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Market pullback could be underway as prices undercut Support

August 2, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 2915-8, 2900-1, 2885-7

Resistance: 3004-5, 3021-3, 3040-2


My CNBC Fast Money interview from 7/31/19 discussing SPX, EEM, USD https://www.cnbc.com/video/2019/07/31/technician-says-these-are-three-areas-of-the-market-to-watch.html

Link to Technical Webinar from yesterday 7/31/19

https://stme.in/wUD3XUBgHE

Wednesday Technical Video, 7/31/19

https://stme.in/ZOFv6TxNO8

SPX - (3-5 Days)- Bearish- Early gains faded and violated 2954 into the close which is a negative as this stretches back to early July. Expecting test of 2915-7 before bounce given positive momentum divergence on hourly charts but pays to be defensive until 3014 can be recaptured, which is a long way higher given yesterday's reversal.

EuroSTOXX 50- (3-5 days) Bearish- Expecting pullback to test 3372-85- Europe peaked out one day before S&P, but gave some ample warning. Now first support lies around 100 points below that adjoins larger trendline from December 2018 and key Fib support

Trading Longs: GBTC, IFF, PPG, AMZN, ETSY, GSK, BG, LMT, TTD

Trading Shorts: SIG, KSS, EAT, XRT, OSTK, SNAP, BLUE, EA, BBBY, URBN, TSLA, CTVA, RCL, CCL, CTRP, ENR, SPB

Well, yesterday's selling was tough to ignore. Despite the early bounce, which proved to be nearly 1%, prices reversed 2% to finish the day down under key support at 2954 along with under lows that had held since early July. Volume expanded both in Wednesday and in Thursday's trading to levels we haven't seen since early May (8/1/19 SPY volume of 142.5mm was the highest since 5/7/19 of 144mm) While a few things did indeed point to a possible peak, price never gave any indication of falling for the major benchmark indices until yesterday. As we've discussed, it's always important to let price be the final judge, and avoid acting prematurely. (Countless times divergences and waning momentum often turn out to be just holding patterns before additional gains) Outside of US markets, Emerging markets reversed to fall sharply again, while the Dollar pushed up aggressively only to reverse course with prices very near channel resistance. The biggest technical development, however, outside of equities, proved to be in the Treasury market, with yields declining a whopping 12 bps down to 1.89, sweeping out former yield lows in the process. It goes without saying that volatility has come back in a big way very quickly, not only with equities, but also currencies, commodities, and the Treasury market.


Looking back, the following seemed important and negative:

1) Sideways action since mid-July which had a negative effect on short-term momentum

2) A drying up in volume (This past Monday witnessed the 2nd lowest volume in SPY all year)

3) Market breadth broke down in mid-July before rallying back, but now looks to be rolling over again

4) Daily momentum oscillators like MACD rolled over to negative more than a week ago (most of this was due to the sideways action, but still a negative)

5) Emerging markets had seen pronounced weakness starting back in July, never following suit to the strength in USA and Europe (USD related)

6) Semiconductors had shown weakness starting around 7/24, nearly a full week ahead of the selling (This leading sector typically is always worth keeping an eye on)

7) Transportation stocks have been lagging badly lately, and despite some minor attempt to play catch-up, DJ Transportation Avg still lies below April and below last Sept highs

8) Small-cap and Mid-cap averages have both plummeted to 10 year lows vs the broader S&P, showing pronounced weakness in every area except Large-cap Growth

9) Counter-trend Demark indicators like TD Sequential and TD Combo lined up to show a confluence of upside exhaustion on both daily and weekly charts

10) Defensive strength- In the month of July, markets showed stronger performance within the Staples group than Discretionary,

Going forward, it's going to be crucial for prices to rebound nearly right away to think this was just a minor blip. Time frame for trend change had focused on the early part of August, and given the last couple days of selling, it sure looks like we've arrived. To have any inkling that this is a false move, we'll need to see heavy volume and breadth on the upside, and make up some substantial ground to negate some of this near-term technical damage. (S&P would require a move back up above 3014) For now, I'm inclined to trust this selling, given the warnings, though feel that true damage might only prove to be 5-8% in nature given the anxious state of sentiment in its current form. Given the lack of any Trade deal and ongoing policy uncertainty, there seems to be a higher level of pessimism than ordinarily would be warranted with indices near all-time highs. Thus, a decline would serve to bring out skepticism and real fear much quicker than normally (which in turn, likely could make the selloff short-lived)

ACTION PLAN-

Selling long XLF and XLI

SELL EURUSD w/ bounce from 1.11 proving temporary and selling off to breach 1.11

Long GOLD by owning IAU, GLD and also GDX for Gold stocks

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Additional charts and thoughts below.

Image 8-2-19 at 4.46 PM.jpg

S&P decline broke down under prior days lows, closing near the lows of the session and representing a violation of support. Prices undercut 2954, so this represented not just a minor break to new lows but a close at the lowest level since early July. Structurally this is the first real sign of technical damage that most momentum and breadth indicators warned to be a possibility in late July. For now, patterns have grown worse and prior highs from late April have been undercut. While positive momentum divergence is in place on hourly charts, warning of a possible bounce in the near future, this has been a fairly damaging break, and could get down to 2915-7 before much support.

Image 8-2-19 at 4.46 PM (1).jpg

US Dollar on weekly charts shows a bit of a different picture than was seen on daily charts with many proclaiming how this was hitting new 2-year highs. The channel which has guided this uptrend over the last year now shows DXY right up against the highs of this pattern. Thus, the combination of near-term overbought conditions with weekly resistance likely halts DXY in its tracks and could bring about a larger reversal in trend. It's thought that both EEM and Commodities might bottom out in the next week if the Dollar peaks out.

Treasuries made a very sharp gain yesterday, with TNX falling under 1.9%. The quickness with which this move happened could be argued definitely played a role in how fast US Stock indices followed suit. Sentiment has grown quite bullish on Treasuries, as might be expected given the extent of this ongoing trend. Near-term, it's difficult to be too negative on Treasuries however until prices can at least regain prior lows that were broken at 1.94-5%. This yield decline will set up positive momentum divergence, making it unlikely to continue down too much more without a bounce. We've seen the 2/10s curve get cut in half over the last few weeks, flattening out substantially and Financials were hit hard yesterday. Overall, given the demand for Treasuries with many European sovereign yields much lower, it's difficult seeing too much of a bounce right now, but just something to watch carefully.




Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligtion to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Post Powell plunge should affect market negatively in August

August 1, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 2962-3, 2954-6

Resistance: 3021-3, 3040-2

Technical Analysis Video Webinar, 15 mins. Today 1pm EST- https://join.startmeeting.com/info69336

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

Wednesday Technical Video, 7/31/19

https://stme.in/ZOFv6TxNO8

Link to last Thursday Technical Webinar 7/25/19- 20 min Analysis

https://stme.in/TntiR5jFDJ

My CNBC interview from 7/23/19 on KO (Coca-Cola)

https://www.cnbc.com/2019/07/23/coca-cola-still-has-room-to-run-always-buy-all-time-highs.html

SPX - (3-5 Days)- Bullish- Worth buying dips given that prices held where they needed to near former April highs (which cushioned equities on their first retest and bounced ) Movement below 2954 would be bearish, while holding above still gives a chance for 3035-3045.

EuroSTOXX 50- (3-5 days) Mildly Bullish- Europe seems to have begun more of a near-term topping pattern than has been seen in S&P with yesterday's pullback to the lowest levels since 6/28. For now a snapback rally into end of week is possible, but momentum seems to be slipping and it will be necessary to regain the losses of the last few days quickly to avoid a larger break in August. Resistance lies at 3500, 3570-5 and then 3600-25.


Trading Longs: GBTC, IFF, PPG, AMZN, ETSY, GSK, BG, LMT, TTD

Trading Shorts: SIG, KSS, EAT, XRT, OSTK, SNAP, BLUE, EA, BBBY, URBN, TSLA, CTVA, RCL, CCL, CTRP, ENR, SPB

S&P got its first real jolt of volatility which managed to break the prior mild trend discussed in yesterday's report. Prices plunged down to 2954-7, an area of support formed by April highs in S&P (As the saying goes, former highs often will act as meaningful support when revisited.) Prices did manage to bounce moderately off that level, but by the close still finished with losses of 1%. Under 2954 is bearish, while over, bullish.

Going forward, it looks increasingly likely that yesterday's plunge served as the "shot across the bow" for equities and should affect momentum negatively enough that rallies from this point on into early next week, if any, should serve as selling opportunities for a pullback in the month of August. Resistance lies near 3035-45 while support is on 2954.

ACTION PLAN-

Long XLF with targets at 30-30.25

Long XLI with targets at 81

SELL EURUSD w/ bounce from 1.11 proving temporary and selling off to breach 1.11

Long GOLD by owning IAU, GLD and also GDX for Gold stocks

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Additional charts and thoughts below.

Image 8-2-19 at 4.42 PM.jpg

S&P decline yesterday got down to the area of the former April highs, which managed to offer support before prices bounced off the lows. The broader trend will not really begin to give way until 2954 is breached. Yet, momentum is going to start to wane badly over the next few days, and it's thought that yesterday should serve as a "shot across the bow" for S&P and that upside from this point into early August should be limited before a more meaningful pullback.

Image 8-2-19 at 4.42 PM.jpg

A big surge in the US Dollar yesterday post Powell comments, which has directly coincided with Emerging markets breaking support along with precious metals turning down sharply. This Dollar rise, interestingly enough has now reached the highest level in 2 years, and while many belived a dovish pivot by the Fed would coincide with Dollar weakness, this seems to be affecting the rest of the world in bigger fashion in the short- run. Counter-trend sells are now in place for the Dolllar, via TD Combo sell signals, which likely do suggest this recent strength in USD could prove short-lived. In the short run though (meaning next 2-3 weeks ) we could see commodities underperform along with Emerging markets.

Image 8-2-19 at 4.43 PM.jpg

Emerging markets breakdown is a negative near-term, (EEM) which is directly happening coinciding with yesterday's Dollar strength. This suggests that EM might underperform Developed markets into early August and should be avoided until the Dollar can show more evidence of backtracking and turning back lower.




Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or poste

AAPL surge offers temporary stability, but could prove short-lived

July 31, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 3000-2, 2973-4, 2962-3

Resistance: 3021-3, 3040-2, 3073-5

Tuesday Technical Video, 7/30/19

https://stme.in/RvWWTtdGaU

Link to last Thursday Technical Webinar 7/25/19- 20 min Analysis

https://stme.in/TntiR5jFDJ

My CNBC interview from 7/23/19 on KO (Coca-Cola)

https://www.cnbc.com/2019/07/23/coca-cola-still-has-room-to-run-always-buy-all-time-highs.html

SPX - (3-5 Days)- Bullish- No change given prices snapback into the close in Futures, and it's thought that overnight gaps in AAPL could prove to be a positive for Technology and for markets into FOMC. Movement higher still expected into FOMC with targets 3040-3

EuroSTOXX 50- (3-5 days) Mildly Bullish- Europe seems to have begun more of a near-term topping pattern than has been seen in S&P with yesterday's pullback to the lowest levels since 6/28. For now a snapback rally into end of week is possible, but momentum seems to be slipping and it will be necessary to regain the losses of the last few days quickly to avoid a larger break in August. Resistance lies at 3500, 3570-5 and then 3600-25.

Trading Longs: GBTC, IFF, PPG, AMZN, ETSY, GSK, BG, LMT, TTD, BDX, PLAN, JCOM, BAX, MDT, OLED, DFS, JPM, AYX, SHOP, TWLO, ORI, MNST, MYOK, ACAD, IOVA, PCTY, MRTX, SE, AXSM

Trading Shorts: SIG, KSS, EAT, XRT, OSTK, SNAP, BLUE, EA, BBBY, URBN, TSLA, CTVA, RCL, CCL, CTRP, ENR, SPB


Despite the early day selling Tuesday, there turned out to be little to no real technical damage by Tuesday's close. After hours AAPL earnings resulted in a surge in S&P September Futures by 4:15 that helped prices largely reclaim most of the early losses. Prices ended up at 3013.18, a level that lies right near Monday's intra-day lows. Overall, much could depend on AAPL ability to hold overnight gains, which as of Tuesday evening had driven the stock up over early May highs in post market after hours trading. Holding above 215 would prove to be a positive for Technology through the balance of this week, while a reversal could be more negative.

The rally in the US Dollar over the last week has proven to be a negative for Emerging markets, while both Crude and gold pushed higher. While Crude's rally looks to be a bounce to sell into, the move in Gold looks more bullish, and has the potential to extend.. Outside of these developments, we saw some evidence of Small caps bouncing sharply yesterday while Cryptocurrencies appear to be trying to stabilize after a very difficult July.


Overall, it's thought that a late week stab at highs should occur technically, as little to no real damage has occurred. However, there has been some breadth and momentum slowdown over the last week as prices have stalled, and this happens to coincide with Exhaustion signals appearing on SPX right as prices are near upside targets at 3035-45. Trends remain bullish, but yet it's right to not be as complacent heading into the month of August, and both Technology and Financials should be watched carefully for any evidence of these sectors starting to wane.


ACTION PLAN-

Long XLF with targets at 30-30.25

Long XLI with targets at 81

SELL EURUSD w/ bounce from 1.11 proving temporary and selling off to breach 1.11

Long GOLD by owning IAU, GLD and also GDX for Gold stocks


Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87


Additional charts and thoughts below.

Image 8-2-19 at 4.37 PM.jpg

Despite yesterday's mild drawdown in S&P there hasn't been much to detract from the current trend, which remains upward sloping albeit with some definite signs of slowing lately. Movement higher has proven less robust, which can be seen not only in breadth turning in flat readings over the last week, but also in momentum, which on 4-hour charts, shows a steadily declining pattern of lower highs over the last month. So while little to no real damage has been done, the key takeaway revolves around the internals that might not be reflecting the same degree of strength that was seen back in early June/July. Much of this, when combined with counter-trend exhaustion tools and Fibonacci projections from former highs and lows, pinpoints 3035-45 as being quite strong in the near-term as an area that might hold gains into and/or directly after FOMC before at least a mild setback. For now, we'll keep an eye on this further in the days ahead, along with monitoring any evidence of trend change, shown by this trendline from June undercutting former lows in S&P Futures.

Image 8-2-19 at 4.38 PM.jpg

A 2% rally in Crude.. but does this change the structure? WTI managed a sharp rally on Tuesday, but given the shape and momentum of daily charts, this move should still encounter strong overhead resistance, and does not change the trend dramatically at this time. The area at $60, along with $61 both have importance, technically, and it would take a move back over 61 to expect Crude starts a sharper rebound. Thus, technically the move in Crude likely should be a selling opportunity, as well as those that are long Energy stocks as markets head into early August.

Apple (AAPL) Bullish gap after hours.. But can it hold? AAPL looks to be set to gap up above the resistance angle of this Triangle consolidation that's held this stock largely range-bound since last Fall. Post market after-hours trading saw AAPL climb above $215, the level marking intra-day highs from 5/1 (the most recent peak in the chart above) This would seem to be a bullish development, and volume likely will pick up in trading on Wednesday as the stock gaps. However, near-term signs of Demark based exhaustion will be complete in AAPL in all likelihood by Thursday's trading, making the likelihood of a continued acceleration throughout August to exceed last year's highs unlikely at this time. Technically I expect that gaps that hold above 215 on a close Wed 7/31, should still not make it above 224 before stalling and backtracking in the month of August. Traditional technicals though would certainly argue this gap is positive if it were to hold. Cycle-wise, the area at 8/14-17 has some importance in this stock based on taking half the range of both high to high and low to low and projecting forward. An additional date to consider that oculd be important for trend change lies at 10/13-16 for AAPL.




Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

All quiet ahead of FOMC w/ 2nd lightest SPY trading of the year

July 30, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 3000-2, 2973-4, 2962-3

Resistance: 3021-3, 3040-2, 3073-5

Monday Technical Video, 7/29/19

https://stme.in/EXiu2RxeJn

Link to Thursday Technical Webinar 7/25/19- 20 min Analysis

https://stme.in/TntiR5jFDJ

My CNBC interview from 7/23/19 on KO (Coca-Cola)

https://www.cnbc.com/2019/07/23/coca-cola-still-has-room-to-run-always-buy-all-time-highs.html


SPX - (3-5 Days)- Bullish- Mild sideways action with prices closing at same levels as last Wednesday within one tick. Movement higher still expected into FOMC with targets 3040-3

EuroSTOXX 50- (3-5 days) Bullish- Similar to S&P, a bit of a sideways range in recent days, yet trend still bullish. Expect push higher to 3600-25.

HSCEI- (3-5 days) Neutral- No change here, very much sideways range in last few weeks. We'll need to see move over 11042 for bullish and under 10632 for bearish.

Trading Longs: AMZN, ETSY, GSK, BG, LMT, CMI, TTD, BDX, PLAN, JCOM, BAX, MDT, OLED, DFS, JPM, AYX, SHOP, TWLO, ORI, MNST, MYOK, ACAD, IOVA, PCTY, MRTX, SE, AXSM


Trading Shorts: SNAP, BLUE, EA, BBBY, URBN, TSLA, CTVA, RCL, CCL, CTRP, ENR, SPB

Little to no real volatility in US or European stocks Monday, as trading looks to be lessening ahead of this week's FOMC meeting. Volume on SPY proved to be the 2nd lowest of the year and by the close, S&P futures finished less than 1 point from where they had closed last Wednesday. Defensive sectors gained some ground, while Financials and Discretionary gave up some ground after recent strength last week. (AMZN in particular looks to be near an important area of support where this can stabilize and push back higher and is important to mention given its weight within the Discretionary stocks.)

The moves of interest came from Healthcare, which pushed up to multi-day highs on MYL (+12.57%) while CI, RMD, HOLX, JNJ, MCK, EW, CAH, HUM were all higher by 1.5% or more. Meanwhile, energy was quite weak, with XOP selling off to new monthly lows and pronounced weakness also out of OIH, despite WTI Crude being higher on the day. The US Dollar continued its mild ascent, and most of the EM space lagged in trading. Overall, despite some minor rotation back into Defensive sectors, Monday proved to be largely very quiet, and the days ahead could very well prove to be a mirror image of yesterday's trading, though with an upward technical bias.

ACTION PLAN-
Long XLF with targets at 30-30.25

Long XLI with targets at 81

SELL EURUSD with targets down at 1.1107

Long GOLD by owning IAU, GLD and also GDX for Gold stocks

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Additional charts and thoughts below.

Image 8-2-19 at 4.28 PM.jpg

A very slow push higher indeed over the last few weeks, and daily charts show literally very little net change since last week. By Monday's close, S&P Futures were at the same levels which they closed last Wednesday within a point. Additional upside here looks likely to 3040, and counter-trend exhaustion signals look to be 3-4 days away from triggering upside exhaustion. Until some evidence of weakness arises, it should be right to expect markets to still push higher into early August before a stalling out.

Image 8-2-19 at 4.29 PM.jpg

An interesting push higher in Healthcare which has lagged badly this year on a 1 month, 6 month and YTD basis. S&P 500 Healthcare index has just moved to multi-day highs which is the first positive technical development we've seen out of this sector in the last few weeks. Additional gains look likely after this severe underperformance, and rallies to test June/July highs look very possible.

Image 8-2-19 at 4.29 PM.jpg

Energy remains a sector to be avoided near-term, and XOP has just fallen to new lows for the year. With just two trading days left in the month of July, XOP looks to reach the lowest levels since 2016, though based on a monthly close, would represent a new all-time monthly low close for the ETF. (Exploration & Production ETF) Until XOP can regain 24.66, trends are bearish and additional weakness looks likely.



Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Technology could gain further into next week with GOOGL, INTC positive earnings

July 26, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 3000-2, 2973-4, 2962-3

Resistance: 3021-3, 3040-2, 3073-5


Link to Yesterday's Technical Webinar 7/25/19- 20 min Analysis

https://stme.in/TntiR5jFDJ

My CNBC interview from 7/23/19 on KO (Coca-Cola)

https://www.cnbc.com/2019/07/23/coca-cola-still-has-room-to-run-always-buy-all-time-highs.html


SPX - (3-5 Days)- Bullish- Pullback failed to do much damage yesterday, holding up above the prior day's lows, and Volume compressed on the move. The rally still looks to be intact up to 2040 over the next 5-7 trading days.

EuroSTOXX 50- (3-5 days) Bullish- A bit of a shakeout yesterday, though still rather unconvincing for a real top. Expect just minor consolidation here beore a push back to 3600-50.

HSCEI- (3-5 days) Neutral- We'll need to see move over 11042 for bullish and under 10632 for bearish.


Trading Longs: TTD, BDX, PLAN, CMI, JCOM, BAX, MDT, OLED, DFS, JPM, AYX, SHOP, TWLO, ORI, MNST, MYOK, ACAD, IOVA, PCTY, MRTX, SE, AXSM

Trading Shorts: EA, DUK, PEG, BBBY, URBN, TSLA, CTVA, RCL, CCL, CTRP, ENR, SPB

Minor weakness yesterday failed to do much technical damage, and Volume came in the lightest we've seen in SPY in seven days time. Breadth was nearly 2.5/1 negative, though Wednesday's success helped many breadth indicators bounce in the short run. Thus, not too much damage and a mild breadth recovery that puts Advance/Decline right back up to near former highs from 7/12. While there is some negative momentum divergence here that will be important as markets enter August, for now it remains premature.

Most of yesterday's Tech gains were given back Thursday, though the after-hours rally in both GOOGL and INTC might help to steer Tech back higher on Friday into next week, as their combined after-market gains helped to add around 75 billion in market value as of 5pm on Thursday afternoon. While Thursday's decline was largely blamed on poor earnings, this past week has been largely much more positive technically given some of the constructive developments seen in Financials and industrials, while SOX managed to surge back to new all-time highs. Overall, it's expected that weakness should not persist, but that indices begin their "final" climb into early August before a more meaningful consolidation takes place. At present, any meaningful selloff still looks premature time-wise here in July and dips should be used to buy.

US 10-Year Treasury yields managed to follow suit to the upside in a key reversal to recent consolidation w/ TNX gaining nearly 3 bps in trading Thursday to finish at new five day closing highs. Further selling in Treasuries looks likely into next week, with a good likelihood of yields gaining ground into next week's FOMC. Mid-July yield highs of 2.148, and over to 2.165, look possible into next week.

ACTION PLAN-

Long XLF with targets at 30-30.25

Long XLI with targets at 81

SELL EURUSD with targets down at 1.1107

Long GOLD by owning IAU, GLD and also GDX for Gold stocks

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Additional charts and thoughts below.

Image 7-29-19 at 2.32 PM.jpg

Yesterday brought about a minor "give-back" in prices, and as seen in momentum, RSI was much lower on Wednesday's push to new highs. Yet, the trend along with near-term cycles argue for a push up to 3040, so it's unlikely that Thursday's setback gains too much momentum. Additional rallies are likely into early August.

Image 7-29-19 at 2.33 PM.jpg

A meaningful push higher in Yields yesterday, that likely should jumpstart the move higher in TNX to 2.16 ahead of next week's FOMC. Emerging markets and commodities were weak as the Dollar's rise also followed suit, and near-term, it looks right to sell Treasuries and/or own TBT for further upward progress in yields

Image 7-29-19 at 2.34 PM.jpg

Intel surged after hours on an upbeat third quarter forecast along with 2Q sales and profit that beat expectations. Post market trading carried the stock to $55, a level that doesn't offer any immediate resistance technically. While near-term overbought, this has exceeded the area that marked the gapdown and should be able to carry this to $57-$57.25 before any temporary ceiling, with former highs not out of the realm of possibility given this move which would put INTC up near $59.59, a very strong level and one to consider taking profits into. For Friday, any intra-day weakness from $55 likely is buyable technically for $57.25, thear area which preceded the gap in April.




Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Technology leads, but SOX getting very close to resistance- Favor Hardware into August

July 23, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com


SPX Cash Index

Support: 2968-71, 2962-3, 2952-5, 2908-10

Resistance: 3019-3010, 3021-3, 3040-2

Monday Technical Video 7/22/19 discussing SPX, SOX

https://stme.in/ylxcjJm2aC

Link to Thursday 7/18/19 Technical Analysis Video Webinar

https://stme.in/lvcuoALeCc

7/17 CNBC interview, discussing NFLX, and IBM after earnings

https://www.cnbc.com/video/2019/07/17/top-technician-reacts-to-big-tech-earnings-results.html

SPX - (3-5 Days)- Bullish- S&P regained more than half of last Friday's decline, recouping trend from mid-June. Over 3006 in SPX cash (3010-Futures) would be quite positive for a rally to 3020 then 3040

EuroSTOXX 50- Bearish- Break of trend from June is a minor negative and will need to recoup 3500 to expect higher prices. Expect any selloff proves short-lived

HSCEI- Neutral- We'll need to see move over 11042 for bullish and under 10632 for bearish.

Trading Longs: AYX, SHOP, BAX, TWLO, AAPL, ETSY, UAL, GDX, PEP, MDT, ORI, CMI, USB, TSCO, MYOK, TNDM, MNST, TWTR, ACAD, IOVA, PCTY, MRTX, SE, AXSM, MCD

Trading Shorts: EA, DUK, PEG, BBBY, URBN, TSLA, CTVA, RCL, CTRP, ENR, SPB

Stocks managed to churn higher largely on Technology strength. As mentioned last week, it looked like Tech was getting closer to resistance, but SOX should be able to get to 1550-70 while SMH approached 120. This now looks to be imminent for SOX and it's thought that this area likely could stall out, while Tech hardware outperforms.

Outside of Technology strength, Monday was a very lackluster session, with no other sector up or down more than 0.55% with Energy showing small positive gains and Staples underperforming the most. The US Dollar made brief upward progress, while Yields finished at 2.046 on TNX.

Key for the days ahead will be regaining last Friday's highs at 3010, which would be very positive, allowing S&P to push higher to 3020 and then 3040. This is the base case scenario of S&P technical direction for the next 1-3 weeks, while on the downside, getting down under 2969 is a must for any real concern, and under 2962 turns trends near-term bearish, thinking a test of 2900-5 occurs. For now, premature to get bearish and right to expect Monday's gains to continue.

ACTION PLAN-

Long GOLD by owning IAU, GLD and also GDX for Gold stocks



Long FANG basket, with AMZN, FB, being key stocks of focus- NFLX breakdown yesterday and after hours warrants more weakness here

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Selling SMH today(Tues 7/23) and XLV .. will revisit both

Additional charts and thoughts below.

Image 7-25-19 at 8.29 PM.jpg

SPX looks to have had a successful retest of prior lows, and as seen on this hourly chart going back since mid-June, managed to turn back higher to near 2990 after having tested 2969. In the short run, this area is "No-Man's Land" and will need to get back up above 3010 in Futures, (3006 in SPX cash) to have real confidence. However, thats the most likely outcome, in my view for the next week, and expect to see 3020 challenged and exceeded despite the lackluster breadth. Movement back under 2969 needed for any type of concern.

Image 7-25-19 at 10.07 PM.jpg

SOX, or Philadelphia Semiconductor index, looks to have entered the resistance zone mentioned in recent reports, which also has similar resistance in SMH at 120. Counter-trend TD signals are now complete, right under prior highs (Demark) and this can likely allow for a stalling out in this part of Technology. Other areas like Tech hardware (more on this below) look more attractive in the near-term. One should consider using this rally to take profits in Semis sometime this week, ideally between 1550-70.

Image 7-25-19 at 8.29 PM.jpg

Tech Hardware indices like Bloomberg's S&P 500 Technology Hardware & Equipment index (S5TECH) is more attractive for the next 2-3 weeks than Semiconductors, but weekly charts show this group also nearing key resistance right near prior highs that could allow for some stalling out. Overall, it's right to be long AAPL here technically for a move to 215. However, the group as a whole might stall out this week into next as prices near prior highs. Given that Tech is 20% of SPX, this goes a long way towards explaining why SPX technical targets are 3040 to a max near 3075 as opposed to 3300 like some Strategists are suggesting.




Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Financials, Industrials could lead as Tech starts to underperform

July 24, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com


SPX Cash Index

Support: 2968-71, 2962-3, 2952-5, 2908-10

Resistance: 3009-3010, 3021-3, 3040-2


My CNBC interview from yesterday on KO (Coca-Cola)

https://www.cnbc.com/2019/07/23/coca-cola-still-has-room-to-run-always-buy-all-time-highs.html

Tuesday Technical Video 7/23/19 discussing SPX, SOX

https://stme.in/0SELg19hhL


Link to Thursday 7/18/19 Technical Analysis Video Webinar

https://stme.in/lvcuoALeCc

SPX - (3-5 Days)- Bullish- S&P regained more than half of last Friday's decline, recouping trend from mid-June. Over 3006 in SPX cash (3010-Futures) would be quite positive for a rally to 3020 then 3040

EuroSTOXX 50- Bearish- Break of trend from June is a minor negative and will need to recoup 3500 to expect higher prices. Expect any selloff proves short-lived

HSCEI- Neutral- We'll need to see move over 11042 for bullish and under 10632 for bearish.

Trading Longs: KO, OLED, DFS, JPM, AYX, SHOP, BAX, TWLO, AAPL, ETSY, UAL, GDX, PEP, MDT, ORI, CMI, USB, TSCO, MYOK, MNST, ACAD, IOVA, PCTY, MRTX, SE, AXSM, MCD

Trading Shorts: EA, DUK, PEG, BBBY, URBN, TSLA, CTVA, RCL, CTRP, ENR, SPB

Stocks managed to churn out impressive gains of nearly +0.70%, led by Industrials, Materials and Financials. The latter has been increasingly strengthening in recent weeks, with Financials now up nearly 4% in the rolling 30 days ending 7/23/19, second to only Technology. KBE and KRE were both higher by over 1%, so this looked to be a widespread rally in the group, not just one dominated by XLF performance of a few. Stocks like DFS, JPM, TROW, FITB, RF all showed impressive breakouts and/or technical strength and should be ones to follow in the days ahead.

SOX extended gains again, but right near prior highs and very stretched while XLK also managed to make new all-time highs. The late day announcement of further anti-trust proceedings vs Big Tech very well could lead to a slowdown in this group given the combination of near-term overbought conditions while signs of upside exhaustion are now present in the SOX/SMH. Overall, one should be selective in this group, and consider that the next 2-4 weeks of gains in indices, which i feel are possible, very well might be led by Financials or Materials, vs thinking Tech can continue its dominance. As presented a few days ago, Equal-weighted Tech vs SPX is up against very important levels, so given that Tech is 20% of SPX, this should be a group to keep a close eye on for any instance of slowing that lasts more than a few days.

Outside of Equities there was an outsized move higher in the US Dollar that looked important technically and seems likely to continue. Thus, an interesting environment in the near-term where both US Dollar and Yields are pressing higher. Normally this combination is not a good one for precious metals. Yet, no real deterioration has occurred thus far. However, Emerging markets have born the brunt of this recent Dollar pop and EEM has underperformed , while China and many LatAm markets have stalled out. Near-term, this Dollar strength does look to persist into early August before any correction, and could serve to hinder rallies in both commodities and EM. Charts below and a bit more explanation of some of the comments above.

ACTION PLAN-

SELL EURUSD with targets down at 1.11


Long GOLD by owning IAU, GLD and also GDX for Gold stocks

Long TBT with targets at 32

Long USDJPY with targets at 111


Long XBI with targets back to 94; Stops on weekly close under 82.87

Additional charts and thoughts below.

ESu530.gif

SPX near-term bullish on minor breakout on hourly charts. S&P Futures managed to climb back up above 3004 yesterday, a key area of near-term resistance on hourly charts that should lead to a retest and breakout above former highs near 3023. This bullish move happened largely given some much needed Financials performance, coupled with Industrials and Materials strength (not that the latter has much weight in SPX) While breadth has proven subpar of late, Advance/Decline did turn in a 2/1 bullish ratio yesterday, and the participation looks to carry stocks higher at least into early August. Thus, it remains right to be positioned long, albeit with lesser exposure in Technology and more into Financials and Industrials.

Image 7-25-19 at 8.26 PM.jpg

A meaningful lift in US Dollar yesterday vs Euro and Sterling and the DXY looks to move higher towards 98.25 which would represent a retest of former peaks. Near-term, one should expect some underperformance in Emerging markets, commodities, and for EURUSD to pullback to test and possibly break former lows.

KOm.gif

Coca-Cola (KO-54.33) Additional strength looks likely in KO after the minor breakout of this five year area of resistance directly following KO's breakout back to new high territory. Overall, this stock looks attractive for further near-term gains to $56-56.50, which should represent the first real resistance to this rise. While near-term momentum is close to overbought levels, the act of breaking out of a 20-year base is truly a bullish intermediate-term development and should help this stock outperform on both a near-term and intermediate-term basis. KO managed to turn up sharply back in 2017 vs Consumer Staples and has outperformed on both a 1 and 3 month basis, making this one to favor for additional outperformance.



Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Liftoff in Financials, Industrials bullish near-term, & Tech follows suit

July 25, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 3000-2, 2968-71, 2962-3

Resistance: 3021-3, 3040-2, 3073-5

Thursday TECHNICAL WEBINAR 1pm EST TODAY

https://join.startmeeting.com/info69336

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

Wednesday 7/24/19 Technical Video, discussing SPX, SOX, XLF, XLI

https://stme.in/4h14NkQtyR

My CNBC interview from 7/23/19 on KO (Coca-Cola)

https://www.cnbc.com/2019/07/23/coca-cola-still-has-room-to-run-always-buy-all-time-highs.html

Link to Thursday 7/18/19 Technical Analysis Video Webinar

https://stme.in/lvcuoALeCc

SPX - (3-5 Days)- Bullish- S&P regained more than half of last Friday's decline, recouping trend from mid-June. Over 3006 in SPX cash (3010-Futures) would be quite positive for a rally to 3020 then 3040

EuroSTOXX 50- Bullish- Move back above 3500 puts bullish trend back intact. Expect rally to 3600-25.

HSCEI- Neutral- We'll need to see move over 11042 for bullish and under 10632 for bearish.


Trading Longs: CMI, JCOM, BAX, MDT, OLED, DFS, JPM, AYX, SHOP, TWLO, ORI, MNST, TSCO, MYOK, ACAD, IOVA, PCTY, MRTX, SE, AXSM

Trading Shorts: EA, DUK, PEG, BBBY, URBN, TSLA, CTVA, RCL, CTRP, ENR, SPB

Yesterday might have proven to be THE most important day of the week. Not only did the SOX break back out to new highs, but both XLI and XLF made meaningful moves to new highs for 2019. Recall that both Industrials and Financials had largely been consolidating near April highs for the last month, while Technology had reasserted itself as the market leader. While there were signs that Tech could have stalled out as recently as this week, yesterday's push to new highs in the NASDAQ and SOX have kept this steep uptrend of late very much intact. Meanwhile, both Financials and Industrials have achieved minor breakouts, which represents about 22% of the SPX. So while breadth had faltered a bit in the last two weeks, with Advance/Decline peaking on 7/12, yesterday's rebound in these sectors is encouraging in the short run. Both sectors look to make upward progress in the days ahead, and should be overweighted through the balance of July into early August.

Breadth came in nearly 3/1 yesterday, another encouraging signal, and most of Europe and Asia also showed decent followthrough higher. (China continues to lag, however and Emerging markets have continued to show underperformance in recent days with the rally in the US Dollar. Overall, we're getting to a stage in the rally where it should pay to watch carefully for evidence of breadth NOT moving back to new highs with many of the breakouts we're seeing in various groups like Industrials, Financials, and Semiconductors, the latter which are growing quite overbought in the short run. Sentiment should continue to grow more bullish, and it's thought that following FOMC meeting next week, if the Fed drops rates as expected and as the market has priced in, this would set off a very bullish escalation in market sentiment that ultimately should bring in a serious market peak by mid-August into early September (with latest cycle dates signaling 9/14-8 as being important). For now, trends are bullish, and investors should "enjoy the ride" though try to avoid getting too complacent into FOMC.

ACTION PLAN-

Long XLF with targets at 30-30.25

Long XLI with targets at 81

SELL EURUSD with targets down at 1.1107

Long GOLD by owning IAU, GLD and also GDX for Gold stocks

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Additional charts and thoughts below.

fullsizeoutput_95.jpeg

Bullish trend breakout in the Value line.. but problems remain- Value Line Arithmetic, the equal-weighted gauge of 1700 companies, finally managed to achieve a minor breakout of its own yesterday with the move to close above June/July highs and finish at 6338. However, it's notable that this index has lagged noticeably, with the recent rally still being well under last September's peak and even further under last January's. For now, the short-term message of yesterday's move is certainly positive. However the broader message is one of concern, barring an immediate snapback to new all-time highs (which should prove VERY difficult to come by into the fall)

xlf.gif

A meaningful lift from Financials yesterday, with XLF breaking out to the highest levels seen since last Fall. After recent consolidation near April highs, this is a very constructive move out of this group (based solely on the XLF move, which has understandably high weightings in BRK/B, JPM, WFC) While yields are gradually bottoming out( and the same happening with Yield curve arguably) Financials have gotten a notable "Liftoff" technically per yesterday's XLF move. This is constructive near-term technically from a pure pattern perspective and bodes well for further strength in the group. One should overweight Financials between now and early August.

XLId.gif

Industrials Bullish near-term- XLI managed to lift to the highest levels of the year, per XLI, and further upside looks likely to a strong resistance zone formed by both January and September highs at 80.25 to 80.66. Moves like this can often be quite important technically when highs spanning back several years are exceeded by daily and particularly weekly closes. While Transports have been a notable laggard, and will still need to be watched carefully in the weeks ahead for signs of continued negative divergence, for now, this is a bullish move for XLI, and should be followed in the short run.



Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Gold breaks out, while Tech, Transports snap back sharply higher

July 19, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 2968-71, 2962-3, 2952-5, 2908-10

Resistance: 3021-3, 3040-2

Link to Yesterday's Technical Analysis Video Webinar 7/18/19

https://stme.in/lvcuoALeCc

7/17 CNBC interview, discussing NFLX, and IBM after earnings

https://www.cnbc.com/video/2019/07/17/top-technician-reacts-to-big-tech-earnings-results.html

7/16/19 Wednesday Technical Video, discussing SPX, Gold

https://stme.in/UjYSlnSikw

SPX - (3-5 Days)- Bullish- Minor break of trendline proved brief, now S&P futures managed to close back up above 3003, which is positive


EuroSTOXX 50- Bearish- Break of trend from June is a minor negative and will need to recoup 3500 to expect higher prices. Expect any selloff proves short-lived

HSCEI- Neutral- We'll need to see move over 11042 for bullish and under 10632 for bearish.

Trading Longs: BAX, TWLO, AAPL, UAL, GDX, PEP, MDT, ORI, CMI, USB, TSCO, MYOK, TNDM, MNST, OGE, TWTR, PEG, ACAD, IOVA, TPB, PCTY, GLDD, MRTX, SE, AXSM, ZIXI, MCD

Trading Shorts: EA, BBBY, URBN, TSLA, CTVA, RCL, CTRP, ENR, SPB

Stocks snapped back just as quickly as they broke down the previous day, and signs of life in Technology coupled with Financials strength were real positives for Thursday's trading. Breadth remained largely tepid, something that's an ongoing concern in the short run, but at present, selloffs are not lasting more than just a couple days before turning back higher.

Specifically, the movement in Transports to rally more than 1.5%, along with Semiconductor issues was thought to be positive for yesterday. Many had turned bearish on the prospects for the Transports after having heard the earnings call for CSX, but the near-term technical trend still bodes well for gains in the days ahead. SOX, meanwhile, should get up to near 1550 without too much trouble before any peak.

Outside of stocks, Yields have pulled back in recent days, which technically looks to be carving out a possible higher low than what occurred in June. Gold and Silver both broke out in recent days, but commodities were lower given some of the carnage seen in Energy in Thursday's session. The extent of this selloff (shown below) is indeed a negative for Crude oil in the near-term and Energy stocks look to also show weakness in trading. Natural gas, for one, looks ripe to retest June lows, and it's right to be bearish near-term on Gas, as well as WTI Crude.

Overall, while S&P just barely got up and over the key 3003 level, Technically it looks like many of the bullish moves which happened yesterday can continue, with regards to Transports and Tech extending further. Thus, although the bear trend looked to have just begun in the US on a near-term basis, it very well could be over just as quickly and prices could turn back higher. Exceeding Wednesday's highs at 3013 for ES_F and 3005.26 for SPX cash would add to the bullish thinking, while any revisiting of yesterday's lows puts a near-term correction back on the front burner.

ACTION PLAN-

Long GOLD by owning IAU, GLD and also GDX for Gold stocks

Long FANG basket, with AMZN, FB, being key stocks of focus- NFLX breakdown yesterday and after hours warrants more weakness here

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Long XLV with targets at 95.50, then 100

Long SMH, raising targets to 120

Additional charts and thoughts below.

ES240.gif

SPX immediately recouped the area broken the prior day, putting the bullish scenario back on the front burner. Over 3003 in S&P futures should lead back to 3021-3 in short order and then over this up to 3040. However, this might take time, and there remain issues with breadth which will be something to continue to pay close attention to. Bottom line, trends are bullish with prices over 3003 and pullbacks now should be buyable Friday into next week with 2974 as a stop and 2962-3 continuing to be good support.

TRANd.gif

DJ Transports remain near-term bullish and pullbacks proved to be a buying opportunity. Transports rallied over 1.5% yesterday, which might have surprised many who heard the bearish news on CSX earnings call the prior day. However, as daily charts of DJ Transports shows above, the trend for this group is very much intact and Wednesday's weakness failed to even give back half of the prior week's gains and did not break the uptrend. Overall, its still likely that Transports can show strength in the days ahead and this could come based on Airlines and also some of the stronger Rail stocks snapping back, like Union Pacific.

CRUDEd.gif

Crude oil bearish on break- WTI Crude sold off much more than might be expected if this was just a minor pullback, and puts the bearish case back on the front burner. The act of violating the minor uptrend and undercutting prior lows in combination is thought to be negative, and should allow for Crude to selloff to $53 which is important in the larger triangle pattern at work on weekly charts. Maximum support to try to buy dips lies near $50.79-51 at June lows. This can certainly not be breached without creating a much more bearish scenario for the months ahead. Near-term, i expect further weakenss out of both XOP and OIH and these should be avoided and/or considered technical shorts for aggressive traders looking for undperformance and possible absolute weakness.



Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

S&P breaks trend from early June/late April but downside likely proves limited, for now

July 18, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 2968-71, 2962-3, 2952-5, 2908-10

Resistance: 3021-3, 3040-2

Technical Analysis Video Webinar , 15 min, Today 1pm EST- Dial in (701) 801- 1211, Access Code- 840-955-999

https://join.startmeeting.com/info69336


7/17 CNBC interview, discussing NFLX, and IBM after earnings

https://www.cnbc.com/video/2019/07/17/top-technician-reacts-to-big-tech-earnings-results.html

7/16/19 Wednesday Technical Video, discussing SPX, Gold

https://stme.in/UjYSlnSikw

SPX - (3-5 Days)- Bullish- Tuesday minor selloff failed to undercut uptrends, and rallied up off its lows into end of day. Uptrend intact and should allow for 3020, 3040

EuroSTOXX 50- Bullish- Close at multi-day highs is bullish, opening the door for push to 3600-25

HSCEI- Neutral- No real change over last few weeks and while this has lagged, we'll need to see move over 11042 for bullish and under 10632 for bearish.

Trading Longs: AAPL, UAL, GDX, PEP, MDT, ORI, CMI, USB, TSCO, MYOK, TNDM, MNST, OGE, TWTR, PEG, ACAD, IOVA, TPB, PCTY, GLDD, MRTX, SE, AXSM, ZIXI, MCD

Trading Shorts: EA, BBBY, URBN, CTVA, RCL, CTRP, ENR, SPB

Stocks experienced their first real evidence of trend damage since early June yesterday. Prices broke trends from late April as well as mid-June, confirming Demark daily TD Sequential and TD Combo sell signals in the process. Near-term, additional weakness looks possible to 2962-3 or a max of 2908-10, but should be buyable for a rally back to new highs. It's thought that this weakness should prove minor in scope and be done by early next week before the start of a rally back. Key areas for time change lie in August, not July, so recent selling likely proves to be a buying opportunity yet again. While there were signs of slowing last week, yesterday was the first evidence of any trend damage, and closing near the lows made it right to respect that, and think that another couple days of weakness are possible before indices stabilize.

Transports suffered losses of greater than 3%. Yet, the prior days had shown much greater strength, so recent weakness has not done much to alter the current uptrend in place for the group. Additionally, stocks like AAPL broke out earlier in the week and still appear like they can move higher. Thus, the recent weakness in recent days is likely to prove temporary, as charts of leading sectors like Semis and Transports are still very much positive.

Precious metals, look to be a key area of focus, and the rise in silver and gold looks to be something to follow, near-term, and could be a way to diversify out of equities after recent strength above 3k in SPX. Silver showed evidence of breaking out yesterday, while Gold is firming and readying a continuation move higher after its own breakout last month. Overall, the metals look attractive here, technically and right to favor.

ACTION PLAN-

Long USO with targets at 14.50 - Stops under 11.60

Long FANG basket, with AMZN, FB, being key stocks of focus- NFLX breakdown yesterday and after hours warrants more weakness here

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Long XLV with targets at 95.50, then 100

Long SMH, raising targets to 120

Additional charts and thoughts below.

Image 7-18-19 at 6.01 PM.jpg

SPX finally broke down under uptrends which have held over the last month. While momentum has quickly reached oversold levels on hourly charts, prices are not yet at key support to buy after the break of 2992. Additional near-term (3-5) day weakness is possible down to 2962-3, just below in S&P Futures, while under would lead to a quick move to 2908-10. However, it's expected that drawdowns prove limited and temporary before rallies back to new highs into August. Thus, this weakness should be buyable.

fullsizeoutput_92.jpeg

Gold looks to be readying for an upside breakout, after consolidation has taken on the shape of a flag pattern, as opposed to resulting in any real weakness. Gold stocks have outperformed Gold in recent days, making their own breakout. Precious metals are likely to show strength with Dollar and Yield weakness. Though, it was likely over the last week that both yields and Dollar were headed higher, the precious metals have not fallen, but yet have produced mild consolidations that have kept prices near recent highs. GDX broke out two days ago, and Gold stocks have taken an early lead. Yet, Gold itself is consolidating, and it's thought that an upcoming breakout is now more likely than any further technical decline after the June breakout. It's right to lean long, betting on Gold and Silver strength in the days and weeks ahead.

fullsizeoutput_93.jpeg

Netflix (NFLX) gapped down post earnings, violating the lows of the six-month neutral trading range that had been intact since January. Any failure of the earnings call to help this regain after hour losses likely will set this stock on a bearish path near-term, with targets down near 275. Given that only two more days are left in the week, a heavy volume gap-down under a lengthy six-month base is thought to be particularly negative in the near-term. However, intermediate-term weekly charts do show weakness to be something to buy into, not look to sell and go away. Thus, with the stock down roughly 13% afterhours or nearly $45 from Wednesday's close, this is one to look to buy dips, (IF AND WHEN) this starts to weaken down under 285 with optimal support at 275 to buy weakness.







Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

CSX woes might provide buying opportunity for Transports given recent technical improvement

July 17, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 2997-8, 2992-3, 2968-71, 2952-5

Resistance: 3021-3, 3040-2

7/16/19 Tuesday Technical Video, discussing SPX, Transports, Oil

https://stme.in/w4WOb4bOqa

7/11 Technical Webinar Link, discussing SPX, TNX, DXY, Crude, Gold

https://stme.in/cl4iRtVZlN

My Real Vision Interview filmed on 7/2/19

https://www.realvision.com/tv/shows/trade-ideas/videos/bond-rally-to-reverse

CNBC Fast Money- 6/26/19- 3 Laggard DJIA stocks that should play catchup in Q3

https://www.cnbc.com/video/2019/06/26/the-man-who-called-the-semi-rally-now-sees-these-three-stocks-breaking-out.html

SPX - (3-5 Days)- Bullish- Tuesday minor selloff failed to undercut uptrends, and rallied up off its lows into end of day. Uptrend intact and should allow for 3020, 3040

EuroSTOXX 50- Bullish- Close at multi-day highs is bullish, opening the door for push to 3600-25

HSCEI- Neutral- No real change over last few weeks and while this has lagged, we'll need to see move over 11042 for bullish and under 10632 for bearish.

Trading Longs: AAPL, UAL, GDX, PEP, MDT, ORI, CMI, USB, TSCO, MYOK, TNDM, MNST, OGE, TWTR, PEG, ACAD, IOVA, TPB, PCTY, GLDD, MRTX, SE, AXSM, ZIXI, MCD

Trading Shorts: EA, BBBY, URBN, CTVA, RCL, CTRP, ENR, SPB

Yesterday's' opening line seems to be something to start with yet again.. "Signs of fatigue are evident given the lackadaisical push back to new highs on negative breadth, but Tech and Industrials should be able to buoy stock indices in the short run." Well, yesterday showed the first evidence of a daily close occurring under a prior day's lows, something that hasn't happened in the entire month of July. Volume picked up from the abnormally low Monday reading, which saw SPY volume hit the lowest levels since 2017, but still only turned in 40.5mm shares, with every day since 7/2 finishing under 60mm, remarkably low and below average. Advance/Decline finished just fractionally negative, but yet again the market seemed to be struggling to find sectors which could lead.

Sector-wise, only three sectors finished positive on the session, with Industrials being the sole group up more than +0.50% with Transports helping to lead the way. (After hours, CSX guidedown resulted in weakness that likely causes some "back and filling" to this rally during Wednesday's trading, yet should provide a buying opportunity. On the downside though, Energy was a notable laggard, the worst performing group, down more than 1%, while Technology also shed nearly 1%, with Utilities underperforming as Yields rose, dropping -0.57%.

The other key technical development outside of Transports gaining ground concerned the US Dollar, which made sharp gains vs Euro and Pound Sterling as investor confidence slipped and no-deal BREXIT risk took center stage yet again. GBPUSD sold off to the lowest levels since early 2017, while Euro gave back most of last week's gains, and at 1.1222, still lies higher than the trough seen in April. Dollar gains resulted in commodities losing ground, yet, European equity indices still managed to turn in much stronger performance than seen in US.

ACTION PLAN-

Long USO with targets at 14.50 - Stops under 11.60

Long FANG basket, with AMZN, FB, NFLX being key stocks of focus

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Long XLV with targets at 95.50, then 100

Long SMH, raising targets to 120

Additional charts and thoughts below.

Image 7-17-19 at 1.47 PM.jpg

SPX breached Monday's lows, though remains above key one-month trendline support near 2992. One should look to buy into early morning weakness Wednesday with only a daily close under 2992 allowing for further corrective activity. Given the bullish nature of Tech Hardware, Hotels, and Industrials, it's thought that selloffs still remain largely premature and 1-2 day declines really havent taken away from the bullish picture. While a stallout has indeed happened, this doesn't need to be bearish, and for now, should provide buying opportunities for traders.

Image 7-17-19 at 1.49 PM.jpg

Europe bullish on move to multi-day highs, and rallies expected up to 3600-25. Yesterday's gains in Europe painted a rosier picture for its key STOXX 50 index vs most of the US, which dropped -0.30-0.50%, and yesterday's success should help prices extend this week. Thus, longs in FEZ, the ETF of EuroStoxx50, are preferred.

Image 7-17-19 at 1.50 PM.jpg

Transports have made some major ground in recent days, a bullish development that makes Wednesday's possible pullback buyable for further gains in the weeks ahead. (CSX after-hours earnings whiff, with 2Q revenue at $3.06 billion, vs estimates of 3.14 billion, resulted in prices falling nearly 5% after hours. However, this followed some very good price action in the last week by stocks like UNP, NSC, KSU, which all demonstrated encouraging near-term breakouts. It's thought that minor weakness Wednesday'Thursday should be a buying opportunity for this group given the recent technical improvement. Union Pacific (UNP) looks to be one of the more attractive technically in this group to favor, and/or using weakness in Transports to buy IYT.




Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Hotel/Restaurants/Leisure outperform along with Tech Hardware/Semis while Energy stalls

July 16, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 3005-7, 2997-8, 2968-71, 2952-5

Resistance: 3021-3, 3040-2

7/11 Technical Webinar Link, discussing SPX, TNX, DXY, Crude, Gold

https://stme.in/cl4iRtVZlN

My Real Vision Interview filmed on 7/2/19

https://www.realvision.com/tv/shows/trade-ideas/videos/bond-rally-to-reverse

CNBC Fast Money- 6/26/19- 3 Laggard DJIA stocks that should play catchup in Q3

https://www.cnbc.com/video/2019/06/26/the-man-who-called-the-semi-rally-now-sees-these-three-stocks-breaking-out.html

SPX - (3-5 Days)- Bullish- Still looks like more gains can occur into Wed/Thur- Long with stops on close under 2992. Upside target directly above this week-3021-2 or 3041-3

EuroSTOXX 50- Bullish- Ability to have erased early losses is a positive- Move over 3514 opens up door for push to 3600-25

HSCEI- Neutral- No real change over last few weeks and while this has lagged, we'll need to see move over 11042 for bullish and under 10632 for bearish.

Trading Longs: AAPL, UAL, GDX, PEP, MDT, ORI, CMI, USB, TSCO, MYOK, TNDM, MNST, OGE, TWTR, PEG, ACAD, IOVA, TPB, PCTY, GLDD, MRTX, SE, AXSM, ZIXI, MCD

Trading Shorts: BBBY, URBN, CTVA, RCL, CTRP, ENR, SPB

Signs of fatigue are evident given the lackadaisical push back to new highs on negative breadth, but for now, sectors like Technology and Industrials (Transports) look to be able to buoy US indices in the short run. Trends will remain bullish until there is at least a move under 2992 on a close for SPX, so trying to sell into this move is still likely premature. Counter-trend Sells are now apparent on SPX on daily charts, but would require confirmation (close under close of four trading days prior) before expecting any decline, and weekly charts are still premature in this regard.

As mentioned, Technology remains a very important part of the process for how to view this rally, and yesterday brought about further strength in SOX along with Tech hardware (shown below) which both look to show further gains. SOX remains at least another 2-3 days away from any peak near-term, even after four of the last five days of gains and targets lie near 1550-1570 to sell. Meanwhile, Tech Hardware just broke out of its minor base and is likely an area to favor within Tech this week as this plays catchup.

Outside of these groups, we saw Financials fall in trading, though Citigroup managed to rally back to near unchanged territory after early losses, and this group remains one to buy weakness in this week. Yields fell globally, but this also appears like nothing more than minor consolidation after the strong push higher last night and something to fade, as higher yields into August appear likely.

ACTION PLAN-

Long USO with targets at 14.50 - Stops under 11.60

Long FANG basket, with AMZN, FB, NFLX being key stocks of focus

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Long XLV with targets at 95.50, then 100

Long SMH, raising targets to 120

Additional charts and thoughts below.

Image 7-16-19 at 3.06 PM.jpg

SPX managed to hit yet another new all-time high, though breadth was negative in trading and Counter-trend indicators of exhaustion from Demark are now in place which when confirmed, could result in a minor stalling out. However, targets have not yet been reached and SPX could still push up to 3040, thanks to Tech and Discretionary, before any peak. The area at 2992 aligns with the uptrend from the last few weeks, so we'll use this as a gauge for being Long/short. Being above still warrants a long stance, and we'll bet that a bit more gains can occur this week.

Image 7-16-19 at 3.08 PM.jpg

Hotel Restaurants and Leisure remains a strong outperformer within Consumer Discretionary, and last week's minor breakout is allowing for near-term relative strength that should continue in the days ahead. Stocks like CMG, MAR, HLT, WYNN, SBUX, MGM have all had above-average performance for this sub-group, and this area should be favored for additional strength. It's likely this index reaches 1350 from its current 1307.74, so many of the Hotels and Casino stocks remain attractive.

Image 7-16-19 at 3.08 PM.jpg

Tech Hardware and Semis still likely to carry market a bit more this week. If the action yesterday was any clue, we saw an important development in S&P 500 Tech Hardware breaking out of its small range which should help lift this back to former highs. This is encouraging and while AAPL dominated, AAPL remains a very important stock for the indices and ETFs and getting above 205 should send AAPL to 215. Overall, it's tough seeing a market decline when stocks like AAPL are making breakouts. Thus, this sub-sector, and AAPL for that matter, look to advance further and are technical longs.


Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Financials rebound further, but Technology looks to be nearing temporary resistance

July 12, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

 

SPX Cash Index

Support: 2968-71, 2952-5

Resistance: 3008-10, 3021-3, 3040-2

 

 

7/11 Technical Webinar Link, discussing SPX, TNX, DXY, Crude, Gold

https://stme.in/cl4iRtVZlN

 

My Real Vision Interview filmed on 7/2/19

https://www.realvision.com/tv/shows/trade-ideas/videos/bond-rally-to-reverse

 

CNBC Fast Money- 6/26/19- 3 Laggard DJIA stocks that should play catchup in Q3

https://www.cnbc.com/video/2019/06/26/the-man-who-called-the-semi-rally-now-sees-these-three-stocks-breaking-out.html

 

SPX - (3-5 Days)- Bullish- Further strength likely to either 3021-2 or 3041-3 in S&P futures which requires one more push higher in the near-term

 

EuroSTOXX 50- Bullish- Move over 3514 opens up door for push to 3600-25

HSCEI- Bearish- Under 10640 should lead to 10465 over next few days, but only under 10029 should pullback last more than 2-3 days. Over 11042 is bullish

 

Trading Longs: USB, TSCO, MYOK, TNDM, MNST, OGE, TWTR, PEG, ACAD, IOVA, TPB, PCTY, GLDD, MRTX, SE, AXSM, ZIXI, MCD

 

Trading Shorts: CTVA, CCL, RCL, ATVI, CTRP, ENR, SPB

 

 

Markets have begun to show some signs of fatigue lately, despite the lack of any meaningful weakness. While US Equities have already shown stellar returns through the first couple weeks of July, to the tune of nearly 2% for SPX, making its YTD Returns almost 20%, breadth has begun to falter a bit in recent days. Yesterday showed flat breadth yet again on the rally, and finsihed with more stocks declining than advancing. Additionally, the percentage of stocks trading above their 10-day moving average has dropped since peaking in late June near 88% and now stands at 65%. So despite markets moving higher to hit new records daily ( The FInancial media has gone through extra efforts to discuss SPX 3000, DJIA 27k) fewer stocks are trading above their 10-day m.a. than 2 weeks ago. Morever, Demark indicators are now within 1-2 days of signaling exhaustion on daily charts, and have a potential weekly confluence as well. Overall, much of this just means that investors need to pay attention extra closely in the days ahead and not become complacent. While Fed-Speak might have made the market more comfortable, technically all is not as good as prices might be reflecting in the last couple weeks.

 

Sector wise, Technology now looks to be near resistance (See chart below) and Industrials has stalled out a bit, while Healthcare also has been churning of late (Thursday's White House decision to pull the plug on Drug-Rebates caused some interesting bifurcation in this sector, with CI, UNH, CVS, HUM, ANTM all rallying more than 4%, while MRK, LLY, NKTR, REGN, BMY fell more than 3%.) Financials, meanwhile, look to be picking up steam, and has outperformed admirably as rates have turned back higher. The 2/10 Spread looks to have steepened out quite a bit in recent days and now up to 27 bps. One of the key concerns, sector-wise has to do with Transportation lagging badly, and this will be something to monitor heading into the back half of July

 

 

 

ACTION PLAN- 

 

 

Long USO with targets at 14.50

 

Long FANG basket, with AMZN, FB, NFLX being key stocks of focus

 

Long TBT with targets at 32

 

Long USDJPY with targets at 111

 

Long XBI with targets back to 94; Stops on weekly close under 82.87

 

Long XLV with targets at 95.50, then 100

Long SMH, raising targets to 120

 

Additional charts and thoughts below.

SPd.gif

 

SPX traded in a very tight range yesterday as part of its uptrend from early June. While there are some minor signs of stalling out, we'll need to see price break last week's lows to have any confidence that a pullback is upon us. For now, counter-trend exhaustion remains premature and groups like Financials appear to be showing more strength. Overall, it looks right to sell into strength to 3020 while awaiting more evidence of trend failure and break of uptrend before turning too bearish. Thus, remaining above 2952 with no counter-trend sells leaves the trend bullish.

XLFd.gif

 

Financials looks to be continuing to make steady progress, with XLF firming after testing prior highs and still looking to rally in the weeks ahead. Broker-dealer stocks made the technically more significant move yesterday to the upside, but both Regional and Money center banks should be well poised to make further progress as yields rise. Overall, i like overweighting Financials with the yield curve and yields rising, and this group could prove to be a better risk/reward into late July than Technology.

XLKd.gif


 

Technology- Time to take profits? Tech looks to be nearing a possible area of resistance after a very good rally in recent weeks. Charts of XLK show prices nearing a minor resistance trend formed by connecting highs since last Fall. (These have more importance than looking at a breakout of prior highs from April, as the April peak itself just marginally exceeded last Fall before peaking) Counter-trend exhaustion could be in place by Friday, and might lead to a temporary stalling out in Tech. Many of the "FANG" names that ive discussed this week as bullish technical candidates reversed yesterday after several days of above-average gains. Overall, Tech remains the group to focus on for those eyeing when markets could start to stall out, as it remains 21% of SPX. 

 

Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice.  Newton Advisors, LLC has no duty or obligation to update the information contained herein.  Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources. 

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.  Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC

Energy could snapback given progress in WTI Crude

July 11, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com

SPX Cash Index

Support: 2968-71, 2952-5

Resistance: 3008-10, 3021-3, 3040-2

Wednesday Technical Video, 7/10/19, highlighting SPX, Crude

https://stme.in/EFTVJ7ZXBy

TECHNICAL WEBINAR TODAY- 7/11- 1pm EST- Click link below at 1pm

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

https://join.startmeeting.com/info69336

My Real Vision Interview filmed on 7/2/19

https://www.realvision.com/tv/shows/trade-ideas/videos/bond-rally-to-reverse

CNBC Fast Money- 6/26/19- 3 Laggard DJIA stocks that should play catchup in Q3

https://www.cnbc.com/video/2019/06/26/the-man-who-called-the-semi-rally-now-sees-these-three-stocks-breaking-out.html

SPX - (3-5 Days)- Bullish- Further strength likely to either 3021-2 or 3041-3 in S&P futures which requires one more push higher in the near-term

EuroSTOXX 50- Bullish- Move over 3514 opens up door for push to 3600-25

HSCEI- Bearish- Under 10640 should lead to 10465 over next few days, but only under 10029 should pullback last more than 2-3 days. Over 11042 is bullish

Trading Longs: INTU, TNDM, MNST, AMZN, FB, NFLX, TWTR, ACAD, IOVA, PLAN, TPB, PCTY, GLDD, MRTX, SE, TSCO AXSM, MYOK, ZIXI, AKBA, MCD, SWAV, CSGP, FIS,AVLR

Trading Shorts: CTVA, CCL, RCL, ATVI, CTRP, XOP, OIH, APA, VLO, ENR, SPB

FOMC Chair Powell's dovishness provided a sense of calm to markets, and should slowly help sentiment to become more and more bullish in the days and weeks ahead into FOMC at end of month. S&P managed to finally get above 3000 and seems poised for further strength up to 3020 or 3041-3 which should be a chance to take profits in the near-term.

Until there is at least some evidence of movement under the last few days lows, it will pay to stay long until Demark exhaustion appears. This looks to be 2-3 days away on most indices and should mark a minor top early next week. However, for now, it still looks right to favor additional follow-through.

Crude oil provided a big positive step in the right direction with its move back up over prior highs just above 60. This looks important and positive for Crude and can allow for additional upside to near 63 in the near-term. Gold also made headway given Powell's dovishness and the drop in the 2 yr yield and the Dollar showed evidence of turning back lower after a healthy rise in recent weeks. For now, it looks right to consider longs in Energy given Crude's lift and/or owning ETF's like USO that can participate in Oil moving higher.

ACTION PLAN-

Long USO with targets at 14.50

Long FANG basket, with AMZN, FB, NFLX being key stocks of focus

Long TBT with targets at 32

Long USDJPY with targets at 111

Long XBI with targets back to 94; Stops on weekly close under 82.87

Long XLV with targets at 95.50, then 100

Long SMH, raising targets to 120

Additional charts and thoughts below.

Image 7-15-19 at 4.27 PM.jpg

SPX Bullish, but approaching a point where this could stall out; For now, additional strength still looks likely up to 3020-3 and above to 3040-3 being possible. Momentum remains positive and not overbought and counter-trend signals are still 2-3 days away on daily charts and getting very close on Weekly charts. For now, breadth has waned a bit on this move to new highs, lackluster for new highs, at 3/2 positive, but yet no evidence of any reversal has been seen. Thus its still right to be long, particularly in Financials, Technology with Energy potentially starting to be attractive after recent weakness.

Image 7-15-19 at 4.33 PM.jpg

Crude made a very bullish near-term move back up above 60, a level that also represented prior lows from May. Thus, resistance important for two different levels and getting above this is positive for further follow-through. The next big level lies near 63 which has even more importance, and getting above would allow for a much larger rally. For now, this Crude gain from yesterday looks constructive and should allow for Energy stocks to start to turn back higher in the short run.


Image 7-15-19 at 4.34 PM.jpg

REITS and Utilities look to make a bit further progress over the next week given their technical resilience and recent bounce attempt. VNQ, the REIT ETF, should be able to challenge former highs, but is then thought to have a good likelihood of peaking again, not unlike what happened a month ago. Yields turning higher should be the culprit for this group to start to weaken. For now, however, a bit more absolute strength looks likely.


Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice. Newton Advisors, LLC has no duty or obligation to update the information contained herein. Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss. The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors. Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report: This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.

Trend damage has proven minimal ahead of G-20

June 28, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2912-3, 2900-2, 2878, 2850-2

Resistance: 2939, 2952-4, 2964, 2985



Link -6/27 Technical Webinar, discussing SPX, TNX, BBDXY, Oil, Gold

https://stme.in/MfjuXKV4AT



CNBC Fast Money- 6/26/19- 3 Laggard DJIA stocks that should play catchup in Q3

https://www.cnbc.com/video/2019/06/26/the-man-who-called-the-semi-rally-now-sees-these-three-stocks-breaking-out.html



My CNBC Interview on GOLD 6/25/19

https://www.cnbc.com/2019/06/26/gold-cools-off-and-charts-suggest-larger-pullback-ahead.html



My CNBC Fast Money interview (6/19/19) on Technology and Chip stocks

https://www.youtube.com/watch?v=QH5UnqRpnHY





SPX - (3-5 Days)- Bearish, but over 2939 would turn trends back to bullish on a close- Yesterday's rally attempt failed to get high enough to turn trends bullish and leaves open the possibility of a final pullback Friday/Monday before trends turn back higher



EuroSTOXX 50- Trading lows near- Bearish but looking to cover shorts in 1-2 trading days Minor pullback to 3400-3415 should find support Thursday into next Monday and turn higher for a rally to test 3511 area. Daily closes over 3460 would turn trend bullish.

HSCEI- Bullish- Another stab at 11k looks to be happening and a brief move over into next week looks likely before any trading high. Thus, a bearish position for now looks wrong and its right to be long with stops under 10663



Trading Longs: XLV, KRE, TROW, FII, PNC, L, BOOT, FISV, SEAS, OMC, UCBI, NOW, IPHI, IHI, TWTR, IOVA, AKBA, MCD, SWAV, CSGP, FIS,AVLR



Trading Shorts: JWN, SPB, GPS, PCAR, CSCO, COTY, SYMC, URBN





Final trading day of the month and quarter, S&P has lost four of the last five days, but yet set to record a stellar month, higher by nearly 6%. This week's pullback has barely made a dent in the recent strength seen since 6/3 lows, and now we're seeing evidence of Financials trying to come back to life given the stabilization in Treasury yields. Healthcare's bounce has been constructive technically, though not strong enough to lead thus far. Materials and Energy along with Tech, have all made very good gains in the last month, outperforming all other sectors, though only Tech has real weight in the SPX. Overall, it's thought that regardless of the outcome of this weekend's G-20 which the market has been eagerly anticipating the outcome should be bullish for stocks, technically given the setup on most charts. Thus, any pullback Friday into Monday likely should be one to buy into.



Outside of equities, Gold and precious metals look to have started a minor pullback given the bounce in DXY and TNX, and this is thought to continue in July. It's thought that TNX moves higher to 2.25-.35% and that DXY is near support and should also bounce. Both of these together might hurt EM performance, which for now, still looks to be ongoing. Cryptocurrencies look to have shown a lot more volatility in recent days both on upside and now downside, while Crude oil has risen to sit near key resistance ahead of the upcoming OPEC meeting which will take place next week, directly following G-20. Thus, we're starting to see a lot more volatility lately in nearly every asset class for the first time in weeks. Stay tuned for Monday's report which will take a closer look at the Financials, which i believe are trying to form a bottom.





ACTION PLAN- 



Long TBT with targets at 32



Long XBI with targets back to 94



Long XLV with targets at 100



Long IHI, with targets at 240, stops under 221



Long SMH, looking to buy weakness, with targets at 112



VNQ hit target, looking to short on rallies







Additional charts and thoughts below.

below.gif

SPX has now fallen for four of the last five days, yet Thursday's gains are not convincing just yet that lows are in to this pullback. Movement back up over 2939 in SPX cash would give far more evidence that prices could push back to highs. For now, its encouraging that Technology has roared back, and there's some evidence of Financials starting to strengthen. Both of these are positive developments ahead of the G-20 given that recent weakness has lost very little ground. Yet, some evidence of moving back above prior days highs will be necessary towards thinking that a move back to new highs can occur. Given the uncertainty of this weekend's G-20, most are betting that very little progress will happen, and as such, it's right to wait on prices to turn up before thinking this decline has run its course.


course.gif

Energy has bounced sharply in the last couple weeks and takes 3rd place for June sector-wise out of 11 with performance of 7.8% through 6/27/19 Month-to-date. Yet, daily relative charts of XLE to SPX show that recent strength is merely a "drop in the bucket" compared to the amount of weakness that's taken place from last May. This group has pulled back sharply over the last year and remains the worst performing sector on a 12-month basis and the only one down over the past 12 months, with returns of -16.62%. The next closest sector is Materials, with POSITIVE gains of 0.77%. With WTI Crude having rallied to near 60 ahead of the OPEC meeting, it's important that Crude get back over 60 to have hopes of Crude extending gains and for Energy stock gains to consider. Until then, this area of resistance is thought to be one to sell into heading into the OPEC meeting.


meeting.gif

Healthcare looks attractive heading into end of Q2. XLV on a weekly basis looks quite attractive after last week's breakout has consolidated for most of this week thus far. The weekly Triangle pattern for XLV which was exceeded has now pulled back to an appealing area to buy, heading into the most bullish month for Healthcare in the last five years, July. It's expected that price turns higher to test former highs near $96 and get over this for a move up to 100. Overall, this remains one of the better risk/reward sectors to consider over the next 6-8 weeks as a long idea to overweight.

Defensive Exodus likely to continue into July

June 27, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2905-7, 2878, 2850-2

Resistance: 2952-4, 2960-1



Technical Analysis Video Webinar, 15 mins. Today 1pm EST-https://join.startmeeting.com/info69336

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



CNBC Fast Money- 6/26/19- 3 Laggard DJIA stocks that should play catchup in Q3

https://www.cnbc.com/video/2019/06/26/the-man-who-called-the-semi-rally-now-sees-these-three-stocks-breaking-out.html



My CNBC Interview on GOLD 6/25/19

https://www.cnbc.com/2019/06/26/gold-cools-off-and-charts-suggest-larger-pullback-ahead.html



My CNBC Fast Money interview (6/19/19) on Technology and Chip stocks

https://www.youtube.com/watch?v=QH5UnqRpnHY





SPX - (3-5 Days)- Bearish, but looking to cover shorts on further weakness to 2900-5 into next week- This pullback should prove short-lived into G-20 and insufficient damage has been done to expect a larger correction. Buy dips at 2905 and then 2878



EuroSTOXX 50- Bearish but looking to cover shorts in 1-2 trading daysMinor pullback to 3400-3415 should find support Thursday into next Monday and turn higher for a rally to test 3511 area.

HSCEI- Bearish- No change-Pullback likely to reach 10541 and under that near 10288 before turning higher. It's thought that US Dollar finding support should result in a bounce and underperformance out of HSCEI in the weeks to come.





Trading Longs: BOOT, FISV, SEAS, OMC, UCBI, NOW, IPHI, IHI, TWTR, IOVA, AKBA, MCD, SWAV, KHC, CSGP, FIS,AVLR



Trading Shorts: VNO, PLD, SPG, KIM, SLG, HST, SPB, PKG, GPS, UPS, FDX, JBHT, WBA, COTY, APA, SYMC, WDC, URBN





2 days left in the month and quarter....and to reiterate the recent message, it's still likely that this minor drawdown proves to be buyable soon, potentially by Friday. Minimal damage has been done technically, momentum remains positive and signs of Technology reemerging are present. Looking back, markets failed to extend early gains and by end of day, prices had closed at a small loss for S&P. However, Technology and specifically, Semiconductor stocks managed to lead yet another bout of outperformance for Tech stocks in a bounce that's been ongoing and considered bullish for risk assets. Meanwhile, Defensive sectors like Staples and Utilities experienced broad losses which is also thought to be constructive also for risk assets. Overall, downside for S&P should be limited to 2850 at a maximum, but is thought that this pullback bottoms out near 2900 and turns back higher to rally in July to 3040-75 into August.



Outside of equities, a bounce is ongoing in the Dollar after weakness the past few weeks and the bigger technical development happening right now concerns the reversal in Treasury yields. Over the last 24 hours, we've seen TNX turn up sharply right on schedule. As mentioned in recent days, this is something which was expected technically based on oversold conditions, counter-trend exhaustion and positive momentum divergence. This likely causes Financials to start to act better, but likely also results in technical deterioration in the some of the yield-sensitive assets. Bottom line, it's likely that risk assets start to turn higher soon for 3 important reasons" Sentiment remains way too bearish given how close to all-time highs indices are trading.. Second, sectors are showing evidence of turning back higher: Healthcare, Financials, Technology, Discretionary. Third, Defensive sectors are turning down sharply.





ACTION PLAN- 



Long TBT with targets at 32



Long XBI with targets back to 94



Long IHI, with targets at 240, stops under 221



Long SMH, looking to buy weakness, with targets at 112



Short VNQ with targets initially near 87







Additional charts and thoughts below.

below.gif

SPX pulled back to near unchanged on Wednesday after early gains and it's not certain that prices have bottomed just yet. Despite Technology strength yesterday, we'll need to see more evidence of prices turning back higher and at least regaining 2940. For now, downside support lies at 2900-5 and then 2878 and either of these could be a possibility into G-20 and directly after before rallies get underway. However, it looks right to buy into weakness and not expect a lengthy selloff, for now.


now.gif

TBT looks to be bottoming near-term given signs of US Treasury yields turning back higher after recent weakness. Evidence of counter-trend exhaustion is now present on TBT, and rallies are likely to near 31.50-32. One should consider selling Treasuries and taking profits in TLT and betting on a bounce in Yields in the weeks to come.


come.gif

XLU looks to be peaking, and defensive groups like Consumer Staples and REITS have also shown signs of deterioration in recent days which makes further weakness likely during a time when yields are bottoming and Equity indices are within striking distance of all-time high territory. As weekly charts of XLU show, prices are right up against very prominent resistance that has held many times over the years and now are stalling out. IT's thought that rising yields over the next 4-6 weeks coupled with Equities pushing back to new high territory should be a source of weakness for Defensive groups and particularly for the Utilities. Pullbacks to the low 50s are expected for XLU.

Pullback should prove short-lived, buyable into G-20

June 26, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2905-7, 2878, 2850-2

Resistance: 2952-4, 2960-1



Tuesday Technical Video 6/25/19

https://stme.in/PPXe92sGzH



Link to Last Thursday's Technical Webinar 6/20/19

https://stme.in/XCMYDCC7la



My CNBC interview (6/19/19) on Healthcare playing catchup

https://www.cnbc.com/video/2019/06/19/health-care-sector-set-to-bounce-after-weak-first-half-of-2019.html



My CNBC Fast Money interview (6/19/19) on Technology and Chip stocks

https://www.youtube.com/watch?v=QH5UnqRpnHY





SPX - (3-5 Days)- Bearish, but looking to cover shorts Wed/Thursday ahead of G-20 This pullback should prove short-lived into G-20 and insufficient damage has been done to expect a larger correction. Buy dips at 2905 and then 2878



EuroSTOXX 50- Bearish but looking to cover shorts Wednesday/Thursday-Minor pullback to 3400-3415 should find support Wednesday/Thursday and turn higher for a rally to test 3511 area.

HSCEI- Bearish- Pullback likely to reach 10541 and under that near 10288 before turning higher. It's thought that US Dollar finding support should result in a bounce and underperformance out of HSCEI in the weeks to come.



Trading Longs: NOW, IPHI, IHI, XBI, ETSY, TWTR, IOVA, AKBA, MCD, SWAV, KHC, CSGP, FIS, TMO, DHR, AVLR



Trading Shorts: VNO, PLD, SPG, KIM, SLG, HST, SPB, PKG, GPS, UPS, FDX, JBHT, WBA, COTY, APA, SYMC, WDC, URBN



Yesterday's break did look bearish for S&P, breaking uptrends from early June, and was something discussed in the last few reports. However, it's thought that this pullback should prove short-lived into G-20 and it should be right to buy dips potentially as early as Wednesday into Friday which could lead indices back to highs. Support targets lie near 2905 initially and then 2878 which is a Fib based target of the prior rally. Maximum support for a selloff lies near Gann based support near 2850-2, right near the 50% retracement. Weakness should be used to buy this week. While a bearish view is still listed heading into today given lack of proof yet of a turnaround, it is expected to materialize in the days ahead.

A few reasons stand out as being important in this regard: First,momentum remains positively sloped on daily charts, and no evidence of any counter-trend exhaustion was found at recent highs. Furthermore, there is evidence of Semiconductor stocks extending gains after hours while Treasury yields look to be VERY close to bottoming. All of these factors suggest selling should prove minor in the days ahead.


It's also thought that the US Dollar is very close to bottoming near-term, which should result in Commodities turning back lower after their recent bounce, precious metals included. Gold has gotten stretched and near trading targets, and Crude is also near upside targets heading into the OPEC meeting. Thus, if Yields start to bottom out and rally and the Dollar also bounces, this could put pressure on yield sensitive issues further like REITS and Utilities, while also adversely affecting Emerging markets after their recent bounce.


Bottom line, for risk assets, it's thought that weakness proves temporary and buyable





ACTION PLAN- 

Long XBI with targets back to 94



Long IHI, with targets at 240, stops under 221



Long SMH, looking to buy weakness, with targets at 112



Short VNQ with targets initially near 87



Taking profits on long TLT and initiating long TBT at the opening of trading Wednesday.





Additional charts and thoughts below.

below.gif

SPX should be nearing an area where this stabilizes and turns back higher ahead of G-20. While yesterday's pullback looked indeed damaging technically, having broken uptrend lines extending up from June lows, momentum remains positively sloped on daily charts, and no evidence of any counter-trend exhaustion was found at recent highs. Furthermore, there is evidence of Semiconductor stocks extending gains after hours while Treasury yields look to be VERY close to bottoming. All of these factors suggest selling should prove minor in the days ahead. Support is listed as 2905, but anything under should not get under 2850 the 50% retracement of the prior rally before turning back up for a rally to 3040-75 into August.




aug.gif

SOX might be close to bottoming out near-term, after MU reported after hours that sales and profits beat estimates in 3Q, and indicated some shipments to Huawei were legal. Technically the chart shows recent lows as having been important in holding up above a minor area of trendline resistance, which acted as support on the recent pullback. A rally back to highs looks likely for SOX, and after hours trading in MU heading into Wednesday showed the stock up 10%, while WDC, and STX were both up more than 3%. INTC, NVDA, and AMD also rose more than 1% after-hours. So if Technology is buoyed by Semis having stabilized and turning higher near-term, this would be a powerful force, given 20% SPX representation for TECH, that could help this recent pullback stop dead in its tracks and head higher. It was thought coming into this week that a pullback could happen, though would prove short-lived. Therefore, this might be part of that process in helping stocks to hold. While trends are bearish given yesterday's break, the next 1-2 days should bring about stabilization.




stabilization.gif

US 10-Year Treasury Yields should be very close to finding support and turning back higher in the days to come. While charts look technically poor, there are three key reasons to expect yields to turn higher. First, momentum has reached its most oversold level in years on a yield basis. Second, Daily charts have begun to reflect positive momentum divergence, as the yield decline is not carrying momentum lower. Third, Demark indicators are now lining up on both a daily and weekly basis to suggest yields are ready to turn back higher. The combination of these three should make it right to take profits on Treasury longs and sell into this move, expecting Yields to turn back higher, as early as Wednesday-Friday of this week.

Transports and REITS weakening in otherwise lackluster session

June 25, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2941-2, 2926-8, 2905-7

Resistance: 2952-4, 2960-1, 2968-70, 2980



Monday Technical Video 6/24/19

https://stme.in/MnnQtq9RMG



Link to Last Thursday's Technical Webinar 6/20/19

https://stme.in/XCMYDCC7la



My CNBC interview (6/19/19) on Healthcare playing catchup

https://www.cnbc.com/video/2019/06/19/health-care-sector-set-to-bounce-after-weak-first-half-of-2019.html



My CNBC Fast Money interview (6/19/19) on Technology and Chip stocks

https://www.youtube.com/watch?v=QH5UnqRpnHY







SPX - (3-5 Days)- Bearish- It's thought that Monday's decline under last Friday lows could bring about 3-4 days of selling into the G-20 with support 2900- Over 2964 on a close lets the rally continue





EuroSTOXX 50- Bearish- Minor pullback here looks likely also over next few days, as this has stalled out just under prior peaks at 3511. Pullback to 3400-3415 would set up for a push back higher to test 3511 area.

HSCEI- Bullish- Rally up to 11085 looks likely over next 2-3 days with a max near 11273 before this stalls out as US Dollar stabilizes







Trading Longs: TMF, NOW, IPHI, IHI, IOVA, AKBA, MCD, SWAV, KHC, CSGP, FIS, TMO, DHR, AVLR



Trading Shorts: VNO, PLD, SPG, KIM, SLG, HST, SPB, PKG, GPS, UPS, FDX, JBHT, WBA, COTY, APA, SYMC, WDC, URBN



Some minor stalling out looks to be happening, not just with Equity indices, but many sectors as well, as SPX is back down under prior highs from April and many sectors like XLY for example have stalled out and rolled over to multi-day lows. As of yesterday's close, SPX had made its first decline under the prior trading days lows since this rally started back on June 3. Breadth came in about 3/2 negative and most of the strength happened in Materials, but no other major sector was up more than +0.30% in a very lackluster session. Conversely, Energy, Discretionary and Healthcare all declined -0.50% or more. Treasury yields seem to be turning back lower, for what appears to be a more serious area of support just under 2%, while the Dollar's pullback also continued. Gold raced further to the upside to near its first upside target at 1425, and Crude finished just below $58.



Overall, after a 200 point S&P rally in 14 days, some minor consolidation looked necessary coming into this week, and there's no signs that this can't extend a few more days. If Monday's session provided any tell-tale signs about the few days ahead of this week's G-20, it's that it very well could prove to be a very slow non eventful week until markets can get a bit more clarity.



Two items of concern technically: Transports look to be weakening more and more, with the DJ Transportation Avg declining to new multi-day lows. Stocks like FDX, UPS as well as JBHT, looked particularly weak. Additionally, the REIT sector looks to be peaking out near-term, and ETFs like VNQ rolled over to multi-day lows, breaking its uptrend, and suggesting further weakness here might be likely. So these look like two sectors to avoid this week, while Financials also could prove weak given the downward bias in yields







ACTION PLAN- 



Long XBI with targets back to 94



Long IHI, with targets at 240, stops under 221



Long SMH, looking to buy weakness, with targets at 112



Short VNQ with targets initially near 87



Long TLT with targets at 134, expecting yields to drop this week





Additional charts and thoughts below.

below.gif

SPX could weaken near-term, but likely to prove minor and buyable into G-20. Movement over 2964 would postpone any decline. Looking back at yesterday, SPX managed to pullback under the prior days lows which represented the first time this has happened on a closing basis since early June. While not a "hard and fast" sell rule per se, many other indices are starting to show some evidence of stalling out and rolling over to multi-day lows, the Transports and REITS being two. Other sectors like XLY failed at former highs and are weakening. Bottom line, some minor weakness could happen in the days ahead, but likely does not get down under 2900 and should be used as a buying opportunity for further strength into July.




july.gif

REITS starting to rollover. Charts of the VNQ, the Vanguard Real Estate ETF, show this sector starting to weaken in recent days. Prices have pulled back under last Friday's lows after having violated the one-month uptrend. REITS like VNO, PLD, SPG, KIM, SLG, HST all look to weaken in the days ahead. Thus, despite rates being low, there are some signs of this sector starting to weaken, which coincides with thoughts of a low in Yields being very near and could happen as early as this week on further yield weakness.





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Transports seem to be weakening steadily after the DJ Transportation Avg. failed to get up over the 50% retracement area of the prior decline and now have violated minor trendline support and fell to multi-day lows. This area should be avoided near-term, and stocks like FDX, UPS and JBHT look like better technical shorts this week on a 3-5 day basis than longs.





SPX hits new all-time highs, while Dollar collapses & EM bounces

June 21, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2917-8, 2905-7, 2892, 2884-5

Resistance: 2953-5, 2968-70



Technical Analysis Video Webinar,





My CNBC interview (6/19/19) on Healthcare playing catchup after recent underperformance

https://www.cnbc.com/video/2019/06/19/health-care-sector-set-to-bounce-after-weak-first-half-of-2019.html



My CNBC Fast Money interview (6/19/19) on Technology and Chip stocks

https://www.youtube.com/watch?v=QH5UnqRpnHY





SPX - (3-5 Days)- Expect near-term stallout Friday-Monday before gains can continue. Look to buy weakness next week



EuroSTOXX 50- Bullish- Rally is just below targets, but likely has a bit more Friday before prices stall out

HSCEI- Bullish- Expecting this bounce continues to 11071 before stalling and offering a pullback as a chance to buy dips



Trading Longs: NOW, IPHI, TNET, IHI, XBI, MRTX, IOVA, AKBA, EXEL, MCD, PLAN, ROKU, TNDM, TNET, SWAV, NVTA, TPB, KHC, CSGP, FIS, TMO, DHR, AVLR



Trading Shorts: SPB, AWI, CROX, SIG, SYMC, WDC, STX, URBN, FOSL

Equities finally pressed up to make the long awaited move back to new high territory yesterday. SPX led this surge to new highs, while both DJIA and NASDAQ failed in this regard. Breadth was strong for the second straight day, with ample participation out of Technology, which is thought to be key. It's interesting though not surprising (from a sentiment perspective) that some of this year's biggest gains have occurred while markets have been largely preoccupied with slowing economic growth or the prospects of the Trade war being prolonged. (This has resulted in many institutional investors sticking to the sidelines who have missed out on this move) From a non-technical perspective, this next week will be hugely important, as POTUS has seemed eager to strike a deal with the Chinese, as a way of jumpstarting his reelection campaign. Just the brief mention of this caused Technology to jump and should continue to be important this coming week. Overall, trends are bullish, but intra-day momentum has gotten quite stretched and one can make the argument of a 3-5 day stallout/reversal before pushing back to new high territory.



Outside of equities, we saw the Dollar and Treasury yields plunge, while Gold hit the highest levels on a close in over 5 years. The move in Yields, as discussed yesterday, should prove short-lived, allowing for an above-average snapback over the next 2-3 months. The Dollar, however, looks to be weakening more and more, Extreme weakness and//or Economic concerns that spur on FOMC turning more dovish wouldn't be thought as something ordinarily that would be extremely bullish. However, in this case, the market is in a sweetspot to rally, as FOMC has not done much to disappoint what has already been factored in. The real concern for the months ahead, remains the fact that intermediate-term momentum (monthly) is negative and diverging- (Higher prices not leading momentum higher) Meanwhile, Small and Mid-caps fell last month to the lowest relative levels in over 3 years. Thus, it very much seems like a Large-cap Growth rally. Yet, until signs of weakness appear, markets likely still carry higher (equities) in July, and likely just stall out near-term at April highs before pressing higher. The main timeframe for concern remains September-November of this year. Further rallies which accompany sentiment turning much more bullish as the SPX gets above 3035 would be something to drive concern.







ACTION PLAN- 



Long XBI -Long half unit, and using any pullback to 83-84.50 to add, expecting July rally back to 94



Long IHI, with targets at 240, stops under 221



Long SMH, looking to buy weakness, with targets at 112





Additional charts and thoughts below.

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SPX managed to move back to new all-time highs Thursday, and this index took the lead in outperforming both the NASDAQ and DJIA, both of which remain slightly shy of these levels. Overall, the area at 2965-70 is important in the short run. Breaking out above that would help S&P push higher to technical targets at 3040-75 into July/August. While seemingly far-fetched for this to happen right away, it's important to note that Sentiment remains largely subdued, and Technology has begun to reassert its strength, and now is back in the #1 position for the year. Bottom line, the next 3-5 days could present a challenge into end of quarter given the degree of near-term overbought conditions on hourly charts . Yet, the broader daily and weekly momentum are now positive and this remains quite resilient, trading up to and above former highs. Thus, there exist few reasons to be too concerned about this move overall, and structurally additional gains are likely to follow any minor 2-3 day pullback, lifting SPX back up to this 3040-75 area.



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Crude oil has just made its largest move of the year, coinciding directly with reports of Iran having struck a US Drone. This news directly coincided with Crude having broken out above its near-term downtrend, arguing for near-term strength. In the next 3-5 days, a bit more upside is possible, with resistance coming in near 58.75-60. However, for signs that this decline has run its course, a move back up over 60 is needed. Until then, this remains a bounce within an ongoing downtrend, and is likely to encounter strong resistance just under 59.


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Bloomberg Dollar index has now made two consecutive days of lossesthat have taken prices down to new multi-month lows. This has helped spur on a sharp rally in Emerging markets, including China, along with most Commodities, though this move largely has been led by the Precious Metals and Energy. Key support for this decline lies near 1180 just at fractionally lower levels. This is extremely important for the intermediate-term trend, as this represents a multi-year area of trendline support. If broken, and prices move UNDER Jan/Feb lows of 2019, this would be quite bearish for the US Dollar, leading to much lower prices for the Dollar. At present, it's thought that the next 1-2 weeks could lower before support arrives along with a counter-trend bounce. This could allow recent surges in Gold and other commodities to pullback, allowing for better risk/reward opportunities to buy. For now, this weakness in USD along with Treasury yields has been important in providing the crucial long-term breakout in Gold to new 5-year highs. Over the next 3-5 days, it's right to consider selling into commodity and Emerging market gains while buying USD as a short-term trade next week. At present, this is premature.

Post FOMC, Gold breaks out to 5-year highs, as US 10year yields break 2%

June 20, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2917-8, 2905-7, 2892, 2884-5

Resistance: 2953-5, 2968-70



Technical Analysis Video Webinar, 15 mins. Today 1pm EST Dial-In Number (United States): (701) 801-1211, Access Code: 840-955-999

https://join.startmeeting.com/info69336



My CNBC interview (6/19/19) on Healthcare playing catchup after recent underperformance

https://www.cnbc.com/video/2019/06/19/health-care-sector-set-to-bounce-after-weak-first-half-of-2019.html



My CNBC Fast Money interview (6/19/19) on Technology and Chip stocks

https://www.youtube.com/watch?v=QH5UnqRpnHY





SPX - (3-5 Days)- Bullish to 2954- S&P and other US indices likely to test April highs before any slowdown- For S&P this lies at 2954, with 2905 being important as support



EuroSTOXX 50- Bullish- Tuesday's rally should lead to a test of April highs near 3511. One should use any minor weakness to buy dips down to 3363 and expect further strength into early next week



HSCEI- Bullish- Expecting this bounce continues to 11071 before stalling and offering a pullback as a chance to buy dips



Trading Longs: NOW, IPHI, TNET, IHI, XBI, MRTX, IOVA, AKBA, EXEL, MCD, PLAN, ROKU, TNDM, TNET, SWAV, NVTA, TPB, KHC, CSGP, FIS, TMO, DHR, AVLR



Trading Shorts: SPB, AWI, CROX, SIG, SYMC, WDC, STX, URBN, FOSL

Equities appear to be in a technical Sweetspot given Fed accommodation with yesterday's Fed decision representing no real surprise for stocks. The combined Inaction along with dovish tilt helped both Stocks and bonds rally in unison along with causing a selloff in the US Dollar. Overall, SPX and other US Indices are now within striking distance of April highs, while momentum is not yet overbought and trends remain bullish near-term. While breadth has arguably not been as strong as desired in recent weeks, we've seen some evidence of Technology stabilization in joining the strength in Industrials, Discretionary and Healthcare to buoy the markets during a real time of indecision.



Healthcare in particular has shown some real mean reversion in recent weeks, jumping from the worst performing sector YTD, to the best performing sector in the last month. Yesterday's 1% gains helped the group gain further ground on other sectors and XLV hit the highest levels of hte year. Overall, this group should be favored for further outperformance in the days/weeks ahead.



Powell's comments however, did lead the Dollar to turn down sharply yesterday while Treasury yields fell back lower.. Both of these coincided with a sharp rally in precious metals and we saw Gold break out above 1365 after hours while Treasury yields slippped down under 2%. Near-term, the move in Treasuries should prove short-lived and should prove to be a selling opportunity for US Treasuries into next week for a more substantial low. With regards to Gold, prices are stretched near-term and despite a decent breakout back to new highs, this will need to be consolidated before expecting an immediate move above 1400.



ACTION PLAN- 



Long XBI -Long half unit, and using any pullback to 83-84.50 to add, expecting July rally back to 94



Long IHI, with targets at 240, stops under 221



Long SMH, looking to buy weakness, with targets at 112





Additional charts and thoughts below.

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SPX is now within striking distance of both April 2019 peaks as well as All-time highs, which look to provide only minor resistance before prices can break through to targets near 3040-75 into August. Near-term, prices might seem extended, but gauges like RSI are not yet overbought, while momentum is certainly positively sloped and trending higher. Overall, it should still pay to favor further gains.




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Healthcare is coming back with a vengeance, as this Sector ETF managed to move to the highest levels of the year on Wednesday, turning in performance that many will start to notice quickly. This worst performing sector of the year is now the best performing sector of the last month, and XLV looks to continue higher in the short-run. Medical Devices are leading in performance, while both the Biotech sector and Healthcare Services sector have engineered short-term breakouts that bode well for both of these groups to show further strength in the weeks ahead. Pharma stocks showed very good performance, but indices like DRG are rapidly approaching former highs that likely offer at least some minor resistance before this group continues. However the group as a whole remains within a very seasonally bullish time, so this recent relative strength looks likely to continue. Near-term resistance for XLV lies near 96.


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Gold has finally managed to push up to new four-year highs after-hours to levels near 1380 which breaks the resistance trend hit no more than two other ocassions since being formed in 2014. Overall, this does look important and positive on an intermediate-term basis. However, in the short run, prices are stretched and it will be better to look to buy dips vs chase prices above 1380. However, this is the move that many were waiting for and will be widely telegraphed in the days ahead, as something to follow. While in broad agreement on the positive intermediate-term implications of this move, in the near-term, it does seem right to hold off for pullbacks to buy dips for the majority of long positions for those not involved.