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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.





weakness.gif

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.

below.gif

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.


59.gif

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.

below.gif

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.




gains.gif

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.


96.gif

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.

Semis lead as US Equities pull to within 1% of All-time Highs

June 19, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

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

Resistance: 2930-1, 2943-5, 2968-70



Tentatively scheduled for CNBC Trading Nation today at 2:20-5 and also CNBC Fast Money near 5:20-5



Link to 6/18 Technical Video, discussing SPX gains ahead of FOMC

https://stme.in/bUHbHOYP96



Link to 6/13 Technical Webinar, discussing SPX, TNX, Crude, Gold and more

https://stme.in/rz4cpQWMpz



Real Vision Interview, 6/3/19, discussing SPX, TNX stabilizing & moving higher

https://www.realvision.com/tv/shows/trade-ideas/videos/finding-a-bottom





SPX - (3-5 Days)- Bullish to 2930-45- Yesterday's rally above 2910 was worth following for a move which likely gets up a bit higher to test April highs before any real top. SPY volume doubled the prior day's totals and breadth came in at 3.5/1 positive, all Pluses.



EuroSTOXX 50- Bullish- While slightly overbought on an intra-day basis, Tuesday's move should lead to a test of April highs near 3511. One should use any minor weakness Wednesday to buy dips down to 3363 and expect further strength into early next week



HSCEI- Bearish- Expecting weakness down to 10067-10100. Gains over 10564 necessary before being too bullish.





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



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


Tuesday's rip certainly cleared up the near-term indecision caused by six sideways days, and clearly puts the Bulls back in the "Driver's Seat" in the short run. While near-term overdone on an intraday basis, breadth took a much needed turn higher yesterday and by the close we saw nearly 3/1 positive breadth while volume flowed into Up vs Down stocks at a near 4/1 ratio or nearly 80%. Technology, Financials, Energy, Industrials all posted gains of greater than 1% in trading, while Staples, Utilities and REITS all lagged in trading and were down on the day. To have any conviction about the possibility of a reversal, stocks at this point would need to erase ALL of Tuesday's gains and close back down under Last Friday's lows at 2879.62.. a Tall order, to say the least. Momentum remains positively sloped and not overbought on daily charts, while sentiment remains clearly subdued with pressure being put on the FOMC to ease, while a Trade deal thus far, has not been achieved. POTUS comments on US Meeting with China at the upcoming G-20 directly coincided with yesterday's surge, but more will be needed to help sentiment get more bullish. From a non-technical perspective, It's thought that enough upside potential is in the cards with a completed Trade deal and a FOMC that does what the market is pricing in (no cut in June, but a July cut) that it's tough getting too negative without any deterioration in price action.



Technology in particular turned up sharply yesterday, leading all sectors, with the Semi group leading the charge. This is a positive development along with Industrials and Healthcare starting to act well, and is thought to be enough to carry the market a bit further in the short run. If Financials can stabilize here with the FOMC not spooking the market and yields start to turn higher, this would be a definite positive which would add to the degree of participation. For now, Financials have been strong since March but have lagged in recent weeks and this will need to change to have more confidence.




Outside of Stocks, The US Dollar firmed a bit, while Treasury yields fell precipitously, not just in US but around the globe. German Bund yields fell to -0.32 bps while French, Austrian and Swedish sovereign 10yr notes fell below 0 for the first time ever. As has been mentioned of late, TNX is now getting very close to important support which likely can hold in the next week and turn back higher. It's worth not getting too aggressive on long Treasury holdings here and using any further TLT strength to take profits and consider "going the other way" into July as yields are getting overdone and counter-trend exhaustion is present. This could take the form of considering long TBT as a long play for the next 6-8 weeks into August, and expecting that yields hold 1.95% and start to reverse.




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

Long XLU, targeting 61.25-61.50. Buy weakness at 58



Additional charts and thoughts below.

below.gif

NASDAQ Composite, along with SPX and DJIA all jumped to new June highs, within striking distance of peaks made in April. Volume and breadth expanded and was a step in the right direction for the Bulls, in the short run. The NASDAQ is shown here as it tends to be the one index to concentrate on, along with TRAN and SOX, for those looking for leading sectors and indices. NASDAQ peaked a full month ahead of the broader market last Fall, and currently shows no divergences. It's thought that a move into April highs should occur before any reversal and likely gets above this area into July/August. Thus, while maybe extended intra-day and could benefit from a minor pullback post Fed, this is thought to be a buying opportunity for a rally into 6/24-5. With all the indecision into FOMC, yesterday's price action gave us a far more complete picture and "tell" than Monday's trading, so it will pay to stick with that, until proven otherwise.




otherwise.gif

Semiconductor stocks led performance in trading Tuesday, outperforming other areas in Technology and taking a much needed step higher after nearly two months of fairly dismal performance. SOX charts show this to be the start of a likely "3rd" wave or "C" wave higher in SOX which i expect to move higher into 1483-95 without much trouble. This would allow the two waves to be equal price-wise and equate to a Fibonacci 61.8% retracement of this past Spring's decline. Overall, it's hard to project a move back to highs, but at least some additional upside here looks probable for Semis, specifically as a result of Tuesday's strength.


strength.gif

Beyond Meat (BYND) reversed course, but does that mean the top is in? Maybe, but maybe not. More evidence necessary- BYND, the much heralded IPO which has gained more than 260% in just a couple months time since its May IPO, showed its first evidence of weakening in trading on Tuesday, trading up over 200 before closing down at a mild loss. When stocks that make rapid gains like this start to reverse course dramatically, it's often worth paying attention, particulalrly when they have market capitalization in excess of 10 billion. In this case, for those making comparisons to TLRY_ Tilray, it's worth pointing out that uptrends have not been broken yet, and this is the first piece of evidence that's needed before weighing in bearish, regardless of the valuation. Second, yesterday's pullback failed to even take out the prior day's lows. Thus, a dramatic reversal, but more needs to be done to validate the bears arguments, Technically speaking. Movement under $150 is thought to be the first real technical evidence of a possible larger pullback, and would cause movement down to $115-120. Until then, this upward volatility could very well continue in the short run, whether warranted or not.

Biotech breakout ahead of FOMC

June 18, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2884-5, 2873-4, 2867, 2853-5

Resistance: 2897-9, 2911-2, 2930-1



Link to 6/17 Monday Technical Video discussing SPX and Biotech move

https://youtu.be/ZyS-yrXYmJg



Link to 6/13 Technical Webinar, discussing SPX, TNX, Crude, Gold and more

https://stme.in/rz4cpQWMpz



Real Vision Interview, 6/3/19, discussing SPX, TNX stabilizing & moving higher

https://www.realvision.com/tv/shows/trade-ideas/videos/finding-a-bottom





SPX - (3-5 Days)- Neutral- Use strength above 2910 as chance to be long for move to 2930-45, while under 2874 likely leads to 2840-5. Sideways range over last 6 days doesn't add any real conviction for Tuesday's trading



EuroSTOXX 50- Neutral- Similar to S&P, very little directional guidance and this needs to change before having any real conviction for this week. Resistance at 3411-3450, while support lies at 3341



HSCEI- Bearish- Expecting weakness down to 10067-10100. Gains over 10564 necessary before being too bullish.





Trading Longs: XBI, MRTX, IOVA, AKBA, EXEL, MCD, ETSY, SMAR, PLAN, WEC, CMS, SO, PNW, ROKU, TNDM, TNET, SWAV, NVTA, TPB, KHC, CSGP, FIS, TMO, DHR, AVLR



Trading Shorts: SPB, AWI, CROX, SIG, WLL, APA, XEC, HP, CXO, EEM, SYMC, WDC, STX, URBN, FOSL


Bottom line, very little conviction on direction heading into FOMC near-term, as prices remain largely range-bound for the last six trading days. Volume and breadth have dried up, with yesterday's SPY volume showing the lowest volume since last August 9, 2018. Breadth came in just fractionally bullish, but otherwise, no meaningful evidence of any real directional change for indices. To paraphrase from the message in this week's Weekly from yesterday morning, Above 2910 would be a bullish sign on a close, while under 2874 likely leads to 3-5 trading days of weakness. Until this happens, the path of least resistance remains the upside, though some troublesome sector rotation has begun again, which ill discuss below.



Transports, for one, have been quite weak lately, with IYT rolling over to multi-day lows after barely having recovered 50% of the drop from late April. Financials also were weaker than preferred yesterday, dropping nearly 1% as Yields fell and the Yield curve flattened.



However, a few bright spots also materialized as the Biotech sector looks to have jumpstarted its rally, thanks to the PFE acquisition yesterday. Quite a few names positioned in Gene therapy and oncology jumped in Monday's trading, and stocks like MRTX, DRNA, IOVA, AKBA, NTRA, EXEL, KURA and RARX all showed attractive near-term technical gains. The XBI itself, the SPDR Biotech ETF, jumped to the highest levels in over a month on heavy volume, which seems promising to this sector.





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 XLU, targeting 61.25-61.50. Buy weakness at 58

Short EEM with thoughts that prices pullback to 40.30


Preemptively closing out XLF and KRE



Additional charts and thoughts below.

below.gif

SPY volume hit the lowest levels yesterday since last August ahead of today's highly anticipated FOMC meeting. Breadth and volume have dried up after this 6% push off the lows. Near-term, it's tough having too much conviction, as one can make the case for followthrough to test highs, or for a mild pullback into 6/24-5 before equities bottom. However, the larger trend still argues for an eventual push back to new high territory. Therefore, any selloff in the next few days following FOMC would be something to buy into. For now, it makes little sense to try to guess direction given that breadth has slowed, and sectors like XLF and IYT have begun to weaken. One should look to follow breakouts in this recent consolidation, on the upside and downside, as this week likely will help to resolve some of this near-term indecision on price trends.



trends.gif

Crude oil looks similar to Treasury yields at present. Both remain in downtrends and look likely to test lows between FOMC and the OPEC meeting on 6/24-5. Thus, it's early to expect prices to turn back higher and it's right to be defensive on Energy between now and end of month. While many of these names and Crude itself have gotten washed out, momentum is not sufficiently oversold and no real counter-trend exhaustion signals are in place to suggest buying dips. I'm expecting a quick move to 48.50-49.50 that turns out to be buyable with many Energy stocks likely stabilizing.


stabilizing.gif

Biotech finally has begun to show some signs of life, and it's thought that yesterday's PFE acquisition news helped to jumpstart many within this sector. XBI jumped to the highest levels in nearly 2 months time and volume also hit multi-month highs on yesterday's gains. One should favor Biotech and use any minor weakness to buy, expecting pullbacks could provide buying opportunities just as Healthcare enters its seasonally bullish time in July. Upside targets for XBI lie near 94.50

Treasuries and Equities rally together, but for how long?reasuries and Equities rally together, but for how long?

June 14, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2884-5, 2873-4, 2867, 2853-5

Resistance: 2897-9, 2911-2, 2930-1



Link to Yesterday's Technical Webinar, discussing SPX, TNX, Crude, Gold and more

https://stme.in/rz4cpQWMpz



Real Vision Interview, 6/3/19, discussing SPX, TNX stabilizing & moving higher

https://www.realvision.com/tv/shows/trade-ideas/videos/finding-a-bottom





My CNBC interview from Thursday 5/29 on SPX, and 3 stocks to favor

https://www.cnbc.com/video/2019/05/29/technician-says-these-are-the-three-stocks-to-buy-amid-sell-off.html





SPX - (3-5 Days)- Bullish- Thursday's gains should lead to a move back to new weekly highs into FOMC before markets reverse. For now, bullish with stops on daily close under 2874 and upside target between 2930-45.


EuroSTOXX 50- Bullish- Europe rally should continue between now and early next week to 3411-3450 before stalling out. Support lies at 3341


HSCEI- Bearish- Rollover in Emerging markets is affecting China and HSCEI and pullbacks to minor new lows are anticipated over next 1-2 weeks before this bottoms. Under 10288 should lead to pullback to 10067, an area to cover shorts and buy.





Trading Longs: MCD, ETSY, SMAR, PLAN, WEC, CMS, SO, PNW, ROKU, TNDM, TNET, SWAV, NVTA, TPB, KHC, CSGP, FIS, TMO, DHR, AVLR,



Trading Shorts: SIG, WLL, APA, XEC, HP, CXO, EEM, SYMC, WDC, STX, CHRW, ANF, URBN, XLC, FOSL, BBBY, GES, EMR


US and European markets continued higher Thursday, extending gains and making further strength Friday into next Monday likely before a stallout. ETF's listed below like XLY, XLK, XLF, and XLI all have targets directly above, and show similar signs of pending exhaustion that will be in place on minor new highs, which could come about as early as Friday. It's thought that the FOMC decision next week could be a turning point for indices, as these meetings often can be pivotal for markets. In this case, breadth has been rising, though not as sharply as during previous rallies, and it's thought that this week's sideways activity Monday-Wednesday has caused an ever so slight dip in momentum, which should make any move back up above 2915 likely prove short-lived into FOMC before a pullback into the OPEC meeting 6/25. For Friday, further gains still look likely, and it's right to be bullish.

One item of concern is the degree to which stocks and bonds are now rallying in tandem. This has occurred at various times throughout history, and largely was the case back in March of this year. Yet, given that yields and stocks have trended together more recently in the month of May, this recent divergence likely could mean that one of these moves is wrong. Technically speaking, Treasuries still look to continue higher near-term with yield targets at 2.06 down to 2.00% into next week's FOMC. For Equities, a bit higher prices also looks right, with 2930-45 a definite potential once SPX gets back over 2915. Technically one can make a good case for selling into the stock and bond rally on a bit more strength over the next week. For Treasuries, a few methods point to possible intermediate-term lows in yield being made in mid-June. For stocks, a short-term correction is possible into 6/24-5, but likely would be buyable. Stay tuned.



Max Targets for Sector ETF's before these stall out and turn lower

XLY-- Target 120.50

XLK-- Target $79.70

XLF- Target 27.90

XLI- Target $78.40




ACTION PLAN- 



Long IHI, with targets at 240, stops under 221



Long XLF with initial targets at 28, with stops under 25.92



Long KRE with targets at 57 and stops under 51.41



Long XLU, targeting 61.25-61.50. Buy weakness at 58





Additional charts and thoughts below.

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S&P Trend still short-term bullish and move back above 2915 likely into FOMC- Looking at this week, the SPX sideways motion has now begun to turn back higher, based on Thursday's gains, and still looks early to turn bearish. While this week's sideways range has taken a toll on short-term momentum, prices failed to turn down sufficiently to think the market had begun to rollover. Movement up to 2915 likely and over to 2930-45 which would be an area to sell into if reached Friday into next Tuesday. At present, bullish stance is preferred.




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US 10-Year Treasury yields look to be rolling over yet again and a TNX pullback to 2.00-2.06% is likely into the FOMC meeting next week before Treasury yields attempt a more serious intermediate-term low. Over the next 3-5 days, long positions in Treasuries are preferred, along with TLT, but movement back to new lows in yield would warrant taking profits and reversing this, for a potential two-month bounce into the fall. This would call for TBT longs, selling TLT and being short Treasury futures for a possible move to 2.25-2.35. At present, a move back to test lows in yields looks likely.




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Transports have made some decent progress of late, and Thursday's rally was sufficient to break out of the entire downtrend from early May. This is encouraging as this had not yet been accomplished by this leading sector, but merely by the broader US indices. Near-term, prices should encounter resistance at either 10341 or slightly above at 10500 before giving some of this rally back into late June. However, the amount of strength that Transports have shown lately is encouraging in recent days, and should mean that further rallies can happen into Fall once this consolidates gains. For Friday/Monday, additional gains look likely.

Equities showing more signs of Fatigue

June 12, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2892, 2880-2, 2873-4

Resistance: 2911-2, 2930-1, 2945-7



Tuesday Technical Video, discussing SPX and TNX

https://stme.in/BtG63ImMO7



Link to 6/6/19 Technical Webinar: 20 min, covering SPX, DXY, Crude, Gold

https://stme.in/vFCE3ACzfT



Real Vision Interview, 6/3/19, discussing SPX, TNX stabilizing & moving higher

https://www.realvision.com/tv/shows/trade-ideas/videos/finding-a-bottom





My CNBC interview from Thursday 5/29 on SPX, and 3 stocks to favor

https://www.cnbc.com/video/2019/05/29/technician-says-these-are-the-three-stocks-to-buy-amid-sell-off.html





SPX - (3-5 Days)- Bullish- Two straight days of stalling out, though this still isn't sufficient to call a Top, and Demark exhaustion is premature by 2-3 days. Stay long while using tight stops at 2880 for longs on a close while resistance likely comes in near 2930



EuroSTOXX 50- Bullish- Europe was more bullish than US yesterday and should continue between now and Thursday/Friday to 3411-3450 before stalling out. Support lies at 3341



HSCEI- Bullish- HSCEI likely to show 1-2 more days of gains, but a bottoming US Dollar could put pressure on this and gains to 10821 should be used to take profits. Under 10304 would drive decline.





Trading Longs: TNET, SWAV, NVTA, TPB, KHC, CSGP, FIS, TMO, DHR, AVLR, MNST



Trading Shorts: EEM, SYMC, WDC, STX, CHRW, SIG, ANF, URBN, XLC, FOSL, BBBY, GES, EMR

Markets definitely have begun to tire, in the short run, and we've now seen two straight days of pulling back materially from early highs. While there hasn't been sufficient weakness to think a top is in, breadth has been subpar and could remain that way the rest of the week before a larger stallout. Overall, Upside looks limited this week, and targets lie between 2930-45 to take profits and expect at least a 1-2 week pullback, which very well could get jumpstarted following the FOMC meeting.



Emerging markets have shown better than average strength in recent days, with bounces in EEM, ILF, EWW, EWZ and others. In the short run, the declining DOllar has largely been responsible for the bounce in EM, but this looks to be nearing completion in the short run after its recent big selloff. US Dollar likely should bottom out in the next 1-2 days, and I expect China and Emerging markets to selloff and underperform.



Max Targets for Sector ETF's before these stall out and turn lower

XLY-- Target 120

XLK-- Target $79.70

XLF- Target 27.90

XLI- Target $78.40





ACTION PLAN- 



Long IHI, with targets at 240, stops under 221



Long XLF with initial targets at 28, with stops under 25.92



Long KRE with targets at 57 and stops under 51.41



Long XLU, targeting 61.25-61.50. Buy weakness at 58



Short XLC- expecting pullback to 44.50 and then a max near 43.70- stops at 47.05





Additional charts and thoughts below.

S&P has now pulled back for two straight days from intra-day highs, yet has barely made any real headway to the downside. Similar to yesterday's message, after 6% gains in 6 trading days, prices are getting stretched, but we'll need to see more to have any real conviction of prices turning down. Under 2880 would allow for minor weakness, but only a move under 2837 should result in a larger decline. Meanwhile, upside targets lie near 2830 up to 2845 and should be more likely than not, given the incomplete Demark signals coupled with ongoing uncertainty amidst a positive momentum trend. Yet, breadth has been very mild of late on this rally, and nearly flat for the last few days. This should be watched carefully in the days ahead for evidence of any negative breadth on gains, or other signs of Tech or Financials stalling after this bounce. For now, it's right to stay bullish, but yet proper to keep a close eye on the exits which i think could be prudent by end of week from a trading perspective.




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EEM- Emerging Markets ETF- At resistance- Look to take profits- In the last week, we've seen signs of the Emerging market space outperforming as the Dollar has pulled back. This looks to be near completion, and US Dollar likely should bottom out technically in the next 1-2 days, with downside exhaustion very similar to the upside exhaustion now being seen in EEM. One should consider taking profits on EEM longs right as price is nearing the 50% retracement, and upside here should prove limited from 42-43 while on the downside, prices could very easily pullback to test recent lows in the high $30's. For now this looks like an appealing risk/reward trade to avoid/short for aggressive traders, but likely depends on the Dollar starting to bounce.




bounce.gif

Crude oil starting to show evidence of stalling out, and pullbacks back down to recent lows look increasingly likely. Similar to Equities, the last 2-3 days in Crude have gone sideways, as part of this existing downtrend. Movement back up over 55 would be necessary to help this breakout, which for now, looks premature. Sector ETFs like XLE look similar and might weaken into next week on a pullback in Crude. For now, this recent outperformance in Energy looks like something to sell into and is not a bullish development.

Minor Stalling out, but More needed to call an Equity top

June 11, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2892, 2880-2, 2873-4

Resistance: 2904-5, 2911-2, 2930-1



Monday Technical Video, discussing SPX and TNX

https://stme.in/AIR3duZcHZ



Link to 6/6/19 Technical Webinar: 20 min, covering SPX, DXY, Crude, Gold

https://stme.in/vFCE3ACzfT



Real Vision Interview, 6/3/19, discussing SPX, TNX stabilizing & moving higher

https://www.realvision.com/tv/shows/trade-ideas/videos/finding-a-bottom





My CNBC interview from Thursday 5/29 on SPX, and 3 stocks to favor

https://www.cnbc.com/video/2019/05/29/technician-says-these-are-the-three-stocks-to-buy-amid-sell-off.html





SPX - (3-5 Days)- Bullish- Rally has reached initial targets, and while some minor pullback from highs occurred yesterday, this wasn't sufficient yet to suggest a top in place. Use tight stops at 2880 for longs on a close while resistance likely comes in near 2930



EuroSTOXX 50- Bullish- A bit more rally likely with targets at 3411 between today and Thursday. Support lies at 3341



HSCEI- Bullish- Yesterday's close over 10500 could drive a short-term bounce. Yet, most of Asia remains much weaker at present than SPX, or Europe. Under 10304 would drive decline.





Trading Longs: SWAV, NVTA, TPB, KHC,SPXC, CSGP, FIS, TMO, DHR, AVLR, MNST, QURE



Trading Shorts: SIG, ANF, URBN, XLC, FOSL, BBBY, GES, MO, PM, EMR

Upside looks limited this week, but heading into Tuesday, insufficient weakness has been seen to turn bearish for most investors. Aggressive traders can use Monday's 2904 high as a stop for shorts, but over this should lead to 2930 this week, potentially into Wednesday or Thursday before any temporary high is in place. When scanning most US indices and sectors, we find that nearly all of these show a Demark "5 count" after having made five consecutive daily closes above the close from four trading days ago. In plain English, markets typically stall out and/or peak on an 8 or 9. Thus, we can allow for another couple days, using this system alone, when expecting a possible peak.



ETF's like the following likely should have max upside at the following levels this week: First price is closing price for Monday; The second price is the maximum upside target: SPX for example is at 2886.73, and has a max target at 2945 on this bounce



XLY-$116- Target 120

XLK- $77- Target $79.70

XLF- $21.35- Target 27.90

XLI- $75.82- Target $78.40



Overall, yesterday's rise , yet again, showed signs of lackluster breadth, with just a 3/2 positive margin. Technology however, showed sharp gains, thanks to Semiconductor names, as the SOXs 2.54% gains helped to lead performance yesterday. (SOX in this case at 1413.89, is on a "6 count" and 2-3 days away from a possible peak, and likely has max upside near its 50% retracement, which is found at 1445.78. Bottom line, given that so many various indices and sectors are showing this same count, on a 5, or 6, leads me to think that another few days are possible in this bounce.



Outside of Domestic markets, there was a healthy move in China's FXI along with Emerging markets in general. This area is thought to be weak, technically; However, we're definitely seeing some ability to play catchup, which i feel should prove short-lived.



Finally, Treasury yields managed to show a decent bounce Monday, closing above the highs of the past few days. Given that Demark patterns here never signaled any kind of meaningful low, and momentum remains quite strong to the downside, for now, it's right to suspect this might be a "wave 4" type Elliott bounce and a final pullback to 2.06% or slightly under can happen into the FOMC meeting before any low in yields.



Risk assets overall are still favored here, though it's wise to be much more selective this week, and i expect upside to prove relatively limited with some evidence of a minor peak in Stocks seen this week, along with Yields stalling and turning back down to new lows.







ACTION PLAN- 



Long IHI, with targets at 240, stops under 221



Long XLF with initial targets at 28, with stops under 25.92



Long KRE with targets at 57 and stops under 51.41



Long XLU, targeting 61.25-61.50. Buy weakness at 58



Short XLC- expecting pullback to 44.50 and then a max near 43.70- stops at 47.05



Covering short EEM, and taking profits in long Copper- COPX, HG_F



Additional charts and thoughts below.

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S&P getting stretched, but yet yesterday's pullback was insufficient to thinking top in place just yet. This past weekend's Weekly Technical perspective discussed some of the reasons for concern heading into this week after a swift, sharp gain for SPX, while weekly and monthly momentum have been negatively sloped. This creates a difficult environment for being long with any real confidence, particularly when trends turned down so sharply in May. For now, the decline off yesterday's intra-day highs was somewhat important in thinking exhaustion is near, yet in these cases its often important to see a move down under the prior day's lows towards driving a decline. Therefore, we'll use 2880 in this case as a stop for longs on a close, while expecting that any move over 2904 should allow for a move to 2930, but that the area between 2930 and 2945 should be very strong resistance for the month of June. Pullbacks could happen in the back half of June, but should create buying opportunities for the month of July.




july.gif

XLK (Big-Cap Technology) looks to be nearing resistance- XLK, as the current SPDR ETF for Technology, shows a similar rebound as was seen in our Equal-weighted Technology chart shown in Monday morning's weekly. However, the importance in this chart is seen in the "5 COUNT" shown in green, as "9 counts" (Demark based exhaustion based on TD Sequential and TD Combo indicator) should be complete within 3 days time. Thus, upside here looks limited for Technology and while the near-term trend is bullish, one should be looking to pare down longs as the week progresses, with former highs near 79.70, less than $3 higher, likely serving as good resistance to gains.


gains.gif

Brokers getting stretched relative to Financial space. Favor the Banks-IAI, or the Ishares Broker Dealer & Security Exchanges ETF, when compared to the broader XLF, shows pretty substantial outperformance over the Financials, and in this case, most of the Banks in recent months. This looks to be nearing conclusion, as we're seeing ratios arrive at price and time areas where this could stall out. One should look to consider taking profits in Brokers and the Exchange stocks, while favoring the Banks among Financials. While a larger bullish trade in the Financials depends on yields likely turning up more aggressively in the US 10-Year yield, my thinking is this should be in place after the Fed meeting, and right to buy dips in the Financial space, if given the chance over the next week





Rally closing in on targets; Healthcare starting to outperform

June 7, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2825-7, 2800-2, 2790-1, 2728-30

Resistance: 2856, 2860-3, 2869-71, 2876-8



Link to 6/6/19 Technical Webinar: 20 min, covering SPX, TNX, DXY, Crude, Gold

https://stme.in/vFCE3ACzfT



Real Vision Interview, 6/3/19, discussing SPX, TNX stabilizing & moving higher

https://www.realvision.com/tv/shows/trade-ideas/videos/finding-a-bottom





My CNBC interview from Thursday 5/29 on SPX, and 3 stocks to favor

https://www.cnbc.com/video/2019/05/29/technician-says-these-are-the-three-stocks-to-buy-amid-sell-off.html





SPX - (3-5 Days)- Bullish- Rally should get to 2860-3, or 2871-8 before stalling out, potentially as early as Monday, or Tuesday of next week. While the short-term trend is bullish, we're likely to stall out into early next week.



EuroSTOXX 50- Bullish- A bit more rally likely into early next week, but similar to SPX, likely could stall into mid-month and backtrack. For Friday into Monday, still early. Targets at 3411



HSCEI- Bearish- Still early to buy. Thursday's weakness seems to suggest pullbacks to 10100 can happen. We've seen nearly 2 weeks of very narrow range-bound consolidation. Over 10500 needed for rally, while under 10304 would drive decline.





Trading Longs: MET, FIS, PODD, TMO, DHR, AVLR, CDNA, MOH, MNST, NDAQ, ICE, REXR, DRE, CSGP, FSV, MOMO, KIE, XLF, KRE, TNDM, COPX, QURE, AON, MMC, KHC, SPXC, AVB, EIX, AEP, ED, WEC



Trading Shorts: XLC, FOSL, BBBY, GME, URBN, GES, ANF, FXI, EEM, SIG, MO, PM, WYNN, LVS, EMR

Further gains look likely on Friday into early next week before any temporary peak is at hand. While intra-day momentum is nearing overbought levels, there remains a lack of counter-trend exhaustion that would argue for any kind of peak. While momentum and breadth have been sub-par on this week's bounce, there's been some constructive developments with regards to short-term structure that have argued for a rally. Sectors like Healthcare Industrials and Financials have shown signs of participating this week, and while it's been still quite Defensive in nature, it remains early to sell heading into Friday.



Outside of lackluster breadth and momentum, another concern is the lack of a sharp rally in both Treasury yields and Crude oil, which both have correlated quite positively with Equities. Yields still look weak, despite a few days of stabilization, and Crude oil also has failed to follow suit to the Equity rally. This coupled with the fact that Small and Mid-cap sectors are hitting new monthly lows vs the broader market is a concern heading into mid-June. While a lack of a trade agreement might be thought to be bearish to some, it's really the non-participation in Small and mid-caps and breakdown in breadth that should be a warning heading into next week. We'll discuss this in greater detail in the Weekly piece. At present, I expect Friday to be bullish into next Monday, and would look to sell gains above 2860 in SPX.







ACTION PLAN- 



Long IHI, with targets at 240, stops under 221



Long XLF with initial targets at 28, with stops under 25.92



Long KRE with targets at 57 and stops under 51.41



Long XLU, targeting 61.25-61.50. Buy weakness at 58



Long Copper- HG_F- Expecting an upcoming trendline breakout at 270 that carries prices up to 285-290. COPX might be considered for non-commodity traders at 18.71



Short XLC- expecting pullback to 44.50 and then a max near 43.70- stops at 47.05



Short EEM with targets at 39, then 38.04 maximum





Additional charts and thoughts below.

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S&P Bullish for a bit more gains into next week- As of yesterday's close, S&P got right near initial targets, yet most time counts suggest it's still early for a top. Thus, a long stance is still right into next week, looking to buy any weakness given the chance early Friday. Upside targets could come about near 2860-2, or above near 2871-8. It's thought that 6/10-12 could usher in a temporary peak, but that any weakness should be buyable. Trends have improved near-term, yet breadth and volume have been sub-par


sub-war.gif

BULLISH on Medical Devices and Healthcare overall for the next 4-6 weeks, maybe longer. US Medical Devices ETF, ( IHI ), managed to exceed the downtrend of the last few months, as XLV also engineered a breakout of its own yesterday. This should help Healthcare to begin outperforming at a time when the group is heading into a very bullish seasonal time, which tends to show very good relative strength for Healthcare. Specifically, the Medical Devices stocks have taken the lead in this regard, and stocks like BSX, DHR, MDT and others have shown very good technical strength that likely helps these stocks continue.


continue.gif

Small caps have gone exactly opposite the direction of broader Equity indices in the last week, with RTY to SPX in ratio form breaking down to the lowest levels in years. This is not constructive to intermediate-term breadth, and it's thought that on a further rally into the Fall, both Small-caps and Mid-caps likely would underperform. For now, Large-Cap Growth remains the place to be, and Russell 2000 looks like a laggard and has trended lower relatively since late last year. Thus, while the near-term trend is bullish for Equities and intermediate-term also likely stays bullish for a few more months, this deterioration is something to keep a close eye on in the weeks and months ahead.

Financials should lead this Equity bounce- Relative breakout worth following

June 5, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2790-1, 2775, 2762-3, 2743-5

Resistance: 2817, 2831-3, 2840-2, 2864-8



Tuesday Technical Video 6/4/19

https://stme.in/3h4JbLN2Sc



Thursday Technical Webinar 5/30/19- SPX, TNX, Crude, Dollar

https://youtu.be/4otZSGdynIw

My CNBC interview from Thursday 5/29 on SPX, and 3 stocks to favor

https://www.cnbc.com/video/2019/05/29/technician-says-these-are-the-three-stocks-to-buy-amid-sell-off.html





SPX - (3-5 Days)- Bullish- Rally underway, & exceeding 2801 on a close likely to lift Stocks further into 6/10 before mid-month swoon. Targets are near 2841-50



EuroSTOXX 50- Bullish- Similar to SPX, SX5E has exceeded former lows and right back up to important make-or-break near downtrend at 3350. However, getting over this should allow for a decent rally in the next week before stalling and likely in July. For now 3350 is the main hurdle.



HSCEI- Bearish- Still not enough proof that China is ready to join S&P and SX5E higher and we've seen nearly 2 weeks of very narrow range-bound consolidation. Over 10500 needed for rally, while under 10304 would drive decline.





Trading Longs: XLF, KRE, NDAQ, ICE, TNDM, COPX, QURE, AON, MMC, KHC, SPXC, MNST, ICE, AVB, AEP, ED, WEC



Trading Shorts: SIG, WYNN, LVS, URBN, HTZ, BBBY, KSS, EMR


Rally looks to be underway, with upside targets near 2841-50 for SPX, which if reached on or near 5/10-11, should be used to take profits for trading purposes. Yesterday's lift might have seemed like a surprise to some, but internal breadth had given plenty of advance notice that stocks were holding up quite well despite the breakdown in Technology in Monday's trading, which was discussed. (Looking back, most of that final day washout in Tech turned out to be largely "FANG" and Large-cap Tech, while the broader sector actually had fared reasonably well last week, showing performance that beat out 8 other of the 11 major S&P sectors)



The combination of near-term oversold conditions (but not drastically oversold, like the Media would have us believe) coupled with a return of pessimism, VIX backwardation, and the start of Tech outperformance were all factors that suggested a counter-trend rally could be near. Yesterday's breadth figures came in just shy of a 90% UP day, and advance/Decline was 4/1 bullish while volume was nearly 8/1 into Up vs Down stocks. Five sectors finished up over 2% on the day, and having both Technology and Financials participate and outperform was a big plus. Specifically and more will be detailed in charts below, XLF v SPX has broken out of the entire downtrend since last year. This is a big plus for the Financials group, & I expect continued relative strength in the days, weeks and months ahead.



Yields and Crude oil also managed to lift and these are all part of the same trade, in my view, which bodes well for a rally in Risk assets into mid-month before a pullback. Overall, one should favor being long, looking to buy dips on any chance Wednesday/Thursday for a push higher into next week.





ACTION PLAN- 



Long XLF with initial targets at 28, with stops under 25.92



Long KRE with targets at 57 and stops under 51.41



Long Copper- HG_F- Expecting an upcoming trendline breakout at 270 that carries prices up to 285-290. COPX might be considered for non-commodity traders at 18.71



Short XLC- expecting pullback to 44.50 and then a max near 43.70- stops at 47.05



Short EEM with targets at 39, then 38.04 maximum



Long XLU targeting 59.85-60 - Buy Weakness at 58





Additional charts and thoughts below.

below.gif

S&P- Bullish for further gains and push to 2850 possible. Rally managed to exceed prior lows at 2801 from mid-May, and did so on very good breadth of over 4/1 positive. While volume was light, we did see very good participation out of Tech and Financials which is a bullish sign. Getting over 2823 would argue for continued strength to 2841-50 which I believe is possible into 6/10-12 before a stalling out and minor reversal. For now, it's right to stick with a long bias, looking to buy any dips if given the chance Wednesday.




wednesday.gif

Technology has stabilized far better than what most have given it credit for in the last week. While the FANG names and most of large Cap Tech experienced severe damage on Monday before rising back sharply yesterday, charts show Tech to definitely have stabilized in the last week after the decline from May took most of this group down sharply. This ratio chart of the Equal-weighted Technology index vs SPX shows a mild breakout of this downtrend followed by a pullback Monday and then Tuesday's about face to turn back higher. Overall, this is a bullish development, and should lead Tech to stage a larger rally in the weeks ahead. Given that Tech is 20% of the SPX, this is definitely a positive development after this recent downtrend.





downtrend.gif

Financials as a group have just exceeded a long-term downtrend from last February's peak that should help to jumpstart this group, just at a time when Yields look to be trying to bottom out after testing the key 2.06% support. This does look to be a technical breakout. and the ability of XLF to SPX to have exceeded prior monthly highs in relative terms should help the group start to show far better relative strength than has been seen in recent months. While a weekly close will mean more than just one day, this is certainly a bullish development which could help to fuel this rally in the weeks and months ahead through the Summer, given that Financials represents 12% of the SPX as the 3rd largest group. This group should be overweighted as a result of the movement in the last two trading days.









Market rally near but stabilization in Tech will be Key

June 4, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2762-3, 2743-5, 2732-4

Resistance: 2800-1, 2840-2, 2864-8



Thursday Technical Webinar 5/30/19- SPX, TNX, Crude, Dollar

https://youtu.be/4otZSGdynIw

My CNBC interview from Thursday 5/29 on SPX, and 3 stocks to favor

https://www.cnbc.com/video/2019/05/29/technician-says-these-are-the-three-stocks-to-buy-amid-sell-off.html





SPX - (3-5 Days)- Bullish- S&P down to levels where shorts can be covered and longs can initiated between SPX 2744 down to 2722, expecting a rebound in stocks back up to 2800



EuroSTOXX 50- Bullish- Monday's Bullish reversal after having hit new lows to recoup nearly all of last Friday's losses is thought to be a positive. Movement up to 3360 likely and over should drive a larger rally back to 3450 and then 3514



HSCEI- Bearish- Dollar pullback should be near support and a rally in USD likely coincides with HSCEI breaking support for a final pullback down to 10067- Still looks early for a rally though this would change over 10600.





Trading Longs: COPX, QURE, AON, MMC, KHC, SPXC, MNST, ICE, AVB, AEP, ED, WEC



Trading Shorts: SIG, WYNN, LVS, URBN, HTZ, BBBY, KSS, EMR

Yesterday's weakness in Technology put a damper on SPX recovery efforts, though breadth finished positive despite the mild drawdown and SPX prices look to be in a zone now both from a price and time perspective where a bounce can happen. The combination of excessively bearish sentiment coupled with near-term oversold conditions is important, and should create a decent risk/reward perspective with SPX at current levels and maximum drawdown from here holding prices above 2722.



Most of yesterday's gains came from the Materials sector on the falling Dollar, which has little overall impact on SPX given its weighting. However, other sectors like Energy, Utilities, Staples all rallied over 1%, while both Industrials and Financials also managed to churn out gains of nearly +0.70%. So not as bad of a move sector-wise as might have been thought given a mildly down market. Interestingly enough, breadth was positive despite a 2% down day in the NASDAQ 100 index, and the broader market was able to absorb Tech's decline and hold up in fairly resilient fashion. While Tech woes might continue a bit longer this week, other sectors should come in to help buoy SPX, and provide an oversold bounce.



The one broader concern, however, is the degree to which the 2year yield continues to plummet as Rate cut Bets continue to pile up. The ongoing trade war uncertainty and evidence of some deteriorating economic conditions have led to expectations of more than 50 bps of cuts in 2019, a dramatic about-face from earlier this year. Near-term,, this has caused the Yield curve to steepen dramatically, though 2year yields look to be near support and are unlikely to get down under 1.70% in the short run.







ACTION PLAN- 



Long Copper- HG_F- Expecting an upcoming trendline breakout at 270 that carries prices up to 285-290. COPX might be considered for non-commodity traders at 18.71



Short XLC- expecting pullback to 44.50 and then a max near 43.70- stops at 47.05



Short EEM with targets at 39, then 38.04 maximum



Short XOP with expectations of a move to 25.50 and then 23.89 to challenge Dec 18 lows



Long XLU targeting 59.85-60 - Buy Weakness at 58





Additional charts and thoughts below.

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S&P- Yesterday's mild decline failed to do much damage, but took SPX momentum further into near-term oversold territory right near lows made in March of this year. Counter-trend exhaustion could be in place by Tuesday's close, and SPX is now into a zone of support where pullbacks likely start to reverse back higher. While Technology remains a weak link, other sectors seem to be helping in a way that's keeping markets afloat, even with a 2% decline in NDX. One should consider covering shorts and assuming longs, with the thought of pressing bets over 2800.

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"FANG" stocks weakened substantially in Monday's trading, with FB, GOOGL and TWTR all falling more than 5% in trading. This group is facing ongoing Antitrust concerns, and as the daily charts show, the recent decline has proven relentless since peaking in late April, erasing nearly 70% of the prior rally. Near-term, no real support exists until under 2200, and the NY FANG index (10 members- BABA, AAPL, NVDA, NFLX, BIDU, TSLA, AMZN, TWTR, GOOGL and FB) looks to weaken more over the next 2-3 days before stabilizing and turning back higher. In the short run, this might prohibit SPX from making much headway higher, but is thought to be a temporary headwind only at this time. One should hold off on buying dips in these stocks technically until Thursday/Friday of this week.

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Copper looks to be on the verge of attempting a counter-trend rally after its recent pullback to test former lows from this past January. The metal has done a complete "Round-Trip" after moving up to test 300 and now having erased much of this move in less than two-months time. Counter-trend exhaustion, however, is now present in Copper in the July contract, and movement over 270 would be quite bullish, supporting movement up to 285-290 initially. Interestingly enough, this move comes on the heels of increasingly more bearish economic data and Trade war uncertainty that's fueling rate cut bets. Technically, a move over 270 would be quite encouraging in suggesting further rallies.