Posts by The Trend Letter

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Headlines – January 26/18

  • Wall Street opens higher on strong earnings, soft dollar. Read story
  • Trump says Republicans will accept citizenship for ‘Dreamers.’ Read story
  • Davos’s founder defended Trump against ‘biased interpretations.’ Read story
  • Trump denies reports he tried to fire Mueller. Read story
  • Coincheck halts trading says $400 million cryptocurrency lost. Read story
  • Finland election brings Finexit threat to EU. Read story
  • Hulbert: Even rising short-term bond yields won’t kill the stock market’s momentum. Read story
  • Trump, the FBI and the ‘secret memo.’ Read story
  • China’s smartphone market in decline. Read story
  • The YouTube and Instagram secret that Google and Facebook don’t want you to know. Read story
  • North Korea to hold ‘intimidating’ military parade one day before Olympics. Read story
  • An ancient jawbone found in Israel rewrites history of Homo sapiens. Read story
  • On the lighter side. Check it out!

Stay tuned!

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Headlines – January 25/18

  • Wall Street gains on solid earnings, lower dollar. Read story
  • Surging Euro forces Draghi to tread carefully on policy. Read story
  • Ontario conservative leader Brown resigns amid sexual abuse allegations. Read story
  • Trump says he is willing to speak under oath to Mueller. Read story
  • Davos attendees are quietly planning to walk out on Trump’s speech. Read story
  • US heads for 3% trifecta on spending, investment punch. Read story
  • Brexit could push 4,000 JPMorgan jobs from Britain. Read story
  • Netflix sees sharks on both sides in Apple and Disney. Read story
  • Trump sees ‘tremendous increase’ in UK-US trade. Read story
  • China is becoming a space superpower, just like the US. Read story
  • We are one tantrum away from accidental war with North Korea. Read story
  • 50 cent has been sitting on bitcoin fortune, but forgot about it. Read story
  • The next generation of smartphone cameras could see through walls. Read story
  • On the lighter side. Check it out!

Stay tuned!

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Geadlines – January 24/18

  • US Dollar hits new low as Mnuchin backs weaker dollar. Read story
  • Whistleblower tells Congress of FBI ‘secret society’. Read story
  • Mueller seeks to question Trump about Flynn, Comey: report. Read story
  • Dalio warns bonds face biggest bear market in almost 40 years. Read story
  • If you’re using an Android phone, Google may be tracking every move you make. Read story
  • Mexico’s drug cartels now hooked on fuel, cripple the country’s refineries. Read story
  • Davos 2018: ‘More to come’ on US tariffs. Read story
  • GE posts $10 billion loss, sales drop, as power weakens. Read story
  • EU fines chipmaker Qualcomm £870m for Apple payments. Read story
  • Apple to offer battery features after slowdown row. Read story
  • Scientists buried in snow at Davos while lecturing on global warming. Read story
  • Silicon Valley’s quest for a digital currency continues as Stripe abandons Bitcoin. Read story
  • Tesla and GM self-drive cars involved in accidents. Read story
  • The fastest shrinking countries on earth are in eastern Europe. Read story
  • On the lighter side. Check it out!

Stay tuned!

ExitStrategy

Markets keep rising…do you have an exit strategy?

The current bull market continues its record breaking run. Consider the following:

  • 2017 was the first year in history where US stocks ended every single month in the green.
  • Bank of America reports that $58 billion flowed into equities in the latest 4-week period, an all-time high.
  • The Dow rallied 1,000 points in just 8 trading days, a new record.
  • The Dow is up 8,000 points since the Trump election victory, while the  S&P 500 is up 35% since the election.
  • Since the Trump election, the financial Sector ETF is up 45%
  • There hasn’t been so much as a 3% pullback in over a year.
  • Apple says it will pay $38 billion in taxes to bring back its $252 billion of cash held overseas because of tax reform.
  • Apple will also invest $30 billion in capital expenditures in the US, & create 20,000 new US jobs.

But as this bull market rages on, seemingly without resistance, we need to be aware of a number of warning signs that this market is overheated. Let’s have a look at 4 of the warning signs that we have been highlighting to our Trend Letter subscribers:

  1. The first indicator we will look at is the Relative Strength Index (RSI), which is  a momentum indicator that compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements of a security. It is primarily used in an attempt to identify overbought or oversold conditions in the trading of an asset.

When an asset sees its RSI drop below 30, it is considered to be in “oversold” territory,  suggesting that the asset may be due for a rally. The opposite is true, too. When we see an asset rise faster than normal, and its RSI moves above 70, it is considered “overbought,” suggesting it is a time for caution, signalling that a correction may be coming. As we can see on the bottom of the chart below, the S&P 500’s RSI reading was at 87.39, an all-time high level, even higher than at the dot-com bubble of the late 1990s.S&PRSI

2. The second indicator that we look at is the American Association of Individual Investors (AAII) Sentiment Survey. The historic average of bullish sentiment is 38.5%, but the reading last week was almost 60%, with only 15.6% bearish, a reading  that is clearly suggesting caution.

AAII

3. The third indicator is the 200-day moving average (DMA). The markets generally trade within 8% of their 200-DMA. In bull markets, they tend to trade above this 200-DMA, while in bear markets, they trade below the 200-DMA.  Whenever markets trade outside of that 8% range, they tend to revert back toward that 200-DMA. As you can see, the S&P 500 is currently over 12% above its 200-DMA, suggesting it is very overbought and should at least cool down to fall within 8% of that 200-DMA.

SPX200mda

4. The fourth indicator is the VIX Volatility Index, also known as the “fear index.” The VIX looks at expectations of future volatility, also known as implied volatility. Times of greater uncertainty (more expected future volatility) result in higher VIX values, while less anxious times correspond with lower values. A reading above  20 suggests that investors are “complacent, with a “risk-on” sentiment. Conversely, a VIX reading over 30 suggests investors are getting “fearful,” with a risk-off sentiment.

As we can see on the chart below, the VIX reading has been below 20 for all of 2017, and only popped above that level once since June of 2016. This implies that investors are all-in, suggesting the markets are overbought.

VIX 0123

Now because all of these indicators are warning that this market is overbought, it doesn’t mean it cannot keep rising, it just means you need to be prepared for a pullback, or a more severe correction.  You need an exit strategy!  What we are saying is that prices are elevated, as are the risks, as the masses are taking on increased risk. This tells us we need to be prepared for a pull back or a more severe correction.

While The Trend Letter does have some “insurance” plays pending, Trend Technical Trader (TTT) is a hedge service, designed specifically to protect, and even significantly grow your wealth on a market decline.

Good deal – We are offering you TTT at $250 off the regular price of $649.95, now just $399.95. Click here to take advantage of this offer.
Great deal – We are offering both The Trend Letter & Trend Technical Trader at $600 off the regular price, now just $649.95Click here to take advantage of this offer.

Stay tuned!

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Headlines – January 23/18

  • Wall St opens higher on strong earnings. Read story
  • Tsunami warning on BC’s west coast cancelled after large 7.9 mag Alaska earthquake. Read story
  • Asia fears US tariffs on washing machines, solar panels just the start. Read story
  • Bitcoin struggles to take $11,000 as South Korea announces cryptocurrency crackdown. Read story
  • Nasdaq exploring “Total Return” bitcoin futures. Read story
  • JPMorgan announces $20 billion investment plan after tax law gains. Read story
  • Twitter COO Noto resigns to become SoFi CEO, stock slides. Read story
  • Apple announces HomePod voice speaker, to take on Google, Amazon. Read story
  • Musk’s compensation package “perhaps most radical in corporate history”. Read story
  • Spanish alert to stop ex-Catalan president Puigdemont from returning. Read story
  • Wealthy millennials are not investing their money. Read story
  • EU creditors to start Greek debt-relief talks. Read story 
  • Here’s how stock performance in Trump’s first year compared to other presidents. Read story
  • ‘Dunkirk’ and ‘The Shape of Water’ lead impressive 2018 Oscar field. Read story
  • On the lighter side. Check it out!

Stay tuned!

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Headlines – January 22/18

  • Stocks shrug off US government shutdown, dollar dips. Read story
  • IMF: Global economic outlook is bright. Read story
  • Bitcoin’s future is ‘insurance’ against ‘Orwellian future’ says Black Swan author. Read story
  • UK growth upgrade could ‘dwarf’ Brexit hit. Read story
  • Amazon opens supermarket with no checkouts. Read story
  • Senator says FBI lost critical texts tied to Clinton probe. Read story
  • High-end art is one of the most manipulated markets in the world. Read story
  • Here is the real reason why US health care is so expensive. Read story
  • Germany’s SPD wants Merkel to sweeten coalition deal. Read story
  • Why you should worry about identity theft with new tax law. Read story
  • Teens roam Sweden’s streets with rifles. Read story
  • German nurse charged with a total of 99 murders. Read story
  • Paying off your mortgage could be the smartest move of 2018. Read story
  • Will this potentially hazardous asteroid hit the Earth? Take a look for yourself. Read story
  • Why Apple’s Tim Cook doesn’t want his nephew using social media. Read story
  • On the lighter side. Check it out!

Stay tuned!

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Headlines – January 19/18

  • Clock running out to avert US government shutdown. Read story
  • IEA predicts “explosive” growth in US oil output as prices rally. Read story
  • SEC pours cold water on prospect of Bitcoin ETFs. Read story
  • Yahoo Finance has a plan to become the Uber of saving money. Read story
  • Bombshell report could lead to removal of senior US government officials. Read story
  • Cities bizarre bids to be Amazon’s new home. Read story
  • Wealthy exodus to avoid new tax rules worries California Democrats. Read story
  • HSBC to pay $101.5 million to settle currency rigging probe. Read story
  • JPMorgan CEO Jamie Dimon got 5.4% raise in 2017, to $29.5 million. Read story
  • Ford CEO Jim Hackett on the future of computing, cities, and self-driving cars. Read story
  • Road to ruin? Carillion collapse puts spotlight on UK outsourcing model. Read story
  • 1 in 3 young Americans spent more on coffee last year than they invested. Read story
  • Pope Francis ‘slander comment angers Chile abuse victims. Read story
  • Uber founder Kalanick, officially a billionaire. Read story
  • Struggling to pay student loan? Here’s what you need to know. Read story
  • On the lighter side. Check it out!

Stay tuned!

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Headlines – January 18/18

  • US housing starts fall; jobless claims hit 45-year low. Read story
  • Apple to hire 20,000, build new campus, and pay $38 billion tax bill on oversea profits. Read story
  • Republicans scramble for votes in Congress to keep government open. Read story
  • Cryptocurrency prices edge higher with Ripple bouncing back 60% after ‘severe’ sell-off. Read story 
  • US 10-year yield tops 2.6% for first time since March. Read story
  • Chinese economy grew 6.9% in 2017. Read story
  • The 20 finalists for Amazon’s HQ2. Read story
  • Sweden preparing its people for war. Read story
  • Merkel and Kurtz clash over migrant quota. Read story
  • Lexus, Infinity luxury cars test ways to fight Tesla, German rivals. Read story
  • Trump infrastructure plan taking shape. Read story
  • Airbus Superjumbo jet saved by Emirates order. Read story
  • Macau casino dealer stole $6 million in chips. Read story
  • The Japanese words for ‘space’ could change your view of the world. Read story
  • Everything we thought about millennial’s money habits was wrong. Read story
  • On the lighter side. Check it out!

Stay tuned!

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Headlines – January 17/18

  • Wall St opens higher as tech stocks gain. Read story
  • 5 reasons why Bitcoin and other cryptocurrencies have lost a stunning $400 billion in 10 days. Read story
  • Bank of Canada raises interest rat rate to 1.25%, highest since 2009. Read story
  • The looming US government shutdown: What you need to know before Jan. 19 deadline. Read story
  • North and South Korea to march under single “unified Korea” flag at Olympics. Read story
  • Former Trump aid Bannon strikes deal to avoid grand jury appearance in Russia probe. Read story
  • Norway desperately needs large new oil discoveries. Read story
  • Australia files WTO complaint over Canada wine sales. Read story
  • Google wants to make building an AI algorithm as easy as drag and drop. Read story
  • Welcome to the neighbourhood. Have you read the terms of service? Read story
  • “New California” takes first step to declare “independence” from rest of state. Read story
  • How Michael Wolff got into the White House for his tell-all book. Read story
  • On the lighter side. Check it out!

Stay tuned!

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Headlines – January 16/18

  • Dow hits 26,000 for first time. Read story
  • Bitcoin drops as China renews crackdown on cryptocurrencies. Read story
  • North Korea summit begins in Vancouver, without China or Russia. Read story
  • China rating agency downgrades US debt rating over political ‘deficiencies.’ Read story
  • IBM plans blockchain joint venture with shipping company Maersk. Read story
  • How Bitcoin and blockchain will build internet 3.0. Read story
  • Japan issues false alarm about North Korea missile just days after Hawaii gaffe. Read story
  • GE to take $6.2 billion charge after being burned by insurance. Read story
  • Washington edges closer to government shutdown. Read story
  • US Treasury list of Putin ‘Oligarchs’ jolts Russia’s elite class. Read story
  • McDonald’s aims for fully recycled packaging by 2025. Read story
  • It’s becoming economically desirable to live in a trailer park. Read story
  • The philosophical case for going vegan is about pleasure – not preachiness. Read story
  • On the lighter side. Check it out!

Stay tuned!