Thursday, May 8, 2014

The NASDAQ Is Falling, And A Bunch Of Big Names Are Getting Crushed, Russell Broke Below Its 200MA Line, Upside Breakout In The Japanese Yen Starting ?!




The NASDAQ Is Falling, And A Bunch Of Big Names Are Getting Crushed
 
It’s already down over 1% in the early going. This comes on top of yesterday’s big losses.
 
In addition to the index losses, there are some big notable drops.
AOL is down 18% after beating on revenue but missing on earnings.
Twitter is down 3.5%. That stock got clobbered yesterday on the lockup expiration, and obviously the selling isn’t over yet.
Yahoo is down 5.6%. This is ominous since the world just got a look yesterday at the Alibaba S-1, which Yahoo owns a big part of.
King, the maker of Candy Crush, is down nearly 10% after earnings this morning..
Whole Foods is down 21.5% after the company warned on weak same-store sales numbers, which was the result of bigger competition.
Momentum stocks whacked again as Nasdaq declines
Russell Plunges To 3 Month Lows
Productivity Slows At Fastest Pace In A Year As Labor Costs Soar
Non-Farm productivity fell most in a year at 1.7% in Q1 - notably worse than the 1.2% drop that was expected. Output growth slowed dramatically and real compensation also fell.
Upside Breakout in the Japanese Yen starting???
 
CLICK ON CHART TO ENLARGE
This multi-year chart of the Japanese Yen (upper left) reflects that rising channel is in place looks to be in place with support tested of late. Over the past couple of years a bullish falling wedge could well have formed.
Is a breakout above the wedge taking place while traders own positions where rallies often take place in the Yen???
If the Power of the Pattern read is correct on the Yen, it could have an impact on portfolio construction and risk assets!
This only took place in 1999 & 2007…Now its happening again!
 
CLICK ON CHART TO ENLARGE
Only twice in 35-years has the NYSE Index been at all-time highs, when the Russell 2000 broke below its 200MA line. Those two times were in 1999 & 2007.
The above chart reflects where the S&P 500 was, when this took place.
Now its taking place for the third time in three decades. Will the “Third Time be a charm” per being different this time?
Stay tuned!!!
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Is the Bull Trend in Transports about to derail?
 
CLICK ON CHART TO ENLARGE
The DJ Transportation Index is doing very well, as it is at/near all time highs. With two thirds of the economy fueled by the consumer, how these stocks perform can be viewed as a barometer of how the economy is doing.
Rail Traffic looks to be in good shape at this time, see below…
CLICK ON CHART TO ENLARGE
The Strategy I use is called TB&M, which stand for “Tops, Bottoms & No Middles.” I attempt to find key highs and lows, where reversals or exhaustion of trends might take place.
Without a doubt, the trend in the Transports is up right now, no matter which way you look at it. The confluence of trend lines and the Fibonacci extension has the “potential” to disrupt the trend in the Transportation index.
With the trend up, odds favor a breakout! Should these resistance points at (1) change the trend, we might pay attention to the potential message coming from Transports about  the direction of the economy.
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Time to Worry About Stock Market Bubbles
Relative to long-term corporate earnings – and more in a minute on why that measure is important – stocks have been more expensive only three times over the past century than they are today, according to data from Robert Shiller, a Nobel laureate in economics. Those other three periods are not exactly reassuring, either: the 1920s, the late 1990s and in the prelude to the 2007 financial crisis.

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