Uncategorized
Bearish Triad: Stock Market Indexes and Market Breadth Test Important Support Level; VIX Above 20
I’ve been looking for the market to bottom for several weeks. But the trading environment has shifted to a new gear; a cautionary one. On the other hand,…
Share this:
I've been looking for the market to bottom for several weeks. But the trading environment has shifted to a new gear; a cautionary one. On the other hand, this sudden shift in sentiment may signal that a climactic selloff, often a prelude to a new uptrend, may be close at hand. Fingers crossed.
Markets correct in two ways: via falling prices or through time via lengthy and painful consolidations. The current market had been in a time correction until last week when the bearish interest environment and the rising hostilities in the Middle East pushed bullish and neutral traders over to the bearish side.
You can see this happening in the market's breadth (more on that below), and in the dearth of sectors that are in uptrends. An even more cautionary sign is the Cboe Volatility Index ($VIX) crossing above 20, a sign that bearish sentiment is rising to new levels.
As a result, it makes sense to focus on cash, build a shopping list, and look well off the beaten path for stocks in areas of the market that may still provide some upside even as interest rates choke off much of everything else.
Subscribers to Joe Duarte in the Money Options have been well positioned for this market via these five time-tested steps:
- Raising cash via positions that hit sell stops;
- Hedging of portfolios;
- Keeping position size small;
- Looking for relative strength in offbeat areas of the market and
- Build a shopping list for when conditions improve.
Energy Has the Momentum, For Now
The energy sector remains a bright light in an otherwise dimming market. This is especially evident in large-cap oil, oil exploration and production, and natural gas stocks.
The two representative ETFs that illustrate this point best are the iShares Oil & Gas Exploration & Production ETF (IEO) and the First Trust Natural Gas ETF (FCG).
Both price charts are intuitively bullish, given their current uptrends, their trading near their recent highs, and the bullish rise in both Accumulation/Distribution (ADI) and On Balance Volume (OBV). Moreover, seasonal tendencies, as winter approaches and the rapidly evolving developments in the Middle East support higher prices in crude oil. In addition, disruptions in the oil supply resulting from the Israel-Palestinian conflict could lead to more money moving into natural gas companies as the liquified natural gas (LNG) market heats up again.
On the other hand, if these strong sectors roll over, it would signal that a full-blown market correction is unfolding.
I recently posted two new energy stock trades at JoeDuarteintheMoneyOptions.com. Have a look with a Free Trial here.
Off The Radar Interesting Stuff
Sometimes, it pays to look well beyond the mainstream, especially during geopolitical stress. Global commerce isn't going anywhere despite the macro trend of relocating factories and supply chains to friendly neighbors (friend-shoring/near-shoring). That's because some universal commodities are grown in specific parts of the world and not others—think coffee, cocoa, and yes, oil and natural gas.
That brings the global shipping industry to the forefront. The mainstream view, which leaders in the shipping industry support, is that times are about to get worse for the sector. Many in the industry are forecasting a global recession as they moan about falling contract rates and rising costs.
Yet a look at the SonicShares Global Shipping ETF (BOAT) shows that investors have been putting money to work in the sector. Granted, it's a niche play and a small ETF with only $20 million in assets while trading in very low volumes. Moreover, it's important to note that the stocks in this ETF are not household words and that sellers may gain the upper hand if the market climate fully sours.
For example, the ETF's biggest holding is Japanese shipper Kawasaki Kisen Kaisha Ltd, which is not US traded. The only US-based company in its top holdings is Honolulu-based Matson Inc. (MATX), whose shares have had a decent run over the last few months and have recently entered a consolidation pattern.
Certainly, even as its stock has done well, MATX is not without risk as the company provides shipping and logistics along the Trans-Pacific sector and services to Hawaii, Alaska, and Guam. The most recent earnings report beat expectations but also sounded a cautionary note, focusing on the economic risks of an economic downturn in the U.S. and other potential problems involving the Chinese economy.
The flip side is that shipping costs will rise if a protracted war further disrupts the global supply chains and that companies like Matson will have pricing power.
My point in highlighting BOAT and Matson is not to recommend their shares but to illustrate the lengths investors may have to go to, especially the allowances to risk that may be required to uncover sectors and companies which may be worth considering in the current times.
Join the smart money at JoeDuarteintheMoneyOptions.com. You can look at my latest recommendations FREE with a two week trial subscription.
And for frequent updates on real estate and housing, click here.
Incidentally, if you're looking for the perfect price chart set up, check out my latest YD5 video, where I detail one of my favorite bullish setups. This video will prepare you for the next phase in the market.
Market Breadth and Broader Indexes Test Major Support as Oversold Levels Near; VIX Breaks Above 20
The NYSE Advance Decline line (NYAD) has struggled to climb above its 200-day moving average while remaining above its March and May bottoms. Unfortunately, looks as if we're heading for a test of the March lows as the May support level has given way. A break below the March and May bottoms, as highlighted by the trend lines on the chart, would be doubly bearish. On the other hand, any further weakness in NYAD would lead to an oversold reading in the RSI (circled area), which could be the final washout of this correction.
The Nasdaq 100 Index (NDX) broke below its 50-day moving average decisively and is testing the bottom of a major VBP support level (marked by the trend line). ADI and OBV both turned lower as selling pressure built. Again, as with SPX below, RSI is nearly oversold.
The S&P 500 (SPX) fell below its 200-day moving average and entered an important support level of 4150 and 4250 (highlighted by trend lines based on VBP bars). ADI and OBV turned lower, signaling rising selling pressure.
VIX Crosses Above 20, Signaling Rising Fear
The VIX has finally crossed above the important 20 level, which has kept the bears in check up to now. If this is not reversed, it will likely cause more trouble in the next few days to weeks.
When the VIX rises, stocks tend to fall as its rise signifies that traders are buying large volumes of put options. Rising put option volume from fearful traders leads market makers to sell stock index futures to hedge their put sales to the public. A fall in VIX is bullish as it means less put option buying, and it eventually leads to call buying, which causes market makers to hedge by buying stock index futures, raising the odds of higher stock prices.
To get the latest information on options trading, check out Options Trading for Dummies, now in its 4th Edition—Get Your Copy Now! Now also available in Audible audiobook format!
#1 New Release on Options Trading!
Good news! I've made my NYAD-Complexity - Chaos chart (featured on my YD5 videos) and a few other favorites public. You can find them here.
Joe Duarte
In The Money Options
Joe Duarte is a former money manager, an active trader, and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best-selling Trading Options for Dummies, rated a TOP Options Book for 2018 by Benzinga.com and now in its third edition, plus The Everything Investing in Your 20s and 30s Book and six other trading books.
The Everything Investing in Your 20s and 30s Book is available at Amazon and Barnes and Noble. It has also been recommended as a Washington Post Color of Money Book of the Month.
To receive Joe's exclusive stock, option and ETF recommendations, in your mailbox every week visit https://joeduarteinthemoneyoptions.com/secure/order_email.asp.
recession sp 500 nasdaq stocks real estate etfs etf testing recession interest rates commodities oil
Uncategorized
Thai crypto investors turn to tarot cards, divine signals to predict market
A Thai fortune teller once purpotedly predicted when the crypto market would recover last year, claiming they were told by the god of the dead.
…
Share this:
A Thai fortune teller once purpotedly predicted when the crypto market would recover last year, claiming they were told by the god of the dead.
Crypto and stock investors have always found interesting and sometimes bizarre ways to “predict” the market's ebbs and flows.
Some have suggested that our unconscious minds can predict the stock market through “precognitive dreaming,” while others have recently been turning to the advice of artificial intelligence chatbots.
However, in Thailand, there appears to be a growing group of investors turning to divine powers and astrology to predict market movements, including crypto — as recently highlighted in a r/cryptocurrency thread on Reddit.
One astrologist, who goes by “Pimfah,” has a 160,000-strong Facebook group where members ask for and send tarot card readings — some ask for help on what their readings mean for the crypto market.
Another self-proclaimed fortune teller, Ajarn Ton, has a YouTube channel with nearly 26,000 subscribers where he’s uploaded hundreds of videos attempting to predict the price of various cryptocurrencies using astrology.
Ton’s most recent focus is predicting that Terraform Labs’ collapsed crypto Terra Luna Classic (LUNC) will see a surge of nearly 50,000% — saying it could hit $0.029.
So far, however, it’s trading at less than $0.000055.
Occasionally, these predictions turn out to be somewhat accurate.
High-profile fortune teller, Mor Plai, made local headlines earlier this year for her August 2022 prediction of a crypto market recovery starting that November — which turned out to be somewhat accurate, ignoring the crypto retrench around FTX’s collapse.
“Color me skeptical”
Commenters on the Reddit post were largely doubtful about the so-called method of prediction.
“Put out enough vague predictions, and you gotta be right eventually,” one Redditor commented.
“If a hamster can perform better than most adults I don’t see why we shouldn’t try astrology,” another joked.
However, while spiritual beliefs would likely attract skeptics in the West, it is not considered out of the ordinary in Buddhist-majority Thailand.
A September Pew Research report said just over 80% of surveyed Thais believe in God, deities or spirits and nearly half believed spells, curses or other magic influenced people’s lives.
Related: Binance collaborates with Royal Thai Police to seize $277M from scammers
Even in parts of the Western world, self-described astrologers have also been using signals from the stars to divine price movements in crypto.
During the 2021 crypto bull market, the United States-born TikTok astrologer Maren Altman gained a following of millions for her astrology-backed Bitcoin price predictions.
Altman told Magazine in January she was “familiar with financial astrology, so it just made sense to apply it to cryptocurrency.”
Didi Taihuttu, a Dutch-born Bitcoiner and “Bitcoin family” patriarch — who sold all their assets in 2017 and lived off Bitcoin since — has a homebrew market indicator that considers moon cycles alongside directional trading data to flag buy and sell opportunities for Bitcoin.
I received many questions about the Bam Bam #bitcoin Indicator and why also moon cycles are part of it. It’s another confirmation that gives you help with deciding when to sell and buy. This research article is a good explanation. https://t.co/hQfhzeXSoG
— ₿ Didi Taihuttu ₿ ALLIN (@Diditaihuttu) July 13, 2023
One Redditor postulated that there could be an indirect relation between astrology and prices, as belief in it could cause traders to "act accordingly" — and thus cause a shift in prices in itself through a self-fulfilling prophecy.
As for what lies in store for Bitcoin in the near future, the pseudonymous crypto-focused astrologer “Crypto Damus” claimed in an Oct. 18 X (Twitter) post:
“Mars is lining up to make a favorable sextile to [Bitcoin] natal Mars over the next several days, (with Mercury cazimi),” which is assumedly positive as they claim it shows strength and will “pump the market.”
However, the “transit of Mars in Scorpio generally hasn’t been that good for BTC” they said — whatever that means.
Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in
cryptocurrency bitcoin crypto btc cryptoUncategorized
Dave Ramsey explains how budgeting is a ‘key to financial peace’
One important move can help people take control.
Share this:
Personal finance radio personality and author Dave Ramsey speaks frequently about some of the basics involved with handling money.
One of the first things he believes people who are getting serious about finances should do is create an emergency fund to cover unexpected expenses.
Related: Forget Bud Light, popular beer brand files for bankruptcy
The next step Ramsey advises is to get completely out of debt, except for a mortgage on a home if a person has one. A mortgage is different than other debt because it secured by the value of the home.
The debts to pay off first include cars, credit cards and student loans, Ramsey counsels. And he suggests paying them off one by one using what he calls the debt snowball method.
"Put them in order by balance from smallest to largest — regardless of interest rate," he wrote on his website, Ramsey Solutions. "Pay minimum payments on everything but the little one. Attack that one with a vengeance. Once it's gone, take that payment and put it toward the second-smallest debt, making minimum payments on the rest."
Once that is achieved, Ramsey advises investing 15% of a person's household income in retirement.
His next recommendations are saving for college funds and paying the home off early. Then, Ramsey says, a person is in a position to build wealth and to give.
TheStreet
The trick is to stay motivated
In order to work successfully through these steps, it is important, Ramsey says, to stay motivated and on budget.
"Sometimes the excitement of having fun right now or the short-term thrill of impulse spending can take our eyes off our priorities," he wrote. "And sometimes life gets so busy that we lose focus on how to stay on budget."
"As a result, our budgeting — a major key to financial peace — takes a back seat. It happens to everyone. So first, show yourself some grace," he added.
Ramsey believes that, while budgeting can be exhausting, it is worth it in the end.
"You can't take charge of your money without a budget," he wrote. "Why? Because when you budget, you tell every dollar what to do. Every. Single. Dollar. That’s taking control!"
"So maybe you don't wake up early when it's time to create a new budget because you just can't wait to get started," he added. "That's okay. You don't have to be jazzed about the process of budgeting as long as you’re pumped about what budgeting does for you, today and in the long run."
Ramsey offers some tips
Because staying motivated to keep on budget is difficult, Ramsey put together a few suggestions on his website.
One of those tips is the mental exercise of making goals visual.
"Hang up images around the house that represent your financial goals," Ramsey wrote. "Paying off that car? Put a picture of it on your fridge to remember why you're cooking at home instead of ordering that pizza. You're adjusting your budget and living by it so you can make big things happen. So, make sure you're reminding yourself of those big things. Every. Day."
Ramsey also encourages people to celebrate wins, both big and small.
"If you're motivated by rewards, don't feel bad," he wrote. "First of all, that's natural. Second, use that to keep up your money motivation. When you reach a goal — even a small one — celebrate! After you budget three months straight, pay off a debt, or cut extra spending for 30 days, treat yourself to a budget-friendly reward."
The bestselling author also has a few words to say about use of social media.
"Let's be honest, your budget is more important than your Instagram feed," Ramsey wrote. "Yes, we said it! It's way more important to track expenses and stay on top of your spending than it is to see what a near-stranger is having for dinner. Of course, it's okay to jump on social media, but make sure it's not getting more of your attention than your money goals."
Ramsey adds a banking tip as well to help people with staying true to a budget.
"Wherever possible, put your goals on autopilot," he wrote. "Set up automatic bank drafts that send money directly to your retirement accounts, mortgage company or lenders."
"If you never see the money in the first place, you're less likely to miss it — and more likely to be pleasantly surprised by your progress along the way," Ramsey added.
Get exclusive access to portfolio managers and their proven investing strategies with Real Money Pro. Get started now.
bankruptcyUncategorized
Should We Use Weakness To Accumulate NVDA Before Its Next Launch?
Over the past six trading days, NVDA has fallen from a high of 476.09 to Friday’s low of 410.78. That’s a drop of 65.31, or nearly 14%, in just over one…
Share this:
Over the past six trading days, NVDA has fallen from a high of 476.09 to Friday's low of 410.78. That's a drop of 65.31, or nearly 14%, in just over one week. Would it make sense to take advantage of this selling? Well, like any other stock, NVDA is subject to overall market headwinds or tailwinds. Currently, there are plenty of headwinds and there are also reasons to believe these headwinds will persist in the very near-term. I discussed the current environment in an article I published earlier today, "Odds Favor Further Selling This Week (Maybe a LOT of it)". Be sure to check it out. Part of trading and/or investing success boils down to preparation. For those interested in NVDA, check out its 20-year seasonality chart from 2003 to 2022:
Do you notice that the probability of monthly gains spikes in the second month of each calendar quarter - February, May, August, and November? Those are the four most likely calendar months that we'll see gains in NVDA. And how about those average monthly returns? To summarize, here's how the average returns break down by calendar quarter months:
- 1st month of calendar quarter (Jan, Apr, Jul, Oct): +2.5%
- 2nd month of calendar quarter (Feb, May, Aug, Nov): +30.1%
- 3rd month of calendar quarter (Mar, Jun, Sep, Dec): +5.5%
NVDA has been a tremendous performer, actually one of the best-performing stocks of this century. But did you know that the second calendar month of each calendar quarter is responsible for most of those gains? There's one reason for this bullish timing on NVDA - earnings! NVDA typically reports earnings in February, May, August, and November. And earnings drive prices. There's a TON of NVDA accumulation (by big Wall Street firms) heading into earnings each quarter. That's why we see those crazy returns when we compare the 1st, 2nd, and 3rd months of calendar quarters. Knowing this type of information can be a real game changer for traders, wouldn't you agree? Don't you feel like your odds of winning trades on NVDA just improved?
I'm a stock market history buff. If you want to learn more about the stock market and how it operates, you MUST understand history and historical tendencies. It's what I discuss in my FREE pdf report, "Money Flows". Use THIS LINK to download your copy NOW - and for FREE!
Happy trading!
Tom
stocks link
