near-term and right to be long and buy minor dips. Under 11423 is negative for further weakness



Trading Longs: WIX, HRS, PEP, KO, TSCO, TEAM, FCX, LYB, CMCSA, MAS, TRP, QSR, THD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE

The two big themes for yesterday's trading revolved around both the ongoing decline in Healthcare, which began to exhibit capitulatory type selling, as well as the advance in Transports, which partially offset, but enough to keep indices largely unchanged, with just small losses by the close. Rails helped Transports as well as Industrials (shown below) which have moved to new highs for the year.



Healthcare accounts for over 13.3% of the SPX, so certainly important as the second largest sector behind Technology. The breakdown in stocks like ALXN, DVA, VRTX, EW, REGN, ISRG, NKTR has been extreme, and each of these stocks was down more than 6% on Wednesday alone. Charts on XLV (shown below) looks to be in a capitulatory type decline and still early for any type of meaningful bottom. Any bounce Thursday/Friday should still be a selling opportunity for a bit more weakness into early next week.



Overall, it's important to note that the 3 big sectors which had accounted for most of the performance thus far this year, Technology, Industirals and Discretionary, have now all moved up above former highs, with Tech and Discretionary moving back to new all-time highs, while Industrials has hit new highs for 2019. These are all temporary positive developments. Upon closer look, the long-term momentum decline has certainly weighed on these sectors, and we'll dig into this a bit deeper in the weekly piece next Monday morning. For now, seeing some type of stabilization in Healthcare will be important for the market, but Tech , Industrials and Financials are perfectly able to carry prices higher near-term a bit longer.





ACTION PLAN- 



Long XLF with targets at 28-28.50



Long XLB with targets at 61 and stops on daily closes under 56.80



Short IWM for a move down to 151 from 155.2- Stops above 157.4



Long Copper for a move up to 308-310



Additional charts and thoughts below.

Industrials have managed to power higher over both prior highs thought to be important. Rails have been primarily responsible, but definitely a very bullish move that argues for further gains in the days/weeks ahead with targets near last Fall's highs. Industrials have now moved back to new highs for the year, while both XLK and XLY have moved to new all-time highs. While momentum has certainly not followed on a long-term basis given the extent of 4Q deterioration, this is a short-term positive. Stocks like UNP, CSX, NSC, KSU have all shown excellent near-term structure and moved higher.

higher.gif

Healthcare, as seen by the SPDR ETF, XLV, broke down exactly opposite of what most symmetrical triangles following lengthy uptrends produce. In this case, a violation of the lower level, which has led to rapid acceleration lower in the last couple days. Given the momentum of this move, it's difficult to call for a bottom here, despite prices reaching oversold territory quickly. Bounces could still represent selling opportunities into next week before any bottom is at hand. Any decline down to 82-83 should represent an excellent risk/reward opportunity to buy dips.

dips.gif

Copper is showing some real strength at the time as Treasury yields have also begun to pop. While this "forward looking" economic gauge has been strengthening, most economic data continues to miss expectations. Near-term though, this move is a positive for Copper and should drive the metal higher up to 308-310.

Dollar & Yields turning down beneficial for Commodities

April 11, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2877-80, 2870, 2861, 2848-9

Resistance: 2902-4, 2908-10, 2915-7



Thursday Webinar today will take place at 11 am EST- Unfortunately i will not be able to do this at 1pm today, so we're scheduling this earlier. Apologies if that doesn't work, but i will have a link that i will post afterwards to the Blog at http://newtonadvisor.com/blog and to YouTube on my channel. See me for details if you cannot locate.





Wednesday Technical Video- 4/10/19

https://stme.in/W8Cskiwxwf



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX



Webinar Link from last Thursday's Technical Call- 4/4/19

https://youtu.be/kvOxFMEciAw





SPX - (3-5 Days)- Bearish- Reversal failed to lead to followthrough yet, but prices now back up to former highs near 2890 and should make it hard to push higher. Resistance at 2900-5 while Stocks likely begin 3-5 day pullback. Maximum weakness down to 2785-2800 in all likelihood.



EuroSTOXX 50- Bearish- Similar to SPX, SX5E has reached areas where it makes sense to lighten up and/or fade this rally. Longs have stops under 3400 and likely max upside to 3500 this week



HSCEI- Rally likely nearing its end; Expect peak Wed/Thurs to follow US/Europe lower near-term Resistance-11895-12000



Trading Longs: IAU, GLD, GDX, UNG, DBC, FCX, LYB, DWDP, CMCSA, MAS, TRP, QSR, TSCO, HD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: SIG, KR, GES, CME, CBOE, MO, OI, LB, TWLO, TEAM, CTXS, OSTK, CI, MHK, WATT, EXPE



Early losses failed to hold, and prices wound up back near prior highs, with little to no damage having been done. Is this the end of the correction? We'll see.. as of now, we still have 3 very important sectors right up at resistance, while breadth and momentum have dropped off sharply. While Technology managed to lead in trading, and was the only sector along with REITS up more than 0.50%. As discussed, S&P prices are now back up to prior highs though with far less momentum and the area at 2895-2905 (if what im thinking is correct) should still be important as resistance and hold prices. ON the other hand, it's always good to know where one's wrong, and if XLY, XLI and XLK all manage to get through prior highs with little to no problems, than the rally might be able to persist a bit longer. After all, the uptrend for SPX, DJIA and NASDAQ had NOT been broken yet, but only with IWM along with some concerning problems with breadth and momentum in the very short term. So it seemed like a good spot to take a stab given some of the warning signs previously discussed, and this largely has not changed with Wednesday's trading. After nearly 3 months of being bullish, it's all about picking spots, and this continues to look appealing to me technically as a place to lighten up for at least a minor move.



Outside of equities, the real action occurred in the US Dollar and Treasury yields which both fell sharply, helping to boost commodities. Given that both fell to new multi-day lows, the decline looks to continue, and should result in CCI index breaking out to new monthly highs and Precious metals to show some real outperformance.





ACTION PLAN- 



Long GLD for a rally up to 127- Stops under 120.96



Long UNG for a rise in Natural Gas into end of April/early May with targets at 2.90-2



Long XLB with targets at 61 and stops on daily closes under 56.80



Short IWM for a move down to 151 from 155.2- Stops above 157.4



Short XLK with targets at 72.25



Short XLY with targets at 114.50







Additional charts and thoughts below.

below.png

SPX managed to push back to the highs of the last couple days, though momentum remains well off highs and as seen in RSI on hourly charts, has steadily moved lower. While a move to 2900-5 can't be ruled out, this still looks like an appealing area to take off risk, not bet on further upside. The key area to breach to have more confidence lies near 2877-8. Under those lows gives some more confidence of a peak in place that should allow for at least 3-5 days of downside.

CCI, the Equal-weighted Thomson Reuters Commodity index, has pushed back up to recent highs, and looks likely to result in this pushing higher in the days and weeks ahead. Given that both the US Dollar and Yields are declining, this should prove beneficial for commodities.

commodities.png

Chinese stocks could weaken near-term, and it's right for those short-term focused to consider taking profits and holding off from initiating new longs here right away after this recent rally. Overall the China Large-Cap ETF, FXI, looks bearish near-term given its recent reversal and further near-term weakness looks likely before this can start moving higher again. In recent days, FXI rolled over in recent days to get back below the area of the prior breakout. This close at multi-day lows likely results in FXI puling back under 45 in the days ahead , which could offer a better risk/reward opportunity on the long side. While the intermediate-term rally is very much intact, the near-term has stalled and might allow for some near-term weakness before this can turn back higher.

Gold looks to be turning higher, while Stocks take a breather, right on cue

April 10, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2880, 2870, 2861, 2848-9

Resistance: 2902-4, 2908-10, 2915-7

Tuesday Technical Video- 4/9/19

https://youtu.be/3zgBL98_7tQ



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX



Webinar Link from last Thursday's Technical Call- 4/4/19

https://youtu.be/kvOxFMEciAw




SPX - (3-5 Days)- Bearish- Reversal happened on cue- Stocks likely begin 3-5 day pullback. Maximum weakness down to 2785-2800 in all likelihood.

EuroSTOXX 50- Bearish- Similar to SPX, SX5E has reached areas where it makes sense to lighten up and/or fade this rally. Longs have stops under 3400 and likely max upside to 3500 this week

HSCEI- Rally likely nearing its end; Expect peak Wed/Thurs to follow US/Europe lower near-term Resistance-11895-12000



Trading Longs: GDX, UNG, DBC, FCX, LYB, DWDP, CMCSA, MAS, TRP, QSR, TSCO, HD, DHR, XOP, USO, FLT, PCAR


Trading Shorts: SIG, KR, GES, CME, CBOE, MO, OI, LB, TWLO, TEAM, CTXS, OSTK, CI, MHK, WATT, EXPE



Simply stated, Tuesday's price action was exactly what needed to happen to have some confidence of markets peaking out in the short run. We saw many indices close down at the lowest level in four days after having recorded upside exhaustion, Breadth confirmed with 3/1 bearish breadth and even heavier volume into Down v Up stocks, the Russell 2000 broke its uptrend, and 3 key sectors stalled out near prior highs: Technology, Industrials and Consumer Discretionary before turning down to make new multi-day lows.

Given that these last three groups are this current year's Leading sectors in terms of performance, we look to finally be at a spot where at least near-term weakness can occur and a short-term pullback could be underway. It's right to be defensive over the next 3-5 days, adopting hedging techniques and/or holding off on buying dips right away.

Outside of Equities the larger move of interest happened in Gold. We saw Gold turn back higher to multi-day highs after what looks to have been a successful retest of March lows. Given the Dollar starting to top out, it looks likely that Gold turns higher, as US 10-Year Treasury yields remain under pressure.


Overall, between now and end of week, it looks right to be Short Stocks, long bonds, long Gold, long Natural Gas. Charts below will help to add some perspective.



ACTION PLAN- 


Long GLD for a rally up to 127- Stops under 120.96


Long UNG for a rise in Natural Gas into end of April/early May with targets at 2.90-2


Long XLB with targets at 61 and stops on daily closes under 56.80


Short IWM for a move down to 151 from 155.2- Stops above 157.4

Short XLK with targets at 72.25

Short XLY with targets at 114.50

Sold FANG basket Tuesday at the close



Additional charts and thoughts below.

below.png

SPX rolled over yesterday to a multi-day low close. While trendlines have not yet been broken, and some might question turning bearish ahead of this development, the combination of Sectors stalling out near key levels while counter-trend sells are present on the heels of the recent stallout in breadth and momentum makes sense to adopt a defensive posture for at least a near-temr pullback. It's thought that weakness likely does not undercut 2785, so pullbacks over the next week should represent buying opportunities.

opportunities.png

Russell 2000 and Small-caps should continue to be avoided near-term, as the break of the near-term uptrend should make IWM weaker than the market in the days to come. While SPX did not yet break its uptrend, IWM did in fact violate this trend. Thus, near-term, one can make the case for pullbacks down to $151 from its current $155.20, which could happen into next week. Thus for the Russell, yesterday's break definitely was more bearish than bullish and signals a good likelihood of further weakness.

weakness.png

Gold looks to have started a move back higher as its recent pullback attempt held above March lows and now the last few days have moved up meaningfully off the lows to multi-day highs. This is constructive technically and the breakout back above 1315 would be a further step in the right direction with movement back above 1325 leading to a more meaningful test of the all-important 1360-75 area. For now, given that the Equity market looks to be stalling out after nearly the best rally in over 16 months, spanning eight consecutive days higher, one might consider diversifying into Gold and/or commodities in general, and should put Gold on the "Front Burner" so to speak as something to watch carefully in the days ahead in the event we see even further follow-through.

Natural Gas spike yesterday likely leads to further gains

April 9, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2880, 2870, 2861, 2848-9

Resistance: 2902-4, 2908-10, 2915-7

Monday Technical Video- 4/8/19

https://youtu.be/dtvdSwy_ptE



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX



Webinar Link from last Thursday's Technical Call- 4/4/19

https://youtu.be/kvOxFMEciAw



SPX - (3-5 Days)- Bearish- Reversal Expected Tuesday/Wednesday, Max upside to 2915- Under 2880 should confirm

EuroSTOXX 50- Bearish- Similar to SPX, SX5E has reached areas where it makes sense to lighten up and/or fade this rally. Longs have stops under 3400 and likely max upside to 3500 this week

HSCEI- Mildly bullish- No change-Movement up to 11895-12000 looks possible into Wednesday before exhaustion sets in. For now, China stronger than US near-term



Trading Longs: UNG, DBC, FCX, LYB, DWDP, CMCSA, MAS, TRP, UBNT, QSR, ETSY, REGN, FB, AVGO, TSCO, HD, DHR, XOP, USO, FLT, PCAR


Trading Shorts: SIG, TLRY, KR, GES, CME, CBOE, MO, OI, LB, TWLO, TEAM, CTXS, OSTK, CI, MHK, WATT, EXPE



Fractional gains yet again for yesterday, and yet again, indices look to successfully battled back to close the day having erased the earlier loss. Breadth however barely finished positive and five sectors were down on the day. Specifically for Tuesday/Wednesday, it looks to be problematic that XLY is now right at the level of last Octobers highs while showing evidence of counter-trend exhaustion in this trend. Additionally, Industrials also looks to be stalling out near February's highs and has similar exhaustion, which last time proved to be problematic for this group in late February. Technology has seen some real ability of the FAANG group to play catchup of late, FB, AAPL, AMZN, NFLX, GOOGL, yet XLI looks to have its own level of resistance near last Fall's highs while also showing a similar pattern of counter-trend exhaustion.

Thus, overall the problem certainly isn't with the trend, but yet with the plethora of exhaustion signals now being seen on the benchmark indices on daily charts along with many of the sectors that have led this market over the first three months of this year. Breadth has now begun to slow a bit, and momentum has not been as strong over the last week. All of these reasons are grounds to consider buying implied volatility in the near-term, and/or considering lightening up in some of the stocks which have now reached prior highs similar to the indices themselves. While the intermediate-term trend still looks quite strong from December 2018 lows and not vulnerable to a large correction, the near-term has given a few hints of cautionary signs for those that are watching and might cause this bullish seasonal month of April to be a bit tougher than many expect to continue straight higher.

Outside of Equities, commodities seem to have suddenly taken charge in the last month, despite the Dollar not having really turned lower materially just yet. Some of the precious metals have rallied, while Energy certainly has been a bright spot. Cattle and Lean Hogs have fared well along with Cotton, and rallies in Coffee (if momentum is any guide) seem to be right around the corner. What's particularly bullish however looks to be what's happened to Natural Gas in the last 24 hours as prices have rallied sharply to break the downtrend over the last month after having hit good support. This move looks to extend in the weeks ahead, and pullbacks could be utilized to give this a closer look as a long, given forecasts of potentially a cooler back half of April.



ACTION PLAN- 


Closing out long XRT, XLY and taking profits on the open, Tuesday 4/9

Long UNG for a rise in Natural Gas into end of April/early May with targets at 2.90-2

Long XLB with targets at 61 and stops on daily closes under 56.80


Long FAANG stocks through NYFANG basket, but looking at selling Tuesday, or Wednesday of this week 4/9-10

Short XLK at 76.75 or higher, with targets at 72.25


Short XLY at 118 or higher with targets at 114.50



Additional charts and thoughts below.

below.png

NDX has gotten right back to prior highs, a level which likely will cause some stalling out this week as this represents strong resistance to the advance. The area from 7600 to 7750 should be thought of something to consider selling into initially as prices near this level. Upon any sort of pullback to this uptrend, that's likely the extent of the selling, at least for the month of April.

April.png

Commodities look to be turning higher, regardless of any strong downward pressure in the US Dollar. The last two weeks have seen consistent gains in the Invesco DB Commodity Index tracking fund (DBC) which has helped this reach the highest levels since last November. Trends remain bullish, and this should be an area to consider diversifying into, as this uptrend should begin to accelerate as the Dollar's drop starts to gain speed.

Natural Gas surge yesterday makes UNG attractive to consider as a technical long, as June Nat Gas likely goes from 2.70 back to 2.90 in the short run. After having held a key area of support that held four times since last September, this managed to gain ground to multi-day highs yesterday, rising back up above 2.70. UNG, the ETF for Natural gas (non-levered) looks to be a good bet to rise to $25 in the short run, and longs are favored for follow-through in the days and weeks ahead.

Discretionary still strong while Technology reaches resistance

April 4, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2854, 2840, 2820

Resistance: 2875-6, 2880, 2885-7

CNBC 4/3 interview on Semiconductor stocks & why best to hold off

https://pub-origin.cnbc.com/video/2019/04/03/why-these-investing-pros-arent-buying-into-the-chip-stock-surge.html



Wednesday 4/3 Mid-day Technical Video Link

https://www.youtube.com/watch?v=Ox7bLKRJsOE



Thursday 3/28 Technical Webinar Link

https://youtu.be/O3A9Irxn18g



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919




SPX - (3-5 Days)- Expect Stallout/reversal between Thursday and next Monday, with resistance at 2905. Stops are raised to 2848 on a close



EuroSTOXX 50- Mildly bullish- No change- Expecting 3425-3460 into next few days before a stallout and reversal. Stops on longs under 3325



HSCEI- Neutral- No change- Prices have reached highs of one-month range, and while 11900 can't be ruled out. the risk/reward is not as good near-term. Under 11420 is a stop for longs



Trading Longs: CMCSA, MAS, ROKU, DLTR, TRP, GDDY, NBIX, MDCO, DVAX, COLM, UBNT, QSR, HEAR, ETSY, REGN, FB, AVGO, TSCO, HD, DHR, XOP, USO, FLT, PCAR


Trading Shorts: OSTK, CI, MHK, WATT, EXPE



Stocks staged just minor reversals from intra-day highs yesterday, though no real damage was done by the close, with prices failing to take out prior lows and trends still very much in place. Breadth came in marginally positive around 3/2 with Tech and Discretionary doing all the heavy lifting, while we saw some definite evidence of Staples and Energy making pretty sharp pullbacks.

Overall, my view is that Technology has limited upside here, based on the S&P 500 Information Technology index back up at former highs, while momentum has lagged for the last two months. Parts of Tech like the FAANG group still look to be able to extend on a 3-5 day basis, but my thinking remains that it's right to consider taking some profits and shifting into Healthcare or into Transportation. On a very near-term basis, there was some definite strength in the Consumer Discretionary group which still looks to lead between today and early next week, while the Consumer Staples group looks to be breaking down and can be avoided.

Outside of Equities, there is some real weakness in Treasuries near-term as yields have turned up to follow stocks over the last few days. Meanwhile the Dollar has been gradually getting weaker, with the Euro trying to firm while Pound Sterling has found a small bid given the UK Parliament's decision to block a No-deal Brexit. Bottom line, the trend in US Dollar can't be called bearish just yet in the short run, and it's still difficult to expect prices to fall right away. WIth regards to Yields, it's thought that another 1-2 days of yield bounce is possible, but this should pave the way for a reversal back lower, and could coincide with equities following suit in the weeks ahead.

Overall, its right to be far more selective at this stage of the rally and there are some cyclical facotrs that could allow for a minor top in stocks by early morning Friday into next Monday. If this doesn't work, than 4/9-4/10 is the next most important area. VIX in particular rose to new multi-day high closes yesterday, which is odd given the market rally and typically makes it worthwhile to pay attention for the potential for a reversal. However, it's thought that a 3-5% pullback into end of April would be buyable, and for now, cannot be confirmed given the lack of weakness. One should stick with Discretionary into next week and buy weakness in Healthcare, while avoiding Tech at this point along with Staples.



ACTION PLAN- 

Long XRT, Lowering targets to 45.75-46.25 with stops raised to 44.75 on a close


Long XLY with targets at 118 and stops raised to 113.50

Long FAANG stocks-AMZN and NFLX are catching up and target for NYFANG index (bloomberg is 2800 with stop at 2612

Long TLT- Target 127.5. Use this weakness to add to longs with stops under 123



Additional charts and thoughts below.

below.png

S&P has now risen for five straight days, which often historically has led to at least a bit more strength in the days to come. In this case, prices are entering the first of two key time zones for trend change. The first starts Thursday into next Monday, and the second will take place at the end of next week. Breadth has stalled a bit, while momentum has failed to keep up with prices push back to new highs. Overall, until there is evidence of price turning down to take out 2848 on a close, it's worth still sticking with this rally, but yet looking to rotate out of groups like Technology and into Healthcare. Specifically for the next 3-5 days, Consumer Discretionary looks to be an outperformer into next week, and should be favored for outperformance. In regards to S&P, we'll need to see some degree of weakness to pay attention with daily closes under 2848.

2848.png

Technology has now risen right back to former highs, a level which should provide some resistance to this rally. Semiconductor stocks in particular have risen more than 35% in the last 3 months and now up to similar levels. Momentum, meanwhile, has failed to keep up with price action , and this combined with former resistance, could be important in allowing for a slowdown in Tech in the coming days. Overall, it looks right to sell into this move in Tech and consider diversifying into different sectors.

sectors.png

Consumer Staples has broken the trend from December over the last two trading days. It was thought that the flight to Defensive might prove short-lived, and with the equity rally having persisted of late, this group has now weakened enough to violate its uptrend. This is a bearish development and should lead to additional underperformance in the days and weeks ahead after this rally.

Markets very close to resistance, but still no meaningful signs of Reversal

April 2, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2854, 2840, 2820

Resistance: 2875-6, 2880, 2885-7



Monday 4/1 Mid-day Technical Video Link

https://youtu.be/lflO4goX59E



Thursday 3/28 Technical Webinar Link

https://youtu.be/O3A9Irxn18g



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919





SPX - (3-5 Days)- Mildly Bullish, expecting 2880-5 but raising stops to 2819 for longs on a closing basis. SPX looks close to making a near-term top, as counter-trend exhaustion is very close, within 2-3 days, while negative divergence is now present on this rise while Technology is close to resistance. For now, a mildly bullish stance is correct for the balance of this week, until more meaningful reversal gets underway.



EuroSTOXX 50- Mildly bullish- expecting 3425-3460 into next few days before a stallout and reversal. Stops on longs under 3325



HSCEI- Neutral- Prices have reached highs of one-month range, and while 11900 can't be ruled out. the risk/reward is not as good near-term. Under 11420 is a stop for longs





Trading Longs: COLM, UBNT, QSR, HEAR, ETSY, REGN, FB, AVGO, TSCO, HD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: OSTK, CI, MHK, WATT, EXPE



Yesterday's surge carried S&P and DJIA to the highest levels since last Fall, while NASDAQ remained fractionally under last week's highs. Breadth came in nearly 3/1 bullish and Technology and FInancials both showed above-average strength, while Transports played catchup, as Industrials were higher by 2+%, helping the DJIA make a more convincingly bullish near-term breakout.



Overall, upside at this point seems rather limited in the short run given a 2% gain over the last three trading sessions. Specifically, we're beginning to see signs of negative momentum divergence while Counter-trend exhaustion is due by end of week. Additionally, Technology is now within striking distance of former peaks, and in dire need of relief from other sectors. Thus, while sentiment could turn a bit more positive on early week gains, the risk/reward of new longs from Tuesday-Friday is sub-par. While this doesn't bring about a chance to sell into gains for anything meaningful just yet (and any Tuesday weakness would actually be buyable), Im not expecting that strength is meaningful in getting above 2900, but likely stalls out at 2880-5 by Friday. Overall, i am entering Tuesday with a "mildly bullish" stance between now and Friday, though am not looking at initiating any new index longs, and will be looking to pare down longs into end of week this week on a bit more strength as a few more technical pieces come into place. For now, a selectively bullish stance is a must given the extent of recent gains and where indices lie.




ACTION PLAN- 

Long XRT, targeting 47.50 with stops raised to 44.65


Long XLY with targets at 118 and stops raised to 113.50


Long XOP- Targets 32.50, stops raised to 30.35


Long FAANG stocks-AMZN and NFLX are catching up and target for NYFANG index (bloomberg is 2800 with stop at 2612

Long TLT- Target 127.5. Use this weakness to add to longs with stops under 123



Additional charts and thoughts below.

below.png

S&P not as great of a risk/reward near-term after it moved to close at the highest levels since last Fall. We're seeing some evidence of negative momentum divergnece and counter-trend exhaustion is now just 2-3 days away, which likely will create some near-term resistance and produce some kind of stalling out into end of week. Heading into Tuesday, after a 2% rise over the last 3 trading sessions, I'm not in favor of pressing longs and given the 60 and 120 minute confluence of Demark sells on intra-day charts, actually feel like Tuesday might prove to be a minor down session before prices push on to 2880. Upside at this point is a bit more limited than this time last week, but yet no definitive evidence of any reversals and yesterday's rally came on nearly 3/1 positive breadth with a strong move out of Financials and Technology. The right positioning seems to be to hold longs for now, but not initiate new longs in the indices, and one would use minor dips to buy on Tuesday with the thinking that a bit more upside can happen over the next 3-4 trading sessions.

sessions.png

Technology looks to be making its final "last-gasp" type rally which could send this back to former peaks, but it's thought that this group should stall out this week on further gains, and that upside should prove limited. The SOX chart i posted last week also has shown gains back over 1430 and within striking distance of highs made last March and June 2018 which should prove important. Bottom line, while the trend remains very much intact, one should look towards areas like Retailing, written about in the Weekly yesterday morning, vs looking to press bets in Technology. It's my opinion that this group should stall out, even if temporarily, by end of week, making gains good to sell into. As discussed, reasoning revolves around counter-trend sells along with prior peaks providing resistance.

resistance.png

After yet another round of Failed votes has thrown the BREXIT deal into further disarray, the Pound Sterling looks increasingly likely to turn back lower in the short run, after a number of weeks of stalling out after just a meager rally. While price action has been largely unchanged vs the US Dollar largely since the end of January, it's notable that recent lows failed to produce any meaningful buy signal from an exhaustion standpoint, similar to what happened at prior lows. Prices remain trending lower from last year and the risk/reward seems to favor selling the Pound as May sets to convene yet again Tuesday. A close under 1.3010 should cause selling down to 1.2785, while movement back higher over 1.3213 is needed to have any sort of confidence in a rise. Thus, the pattern near-term is quite mixed, and on weekly charts it looks more negative, in the next 3-5 weeks, as seen above. Movement down towards recent lows would offer more support to buy, vs thinking any meaningful upside is yet likely.

Transports and Healthcare should play Catchup, while Tech slows

April 3, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2854, 2840, 2820

Resistance: 2875-6, 2880, 2885-7



Tentatively scheduled to be on CNBC today at 2:20-2:25pm



Tuesday 4/2 Mid-day Technical Video Link

https://youtu.be/NEDZiB8nkC8



Thursday 3/28 Technical Webinar Link

https://youtu.be/O3A9Irxn18g



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919





SPX - (3-5 Days)- Mildly Bullish, expecting 2880-5 but raising stops to 2819 for longs on a closing basis. SPX looks close to making a near-term top, as counter-trend exhaustion is very close, within 2-3 days, while negative divergence is now present on this rise while Technology is close to resistance. For now, a mildly bullish stance is correct for the balance of this week, until more meaningful reversal gets underway.



EuroSTOXX 50- Mildly bullish- No change- Expecting 3425-3460 into next few days before a stallout and reversal. Stops on longs under 3325



HSCEI- Neutral- Prices have reached highs of one-month range, and while 11900 can't be ruled out. the risk/reward is not as good near-term. Under 11420 is a stop for longs



Trading Longs: NBIX, MDCO, DVAX, COLM, UBNT, QSR, HEAR, ETSY, REGN, FB, AVGO, TSCO, HD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: OSTK, CI, MHK, WATT, EXPE



Some minor evidence of stallout Tuesday and by day's end, SPX had largely finished unchanged, while NASDAQ was higher by 0.25% and DJIA was fractionally lower. Breadth came in Negative ever so slightly and around half the sectors finished down, led by Consumer Staples and Energy, despite the late surge by WTI Crude. All in all, not a convincing reversal sign for indices, but yet seeing some negative breadth towards the end of rallies typically will be important to monitor over these next couple days. Overall, to have real faith in a reversal, ideally we'll need to see an early rally attempt that fails and moves to new multi-day lows. (At present we've seen four straight days where the open, high, low and close were all higher) The minor pullback we saw from 3/21 into 3/27 failed to do much damage and held the trendline from December lows. Getting below this swing low which hits this trend would involve a close down UNDER 2785, or around 80 points lower. Thus, a minor pullback is possible that doesn't make much progress lower and then pushes higher. Yet, at this stage of the rally with the start of breadth stalling while Technology reaches resistance, we have more evidence that a pullback, even if minor, should be right around the corner.



Two groups could come to the rescue to bail out Technology and buoy the market during the month of April. Transports are one of these which had lagged badly in the last month, but which have come to life recently, with Rails breaking back out to new highs (see CSX, NSC, KSU, UNP) Even the Airlines have managed a bounce, within their respective bearish pattern. The second is Healthcare, which is looking increasingly interesting as a long. Biotech ETF (XBI) along with the Healthcare ETF (XLV) both show triangle patterns where prices are now testing the upper part of this boundary which has already been tested before (and in my thinking, should finally lead to a breakout in this group) Overall, both of these latter sectors are attractive and can be considered substitutes for those wishing to exit Technology in the next 1-2 days.





ACTION PLAN- 

Long XRT, targeting 47.50 with stops raised to 44.65


Long XLY with targets at 118 and stops raised to 113.50


Long XOP- Targets 32.50, stops raised to 30.35

Long FAANG stocks-AMZN and NFLX are catching up and target for NYFANG index (bloomberg is 2800 with stop at 2612


Long TLT- Target 127.5. Use this weakness to add to longs with stops under 123





Additional charts and thoughts below.

S&P has now pushed higher off its trend from December for four straight sessions, with SPX cash index recording exhaustion, while Futures contracts for June show these to be two days away. Meanwhile momentum has made a pattern of lower highs than either of the two recent peaks. Bottom line, the trend remains positive and for now, no evidence of any reversal. Thus, a bit more strength looks possible with targets at 2880-5 for SPX cash. If Transports and Healthcare can both follow through on recent strength, this would be seen as a big positive at a time when Tech is thought to face major resistance and likely stall out by next week. To have real confidence in any pullback, prices will need to get down under 2785, which represents the uptrend line and last swing low. Until that time the trend is bullish, but one should look to sell into strength over the next 2-3 days.

Transportation stocks have been the number 1 performing SPX GICS Level 2 group in the past week, showing +6% performance out of 24 groups. The DJ Transportation Avg, shown above, has now officially begun to play catch-up, and technically has just exceeded the entire downtrend from September, something that most market indices accomplished around two months ago. Near-term, while February highs could represent some minor resistance, this breakout is worth highlighting and should lead to outperformance in the weeks and months ahead. Rail stocks in particular are the most attractive part of this group, and stocks like CSX, UNP, KSU, and NSC have all shown recent breakouts that make this area worth highlighting.

highlight.png

Healthcare now is on the verge of breaking out after nearly a full month of sideways trading. This sector lagged throughout the month of March, but now is well positioned to move higher after pushing up to test the upside border of this Triangle which has been intact for the last couple months. Patterns look similar in both XLV and also XBI and favor being long after already one successful test, thinking that the second retest won't hold, and we'll see a breakout of this pattern. Overall, it looks right to favor Healthcare for a bounce this month and to play catchup after having lagged this last month. Technically, this sector remains good structurally but just looks to have consolidated, which has helped to alleviate overbought conditions.

The Pause that Refreshes? Despite slowdown, still little real weakness- but Short-Term Peak likely in April

March 29, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2785, 2722, 2709-11

Resistance: 2860-2, 2871-2, 2885-7



Thursday 3/28 Technical Webinar Link

https://youtu.be/O3A9Irxn18g



Wednesday 3/27 Mid-day Video discussing SPX Transports, Financials

https://www.youtube.com/watch?v=uESCszDcGGY



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919



SPX - (3-5 Days)- Bullish, using 2785-9 as a stop for longs- Expecting 2860 should be challenged and exceeded this week before any top, as time remains a bit early for a top.



EuroSTOXX 50- Bullish- Upside targets for gains 3375-3425- Expect rallies into early April, but the break of the uptrend is a negative and rallies should be sold into late week. Under 3281 turns trend bearish

HSCEI- Minor bearish expecting former 11151 lows hold and allow for rally back to 11550-11600



Trading Longs: COLM, QSR, HEAR, ETSY, COP, HES, DVN, REGN, FB, AVGO, TSCO, LOW, HD, DRI, AAP, DHR, AGN, ALGN, XOP, USO, FLT, ISRG,PCAR, GDDY



Trading Shorts: HUM, CI, MHK, TRIP, OSTK, WATT, BWA, CE, EXPE



Yesterday's trading yet again proved to be a large non-event for Equities as the trading month and quarter comes to a close today with the 12.31% gains proving to be the largest quarterly gain since Q3 2009. This can't last in my opinion, yet we'll need to see a bit more to think stocks are turning down. SPX is largely at the same area it was back in early March nearly 3 weeks ago, with yesterday's 2815.44 close less than 4 ticks above levels hit 11 days ago. Technically, my opinion is that this slowdown should lead higher into next week and a "final" breakout of this range should result in a test and potentially a minor move above 2860-6 before a top into the end of the first week of April. For now, despite the breadth and momentum slowdown, it's premature to exit longs until weakness (on a close) dictates. So for the record, I DO expect a reversal in April , and DO feel that upside is limited. I just can't turn negative here given a real lack of bearish price action. The rotation thus far has helped to bail out the market, and this WFC CEO stepping down likely will help Wells outperform and at 6.7% of the XLF, likely is a positive force for Financials into end of Quarter today.



Outside of Equities the real mover, of course was the US Dollar, inching up again, albeit nearly Half a cent, strong enough to send GBPUSD and EURUSD breaking down, along with commodities and specifically Precious metals. My thinking is this should prove short-lived, though technically it's wrong to step in and fade the Dollars move just yet, as well as the weakness in Precious metals. For intermediate-term investors this washout should allow for a decent buying opportunity into April. For now, this is premature in my view.




ACTION PLAN- 

Long XRT, targeting 47.50 initially with stops at 43

Long XLY with targets at 118 and stops at 111.25

XOP- Crude's advance should lead XOP higher to near 32.50 and its thought that this ETF challenges and breaks out of the consolidation since late January. Stops under 29.75

Long FAANG stocks- though with thinking that AMZN and NFLX make more near-term progress than FB and GOOGL.

Long TLT- Target 127.5. Stop 120.92




Additional charts and thoughts below.

below.png

S&P still is trading near levels that were seen 11 days ago, so this last few weeks has done little to nothing to the larger trend. As stated in previous notes, given that Demark exhaustion is premature and price has not weakened down under 2785, this looks to be a consolidation that still should be resolved by a move to the upside. Bottom line, it's still right to hold longs, expecting a challenge and move above 2866 before highs are in.


in.png

Gold sold off sharply yesterday as the Dollar's rally along with rates stabilizing caused some weakness in the Precious metals space. This erased nearly 80% of the move up in March. Overall, one should hold off on buying dips until 1280 and under this would result in a potentially final move to 1250-65 before this bottoms. Overall, this is looked to be a short-term decline only and the Dollar gains should prove short-lived and then rollover which is likely going to be a positive for Gold. Bottom line, hold off near-term on adding to Gold or Gold stocks, but there should be opportunity to buy into mid-April.



april.png

Homebuilders look to be able to extend after moving up sharply in recent days after this recent base. While housing data has been soft of late, technically this group has begun to reverse course and turn higher in recent days. One should consider having longs of some size in ITB, and looking to buy dips if given the chance in the days/weeks ahead.

Increasing likelihood that a top is near; Repeated failures taking a toll on momentum

March 28, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2785, 2722, 2709-11

Resistance: 2860-2, 2871-2, 2885-7



Wednesday Mid-day Video discussing SPX Transports, Financials

https://www.youtube.com/watch?v=uESCszDcGGY



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919




Replay Link-Thursday 3/14/19 Technical Webinar

https://youtu.be/EgbO3PCKl9I




SPX - (3-5 Days)- Bullish, using 2785-9 as a stop for longs- Expecting 2860 should be challenged and exceeded this week before any top, as time remains a bit early for a top.

EuroSTOXX 50- Bullish- Upside targets for gains 3375-3425- Expect rallies into early April, but the break of the uptrend is a negative and rallies should be sold into late week. Under 3281 turns trend bearish

HSCEI- Minor bearish expecting former 11151 lows hold and allow for rally back to 11550-11600



Trading Longs: TMUS, VZ, COP, HES, DVN, REGN, FB, AVGO, TSCO, LOW, HD, DRI, AAP, DHR, AGN, ALGN, XOP, USO, FLT, ISRG, DXCM, PCAR, GDDY


Trading Shorts: HUM, CI, MHK, TRIP, OSTK, WATT, BWA, CE, EXPE


Yesterday's late-day rally into the close helped US indices fail to breakdown sufficiently to think that market are peaking out right away and corrections for now still look a bit early. However, the reversals in Technology did look somewhat damaging, particularly in Semiconductor issues, and momentum continues to worsen. Overall, its likely that upside at this point proves limited and that rallies into next week should be used to sell for a more serious pullback in the month of April.

Bottom line,one should still stay positive barring a move down under 2789 for Futures, 2785 for SPX cash. Demark exhaustion is not yet complete, and there stands to reason that a rally into end of month/quarter could happen given how positive the first 3 months of the year have been. With just two more trading days in the month and quarter, SPX is now set to record the largest quarterly gain in 10 years time. However, the extent to which breadth is starting to drop off while Technology has reached resistance looks to be a definite issue heading into the month of April. Failure to rally back nearly right away to challenge and/or exceed recent highs would suggest that any minor rally is a selling opportunity, and that losses are possible in April after 3 straight "up" months.

The real concern which many seem to be pointing out now, revolves around the decline in Treasury yields, not just in the US, but globally. We've seen pretty major collapses in yields on most timeframes and with German Bund yields at -8 bps, the demand for US Treasuries at 2.30%+ is very real. Near-term, TNX looks to have a chance at testing this 2.25% which looks to be near-term support. Yet, stocks haven't declined sufficiently to become all that negative. Overall, with regards to equities, t remains right to have a constructive stance unless 2789 is broken. Until that time, it should pay to favor additional stock market rallies into the first week of April.



ACTION PLAN- 


Long XLY with targets at 118 and stops at 111.25


XOP- Crude's advance should lead XOP higher to near 32.50 and its thought that this ETF challenges and breaks out of the consolidation since late January. Stops under 29.75

Long FAANG stocks- though with thinking that AMZN and NFLX make more near-term progress than FB and GOOGL.

Long TLT- Target 127.5. Stop 120.92



Additional charts and thoughts below.

below.png

S&Ps pullback hasn't been sufficient enough to think that the trend is yet turning lower. One should obey the recent 2785 spike lows for SPX cash and 2789 for S&P futures that still look quite important in the short-term for this tend. Breaking these levels would add to the likelihood of a larger decline. Thus far, one should still look to buy into recent weakness, given that Jan-March 2019 stands to be one of the best quarters in the last 10 years. The first week in April has some significance cyclically as something which might make a top. For now, too many seem to think that Yields are bearish right away, and this sentiment switch is tough to press the bearish case.

case.png

SOX decline is thought to be fairly negative in the short run, and while stocks like AAPL have helped Tech hardware show strength even on days like Wednesday, the Semiconductors have turned down sharply which is a bit more negative as a leading indicator for Technology in the weeks/months ahead.

ahead.png

While Equal-weighted index underperformance has been thought by many to be a key issue why stocks have begun to stall out a bit, it should pay to see the charts of Equal-weighted S&P vs Cap-weighted SPX which largely has been falling since 2015. So while equal-weighted Sector analysis can often shed some valuable light as to the upcoming directional move in the sector itself, this is a much tougher task with Equal-weighted index study. Note that during the harshest time of Equity declines last Fall, in Nov/December, Equal-weighted SPX was in the process of turning up. Thus, while down over the last 4 years, still difficult to make any immediate conclusion.

Rally seems on track for this week, though Transports/Financials weakness a concern heading into April

March 27, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2785, 2722, 2709-11

Resistance: 2860-2, 2871-2, 2885-7



Tuesday Mid-day Video discussing SPX Transports, Financials

https://stme.in/3ncWMmx84L



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919




Replay Link-Thursday 3/14/19 Technical Webinar

https://youtu.be/EgbO3PCKl9I




SPX - (3-5 Days)- Bullish, using 2785 as a stop for longs- Expecting 2860 should be challenged and exceeded this week before any top, as time remains a bit early for a top.

EuroSTOXX 50- Bullish- Upside targets for gains 3375-3425- Expect rallies into early April, but the break of the uptrend is a negative and rallies should be sold into late week. Under 3281 turns trend bearish

HSCEI- Minor bearish expecting former 11151 lows hold and allow for rally back to 11550-11600



Trading Longs: COP, HES, DVN, REGN, FB, AVGO, TSCO, LOW, HD, DRI, AAP, DHR, AGN, ALGN, XOP, USO, FLT, ISRG, DXCM, PCAR, GDDY



Trading Shorts: HUM, CI, MHK, TRIP, OSTK, WATT, BWA, CE, EXPE



Yesterday's + 0.75% gains helped S&P extend gains to the highest level in 3 days, as Energy, Financials both rallied more than 1% while Technology, Industrials Healthcare also made good ground, as did the Defensives with Utes and Staples both gaining more than 0.70%. Breadth was higher by more than 2.5/1 bullish while Crude oil extended gains over $60 intra-day, as the Dollar began to firm. Overall it's looking likely that the Dollar makes a mild move higher before peaking out again, but yet Crude should be on a path for $62-63 in the short run, and Energy might still benefit.


The negatives at this point have to do with Financials having turned down sharply lately while Transports have not followed through on the upside. This is largely the fault of the Airlines and Air Freight, but still looks to be a big deal at a time when Technology is close to or at resistance. Price wise though, indices look early to peak this week and given the end of quarter/end of month seasonality with the extent of the move in January/Feb/March thus far, one should look for further gains to end the quarter before any meaningful peak. However that being said, April could very well be a down month for stocks after three stellar months of gains and the best quarter in over a decade.

For now, its right to favor Energy, healthcare (except for Services stocks) and the defensives.. and look to take profits on Tech gains this week



ACTION PLAN- 


Long XLY with targets at 118 and stops at 111.25


XOP- Crude's advance should lead XOP higher to near 32.50 and its thought that this ETF challenges and breaks out of the consolidation since late January. Stops under 29.75


Long FAANG stocks- though with thinking that AMZN and NFLX make more near-term progress than FB and GOOGL.


Long TLT- Target 124. Stop 120.92



Additional charts and thoughts below.

below.png

S&Ps gains on Tuesday followed through even despite some meaningful backing off in Technology intra-day, but still managed to close at the highest levels in three days. While the recent dropoff in Transports and Financials is a concern at this stage of the rally, it seems premature to think markets turn down just yet. One should still expect a possible test of recent highs into end of Quarter before any real stalling out. Stops lie at 2785.

Rails vs Airlines in ratio form shows why running these kinds of Ratio charts can be so valuable. This turned sharply higher nearly two years ago, providing a mechanism where one would be long the Rail in Transportation while shorting the Airlines. This still looks to be the case though is close to nearing at least some near-term exhaustion. One should still favor Rails to outperform into the first week of April and be short Airlines.

airlines.png

Financials turned down quite sharply in recent days, which is problematic to the bull case for Equities given their exposure within SPX. Relative charts show the group pulling back to the lowest levels since 2016 and still early on weekly charts to form exhasution. While a case could be made two weeks ago for some exhaustion and rally, the extent of the pullback last week is definitely damaging to this bullish case and longs in Financials likely are still a bit premature.

Tuesday morning rally encouraging that a further bounce this week can happen

March 26, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2812-7, 2797-8, 2785

Resistance: 2829-30, 2846-8, 2860-2

Thanks for your recent patience (From most of you) I spent 5 days in China and Hong Kong and got home about an hour ago, after 15 hours of flight-time. My apologies on lack of timely notes. Having a VPN connection there (with China blocking Google) doesn't even guarantee that one can get a good connection !! But a fantastic trip, and good to be back. Today we'll address this morning's activity and service should be fine for Daily notes going forward, with Videos sent to Blog and to Private Twitter. Today's video is included given that i'm putting out a mid-day report.



Tuesday Technical Video

https://stme.in/3ncWMmx84L



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919



Replay Link-Thursday 3/14/19 Technical Webinar

https://youtu.be/EgbO3PCKl9I




SPX - (3-5 Days)- Bullish, Expect a rally to test and exceed 2860 before markets peak in early April. Under 2785 (SPX cash ) would postpone

EuroSTOXX 50- Bullish- Expect rallies into early April, but the break of the uptrend is a negative and rallies should be sold into late week. Under 3281 turns trend bearish


HSCEI- Minor bearish expecting former 11151 lows hold and allow for rally back to 11550-11600



Trading Longs: COP, DVN, CXO, XOP, USO, TSCO, LOW, HD, WYNN, DRI, AAP, DHR, HUM, AGN, CI, ALGN, BAC, GS, LNC, WFC, FLT, ISRG, DXCM, PCAR, GDDY


Trading Shorts: MHK, TRIP, BBBY, OSTK, WATT, BWA, CE, EXPE


Today's snapback higher on the heels of yesterday's strong close after early weakness is a positive if this can hold above today's open. Tuesday closes above 2812.66 should allow for further gains in the days ahead with a challenge of 2860 likely


Energy is leading all sectors while Healthcare and Technology are both showing gains of nearly 1%. Breadth is higher today by more than 3/1 and the movement in Crude oil should be noted, as this has now gotten back up above 60 and a bullish development.



ACTION PLAN- 


Long XLY with targets at 118 and stops at 111.25

XOP- Crude's advance should lead XOP higher to near 32.50 -Stops under 29.75

Long FAANG stocks- NY FANG index likely to move to 2700-2750 before any stalling out

Long TLT- Target 126.50 Stops raised to 124



Additional charts and thoughts below.

below.jpg

Today's snapback is encouraging that prices likely will revisit prior highs and finish out the Demark exhasution counts before any reversal lower occurs. Prices managed to hold right where they needed to, as discussed in Monday's Weekly Technical Perspective, and the combination of yesterday's snapback to make a bullish close along with today's gains is a positive. Only on a close back down under Monday's lows would this change, which is at 2785. Until/unless that happens, it's right to lean long and expect a retest of highs.

highs.png

Technology in particular is up nearly 1% the 3rd best performing sector today. Similar to SPX, i expect a test of highs in the S&P 500 Information Technology index, and in this case, there is substantial resistance just above that likely holds prices into April and causes a stallout. Thislevel has held going back since last August/September, so this has some importance. Look to sell gains into this area by late this week/early next.

next.png

Crude oils's gains have now risen back above $60 in WTI and should be able to exceed last week's 60.39 intra-day high which would help to drive a rally back to the mid-60's. Overall, Energy should be overweighted, and specifically, stocks like COP, DVN, HES, CXO look quite positive for further gains.

Transport lagging could persist with FDX earnings woes

March 20, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2830-1, 2824, 2808-9, 2800-2

Resistance: 2838-40, 2845, 2852-3

Note: I will be flying to China today 3/20 for a conference i was invited to speak at, which will last until next Tuesday 3/26. I will make the utmost attempts at continuing to generate actionable content and deliver it as i am able and as the connection allows. Thanks for your patience and any unintentional service interruption.





Replay Link- Tuesday Technical Video- covering SPX, XLF, IYT, XOP

https://stme.in/40NJa4vUbg



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919





Replay Link-Thursday 3/14/19 Technical Webinar

https://youtu.be/EgbO3PCKl9I





SPX - (3-5 Days)- Still bullish into late March-Buy Wed-Thursday weakness- Under ES_F 2829 (2821-SPX cash) would allow for 2-3 day pullback, but should be bought with a push higher into late March/early April likely- Still premature for larger peak



EuroSTOXX 50- Bullish- Trendline breakout from last January is a positive for Europe. No evidence of exhaustion yet- Expect movement to 3475-3500 before peak unfolds over the next 3-5 trading days- Buy weakness



HSCEI- no change- Mildly bullish- Movement up to 11862-94 likely which is a 50% retracement of entire pullback from last year's peak





Trading Longs: DHR, HUM, AGN, CI, ALGN, BAC, GS, LNC, WFC, XOP, USO, FLT, ISRG, DXCM, PCAR, GDDY,



Trading Shorts: MHK, TRIP, BBBY, OSTK, WATT, BWA, CE, EXPE



Late weakness resulted in indices giving back earlier gains, but does this turn the trend negative? My thinking is that more needs to be done to prove that markets are peaking out, particularly when Energy and Financials along with Healthcare have joined forces to help Technology. None of the Demark exhaustion indicators are yet lined up and prices failed to even take out the prior days lows.



However, technically one can make the statement that markets are close to a near-term top, given the combination of near-term lagging in some of the leading sectors like Transports. (This sector was thought to be trying to emerge, but Tuesday's 1% down day in this group along with a likely poor showing from FDX certainly will not help this situation Furthermore, Gann-based cycles related to turning points of former highs and lows which project to late March/early April based on angles of the circle suggest we are approaching an important time. (Given decent breadth and better participation, i'm apt to believe this will prove short-term in nature) For those keeping track, this coming week marks a perfect 6 month anniversary to the September 2018 peaks, along with a 3 month anniversary to December. Additionally we see that several of the tuns from November also point to this time in March. Thus, we have a confluence of 90, 120, 135, 180 days from a former turn, along with being an important seasonal time of change (which WD Gann often wrote about) My thinking is that when exhaustion signals line up over the next week, this would have the effect of causing near-term peaks in price, allowing for minor weakness before additional upside occurs.



Specifically, as will be shown below, the resurgence in Healthcare looks promising to join Financials and Energy, while Transports are more bearish, and their lagging might persist with FDX woes in Wednesday's trading..Overall, I am expecting some kind of a peak in price between now and the end of March. Until there is sufficient signs of prices turning down to make new multi-day lows, it won't pay to bet too aggressively on when this has arrived based on other metrics, as price tends to rule all. Investors, if intermediate-term in nature, might utilize further rallies to 2860-70 to lighten up and/or consider hedging, while for traders, keeping a keen eye on breadth and reversal patterns in the indices is of utmost importance.



ACTION PLAN- 

Long XOP- Crude's advance should lead XOP higher to near 32.50 and its thought that this ETF challenges and breaks out of the consolidation since late January. Stops under 29.75


Long FAANG stocks- though with thinking that AMZN and NFLX make more near-term progress than FB and GOOGL.

Long KRE- Expect a push higher to test 57.64 into early April and above would be bullish for an advance into 60- Stops under 54.65


Long IYT- Target 192.25 initially- Stop 184.50

Long TLT- Target 124. Stop 120.92



Additional charts and thoughts below.

below.gif

Fed-Ex (FDX) looks to be turning down to retest early March lows given its after hours decline post earnings. (167 Important) This stock's breakdown under the 2 year channel looked negative and the resulting 20% bounce since December really has not helped to improve its structure significantly. (NOte the monthly chart- Not shown, shows 150 as a perfect 50% retracement to the entire 10year rally and important) For near-term purposes, Wednesday-Friday weakness would need to hold above 167, near early March lows. Under would take FDX back down to challenge 150, a more important spot for this stock on an intermediate-term basis. To have real confidence that this can snapback, FDX requires a reversal Wednesday from early lows and turn back higher to take out 187 in the days/weeks ahead. Above that lies 208 and until this is exceeded, this stock likely could continue to lag performance, similar to other Air Freight and Airlines. As mentioned on CNBC yesterday, the Rails are the favored area within Transports, specifically CSX and KSU.

KSU.gif

Transports had appeared yesterday like they might be on the verge of starting to make a larger move higher. Tuesdays selling postponed that, and this very well could be postponed further given FDX weakness after hours, which has sent this stock down to near $172. Given the negative week in Transports two weeks ago, the weekly chart remains under pressure and barring an immediate move back to monthly highs, suggests that this group's lagging might persist into April/May. To have faith of the Transport rally continuing, we'll need to see movement back up to 10700 and above which would warrant a bullish stance to 11k-11250. Until then, the combination of yesterday and today's possible weakness suggests this recent underperformance might not end all that quickly.

quickly.gif

XLV, the Healthcare Select Sector SPDR ETF, looks to be well positioned for further gains after yesterday's gains back to multi-day highs. This comes at a much needed time when other sectors could join to help take the weight off of Technology alone to do the heavy lifting. Daily charts show February highs to be important, and above that should allow for a further push higher to $95.50-$96. Stocks recommended as near-term technical bullish picks include HUM, CI, AGN, and ALGN.

Financials turning higher is a short-term positive- S&P has resistance near 2850-3

March 19, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2830-1, 2824, 2808-9, 2800-2

Resistance: 2838-40, 2845, 2852-3



Replay Link- Monday Technical Video- covering SPX, XLF, IYT, XOP

https://stme.in/pCdYsDaPkI



Replay Link-Thursday 3/14/19 Technical Webinar

https://youtu.be/EgbO3PCKl9I





SPX - (3-5 Days)- Bullish- Target 2850-60 for SPX Transports, Financials and Energy all turning higher are near-term bullish- No evidence of trend exhaustion yet. Long with stops at 2800



EuroSTOXX 50- Bullish- No evidence of exhaustion yet and prices are through trendline resistance going back since Jan 2018 peaks. Expect movement to 3450-75 to challenge last Fall highs



HSCEI- Mildly bullish- Movement up to 11862-94 likely which is a 50% retracement of entire pullback from last year's peak



Trading Longs: BAC, GS, MS, WFC, XOP, USO, FLT, ISRG, DXCM, DHR, PCAR, GDDY, FTS, PNW


Trading Shorts: BBBY, OSTK, WATT, MHK, VMC, BWA, ROST, CE, K, HBI, EXPE, TRIP



Early weakness failed to hold and by day's end, prices were higher across the board by +0.30-0.50% with particular strength in Transportation, Financials and Energy. While Technology has grown stretched, despite being bullish, which was discussed in yesterday's Weekly Technical Perspective, Technology still closed up with a higher high, higher low and higher close which keeps the trend in this group bullish.



Crude oil managed to push up above $59 briefly but still managed a close at new multi-day highs, and some evidence of upside call buying was seen in The XOP -Exploration and Production ETF yesterday which is seen as a bullish sign for additional follow-through. Additionally, the DJ Transports Average managed to make the highest daily close since early March, and should allow for additional strength in this group. While the media continues to mention Boeing (BA) in a negative light, we've seen this stock close roughly in line with where it was five days ago and very little net change, which suggests stabilization. Furthermore, Financials upward trek also was something positive in this rally and strength in the Regional banks was prevalent in trading yesterday and looks likely to continue.



Overall, at this stage of the rally, it's important to keep a close eye on breadth, as it's thought that towards the end of a move, we'll see some evidence of this rally tiring by means of flat to negative breadth, with poor volume into advancing issues and overall Advance/Decline potentially turning lower. Thus far, this has not happened, and yesterday's breadth registered 2.5/1 positive. While exhaustion signals are 3-5 days away for the major indices, we'll be on guard at this point for any move that starts higher and then closes down at a loss for the day. For now, it's still right to be bullish, but it's not wrong to consider using strength to pare losses for those who are more active traders, as its thought that some type of resistance/exhaustion is likely by end of week



ACTION PLAN- 


Long XOP- Crude's advance should lead XOP higher to near 32.50 and its thought that this ETF challenges and breaks out of the consolidation since late January. Stops under 29.75


Long FAANG stocks- though with thinking that AMZN and NFLX make more near-term progress than FB and GOOGL.


Long KRE- Expect a push higher to test 57.64 into early April and above would be bullish for an advance into 60- Stops under 54.65


Long IYT- Target 192.25 initially- Stop 184.50


Long TLT- Target 124. Stop 120.92



Additional charts and thoughts below.

below.gif

S&P Financials index managed to exceed February peaks yesterday, a move which should help this group extend in the short run, with areas near 460-5 being a legitimate target to sell longs into end of week. It's thought that Financials are just beginning to play catchup, and many names such as BAC, MS, GS, WFC all made legitimate breakouts in trading Monday, which adds to this sectors near-term attractiveness. While this is seen as a bounce only, and not the start of a long-term move, much will depend on what happens when prices near this intermediate-term downtrend shown above.

above.gif

Transports look to be beginning a period of positive gains in the days ahead after prices managed to exceed the downtrend from mid-February as of Monday's close. While prices moved sideways in recent days, it was the breakout on a close yesterday that seemed important and bullish in being able to lead follow-through. One would use stops on longs near the lows of the last few trading days, but the bias looks to be higher on this lagging group and should provide a chance to play catchup this week.

week.gif

XOP, the Exploration and Production ETF, looks likely to push higher given WTI Crude's advance, and with Crude likely to get to $62, XOP should test the highs of this consolidation and exceed highs in the days/weeks ahead. Targets for longs lie near 32.50, above the former peaks seen in this chart above. Long positions are recommended in Energy and in WTI, Brent Crude through ETF's, expecting further gains into April.

Bullish into early next week given Financials, Healthcare rebounding

March 15, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2808-9, 2800-2, 2782-5

Resistance: 2821, 2830-2



Replay Link- Thursday 3/14/19 Technical Webinar

https://youtu.be/EgbO3PCKl9I





SPX - (3-5 Days)- Bullish- Quad-week seasonality continues to suggest higher prices into early next week and both Tech and Financials are still showing strength. Rallies over 2821 should reach 2830-5. Buy dips at 2808-10.



EuroSTOXX 50- Mildly bullish- Expecting some stallout at 3365-70 but Demark signals are present now right at trendline resistance from last year, so the area from 3365-3400 could present some resistance between now and early next week



HSCEI- Mildly bullish- Still right to expect a small push, though doubtful prices get back above 11890 right away. Under 11284 is negative. Until this happens, it's right to stay long-



Trading Longs: FLT, ISRG, DXCM, DHR, GOOGL, PCAR, GDDY, FTS, CPRT, USO, XLK, PNW



Trading Shorts: MHK, VMC, BWA, ROST, CE, OSTK, WATT, K, HBI, EXPE, TRIP



Tough to read too much into Thursday's stalling out. S&P had managed to exceed March highs on a closing and intra-day basis Wednesday, while the NASDAQ remains elevated above its upper 2% Standard Deviation Bollinger band, though both still quite bullish in the short run. This stalling didn't produce any real decline in the sectors that truly matter for this market, that being Technology and Financials (34.11% combined in SPX) The only sector giving up more than -0.50% was Materials which accounts for just 2.66% of SPX. Overall, with no evidence of prior days lows being broken and Technology's run continuing, its right to still favor further gains. As discussed in recent days, the "FAANG" stocks such as FB, AAPL, AMZN, NFLX, GOOGL, are likely to make further progress despite some of the bad news hurting FB Thursday early on.



Interestingly enough, two sectors thought to be important to markets continuing higher have begun to outperform in the rolling 5 days: Financials and Healthcare. The latter was discussed yesterday morning with Services stocks bouncing, and below we'll take a look at Financials.



Outside of stocks, Treasury yields remain pointed lower, The Dollar has attempted to rally, while Crude oil remains pointed higher towards $61-$63 and Gold looks to be turning back lower for at least a mild correction. Charts of Pound Sterling remain constructive near-term, while the EURUSD bounce looks fadeable for a pullback down to 1.115.



Overall with regards to risk assets, still not too much troublesome in the near-term, and it still looks likely that stocks push higher into end of month.



ACTION PLAN- 



Long FAANG stocks- FB, GOOGL, AAPL, AMZN, NFLX, thinking additional upside is likely for this group and could begin to outperform after a long consolidation


Long KRE- Expect a push higher to test 57.64 into early April and above would be bullish for an advance into 60

Long IYT- Expect that Wednesday's stabilization in the Airlines in the wake of bad news is a positive for this group and the technical minor breakout in Transports follows through

Long TLT- Expect a push up to 124 initially and potentially higher



Additional charts and thoughts below.

below.gif

S&P likely to turn higher Friday after just a minor blip in yesterday's trading. As daily charts show, after having made new intra-day and closing highs on Wednesday, yesterday's minor weakness which failed to even take out prior lows shouldn't be paid too much attention. Seasonal trends tend to favor strength through Quad-witching followed by potentially a down week next week. For now, not too much to suggest "down" just yet, so we'll still lean long, expecting a push back to new highs for the week.


week.gif

Those who utilize counter-trend signals like Demark's exhaustion indicators TD Sequential and TD Combo see that stocks like AAPL currently have an 11 count out of a possible 13, indicating that further strength is likely in this before it fades. Near-term targets should lie near the 50% retracement of this decline, or 187.83, with not much standing in the way of prices pushing up a bit more into next week. Given the % weightings in many indices and sectors, this alone might serve as a tailwind for stocks until early next week.


next.gif

Don't look now, but Financials have stabilized in recent days and have begun to outperform in the last 5 trading sessions, showing outperformance to the broader market, as XLF has begun to push higher. Following the last month of weakness within Financials, this group looks to be slowly but surely trying to bottom out. Relative charts of XLF to SPX show counter-trend BUYs now in place using TD Sequential, the same indicator that suggested this group might be on the verge of weakening in late January. Overall, when groups like Financials start to play catchup, it's still worth holding longs, as Technology and Financials together represnet over 1/3 of the SPX. Overall this is one factor that is a clear "arrow in the quiver" for Bulls that could keep the rally going a bit longer than most expect.

Defensive outperformance looks to continue in Short-run

March 13, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2771-3, 2759-60, 2729-31, 2705-10

Resistance: 2795-6, 2808-10, 2816-8



Tuesday Technical Video

https://stme.in/eF0w2x1eCN



REPLAY LINK: Thursday 3/7/19 Technical Webinar

https://youtu.be/1W08xlEHQX4



SPX - (3-5 Days)- Bullish- No change- Am expecting a test of March highs into next week before any stallout- The act of getting back above prior week's lows at 2767-72 along with surpassing trendline resistance should produce a lift to test and exceed March highs. Breadth proved to be far stronger yesterday on the upside than any of the down days last week.



EuroSTOXX 50- Minor bullish on Monday's rebound- Gains to 3350 look possible, with movement up over 3375 needed to create meaningful strength.



HSCEI- Mildly bullish- No change-Snapback rally likely to echo what happened in the US, Europe, with gains to 11500- above would allow for rally to 11775



Trading Longs: FB, GOOGL, PCAR, GDDY, PANW, ADSW, DG, FTS, CPRT, USO, XLK, PNW


Trading Shorts: UAL, LUV, CPB, K, HBI, DVA, EXPE, TRIP



Tuesday's ability to close up 0.30-0.50% on the day still make gains more likely over the next few days, vs Declines. For the second straight day we witnessed some decent Tech strength, which proved broad-based in showing strength out of the Semiconductors, Tech Hardware, and Software. Many of the "FAANG" stocks extended breakouts, with stocks like GOOGL and AAPL pushing higher as the NY Fang index broke out above the entire downtrend since last Summer. Energy snapped back along with Healthcare while Industrials lagged again, with Boeing (BA) proving to be a heavy weight on the index. Breadth came in only fractionally positive at less than 3/2 bullish, but yet seeing Technology provide some meaningful strength was thought to be a positive for the market at a time when many still doubt the longevity of this rally.



Overall, the Defensive outperformance has been unusual and persistent in the last month, with Utilities and Real Estate showing better performance than all other 9 sectors in the last week, and outperforming on a 1 month basis, with these groups up 4.02% and 2.96% respectively # 2 and #4 out of 11 on a rolling 30-day basis. While many might suggest this is a warning sign for stocks to pullback, this would only be the case if Technology starts to turn down sharply. For now, with Tech leadership and low rates, a bid for these defensive sectors makes sense given the hunt for yields while Treasuries are extending higher (yields breaking down)



This yield weakness IS something to watch carefully however, as historically yields have paved the way for equities not vice versa and it's been rare that yields and Equities have diverged substantially over the last year. For now, it's right to bet on yields moving a bit lower and still look at following this breakout in Utilities a bit more. However, both Utes and REITS have pretty substantial resistance on weekly and monthly charts (as will be shown below) that make it less likely that this push into Defensive sectors lasts, particularly if/when S&P gets above March highs. For now, despite this being a market of many moving pieces, the trend remains higher and it looks premature to fade this rally




ACTION PLAN- 



Long FAANG stocks- FB, GOOGL, AAPL, AMZN, NFLX, thinking additional upside is likely for this group and could begin to outperform after a long consolidation


Long XLU- Upside target 58.80, with stops under 56.25


Long TLT- Expect a push up to 124 initially and potentially higher, but the breakdown in yields looks to continue throughout the balance of this week and potentially next, and it looks premature to fade.



Additional charts and thoughts below.

below.gif

NASDAQ still trending higher vs SPX which is bullish- The NASDAQ has turned back higher to new monthly highs vs SPX in the last couple days, something which bodes well for this rally to continue a bit higher before stalling out. Normally before broad-based market weakness occurs, it's been typical to see the NASDAQ start to stall out and weaken relatively speaking to the rest of the market. Yet now, we're seeing precisely the opposite with NASDAQ pushing up to new highs vs SPX to the highest levels seen since last October. Counter-trend signs of exhaustion on this lift are premature and bode well for further relative outperformance in NASDAQ v SPX.

spx.gif

The breakdown in Treasury yields looks to extend in the near-term, with the support violation in US 10-Year Treasury note yields likely to send yields down to test early year lows near 2.545 without too much trouble. Only a move back up above 2.67% would suggest this could be a fake move. For now, additional Treasury strength is likely (yield weakness) which might keep Financials under a bit more pressure in the next 2-3 days before this group can stabilize and turn back higher.

higher.gif

Utilities "breakout" does look to extend near-term, and as written in this week's Weekly Technical Perspective 3/10, is something to consider overweighting into April. However, it's important to reiterate that the weekly and monthly charts look far different than Daily, and suggest selling into this move is right once XLU reaches 60, and when VNQ reaches 86 for the REITS. While rates moving lower should be bullish for these groups, the long-term channel resistance lines are likely to result in far stronger resistance than recent December highs which were just broken, and suggest taking profits/fading these Yield sensitve groups makes sense in the weeks ahead on further strength.

Bullish rise back above SP-2767-72 should help rally extend above March highs

March 12, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2771-3, 2759-60, 2729-31, 2705-10

Resistance: 2795-6, 2808-10, 2816-8



Monday Technical Video

https://stme.in/iNN0talsIE



REPLAY LINK: Thursday 3/7/19 Technical Webinar

https://youtu.be/1W08xlEHQX4



SPX - (3-5 Days)- Bullish- The act of getting back above prior week's lows at 2767-72 along with surpassing trendline resistance should produce a lift to test and exceed March highs. Breadth proved to be far stronger yesterday on the upside than any of the down days last week.



EuroSTOXX 50- Minor bullish on Monday's rebound- Gains to 3350 look possible, with movement up over 3375 needed to create meaningful strength.



HSCEI- Mildly bullish- Snapback rally likely to echo what happened in the US, Europe, with gains to 11500- above would allow for rally to 11775



Trading Longs: AAPL, FB, GOOGL, DG, DECK, FTS, DKS, CPRT, USO, XLK, PNW


Trading Shorts: HAE, HBI, DVA, EXPE, TRIP, CTSH



Monday's sharp rebound was sufficient to think that a rally is now underway which should exceed March highs, pushing higher into late March/early April before any stalling out. (and could potentially challenge last Fall's highs) Breadth expanded substantially on yesterday's move to nearly 4/1 bullish, and we saw both Technology and Financials gain ground by at least 1%. In total, 8 sectors out of 11 were up 1%+ on the session, and we saw important rebounds in both Semiconductor and Retail stocks, which had been under serious pressure in the last week.



Overall, the act of getting back up OVER 2772 for S&P Futures and above 2767.66 in SPX cash along with NDX-7073, NASDAQ Comp 7501, is thought to be a very bullish development. S&P exceeded the downtrend from last week, and did so on a very encouraging move in Technology, with the so-called "FAANG" stocks like AAPL, FB and GOOGL all making meaningfully positive breakouts in Monday's trading.



It was thought that technically the trend was bearish until 2772 could be surpassed, and that happened yesterday. Prices had neared the lower Bollinger band (2% Std Dev) and yesterday's breadth was far more positive on the upside than any of the negative days seen last week. Sentiment wise, we'd seen a contraction in bullish sentiment on just a minimal pullback, something which was thought to limit any further drawdown. Thus, while it was thought that a correction could be upon us last week, it appears to have been incredibly short-lived for now and has gotten back up above areas that alleviate short-term concern.




ACTION PLAN- 



Long FAANG stocks- FB, GOOGL, AAPL, AMZN, NFLX, thinking additional upside is likely for this group and could begin to outperform after a long consolidation

Long XLU- Upside target 58.80, with stops under 56.25


Additional charts and thoughts below.

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S&P- Further gains likely to exceed March highs - S&P rally yesterday accomplished two positive things technically. Prices moved back up above 2772 which had marked last Monday's lows. Additionally, prices broke out above the minor downtrend in place since last week. This is thought to allow for a further rally to challenge and surpass March highs. While momentum remains negatively sloped on daily charts, it's positive on a weekly basis, and we've seen a breakout in the popular FANG group which has a heavy weighting in Technology and Discretionary. It's thought that yesterday's move might lead to a rally into late March/early April before a peak.

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Technology's "FAANG" group should rally further in the days/weeks ahead- NY FANG index on Daily charts managed to completely reverse the breakdown seen last week. Furthermore, prices exceeded the downtrend which has been in place since early last year. This looks to be important and positive (often the false moves can produce bigger snapback rallies than the breakouts themselves, as short-covering and technical buying starts to chase the breakouts ) Overall, stocks like FB, AAPL and GOOGL all look to have broken out above meaningful resistance yesterday, while AMZN, NFLX are well positioned for such a move, but still basing at this time. Overweights look prudent given the degree of the consolidation since last year which now looks to have led this group higher and broken out as of Monday's 3/11 advance.

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POT stocks look bullish for further gains following Monday's rebound.The "Pot" stocks, judged by the BI Global Cannabis Competitive Peers index, which includes 99 different companies, made a sharp rebound yesterday that managed to recoup former lows and close out near the highs of the day. Additional gains look likely here to challenge the trend near 225, making this pattern out to be a triangle pattern that could offer upside in the weeks ahead, as opposed to have failed in its movement higher. Overall, i see higher prices in this group, and it's not wrong technically to consider diversifying and playing for further gains.

Decline looks to have support at S&P 2705-10, Dollar rise hurts EM, commodities

March 8, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2729-31, 2705-10

Resistance: 2770-2, 2808-10, 2818-20



REPLAY LINK: Thursday 3/7/19 Technical Webinar

https://youtu.be/1W08xlEHQX4





REPLAY LINK: Thursday 2/28/19 Technical Webinar

https://youtu.be/3jDSAMpt97k



SPX - (3-5 Days)- Bearish- Pullback should have support near 2705-10, while needing to get back up above 3/4 lows at 2772 to have any immediate chance of recovery- Use early strength to sell Friday



EuroSTOXX 50- Minor bearish trend but require break of 3270 to have conviction of a larger decline to 3175. For now, a negative minor reversal and could play catchup to US markets Friday morning



HSCEI- Bearish- Expect US Dollar gains result in weakness for HSCEI & many China indices- Pullback to 11260-80 likely and max drawdown to 11000





Trading Longs: XLU, NI, EIX, SRE, PNW



Trading Shorts: EEM, FXI, K, TTWO, HAE, DVA, EXPE, TRIP, CTSH



Market selloff looks to be underway on a short-term basis as indices finally broke to join what breadth and momentum had been suggesting since 2/20. We saw a notable peak in Advance/Decline and Small-caps during that time in late February, and while S&P moved sideways, there was notable breadth erosion and a downturn in daily technical momentum indicators like MACD, not unlike what happened in September 2018.



near-term, I think pullbacks prove limited based on two factors. First, sentiment is a lot more subdued than was the case in Sept 2018. This minor pullback will put some heavy weight on sentiment, resulting in put buying and help fear elevate much more quickly than during normal peaks after a bull run. Second, breadth overall is still in very good shape since late December. Granted, the mild deterioration in breadth we've talked about in the last week IS a concern and a reason why markets are starting to turn lower. Yet the broader trend in breadth has been impressive and likely helps this dip be bought much quicker than otherwise. Overall I will be using dips to 2705-10 to cover shorts and start buying names I like technically.



In addition to equities, we saw an impressive bounce in the US Dollar Thursday that adversely affected Emerging markets, commodities, and many materials names. This looks likely to continue in the short run. Charts of FXI and EEM look quite similar in starting to break down, and I think this trade has a bit of longevity in the next 1-2 weeks before it runs its course. Some charts to put these thoughts into perspective below.




ACTION PLAN- 


Long XLU- Upside target 58.80, with stops under 56.25


Short FXI, and EEM- Expect that the breakdown in trend since December should lead both lower at a time when USD is moving up. While a short-term trade, both look to lose 3-5% in the near-term before

Short IYT- Expect further weakness out of the Transports which is still largely the Airlines which are losing the most ground. Avoid and/or short AAL, ALK, JBLU, UAL, DAL





Additional charts and thoughts below.

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S&P showed the much needed follow-through to turn the trend bearish early Thursday morning, violating Monday's lows at 2772, and the violation of 2764 brought prices temporarily below 2750 before rebounding mildly into the close. The trend has turned negative, with prices managing to finish near lows of the day, and downside looks possible to near 2705-10 which represents the bottom area at the Bollinger Band on daily S&P charts, along with representing important Gann support from the recent highs. Overall, it's tough to make too much of this as anything more than a short-term correction and dips should be used to buy into early next week.

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Emerging market ETF (EEM) managed to followthrough on last week's trend violation along with breaking down below earlier week lows. Given the US Dollar index rising to new multi-week highs, this might put further pressure on Emerging markets in the near-term and could see EEM fall another 3-5% before this finds support. Structurally this looks to have turned bearish on Thursday's close, so it's likely that EEM weakens further in the days ahead.

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US Dollar index managed to exceed recent monthly highs which could help the near-term bounce extend a bit longer before stalling out and reversing lower. While the broader trend is arguably still top-like going back over the last year, the near-term trend is positive and the act of just exceeding a former monthly high likely does offer the chance to extend a bit more in the near-term. Until this reverses and turns back to give back what was gained this week, this is viewed as a bounce and will be detrimental to EM and commodities.

Short-term Pullback looks to be underway- Over S&P 2800 needed to postpone

March 7, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2764-5, 2729-31

Resistance: 2808-10, 2818-20



REPLAY LINK: Wednesday Technical Video:

https://www.youtube.com/watch?v=5RBBeYpBsPE



REPLAY LINK: Thursday Feb 28 Technical Webinar

https://youtu.be/3jDSAMpt97k



TODAY"S TECHNICAL WEBINAR : 1pm EST

https://join.startmeeting.com/info69336

Dial-In Number (United States): (701) 801-1211, Access Code: 840-955-999



SPX - (3-5 Days)- Bearish- It looks like Wednesday's drawdown likely jumpstarted at least a minor pullback into mid-March. While prices have not officially gotten under 2764, the selling in many other sectors has broken down and makes weakness a bit more likely- Bearish with 2800 as a stop and targets 2750, then 2698-2700



EuroSTOXX 50- Reversal possible Thursday/Friday-Upside limited- Bearish unless 3400 exceeded- Don't expect move above 3400 and rally nearing important resistance . Right to consider taking profits and adopting hedges



HSCEI- No change- Expect stallout in next 1-2 days. Exhaustion signs present. Peak possible before this can get above 11890 11342 would be bearish. For now, a minor pullback can happen without disturbing bullish structure.



Trading Longs: HLT, DIS, UNH, BMY, XLU, NI, EIX, SRE, PNW, BP, COP, FANG, UNG



Trading Shorts: K, TTWO, MNST (2-3 days) HAE, DVA, EXPE, TRIP, CTSH



Markets look to be beginning at least a short-term pullback, and while S&P got down to near make-or-break at 2764-7 (2767 at the time of this writing) prices haven't officially broken down just yet. However, this seems like an interesting time zone for potential trend change (as written in emails a week ago) Given that price has turned down sharply to close at the lows, and much of this selling was LED by many of the leading sectors, Transports and now Semiconductor stocks, while Small-caps, and breadth peaked between 2/20-2/22, i think its likely that a short-term pullback has begun. Much of the sentiment has also turned more positive lately, with AAII widening out nearly as wide as Investors Intelligence. When both of these start to line up with 20 point differences between bulls and bears (in either direction) it typically is worth paying attention.



Wednesday brought about a fair amount of selling pressure again in Financials, while Technology sector indices like the S&P 500 Information Technology index closed at the lowest level since 2/22, it looks likely that Tech and Financials are both starting to rollover and join the recent selling pressure being seen in other sectors. GE fell 7% today, in a fairly bearish one-day pattern that bolsters the argument for further selling here after breaking its uptrend from December. (This will have a big influence on XLI) Overall, it's thought that while indices holding up while various sectors were selling off might have been a positive thing, now that SPX and other indices have pulled back to new multi-day closing lows while breadth is rolling over, markets might finally be susceptible to some selling.



Bottom line, a move to new weekly lows makes it possible to see a 25-30% pullback of this prior uptrend into mid-March. However, given the breadth expansion seen, it's likely that selling proves short-lived and should pave the way for additional gains in the back half of March. One should favor owning Utilities and Energy, and Healthcare selectively, while avoiding Financials, Industrials and/or Discretionary stocks for the next 3-5 days. IF S&P can regain 2800, this could be incorrect, and certainly over 2816 would have to be followed and shorts covered. For now, this seems like a good risk/reward to consider hedging for at least a minor correction.





ACTION PLAN- 



Long TBT with targets 37.50 and possibly 39 before stalling. Stops 34.75- Monday's close might bring 1-2 days of weakness, but should be used to buy at 35.25-75


Long XLU- Upside target 58.80, with stops under 56.25

Short IYT- Expect further weakness out of the Transports which is still largely the Airlines which are losing the most ground. Avoid and/or short AAL, ALK, JBLU, UAL, DAL





Additional charts and thoughts below.

S&P has broken its uptrend from late January and now rests near critical make-or-break support at 2764-7, mentioned over the last few days. While S&P has not yet broken down, the weight of the evidence supports a break given the downturn in momentum and many sectors rolling over, the downside on this go-around is likely limited to 2698-2700 with first targets near 2750 on a break of 2764. Movement back up OVER 2800 is necessary to offset some of this negative deterioration.

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Technology has just broken down to the lowest level in 8 days on a close. Trends have been violated, and this should be the start of at least a minor selloff in Tech. One should look at buying dips into mid-month, but until/unless Monday's highs are recaptured, it looks right to hold off on buying dips too aggressively and better to position in Utilities in the upcoming week. The near-term bearish pattern in the Philadelphia Semiconductor index itself looks to extend and something to pay attention between now and mid-month.

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NYSE "All Stocks" Advance/Decline looks to have made its first meaningful peak after the runup from December. While price has just moved sideways largely until yesterday's late day decline, breadth and momentum in this case might lead to a minor selloff, while breadth trends over the last month definitely seem to have been violated. So while the intermediate-term advance from December looks to extend in the months ahead, we seem to be at a juncture where at least a minor selloff could occur and breadth and momentum typically tend to lead price.