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Market Commentary

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A Little Of This, Some Of That, And Enough Is Enough

There was a time when three TV channels, a handful of metropolitan newspapers, and local radio stations told us what we needed to know. True, you could buy a book or a magazine for in-depth information, but, generally, our sources were limited compared with today, which then forces the question: do we have too much information?

  • Almond milk sales are soaring, but is it good for you?

Here we go again. Eggs, coffee, and wine are three food sources that have gone through this ringer – good or bad...

May 27, 2015
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Can Apple (AAPL) Lead This Market Higher?

Since its high in March, Apple has been moving in a sideways consolidation with highs at 133.50 – 134.54 and lows at 121.63 – 122.50.  Over the same period of time the Nasdaq 100 has been stronger, showing an upward sloping channel.  This relationship could easily change based on Apple’s resolution of its current consolidation range.

The volume-at-price histogram in AAPL reveals the current high volume area at 124.70 – 129.20.  If the current test to 129.20 is met with buyer interest such th...

May 27, 2015
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Dow Transports Flash Death Cross Warning Signal

Dow Theorists— we have a problem. 

It appears to be the beginning of a larger move on the larger timeframe versus the ending move on a smaller timeframe in the iShares Dow Jones Transports ETF  

A Little Background

The trouble started back in March 2015 where we started to produce lower highs after making a triple top in the $165 area.  This was the first warning sign.  The last attempt at breakout resulted in a selloff down to the 200 day moving average which produced a picture perfect bounc...

May 27, 2015
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The Target Has Been Set: Nasdaq Gap Test

I have been wondering when the big gap test would finally start… and Tuesday was the day.

In yesterday’s review and forecast I indicated that key initial support was at 4485-4491. On Tuesday morning we quickly took that level out and then ended the day with a perky bounce that is likely to retest that level from below. So, at this time, what was recently key support is now important resistance, as marked on the chart with a red dashed line.  

Reid_5-27-2015_NQ.png

The ultimate target, however, is the large gap zo...

May 27, 2015
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Are Stock Traders Packing It In For The Summer?

In Tuesday's article we warned that a short-term retracement was likely. In Tuesday's trading, we got it.

The S&P 500 mini futures not only broke below the 20-day moving average, it dropped even lower to the 40-day exponential moving average , and was heading lower still until the customary 3:00 pm rally into the close left it with a modest bounce. The market looked naked, clinging desperately to the faded hopes inspired by last week's rally.

It was crying time for the bulls. The market star...

May 27, 2015
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Featured Stories

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Don't Get Burned: Watch Yield Curve For Fed Clues

Interesting quote from Lawrence Lindsey at last week’s Peterson Foundation Fiscal Summit: “We’re at the point of absurdity. Maybe it made sense [ZIRP] when you had a crisis. It does not make sense now. At some point what is going to happen – and this gets to my eight or nine cataclysmic number [on a scale of 1 to 10] – is that we’re going to get a series of bad numbers – a little higher inflation, higher average hourly earnings or whatever – and the market is suddenly going to say, “Oh my God...

May 27, 2015
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Chart Warns S&P 500 Could Be Near Short-Term Top

The S&P 500 had a pretty interesting week in the run-up to the Memorial Day holiday. It made a new all-time high at 2134.72, and it closed Friday at 2126.06, the first time it has managed to close above the high set in April. That’s the good news.

The bad news is that the range for the week was extremely narrow — roughly 14 points, which is hardly a decent range for a single day — the momentum was very weak, and the volume was very low, as it has been for most of this month.

We got up there,...

May 26, 2015
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US Labor Market Coming To A Boil

Despite a recent host of weak and weaker than expected economic data the employment picture remains robust. Aside from one month of poor non-farm payrolls data the sector remains strong with positive expectations into the future. One proof of that is the rebound in NFP we saw for April. The number jumped back above 200,000 and into the range commonly agreed to represent health, if not strength, in job creation. Further evidence can be found in the Kansas City Federal Reserve's Index of Labo...

May 21, 2015
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Wheat Reality

Last Thursday’s weekly export sales report for wheat showed 115 thousand metric tons. That was old crop numbers with new crop numbers coming in at 142 thousand.  Clearly demand is not a driving force and for months hasn’t been in wheat.  Demand looks to remain weak until the new crop in the field shows its strength.  The Monday’s crop condition report showed 45% of the crop in good to excellent condition. We need over 60% good to excellent condition to make us a primary port of origin for hig...

May 20, 2015
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5000 Years of Data

Systematic futures traders are invariably plagued by the small set of available daily data upon which to develop and test strategies. The last data revolution was the introduction of 24 hour electronic contracts starting in 2000.  Only a few symbols go back that far and many of them start much later.   Although some futures have a longer history, it is not helpful to back-test prior to 2000 because markets changed radically with the introduction of electronic futures. Consequently systematic ...

May 13, 2015
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