Posts by The Trend Letter

S&P 500 re-testing key support

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Last week we warned to keep a close eye on the 200-DMA because it is an important technical indicator. In bull markets, stocks tend to spend most of their time above the 200-DMA, while during bear markets, they spend most of their time below this line. Stocks seldom stray too far from this line in either direction, and when they do, the further they stray, the faster they tend to revert back to it.

Today the S&P 500 closed just under the 200-DMA at 2581, which just happens to be the first target support level that we published a few months ago.

A closing below 2581 suggests that the S&P 500 could test the bottom of its 2+ year uptrend channel. Breaking below that channel at 2535 warns that we could see a more significant correction going into June. Keep your eye on that 2535 bottom of the uptrend channel, it is key. A break below 2535 validates our original target low of 2470, which we identified in our February 11/18 issue of The Trend Letter.

spx2y0402

Tomorrow we will see if the 200-DMA can hold here. Certainly, the bulls need to see the 2-year uptrend channel hold.

While we still believe that this pullback is simply a long over-due correction in an ongoing bull market, rather than the beginning of a long bear market, you still need to manage risk. You should always have an exit strategy for when the markets turn against you. This includes using trailing SELL Stops, holding a solid amount of cash, and using a hedge service that allows you to not just protect your wealth, but actually profit when the markets decline.

For those who have not yet taken advantage of our Special Offer to subscribe to Trend Technical Trader (TTT), seriously think about doing it now. Protecting your wealth in a declining market is critical to being a successful investor.

We have extended our Special Offer to make it easier for you to get TTT’s strategies for a correction, and especially for a full-on crash. It’s your money – take control!  Save $250 off the regular price of $649.95, and get TTT’s daily updates on the markets for only $399.95. Click here to take advantage of this offer.

Stay tuned!

Headlines – April 2/18

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  • China hammers US goods with tariffs as ‘sparks’ of trade war fly. Read story
  • Tesla bankrupt? Elon Musk cracks jokes after worst month in 7 years. Read story
  • Apple, Nike, and 18 other US companies have $150 billion at stake in China trade war. Read story
  • Sachs, Lord & Taylor breach: Data stolen on 5 million cards. Read story
  • The Kremlin clams Trump invited Putin to White House. Read story
  • Amazon shares fall 3% as Trump renews attack. Read story
  • Zuckerberg slams Apple CEO Cook’s comments on Facebook as ‘extremely glib’. Read story
  • French rail strike to test Macron. Read story
  • Fiery Chinese space station crashes into Pacific Ocean. Read story
  • Canada risks sending tech sector to ‘race to the bottom’: Jim Balsille. Read story
  • London murder rate higher than NYC for first time after 12 killings in just 19 days. Read story
  • India’s biggest renewable energy deal has been sealed.Read story
  • Israel scraps African migrant deportation plan. Read story
  • How to retire without money. Read story
  • Heavy rains in Kenya reveal a crack that shows Africa will split into two continents. Read story
  • On the lighter side. Check it out!

Stay tuned!

Headlines – March 29/18

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  • Treasury yields extend slide ahead of jobless claims, inflation data. Read story
  • US jobless claims drop to lowest level since January 1973. Read story
  • The robots are killing Tesla. Read story
  • Canadian GDP expectantly falls in January as housing chill sets in. Read story
  • Trump attacks Amazon for paying ‘little or no taxes.’ Read story
  • Kim Jung Un became a regional power overnight by saying a single, meaningless word to Trump. Read story
  • North and South Korea leaders to meet for historic summit on April 27. Read story
  • Facebook to limit information it shares with data brokers. Read story
  • How data mining giant got me wrong. Read story
  • VW to buy back cars hit by German city diesel bans. Read story
  • The latest Apple Watch is a perfect example of why you should never buy a first generation Apple product. Read story
  • How Beijing is wining in the South China Sea. Read story
  • Analyst who left Fox  over ‘propaganda’ now takes aim at CNN, MSNBC. Read story
  • On the lighter side. Check it out!

Stay tuned!

Headlines – March 28/18

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  • Kim Jong Un’s secret trip to China was full of gourmet food, wine, and music – take a look inside the lavish visit. Read story
  • China says Kim Jong Un has pledged to denuclearize Korea. Read story
  • Gold heads for back-to-back losses as dollar, stocks point higher. Read story
  • Higher Mexican auto wages the centrepiece of major US NAFTA proposal. Read story
  • China preparing list of retaliatory tariffs on US imports. Read story
  • Tesla is just months away from total collapse, says hedge-fund manager. Read story
  • Could the US tech sell-off finally bring stock valuations down to earth? Read story
  • Trump wants to go after Amazon. Read story
  • China just officially approved drone-based package delivery. Read story
  • How the ‘grocerant’ is disrupting the $500 billion food industry. Read story
  • Google’s ‘secret’ smart city on Toronto’s waterfront sparks row. Read story
  • Poll: Majority of Americans not seeing change in paycheck due to tax cuts. Read story
  • SUVs rule the auto industry, but is a peak coming? Read story
  • China using AI and facial recognition to fine jaywalkers via text. Read story
  • On the lighter side. Check it out!

Stay tuned!

Stock market approaching key support level

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In early February the S&P 500 tested its 150-DMA (black circle red line) and then rallied off that support level. Last week the S&P 500 tested its 200-DMA (black circle on blue line) and bounced off that support level. Today, after Monday’s big rally, the S&P gave up much of those gains, and is again approaching that 200-DMA.

We want to keep a close eye on that 200-DMA because it is an important technical indicator. In bull markets, stocks tend to spend most of their time above the 200-DMA, while during bear markets, they spend most of their time below this line. Stocks seldom stray too far from this line in either direction, and when they do, the further they stray, the faster they tend to revert back to it. Looking at the chart below, we can see that in January, the S&P 500 strayed over 12.6% above the 200-DMA, which was an extreme,  and warned us that a correction was overdue.

The question now is, can this 200-DMA hold, and the S&P rally from there?

Key levels to watch:

2587 – the 200-DMA
2535 – bottom of the 2-year uptrend channel
2470 – Key Support

This action in the markets is a reminder that every investor needs to have an exit strategy, a plan to ensure that you do not incur large losses. Be sure to have SELL Stops to lock in gains and limit losses.  Another great strategy is to hedge your long positions. Trend Technical Trader (TTT) is an excellent hedging service that provides subscribers with daily market updates and easy to action strategies to protect their investments and actually make money when the market is declining.

This bull market in stocks has been running for over 9 years, and it is going to end sometime. In the very best-case scenario, we are in the late innings of this bull market, suggesting that a sizable correction is coming. Be sure you are protected!

We have extended our Special Offer to make it easier for you to get TTT’s strategies for a correction, and especially for a full-on crash. It’s your money – take control!  Save $250 off the regular price of $649.95, and get TTT’s daily updates on the markets for only $399.95. Click here to take advantage of this offer.

Stay tuned!

Headlines – March 27/18

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  • Deutsche Bank seeks new CEO as it runs out of quick fixes. Read story
  • The Dow and S&P 500 have already doubled the number of 1% moves seen in all of 2017. Read story
  • A practical guide to how blockchain could end corruption in South Africa. Read story
  • The US needs to borrow $300 billion this week – in the middle of a fight with its biggest creditor. Read story
  • Cambridge Analytica whistle-blower reveals shocking claim his predecessor was poisoned and police bribed. Read story
  • Zuckerberg refuses to explain data scandal to British parliament – and instead wants to put senior execs in firing line. Read story
  • Bitcoin hovers around $8,000 as Twitter bans crypto ads. Read story
  • Mystery train believed to be carrying North Korean delegation and possibly Kim Jong Un leaves Beijing. Read story
  • Thousands protest over Russia fire tragedy that killed 64, including 41 children. Read story
  • FCC wants Chinese tech out of phones, routers. Read story
  • US to add citizen question in 2020 census. Read story
  • Suspicious packages found at several military installations in DC area. Read story
  • A 21-year old Swedish AI prodigy wants to revolutionize the $6 trillion education industry – and Tim Cook is impressed. Read story
  • On the lighter side. Check it out! 

Stay tuned!

Headlines – March 26/18

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  • World stocks bounce on report of US-China trade talks. Read story
  • Mnuchin ‘cautiously hopeful’  US can reach trade deal with China. Read story
  • US is expelling 60 Russian diplomats in solidarity with Britain over nerve agent attack. Read story
  • Stormy Daniels describes her alleged affair with Donald Trump. Read story
  • Facebook scraped calls, text message data for years from Android phones. Read story
  • Battered underfunded public pensions to persist. Read story
  • China challenges Europe, US benchmarks with launch of first oil futures contracts. Read story
  • Thousands protest in Barcelona as ex-Catalan leader Puigdemont arrested in Germany. Read story
  • ‘It’s just chaos’: Nobel Prize-winning economist Robert Shiller warns that an ‘economic crisis’ is brewing. Read story
  • American adults just keep getting fatter. Read story
  • Remington, the oldest US gunmaker, files for bankruptcy. Read story
  • Tesco veteran to head Walmart’s Jet.com as US grocery wars flare. Read story
  • Amazon checking accounts could have massive appeal for these Americans. Read story
  • Facebook is too big to fail. Read story
  • Charles, the mind reading robot mimics human facial expression. Read story
  • On the lighter side. Check it out!

Stay tuned!

Big down day as stocks lose another 2%

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Let’s look at the volatility in the equity markets. The following chart shows the VIX Volatility Index. With the VIX Volatility Index a reading of under 20 indicates that investors are ‘complacent’, meaning a ‘risk-on’ sentiment, while a reading over 30 indicates investors are ‘fearful’ with a ‘risk-off’ sentiment. In the last couple of days the VIX has jumped almost 60%, moving out of the ‘complacent’ zone into a ‘neutral’ zone.

Vix0323

Now let’s look at the S&P 500 chart. The S&P 500 gained over 23% from mid-April to late-February, and then lost almost half those gains (over 10%) from February to current levels.

S&P0323

Unfortunately, most investors do not have an exit strategy and that is very dangerous, especially when we see severe market crashes. We always set SELL Stops to get out when the market turns against us. Another prudent strategy is to hedge your positions, with strategies that let you profit while the markets decline. Trend Technical Trader (TTT) is one of the best hedge services that we have ever seen, and its equity hedge strategies have gained over 55% since the market high in January.  While the S&P 500 has lost over 10% since the January high, TTT’s equity hedge positions are up an average of over 55% in that same time.

This bull market in stocks has been running for over 9 years, and it is going to end sometime. In the very best-case scenario, we are in the late innings of this bull market, suggesting that a sizable correction is coming. Be sure you are protected!

We have extended our Special Offer to make it easier for you to get TTT’s strategies for a correction, and especially for a full-on crash. It’s your money – take control!  Save $250 off the regular price of $649.95, and get TTT’s daily updates on the markets for only $399.95. Click here to take advantage of this offer.

Stay tuned!

Headlines – March 23/18

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  • Trump threatens to ‘VETO’ massive $1.3 trillion spending bill, which would push government into shutdown. Read story
  • French hostage crisis: ‘Two dead’ in Trebes supermarket. Read story
  • Gold rallies as investors seek shelter from global trade tensions. Read story
  • Asian shares tumble on trade war fears. Read story
  • EU complains of Trump’s ‘gun to our head’ over tariffs. Read story
  • Trump appoints hawkish new security chief. Read story
  • McMaster is out – here is a list of the Trump administration casualties so far. Read story
  • Music industry sees fastest growth in more than 20 year. Read story
  • State and local sales, income and property taxes all at record highs. Read story
  • Japan loses out amid China trade threat that shakes markets. Read story
  • Canadian Senate passes bill to legalize recreational marijuana. Read story
  • Trump’s crackdown on Chinese imports is on firmer ground than many of his other trade complaints. Read story
  • Canadian inflation rate accelerates to 2.2%, beyond BoC target. Read story
  • Inside Jeff Bezos’s private conference for a new ‘golden age.’ Read story
  • On the lighter side. Check it out!

Stay tuned!

Market update – Trade war reality

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Trade war fears became reality as Trump did the expected and placed up to $60 billion in tariffs directed at China imports. China responded, saying “if a trade war were initiated by the US“, which is exactly what Trump did, “China would fight to the end to defend its own legitimate interests with all necessary measures.”

The two largest economies entering a trade war drove fears about the global economy, fueling the biggest stock market declines since Trump’s steel tariffs announcement 6-weeks ago. In addition to trade war fears, we had Trump’s personal lawyer resign today, suggesting that the Mueller investigation is coming to a head. Trump has been very good for the stock markets, so any thought of him being side tracked by a scandal does not go over well with the markets.

The Dow dropped 724 points or  2.93%, the S&P 500 was down 68.54 points or 2.52%, while the Nasdaq was down 178.61 points, or 2.43%.

In Sunday’s issue of The Trend Letter, we showed subscribers how the S&P had been trading inside a wedge pattern. Below is an updated chart showing how the S&P has fallen out of that wedge pattern, dropped below its 50-DMA (blue line), and is approaching its 100-DMA (pink line).

Next Key Support will be the February low where we had a close of 2581. A breach of 2581 would open the door for a test of  2535, and a break below 2535 would validate our target low of 2470.

In the bullish scenario, the S&P 500 needs to push back above 2700, then break through 2750, before attempting a third run at Near-term Resistance at 2787 (horizontal red dotted line).

Volatility

The CNN Fear & Greed Index has moved toward its deepest ‘Extreme Fear’ reading since the February low.

CNNFear

With the VIX Volatility Index a reading of under 20 indicates that investors are ‘complacent’, meaning a ‘risk-on’ sentiment, while a reading over 30 indicates investors are ‘fearful’ with a ‘risk-off’ sentiment. Today the VIX jumped over 30%, moving out of the ‘complacent’ zone into a neutral zone.

vix0322

Are you protected?

While most investors will have trouble sleeping tonight worrying about their portfolio, subscribers to Trend Technical Trader (TTT) have seen their equity hedge positions gain an average of 47% since the January high in the equity markets.

You probably buy fire insurance for your home, why would you not buy insurance to protect your portfolio. TTT gives subscribers easy to action strategies to protect themselves and their portfolio in case this correction turns into a full blown crash. This bull market in stocks has been running for over 9 years, and it is going to end sometime. In the very best case scenario, we are in the late innings of this bull market, suggesting that a sizable correction is coming. Be sure you are protected!

We are extending our Special Offer to make it easier for you to get TTT’s strategies for a correction, and especially for a full-on crash. It’s your money – take control!  Save $250 off the regular price of $649.95, and get TTT’s daily updates on the markets for only $399.95. Click here to take advantage of this offer.

Stay tuned!