Weekly Market Update – 24 July 2017 BMO

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RECORD HIGHS

Equities kept chugging along this week, underpinned by a generally solid batch of earnings reports and the notion that monetary policy will remain accommodative for the foreseeable future. The S&P 500 ended the week higher for the third-consecutive time, adding 0.5%, but the real star was the Nasdaq, which climbed 1.2% and settled at a new record high for three sessions in a row. The Dow lagged this week, finishing with a small loss of 0.3%.

The stock market kicked off the week with a rather uneventful performance on Monday that left the major averages little changed. However, activity picked up on Tuesday as the Nasdaq climbed to a new record high for the first time since June 8. Netflix (NFLX) headlined the earnings front, surging 13.5%, after adding a surprisingly-large number of new subscribers in the second quarter.

Buyers were in the driver’s seat during the midweek session, pushing the Nasdaq, the S&P 500, the Dow, and the small-cap Russell 2000 to new all-time highs. Each of the S&P 500’s 11 sectors finished in the green with the energy group setting the pace following an upbeat EIA crude inventory report. Conversely, financials and transports struggled once again, shrugging off some relatively upbeat earnings reports.

However, it’s important to note that the S&P 500’s financial sector and the Dow Jones Transportation Average both had bullish, multi-week runs ahead of earnings season, making it difficult for their components to advance on upbeat results alone.

On Thursday, monetary policy was the focal point as investors digested the latest policy decisions from the European Central Bank and the Bank of Japan. Both central banks decided to leave interest rates unchanged and sounded dovish about future accommodation. However, the euro rallied against the U.S. dollar nonetheless as ECB President Mario Draghi failed to dispel the notion that the ECB might soon announce a tapering of its asset purchase program.

The Nasdaq eked out another record close, extending its winning streak to ten sessions in a row, while the S&P 500 and the Dow finished just shy of their unchanged marks. The telecom services sector was the top-performing group–which has been a rarity this year–following an upbeat earnings report from T-Mobile US (TMUS). However, ironically, TMUS shares finished solidly lower.

Equity indices ended the week with small losses on Friday. General Electric (GE) weighed on the industrial sector, dropping 2.9%, after reporting disappointing organic revenue growth for its industrial segment. Microsoft (MSFT) also faced selling pressure as its better than expected earnings and revenues failed to fully justify its preceding ten-day rally. Energy was the worst-performing sector following news of increased OPEC production, which sent crude oil on a 2.7% plunge.

The fed funds futures market still points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 52.0%, up slightly from last week’s 50.6%. The Fed will release its latest policy statement on Wednesday afternoon at 14:00 ET.

(Excerpts from Briefing.com)

Currencies: Euro strengthens ahead of next week’s PMI reports

Bonds yields: The yield curve fell further following last week’s losses to flatten considerable. Spreads across the yields have now tightened to 57bps on the 10/30, 43bps on the 5/10 and 46bps on the 2/5.

Commodities: Crude loses, Metals gain. The Baker Hughes total rig count decreased by 2 to 950 after no change last week

Agriculture: Grains closed mixed after a week of gains.

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wk30THE WEEK AHEAD

More volatility ahead as earnings season goes into its peak. No less than 13 DOW components are on the line this week

Monday 24 July to Friday 28 July (Week 30)

The thirtieth week of 2017 (wk30) looks flat and uneventful with less than 50% reliability on the DIA and an average of 50% on the SPY. However, expect a lot of volatility within the week as the daily gyrations are expected to whipsaw the market.

Our daily models over 5, 10 and 15 year averages show the DIA as bearish all weekSPY is expected to be bearish on Monday and Tuesday, bullish on Wednesday and Thursday and unpredictable on Friday.

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The 2017 Stock Trader’s Almanac’s averages for the benchmark indices (based on 21 years) for week 30;

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Earnings Calendar for the week of July 24th

Mon 24 July

Tue 25 July

Wed 26 July

Thu 27 July

Fri 28 July

Key Economic Dates

Mon 24 July

Tue 25 July

Wed 26 July

Thu 27 July

Fri 28 July

SUMMARY

So the doubters continued to get shamed by this market that doesn’t want to come down. Well, August and September are just around the corner and they may get their wish … eventually. But until then, there’s so stopping this bull run. Unless of course, the GDP number come out with a stunningly negative surprise along with a surprise move by the Fed on Wednesday.

Happy Hunting!

LAST REMINDER:

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The Pattern Trader™ Tutorial will be having its second Preview for the August Batch on 27 July. Don’t miss out on this educational three-hour session by registering here: July 27, 2017 Preview Session

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Weekly Market Update – 17 July 2017 BMO

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S&P 500, Dow Advance to New All-Time Highs

The stock market closed the week on a positive note with the S&P 500 (+0.5%) and the Dow (+0.4%) both advancing to new record highs. Meanwhile, the Nasdaq climbed 0.6% and finished just nine points below its record close. For the week, the S&P 500 moved higher by 1.4%, which marks its best weekly performance since the end of May.

The stock market got off to a slow start this week, but Fed Chair Janet Yellen’s semiannual testimony before Congress sparked a rally in the midweek session that lingered all the way into Friday’s closing bell. In the end, the S&P 500 registered its largest weekly gain since the end of May and settled Friday’s session at a new record close. For the week, the S&P 500 advanced 1.4%.

For the most part, the first two sessions of the week were uneventful. The stock market did make a sharp move lower on Tuesday after Donald Trump Jr. tweeted an email exchange that involved him setting up a meeting with a Russian lawyer in an attempt to gain some possibly incriminating information on then-presidential candidate Hillary Clinton. However, the bearish sentiment didn’t last and the S&P 500 entered Wednesday’s session flat for the week.

Equities rallied in the midweek session after Fed Chair Janet Yellen’s semiannual monetary policy testimony came off less hawkish than many were anticipating. One of the key takeaways from Ms. Yellen’s prepared remarks was her acknowledgment that “the federal funds rate would not have to rise all that much further to get to a neutral policy stance.” The statement created a sense that the Fed may in fact follow a shorter path of rate hikes that will keep the longer-run neutral level of the federal funds rate below levels that prevailed in previous decades.

The S&P 500 leaned on its most influential sectors, namely technology and financials, to capture its third win of the week on Thursday. The financial sector’s positive performance was particularly notable as the group plays an important role in driving economic activity and had failed to keep pace with the broader market in the three prior sessions. Financials remained a focal point once again on Friday with JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C) headlining the earnings front.

All three of the aforementioned banks reported better than expected earnings–with JPM and C also beating revenue estimates–but the results were just not enough, at least in the market’s mind, to justify the bullish six-week run that JPM, WFC, and C rode into Friday’s session. The financial sector settled in the red, losing 0.5%, but the S&P 500 managed to advance to a new all-time high thanks to gains from ten of its eleven sectors.

In addition to earnings, economic data was also a focal point on Friday as below-consensus retail sales and core CPI readings for the month of June prompted a rally in the Treasury market; the benchmark 10-yr yield, which moves inversely to the price of the 10-yr Treasury note, dropped three basis points to 2.32%, ending the week with a seven-basis point loss.

Like Treasury yields, rate-hike expectations were also dialed back a bit this week. However, the fed funds futures market still points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 50.6%. This time last week, the implied probability of a December rate hike sat at 59.1%.

(Excerpts from Briefing.com)

Reviewing Friday’s big batch of economic data, which included June CPI, June Retail Sales, the June Industrial Production and Capacity Utilization Report, May Business Inventories, and the preliminary reading of the University of Michigan Consumer Sentiment Index for July:

Currencies: Dollar Index nears Bear-Market Territory on Weak Data

Bonds yields: Yield curve falls after two weeks of gains with the belly of the curve taking the biggest loss.

Commodities: Crude, Metals rise 

Agriculture: Grains fall after two weeks of gains.

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Week29THE WEEK AHEAD

Expect an uneventful week ahead as Q2 Earnings Season goes into its second week.

Monday 17 July to Friday 21 July (Week 29)

The twenty-ninth week of 2017 (wk29) is flat-to-bullish for the DIA and the SPY over all the 5, 10 and 15 year averages with less than 60% average reliability.

Our weekly models over 5, 10 and 15 year averages show the DIA as mildly bearish throughout the week with a very bullish TuesdaySPY is expected to be unpredictable throughout the week with a unreliable statistics.

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The 2017 Stock Trader’s Almanac’s averages for the benchmark indices (based on 21 years) for week 29;

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Earnings Calendar for the week of July 17th

Mon 17 July

Tue 18 July

Wed 19 July

Thu 20 July

Fri 21 July

Key Economic Dates

Sun 16 July

Mon 17 July

Tue 18 July

Wed 19 July

Thu 20 July

Fri 21 July

SUMMARY

Apparently, Singapore barely avoided a recession by reporting a 0.4% expansion in growth for the the second quarter of 2017 over the previous quarter. The number was most derived from “robust growth in its electronics and precision engineering industries due to strong global demand for semiconductors and semiconductor manufacturing equipment.”

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I find that hard to swallow because every time our growth is expected to make consecutive negative contractions, some vague white knight manages to help the number to barely scrape by or form some anomaly that’s obviously unsustainable. Although manufacturing has been a consistent contributor to the growth number for the last 10 months, the sector has not played a huge part in the island state’s growth story for the past two decades as compared to services, import/export and various other infrastructure based businesses. It seems convenient that it now plays a huge part in the country’s growth.

You can delay the inevitable but the street already knows what the numbers don’t say – jobs are getting tighter, salaries are getting squeezed, spending is stagnant if not falling and property prices have been falling for 15 quarters.

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The bright side is that analysts are optimistic that this will spur growth in the services sector. With the next Monetary Policy Meeting due in October, analysts are confident that the central bank (MAS) will hold policy steady.

Happy Hunting!

REMINDER:

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The Pattern Trader™ Tutorial will be having its second Preview for the August Batch on 27 July. Don’t miss out on this educational three-hour session by registering here: July 27, 2017 Preview Session

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Weekly Market Update – 10 July 2017 BMO

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REMINDER:

The Pattern Trader Tutorial will be having its second Preview for the August Batch on 27 July. Don’t miss out on this educational three-hour session by registering here: July 27, 2017 Preview Session

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Modest Gains For The Week, Russells Unchanged

Equity indices kicked off the third quarter on a positive note, finishing the first week of July with modest gains. Trading volume was light as many investors took some extra time off to celebrate the Fourth of July holiday. The S&P 500 added 0.1% while the Nasdaq and the Dow finished with gains of 0.2% and 0.3%, respectively.

The major averages settled mixed in an abbreviated session on Monday. The financials and energy sectors were bullish, finishing at the top of the day’s leaderboard, and helped the S&P 500 overcome the top-weighted technology sector’s third-consecutive loss. The tech-heavy Nasdaq wasn’t so lucky, dropping 0.5%, while the Dow outperformed, hitting a new intraday record high.

U.S. markets were closed on Tuesday in observance of the Fourth of July holiday, but the benchmark index picked up where it left off in the midweek session, registering another modest win with the technology group leading the charge. The minutes from the June 13-14 FOMC meeting were released on Wednesday, but did little to change the market’s rate-hike expectations.

In the minutes, Fed members seemed generally upbeat about economic activity and gave the impression that they believe the recent softness in inflation is transitory. In addition, Fed officials were divided on when to start unwinding the Fed’s balance sheet; some wanted to start in a couple of months while others preferred to hold off until the end of the year.

Investors pulled back on Thursday, dragging all three major averages into negative territory for the week and leaving the S&P 500 below its 50-day simple moving average for the first time in nearly two months. The market expressed concerns about less accommodative central bankers, evidenced by rising interest rates around the globe. U.S. Treasuries moved in a curve-steepening trade, helping to keep the influential financial sector ahead of the broader market.

The Employment Situation Report for the month of June, which showed the addition of 222,000 nonfarm payrolls (Briefing.com consensus 173,000) and stable hourly earnings (+0.2% vs Briefing.com consensus +0.3%), was the focus of Friday’s session. The report was largely seen as another ‘Goldilocks’ report, pointing to an economy that is growing at a modest rate without the worry of inflation.

Eight of the S&P 500’s eleven sectors ended Friday in the green, which was just enough to bring the benchmark index back into positive territory for the week. The technology group was the top-performing sector, benefiting from broad strength. However, the energy group underperformed as crude oil weighed.

WTI crude futures struggled this week, dropping 4.1%, following news that OPEC exports increased in the month of June and headlines that Russia is not in favor of deepening the current OPEC-led production cut agreement. In addition, the weekly inventory report from the Department of Energy, which showed a rise in U.S. production alongside a larger than expected drop in crude and gasoline stockpiles, also prompted selling pressure.

The fed funds futures market still points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 59.1%, up from last week’s 54.4%.

(Excerpts from Briefing.com)

Non-Farm Payrolls Report

GDP Estimates

Currencies: Dollar Rallies as Jobs Growth Exceeds Expectations

Bonds yields: Yield curve steepens for the second week

Commodities: Crude rises while Metals fall 

Agriculture: Grains gain for the second week.

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Week28 THE WEEK AHEAD

Looks like the bulls may get back into the game after the shortened week to kick start earnings season.

Monday 10 July to Friday 14 July (Week 28)

The twenty-eighth week of 2017 (wk28) is bullish for the DIA and the SPY over all the 5, 10 and 15 year averages with around 80% average reliability.

Our weekly models over 5, 10 and 15 year averages show the DOW and SPY as bullish throughout the week with slight bearishness on Tuesday.

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The 2017 Stock Trader’s Almanac’s averages for the benchmark indices (based on 21 years) for week 28;

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Key Economic Dates

Sun 09 July

Mon 10 July

Wed 12 July

Thu 13 July

Fri 14 July

SUMMARY

It will be nice to get back into a smooth rally but for the start of earnings season. I don’t expect a lot of speed bumps after Friday’s dovish employment numbers and on the back of such historically bullish statistics, it is definitely not in my plans to be short.

Happy Hunting!

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June 2017 In Review, July Preview

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June was a weird month for me mostly because my household was missing one person who had gone off to serve his nation. It’s so strange not having him around and I do miss my gym and swim buddy.

Other than that, the Pattern Trader did its first independent Previews in Singapore (June 20th) and Penang (June 22nd).

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The turn out was encouraging and sustainable given that I intend to slow down the frequency of the Tutorials with this independence to focus on other things.

If you missed this session in Singapore, consider coming for the second Introductory Preview Session where you will get answers to all your queries regarding attending the tutorial. Register here: PATTERN TRADER INTRODUCTORY SESSION

TUTORIAL MATTERS

PTT10thCoverThe Tutorial’s 10th Edition Notes were also completed in June to cap my finest work to date. The participants will also be getting a comprehensive “Gift Pack” of tools and support goodies to help them along with their homework and assignments complete with references and work samples.

There will be more than 50 hours of Tutorials. Thereafter, graduates of the Tutorial will be given four Post Graduate Assignments to manage. Those who need extra hands-on help can get it with our Post Graduate Tutelage,  (optional for an additional S$499.00) comprising four week-night sessions of small group coaching and tuition.

Along with the most efficient syllabus to date, the Pattern Trader Tutorial is now more complete and holistic than its ever been, boasting 40 solid chapters of the smartest methodologies and defensive financial techniques along with support that no other workshop can claim to have.

Time-tested and proven over the last decade, the Pattern Trader Tutorial and its support programs are destined to become the most exclusive financial education from hereon in. This is the most complete financial syllabus that you’re not going to find anywhere else and is NOT for those who are dreaming about becoming millionaires or attaining financial freedom because this is not a get-rich-quick program. Past graduates have testified that this is more complete than most MBA programs.

It is designed for those who wish to know everything about their finances and how economics can affect their money without attending a formal education. The Tutorial gives the participant the knowledge and skills required to begin or accelerate their financial journey in the money markets, online and offline. This is material you will never find in books or other workshops because those experiences only happen to the REAL MACROTRADERS who know how the market works, how the floor operates and how the institutions make it their killing field.

For a full run-down on the Tutorial and its support programs, please look here: The Complete Pattern Trader Tutorial

PTT 10th 2018Syllabus

Requirements;

Please consider coming for the Introductory Preview Session where you will get answers to all your queries regarding attending the tutorial. Register here: PATTERN TRADER INTRODUCTORY SESSION

Interested parties can write to me at support@patterntrader.com. (Naysayers, crabs, haters and competitors need not apply so save yourself the time and effort and go hate someone else please.)

MARKET MATTERS

Its been an odd month of June and I can’t say I have a lot to talk about as it was generally quite boring. Even the Paris Air Show was a non-event for the financial markets. But things are getting very interesting on the economic fronts of Singapore, the United States and even Malaysia. China, as usual, continues to provide the disruptive element to every economy in the region and is going to be a key factor for Asian direction in Q3.

July Preview

July is the start of quarter three and is the best month in the worst quarter of the year. Having said that, it is also the most volatile month of the trading year. The three months of Q3 are extremely varied with July reputed to be the most volatile, August being the most bearish in the last 26-plus years with no reliable patterns and September, known famously for having the lowest volumes of any month and the most bearish of the calendar year over the last 86-plus years.

July2017

July 2017 has 19 full trading sessions, one shortened session (Monday, 3 July) and one public holiday (Tuesday, 4 July). July is known for its volatility with huge swings either way. It is also the start of the third earnings season of the year when companies are known to pull back on their guidance and become conservative about their outlooks.

July Trivia

Key Economic Dates

Sun 02 July

Mon 03 July

Tue 04 July

Wed 05 July

Thu 06 July

Fri 07 July

Sat 08 July

Sun 09 July

Mon 10 July

Wed 12 July

Thu 13 July

Fri 14 July

Sun 16 July

Mon 17 July

Tue 18 July

Wed 19 July

Thu 20 July

Fri 21 July

Mon 24 July

Tue 25 July

Wed 26 July

Thu 27 July

Fri 28 July

Sun 30 July

Mon 31 July

Commodities

SUMMARY

Now we go into the worst three months of the trading year with a market that’s grossly overbought, commodities that stay stubbornly under-valued and bond yields that are hugely under par. Its going to be an interesting quarter especially if my three-year outlook (from mid-2014) is to remain on track with a major correction expected in September/October.

I am personally excited that my career takes on a new path of independence to allow me to do more of what I love and to venture into new areas of businesses. It has been stressful for the last couple of months but its a good stress that I wouldn’t give up for anything less.

Stay keen, stay alert and stay safe!

Happy Hunting Always!!

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Weekly Market Update – 03 July 2017 BMO

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The stock market endured some volatility, which resulted in a lower finish for the major indices. Relative weakness among technology stocks sent the Nasdaq Composite down 2.0% for the week while the S&P 500 surrendered 0.6%. The price-weighed Dow Jones Industrial Average (-0.2%) ended the week little changed.

The influential financial sector opened the week on a positive note, ending its four-session losing streak with a gain of 0.5%. However, negative performances from the heavily-weighted technology and health care groups mitigated the bullish influence of financials, leaving the benchmark index just a tick above its unchanged mark. Meanwhile, crude oil registered its third-consecutive win, climbing 0.8%.

Things got a bit more interesting on Tuesday, especially in the global bond market, where sovereign yields jumped after European Central Bank President Mario Draghi provided an upbeat assessment of eurozone inflation and growth trends. The financial group outperformed, once again, amid a steepening of the yield curve, but the ten remaining sectors finished in the red with the technology group pacing the retreat.

The midweek session brought some relief as investors bought the dip and put the S&P 500 back at its flat line for the week. The financials and technology sectors led the charge, but strength was broad-based with nine sectors settling in the green. The improvement in risk sentiment came after the ECB said that Mr. Draghi’s Tuesday remarks were misinterpreted as hawkish while they were meant to strike a balance. However, longer-dated Treasuries and German bunds held their ground.

The relief rally didn’t last long as the market reversed and set a fresh low for the week on Thursday. The technology sector fell to heavy profit-taking, dropping 1.8%. Selling was broad-based with only the financials and energy spaces escaping the session with wins. Banks underpinned the financial group after the Federal Reserve approved the capital plans of all 34 banks required to partake in the annual stress test.

Thursday also saw more selling in the global bond market. Treasuries tumbled in a curve-steepening trade while German bunds slid following hotter than expected inflation data out of Germany.

Friday’s session featured a weak rebound in the broader market, as financials, health care, and technology struggled. NIKE (NKE) surged more than 10.0% after beating earnings expectations, which helped keep the market above water.

The fed funds futures market still points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 54.4%, up from last week’s 51.3%.

The stock market was on track to end Friday on its session high, but quarter-end selling during the final minutes of the action knocked the key indices off their afternoon highs. The S&P 500 added 0.2%, trimming this week’s loss to 0.6%, while the Nasdaq Composite (-0.1%) underperformed, widening its weekly decline to 2.0%. Shielded from this week’s underperformance in technology, the Dow Jones Industrial Average (+0.3%) shed just 0.2% for the week. The S&P 500 ended the second quarter with a gain of 2.6% while Dow climbed 3.3% and Nasdaq advanced 3.9%.

(Excerpts from Briefing.com)

Currencies:

The Canadian dollar jumped to a nine-month high against the dollar today as WTI crude rallied 2.05% to $45.85/bbl. While the Canadian economy faces risks from a frothy housing market and a potentially secular decline in oil prices, the greenback itself has been very weak (this was the worst quarter for the dollar since 2010) and Bank of Canada Governor Poloz has signaled that a July rate hike is in play. The euro pulled back from a one-year high today although inflation ran faster than expected in the eurozone during June. Thursday’s report of higher-than-expected CPI growth in Germany may have set the market up to expect bigger things. The Swiss franc pulled back from a one-year high as well despite improvement in economic leading indicators. The Japanese yen traded near to a one-month low although the 10-year JGB yield touched its highest level since the Ides of March (0.09%). The antipodean currencies both traded higher as Chinese PMI data beat estimates. The kiwi dollar touched a four-month high. The Chinese yuan hit a seven-month high against the greenback. The U.S. Dollar Index is up 0.09% to 95.72

Bonds yields: The curve rose and steepened for the week

Commodities: ABCDE 

AgricultureThe USDA released two big reports today: 

 Acreage report shows:

Quarterly grain stocks report shows:

Friday’s Closing Prices:

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Week27_2017 THE WEEK AHEAD

Looks like we in for a boring week if the statistics play according to history.

Monday 03 July to Friday 07 July (Week 27)

The twenty-seventh week of 2017 (wk27) is flat-to-bullish for the DIA and the SPY over all the 5, 10 and 15 year averages with less than 60% average reliability.

Our weekly models over 5, 10 and 15 year averages show the DOW and SPY as flat throughout the week with slight bullishness on Friday.

DIAweek27SPYweek27 

The 2017 Stock Trader’s Almanac’s averages for the benchmark indices (based on 21 years) for week 27;

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Key Economic Dates

Sun 02 July

Mon 03 July

Tue 04 July

Wed 05 July

Thu 06 July

Fri 07 July

Sat 08 July

Sun 09 July

SUMMARY

The week before earnings is always unpredictable and rather dull. To add to the confusion, the week is also heavy with employment and manufacturing data and the G20 meetings.

Happy Hunting!

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Weekly Market Update – 26 June 2017 BMO

Weekly Market Update – 26 June 2017 BMO

Dexes24June

Wall Street ended the week on a positive note as the S&P 500 (+0.2%) cruised to a modest victory on the backs of the technology (+0.7%) and energy (+0.8%) sectors. The Nasdaq (+0.5%) and the Russell 2000 (+0.7%) outperformed while the Dow (unch) settled just a tick below its unchanged mark.

After some teeter tottering at the start of the week, the S&P 500 settled into a sideways trend, drifting alongside its unchanged mark, as investors lacked conviction to decisively move the market one way or the other. In the end, the benchmark index sealed its second-consecutive weekly win with a slim gain of 0.2%.

Wall Street kicked off the week on a positive note with both the S&P 500 and the Dow advancing to new all-time highs. The Nasdaq exhibited relative strength as technology and biotechnology stocks outperformed, bucking their recent bearish trends, with names like Apple (AAPL) and Biogen (BIIB) leading the charge. Financials also posted a solid performance, continuing their bullish two-week run.

The tide turned on Tuesday as the benchmark index coughed up nearly all of Monday’s advance. The energy sector finished at the bottom of the leaderboard, for the second day in a row, as crude oil continued to tumble amid excess supply concerns. However, despite the bearish tone, biotechnology stocks kept chugging along, pushing the iShares Nasdaq Biotechnology ETF (IBB) higher by 1.3%.

Range-bound action set in on Wednesday as the heavily-weighted health care and technology sectors upheld the S&P 500 amid weakness in the broader market. Staying true to the week’s trend, biotech companies were bullish, advancing the IBB higher by 4.1%, while crude oil was bearish, dropping another 2.3%, despite a relatively upbeat inventory report from the Department of Energy.

Investors shifted their attention to Washington on Thursday as the Senate rolled out its version of the healthcare reform bill. Compared to the version that the House passed last month, the Senate’s version would roll back the Affordable Care Act’s Medicaid expansion more gradually, but the cuts to Medicaid would be larger in total. However, in general, the two versions of the bill are very similar.

The health care sector took the news in stride, moving higher by 1.1%, but the S&P 500 settled slightly lower as the financials, consumer staples, and utilities sectors weighed. Crude oil did manage to secure its first win of the week, but the advance was modest in comparison to the commodity’s recent swoon. Moving into Friday’s session, the energy component held a week-to-date loss of 4.5%.

Equities ended the week on a positive note as the technology and energy sectors fended off the negatively-charged financials, consumer discretionary, and health care groups. Biotech stocks fell to some profit-taking efforts early, but the IBB still managed to pull out a win, ending the week higher by 9.6%. Crude oil registered another modest win on Friday, but ended the week lower by 4.0%.

Market participants altered their rate-hike expectations a bit this week following comments from several FOMC voters, including Fed Vice Chair Fischer, Fed Governor Powell, New York Fed President Dudley, Chicago Fed President Evans, and Dallas Fed President Kaplan.

The fed funds futures market now points to the December FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 51.3%, up from last week’s 43.4%.

(Excerpts from Briefing.com)

Dollar: The U.S. Dollar Index is lower by 0.4% at 97.24, tracking a 0.2% downtick for the week after recording a slight 0.1% dip last week. This leaves the index in an area that has been well-travelled over the past five weeks.

Bonds yields: The yield curve flattened during the week, as the 2/10 spread narrowed to 81 basis points from last Friday’s 84.

Commodities: WTI Crude falters, Silver stumbles, Gold and Copper close higher. 

Agriculture: Grains all close lower for the week

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Wk26 THE WEEK AHEAD

A week of possible bullish reprieve ahead of earnings season.

Monday 26 June to Friday 30 June (Week 26)

The twenty-sixth week of 2017 (wk26) is bullish for the DIA and the SPY over all the 5, 10 and 15 year averages with more than 60% average reliability.

Our weekly models over 5, 10 and 15 year averages show the DOW and SPY as bearish on Monday, bullish on Tuesday, Wednesday and Friday while Thursday might be a bit flat or unpredictable.

DIAweekly SPYweekly

The 2017 Stock Trader’s Almanac’s averages for the benchmark indices (based on 21 years) for week 26;

Screen Shot 2017-06-26 at 1.47.28 PM

Key Economic Dates

Mon 26 June

Tue 27 June

Wed 28 June

Thu 29 June

Fri 30 June

SUMMARY

One look at the three benchmarks and you have a very good idea how difficult conditions have been in the market in the past week. The divergence is broadening more and more with each passing week just as it did between June and August 2007. With Healthcare leading the sectors for four out of the five days last week, doubt seems to have crept back into risk. But Discretionary’s performance makes you wonder if the doubt has outweighed the appetite for risk yet.

Even though the week was obviously more bearish and bullish, it still closed higher that the previous Friday to give us the illusion that this is still a bull market. Let’s not take our eyes of the proverbial ball – watch the market internals and sector performances for a clearer read on the market.

Happy Hunting!

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Weekly Market Update – 19 June 2017 BMO

Weekly Market Update – 19 June 2017 BMO

dexes

The stock market was fairly flat this week, especially in the second half, as investors chewed on a host of headlines, most notably of which was the FOMC’s latest rate-hike decision. The S&P 500 registered three losses and a new record high this week, eventually settling with a slim gain of 0.1%. The Dow (+0.5%) and the Nasdaq (-0.9%) settled on opposite sides of the S&P 500.

After plunging nearly 3.0% last Friday, the top-weighted technology sector registered another notable decline in the first session of the week, losing 0.8%, as mega-cap names like Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), and Facebook (FB) weighed. Amazon (AMZN) also underperformed, but the consumer discretionary sector, like the S&P 500, was able to escape with just a slim loss.

The tide turned in the bulls’ favor on Tuesday as the aforementioned companies bounced back from their two-day declines. The technology and consumer discretionary sectors led the advance, pushing both the benchmark index and the Dow to new record highs. However, the S&P 500’s gain was capped at 0.5% as investors approached Wednesday’s FOMC rate decision with caution.

As expected, the FOMC voted to raise the fed funds target range by 25 basis points to 1.00%-1.25% in the midweek session. The vote was nearly unanimous with Minneapolis Fed President Neel Kashkari being the lone dissenter. In addition, the Fed laid out a specific plan for how it will start to normalize its balance sheet and revealed that the median FOMC member expects one additional rate hike in 2017.

The Treasury market held a big gain going into the decision, underpinned by weak CPI and retail sales readings for May, but gave back a portion of that advance in the aftermath. However, in the equity market, the S&P 500 hardly deviated from its unchanged mark as investors continued to digest the Fed’s policy prescription into the closing bell and beyond.

Equity indices opened solidly lower on Thursday as the market continued to debate whether the Fed might be tightening policy too much and/or too fast. In addition, sentiment was dampened by a Washington Post report that claimed Special Counsel Mueller’s investigation of Russia’s interference in the U.S. election is broadening in scope to examine whether President Trump tried to obstruct justice.

The technology and consumer discretionary sectors showed relative weakness, yet again, on Thursday morning. However, the two groups were able to reclaim a good portion of their losses as the day went on. A positive performance from the industrial sector, which was led by names like Caterpillar (CAT), General Electric (GE), and Boeing (BA), helped keep the S&P 500’s loss (-0.2%) in check.

On Friday, Amazon (AMZN) dominated the headlines after announcing that it plans to acquire Whole Foods Market (WFM) for $42 per share in cash. Big-box retailers like Wal-Mart (WMT), Costco (COST), and Target (TGT) plunged on the news, sending the consumer staples sector to the bottom of the day’s leaderboard. However, the S&P 500 still managed to eke out a slim victory.

It’s also worth pointing out that WTI crude settled the week with a loss of 2.4% following a bearish EIA inventory report on Wednesday, which showed a smaller than expected draw of 1.7 million barrels (consensus -2.5 million barrels) in crude stocks and a build of 2.1 million barrels in gasoline inventories for the week ended May 9. The tumble left the commodity at its worst level since early November.

Despite the Fed’s call for a third rate hike in 2017, the fed funds futures market points to the March 2018 FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 50.8%, down from last week’s 60.7%. The implied probability of a December rate hike sits at 43.4%, down from last week’s 51.7%.

(Excerpts from Briefing.com)

Dollar

Bonds yields: The yield curve flattened dramatically over the week as the longer maturities saw a flight to safety.

Commodities: WTI Crude closes higher, Metals close lower. 

Agriculture

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Wk25forJUNE THE WEEK AHEAD

Looks like a bearish week ahead and with plenty of reasons to be.

Monday 19 June to Friday 23 June (Week 25)

The twenty-fifth week of 2017 (wk25) is bearish for the DIA and the SPY over all the 5, 10 and 15 year averages with more than 80% reliability. 

The 2017 Stock Trader’s Almanac’s averages (based on 21 years) for week 25;

Screen Shot 2017-06-18 at 1.50.16 PM

Key Economic Dates

Mon 19 June

Tue 20 June

Wed 21 June

Thu 22 June

Fri 23 June

SUMMARY

With such bearish statistics for the coming week, the long trade is definitely out of the question. However, it will only be for a week as the last week of June often sees bullish spikes as a result of the Portfolio Pumping phenomenon.

On the economic front, The Little Red Dot will be anticipating some sort of fall out from THAT Family dispute that has inadvertently dragged some big named ministers into the fray. The boss gets back to work on Monday so watch the SGD for the first signs of any fall out. This is not just going to be a family issue – the economic fall out if this thing if not handled properly, can have serious long-term ramifications with regard to investor confidence knowing that a ministerial committee can be convened at any time to take away your most basic human or even corporate rights without due process.

I am praying that those in power do the right thing for the greater good rather than personal gain or pride.

Screen Shot 2017-06-18 at 5.26.05 PM

~~~~~~~~~~~~~~~~~~~~~~~

And don’t forget:

17504530_10155114499883665_3822934093221632409_o

I will be hosting my very first independent Preview Session for the Pattern Trader (Singapore) Tutorial’s upcoming batch in August:

Date: Tuesday, 20 June 2017
Time: 07:00pm to 10:00pm (registration starts at 06:30PM)
Venue:
51 Cuppage Road,
Acc EduHub #03-03

Vibrant Room 3
Singapore 229469
(behind The Centrepoint & next to The Holiday Inn Hotel)

For Tutorial details, go here: PTT91 in Singapore

REMEMBER to book your free complimentary HERE: INTRODUCTORY SESSION TO MACROTRADING

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Pattern Trader Tutorial’s upcoming batch in Penang will run between 30 August and 04 September 2017. We have arranged to have a Preview Session for this;

Date: Thursday, 22 June 2017
Time: 07:00pm to 09:30pm (registration starts at 06:30PM)
Venue:
YMCA Penang, Rm Grace 1
211 Jalan Macalister
George Town 10400
Pulau Pinang

For Tutorial details, go here: PTTPG06 in Penang.

Write to: support@patterntrader.com to book your seat.

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Comments Off on PATTERN TRADER TUTORIAL PREVIEW (PENANG)

PATTERN TRADER TUTORIAL PREVIEW (PENANG)

Fut1

Pattern Trader Tutorial’s upcoming batch in Penang will run between 30 August and 04 September 2017. We have arranged to have a Preview Session for this;

Date: Thursday, 22 June 2017
Time: 07:00pm to 09:30pm (registration starts at 06:30PM)
Venue:
YMCA Penang, Rm Grace 1
211 Jalan Macalister
George Town 10400
Pulau Pinang

Write to: support@patterntrader.com to book your seat.

This will be our very first preview in Malaysia outside of our former representative event company. During this session, you will find out the following:

  • The difference between trading and investing that many don’t consider as risk.
  • Discover how you can trade various markets and instruments like Equities/Stocks, Currencies, Futures, Commodities, Options and Bonds.
  • Discover the fundamental know-how and skill sets you require to trade profitably on a consistent basis.
  • Get a glimpse of how professional traders use a 400-year-old technique to make highly reliable and low-risk trades.
  • Reliable trading strategies that best suit your psychology, lifestyle and needs.
  • How your own Trading Psychology can give you a winning edge or a losing habit.
  • Master the Trading Psychology that can help you to ride out the market’s irrationality and manipulations.
  • Proper Financial Management habits that can help to increase and improve your winning edge.

PLUS!! Be amongst the first to be introduced to the LATEST PATTERN TRADER™ TUTORIAL EDITION 10 SYLLABUS

This is the most complete financial syllabus that you’re not going to find anywhere else because this is a very unique and exclusive program. It is not for those who are dreaming about becoming millionaires or attaining financial freedom because this is not a bullshit program. Past graduates have testified that this is more complete than most MBA programs. It is designed for those who wish to know everything about their finances and how economics can affect their money without attending a formal education.

The Tutorial gives the participant the knowledge and skills required to begin or accelerate their financial journey in the money markets online and offline. This is material you will never find in books or other workshops because those experiences only happen to the REAL MACROTRADERS who know how the market works, how the floor operates and how the institutions make it their killing field.

~~~~~~~~~~~~~~~~~~~~~~~~

PENANG – PTTPG06: August 30 to SEPTEMBER 04, 2017

This Bootcamp will be held over 6 sessions (50 hours) including the Platform Familiarization Workshop.

For Tutorial details, go here: PTTPG06 in Penang.

Write to: support@patterntrader.com to book your seat.

Thank you for all the incoming queries and thanks all those who made recommendations to their friends and families to attend the Tutorial.

Happy Hunting!!

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Comments Off on Weekly Market Update – 12 June 2017 BMO

Weekly Market Update – 12 June 2017 BMO

Just a quick reminder first:

17504530_10155114499883665_3822934093221632409_o

I will be hosting my very first independent Preview Session for the Pattern Trader Tutorial’s upcoming batch in August:

Date: Tuesday, 20 June 2017
Time: 07:00pm to 10:00pm (registration starts at 06:30PM)
Venue:
51 Cuppage Road,
Acc EduHub #03-03

Vibrant Room 3
Singapore 229469
(behind The Centrepoint & next to The Holiday Inn Hotel)

For Tutorial details, go here: PTT91 in Singapore

REMEMBER to book your free complimentary HERE: INTRODUCTORY SESSION TO MACROTRADING

Weekly Market Update – 12 June 2017 BMO

Screen Shot 2017-06-10 at 4.03.25 PM

The stock market successfully hurdled several key macro events, including the testimony of former FBI Director James Comey, the latest policy decision from the European Central Bank, and the UK general election, only to get tripped up by tech stocks on Friday. The major averages settled the week mixed with the Dow adding 0.3% while the S&P 500 and the Nasdaq lost 0.3% and 1.6%, respectively.

Following back-to-back losses for the S&P 500 on Monday (-0.1%) and Tuesday (-0.3%), financials led the benchmark index to its first win of the week in the midweek session (+0.2%), even in the face of a bearish inventory report from the Energy Information Administration. Crude oil plunged nearly 5.0% after the EIA showed a build in both crude and gasoline inventories for the week ended June 2.

However, prepared remarks from Mr. James Comey, which were released to the public ahead of Thursday’s testimony, were the focal point of Wednesday’s session. The initial response to the statement was positive as market participants were seemingly heartened by the understanding that there wasn’t any overt obstruction of justice claim against President Trump.

On Thursday, the Senate Intelligence Committee directly asked Mr. Comey if he thought Mr. Trump was trying to obstruct justice during their meeting on February 14 when he told Mr. Comey that he hoped the FBI could let go of the investigation of former National Security Adviser Michael Flynn. Mr. Comey responded that it wasn’t for him to say and he would let others make that determination.

Investors breathed a sigh of relief, not only in reaction to Mr. Comey’s testimony, but also in reaction to the ECB’s decision to leave interest rates unchanged, as expected. With two of the week’s three major events in the rearview mirror, the financial sector led the S&P 500 to its second victory of the week. However, gains were held in check as investors awaited the results of the UK general election.

Sure enough, the Brits threw the world for a loop, yet again, as Prime Minister Theresa May’s Conservative Party lost its parliamentary majority. The pound dropped noticeably following the results while European markets took the news in stride. Meanwhile, U.S. indices ended the week lower as high-flying, mega-cap names like Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), and Facebook (FB), and semiconductor stocks, like NVIDIA (NVDA), came under some notable profit-taking pressure.

The top-weighted technology sector, which houses five of the six aforementioned companies, plunged 2.7% on Friday. However, the financials and energy sectors, which have been underperforming all year, helped keep the tech group’s bearish influence in check, adding big gains of 1.9% and 2.5%, respectively, in what had the appearance of a sector rotation trade.

The major U.S. indices closed the week on a mixed note as a sector rotation trade pitted the top-weighted technology sector (-2.7%) against the financials (+1.9%) and energy (+2.5%) groups. The tech-heavy Nasdaq (-1.8%) finished solidly lower while the S&P 500 (-0.1%) settled just a tick below its unchanged mark. Meanwhile, the Dow and the Russell 2000 outperformed, adding 0.4% apiece. For the week, the S&P 500 declined 0.3%.

The fed funds futures market still points to the June FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 95.8%, unchanged from last week. The U.S. central bank will kick off its two-day meeting on Tuesday with the rate-hike decision crossing the wires on Wednesday afternoon at 14:00 ET.

(Excerpts from Briefing.com)

GDP, Dollar

Bonds yields: Treasury Yields recover from Post-Election Lows but flattens a little more on the shorter maturities.

Commodities: WTI Crude closes below previous week in spite of rally following rig count data. 

Agriculture: Grains recover.

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Wk24forJUNE THE WEEK AHEAD

Remember I said that June has historically been the most unpredictable month of the trading year? This coming week is typical of that phenomenon in that the statistics are all over the place when you sort them out in different timeframes. Nothing is reliable across the various averages.

Monday 12 June to Friday 16 June (Week 24)

The twenty-fourth week of 2017 (wk24) is mildly bullish for the DIA and the SPY over the last 5 years but the 10 and 15 year averages are unusable for any indication. 

The 2017 Stock Trader’s Almanac’s averages (based on 21 years) for week 24;

Screen Shot 2017-06-10 at 5.53.35 PM

Key Economic Dates

Mon 12 June

Tue 13 June

Wed 14 June

Thu 15 June

Fri 16 June

~~~~~~~~~~~~~~~~~~~~~~~

SUMMARY

More signs of market weakness as the major indices displayed very divergent action on Friday mainly because the “FAANG” stocks suffered a blood bath Friday. FAANG stocks are Facebook FB, -3.30%, Amazon AMZN, -3.16%, Apple AAPL, -3.88%Netflix NFLX, -4.73% and Google GOOG, -3.41% GOOGL, -3.40%. This is a significant signal as the FAANG group has consistently outperformed (thus a bubble) as large-cap U.S. technology stocks.

In the coming week, the most important event is the Fed Monetary Policy decision, with markets anticipating another hike in the Federal Funds Rate. The Bank of England and the Bank of Japan are expected to leave monetary policy on hold.

On the local front, the press is telling us what what I have been saying for months now: singapore-current-economy-4-charts-040033035.html. I don’t know how the Little Red Dot is going to avoid another quarter of contraction that would officially put it in recession.

Screen Shot 2017-06-10 at 6.00.23 PM Screen Shot 2017-06-10 at 6.00.43 PM

The numbers have been consistently been so poor that nothing short of a miracle or another round of creative accounting is going to avert the inevitable.

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Comments Off on Weekly Market Update – 05 June 2017 BMO

Weekly Market Update – 05 June 2017 BMO

Screen Shot 2017-06-04 at 11.56.09 PM

The stock market got off to a sluggish start this week as investors begrudgingly returned to their trading desks following the extended Memorial Day weekend. However, things picked up in the second half of the week as employment data for the month of May came into focus. The S&P 500 ended the week higher by 1.0%.

Equities ticked down on Tuesday and Wednesday, breaking the S&P 500’s seven-session winning streak, as the energy and financials sectors weighed on the broader market. Crude oil influenced the energy sector lower following reports of heightened production in Libya while cautious comments about second quarter results from major players negatively impacted the heavily-weighted financial group.

Things turned around on Thursday after the ADP National Employment Report for May soundly beat expectations. The S&P 500 hit some technical resistance at its then all-time high, but a bullish EIA inventory report and solid leadership from the financials, consumer discretionary, and health care sectors helped the benchmark index, and its peers, advance to new record highs.

The positive momentum carried into pre-market action on Friday, but a disappointing Employment Situation Report for May forced investors to hit pause. Specifically, nonfarm payrolls (138,000 actual vs 185,000 consensus), nonfarm private payrolls (147,000 actual vs 172,000 consensus), and average hourly earnings (0.2% actual vs 0.3% consensus) all missed expectations.

However, in the grand scheme of things, the jobs report wasn’t all that bad; nonfarm payrolls still increased, there was no wage deflation, and the unemployment rate fell to a 16-year low of 4.3%. At the risk of sounding like a broken record, it made for another ‘Goldilocks’ report, neither too hot nor too cold, highlighting modest economic growth without amplifying worries of inflation.

Investors took the report in stride, pushing the major averages to new record highs for the second day in a row. The technology sector led the charge, but the energy and financials spaces showed relative weakness, yet again. A flattening of the yield curve weighed on financials while energy moved lower with crude oil following President Trump’s decision to pull out of the Paris Climate Accord.

The fed funds futures market still points to the June FOMC meeting as the most likely time for the next rate-hike announcement with an implied probability of 95.8%, up from last week’s 83.1%.

Employment Situation Report for May

Dollar Slides on Disappointing Employment Report

(Excerpts from Briefing.com)

GDP, Dollar

Bonds yields: Treasury Yields Fall to Post-Election Lows to flatten the curve as longer maturities see a flight to safety.

Commodities; WTI Crude Oil closes lower again.

Agriculture: Grains slump

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Wk23forJUNETHE WEEK AHEAD

Monday 05 June to Friday 09 June (Week 23)

The twenty-third week of 2017 (wk22) is mildly bullish for the DIA while the SPY should be bearish.

The 2017 Stock Trader’s Almanac’s averages (based on 21 years) for week 23;

Screen Shot 2017-06-05 at 4.54.21 PM

Key Economic Dates

Mon 05 June

Tue 06 June

Wed 07 June

Thu 08 June

Fri 02 June

~~~~~~~~~~~~~~~~~~~~~~~

SUMMARY

June has always been an unpredictable month as testified by its erratic statistics. The flight-to-safety last week was indicative that the smart money was expecting some volatility ahead of the last month of Q2. With Australia’s and Japan’s GDP on the line this week along with UK’s elections and the ECB press conference later in the week, I am likely to be sidelined this week, also because the seasonal stats aren’t favourable for most of my regular securities.

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