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Is The Market Going Back To Normal?

Is The Market Going Back To Normal?

For the first time in some time, I feel the market is behaving normally. I am not sure why I feel this way, but somehow the market action today feels right. I suspect it is the VIX going down, along with the Dow (incrementally), while the Russell 2000 is going up. That just feels right, as if it is the way to go now after all of the recent volatility. The US dollar going up and remaining on...

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Remove Uncertainty and the Fear Goes Away

Remove Uncertainty and the Fear Goes Away

If there is one thing markets hate it is uncertainty.  Yet, we find ourselves constantly in a vacuum of the unknown, and with the news flow being so quick these days (Internet and 24-hour news outlets), well there is just no time to take a breath.  So far in 2015, we’ve seen a big rise in volatility across the VIX term structure (see chart below) as the market is pricing in more...

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Don’t Be Fooled By This Strength In GOOG

Don’t Be Fooled By This Strength In GOOG

With Google's (GOOGL's) earnings release date just around the corner (January 29th), I thought I'd take a close look at the daily and weekly charts in hopes of offering a useful technical interpretation of the price action on both the intermediate and short-term time frames.  The daily chart below sports a bullish BAT harmonic pattern that confirmed on two separate occasions by dropping...

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S&P Futures Market Review: Knocking on the Ceiling

S&P Futures Market Review: Knocking on the Ceiling

On Thursday, the S&P 500 futures followed through on the anticipated move up to the 2051-2061 zone.  The key level now is 2061. That level is determined by the small green peak on the volume profile seen on the left side of the chart below. The 2061 level has been in place for several months. It’s an area where we can expect selling to occur. This profile encompasses more than a year of...

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Get Your Money Into Europe

Get Your Money Into Europe

Okay, so the market volatility continues, in a big way. Perhaps it is the ECB actions that are driving the market. Actually, the ECB is driving the market. This is big news out of Europe. The expectation is that the QE there will do for Europe what it did for the US. As we all know by now, the central bank announced a Quantitative Easing program to the tune of €60b per month, beating the...

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The Canadian Dollar, A Bearish Play

The Canadian Dollar, A Bearish Play

Another week of currencies at play … Last week, it was the Swiss National Bank giving the markets a kick. This week, rumors about ECB action and Super Mario’s words have everyone’s attention. Thursday morning, the ECB gave us two pieces of information. They will leave the interest rate unchanged, and they will begin a QE (quantitative easing) program similar to what just finished up in the...

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S&P Futures Market Review

S&P Futures Market Review

The S&P 500 futures survived a very important test over the last few days at the 1984 level, as you can see on the year-long Volume Profile on the left side of the chart below. This support level has been in place for many months. On Tuesday, the index broke up through a down-trend line stretching back to 1/9. That was a bullish development. On Wednesday it tested that trend line from...

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Time To Buy The Dip In Morgan Stanley?

Time To Buy The Dip In Morgan Stanley?

On January 20th, Morgan Stanley (MS) reported lighter than expected Q4 EPS and revenue, initially sending shares down 3% that morning. The company has actively been buying back shares (repurchased 8M shares in Q4 for $271M) and following an 11% dip in just three weeks, this could be another opportunity for management to put their plan to good use. MS currently trades at a P/E ratio of 10.56x...

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Will Europe Make It Back in 2015?

Will Europe Make It Back in 2015?

The talk among many analysts now is about what will happen to Europe in 2015. Given the recent decline in economic data from some of the bigger players in Europe (save for Germany with record low unemployment), and Greece’s inability to conform to the needed cuts, thus the talk of Greece leaving the Eurozone, one might think 2015 for Europe will not be a good one. Think again. Mario Draghi...

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The Oil War Is Not Over, Nor The Volatility

The Oil War Is Not Over, Nor The Volatility

Is the “Oil War” coming to an end? This is a question the talking heads are starting to throw around. U.S. drillers have taken a record number of oil rigs out of service in the past six weeks as OPEC’s sustained production sent prices below $50 a barrel. As I have written recently, US oil production is curtailing especially among the smaller independents, but this does not mean that enough...

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Get Long Dec Corn For Potential Rally

Get Long Dec Corn For Potential Rally

Weekly export sales for corn came in at 818 thousand metric tons versus 387 thousand last week and down 10% on the four week average.  There were two surprises on the report.  One, Japan was absent from the import list.  That is important as they are the largest importer of US corn on a weekly basis.  Due to their shipping proximity and US corn’s current value, we will look for this...

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Swiss Rocket Fuel Blasts Gold Higher

Swiss Rocket Fuel Blasts Gold Higher

Last fall, our reading of the Gold futures chart led us to believe we would see a final decline below $1100 an ounce to establish the bottom that would support a new rally. To be clear, we were – and are – bullish on gold at these levels. But we expected a bit more down before we started to move up. That is still a possibility, but it is starting to look more remote, thanks to a sudden blast...

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Time To Start Looking Long

Time To Start Looking Long

Since December 23rd, the Sentiment Timing Index has been telling us to expect weakness from late December into January 16th— with outsider turns coming soon. Yes, it is great picking the exact dates when the markets will turn and for the most part, the SPX (S&P 500 index) has reversed right on the expected turn dates. Making money is not about knowing the exact date of the turn; rather,...

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Time To Look At Netflix Again

Time To Look At Netflix Again

Netflix, Inc. (NFLX) is scheduled to release its fourth quarter earnings report today following the close of the market session.  Consensus analyst estimates are forecasting earnings per share of $0.45 on overall revenues of $1.48 billion.  The same quarter one year prior (Q4 2013) saw EPS of $0.66 on $1.18 billion in revenue.  NFLX shares are off by a modest 0.8% in 2015, but the stock has...

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Buy When the Crowd is Scared

Buy When the Crowd is Scared

The increased volatility and wide price swings in equities since the beginning of December reflect high emotion and a state of confusion in the crowd. Often the best time to buy is when you're most afraid. Technical conditions indicate this is probably one of those times. To start, the S&P 500 chart shows two consecutive lower shadows confirming demand at the weekly mean (20-week simply...

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