Make America Great Again. Buy American Hire American. It was bullish, but that was the pre election play and post election move.
The post election move up is now a VERY crowded trade and you can see it surfacing in the charts. The DJIA continues to be the outlier for how extended the market is present day. It’s too bad that everyone had to throw away their #dow20k articles that they have had written for over a month now.
My view is the same. Down we go from here. Everyone has been PM-ing me getting all happy about how I have been wrong. You are right, I have been wrong, by 1.1%.
Am I going to turn bullish now? Hell no. The SPX has gone NO WHERE for the last month and a half. This is making my down case even more of a probability than before. Let’s dive in.
DJIA – Dow Jones
Just down. I like to think of it this way. I believe that if the train leaves without me here (which I HIGHLY doubt it does) then I will be able to buy the DJIA at this SAME price sometime in the very near future if I want. The DJIA is not going to blow through 20K and hit 25K. It may touch the measured move of 20,500 and then the 500 points down would be right in the same spot I was in a couple weeks ago. The market is overbought and there are plenty of signs under the surface.
SPX – S&P 500
The SPX just put in an inside week. I expect this to break lower next week with the Yen trade over. If this drops below 2240 then 2200 comes real quick. I will bet ANYONE on here .05 Bitcoins 🙂 that we see 2240 before 2300. I turned bearish on December 8th and the SPX has practically gone nowhere since. I still am in the down camp.
IWM – Small Caps
What led the rally up…will be leading the rally down. As Everyone is still so damn bullish, the small caps are down in 2017. I don’t get it. Sentiment is amazing. IWM will be leading us down I have a feeling. I believe that 128 is a given here and if that doesn’t hold then 120-124.
QQQ – Technology
The rotation into this was quick and feisty. Touché to anyone who bought AMZN and FB and TSLA and whatever else in the QQQ’s. I am currently short the Nasdaq as well with an average price of 5074 here. I opened this short much later than me turning bearish (December 8th) because I believe the Nasdaq is out of control here as well. Technical reasons is its hitting the top of the BB on the Weekly basis and the RSI is clearly starting to lose momentum. Until the SPX isn’t pinned anymore this may continue to rise but it will definitely be over smaller increments in my opinion. 118 Can be seen in a couple weeks IMO, This rising bearish weekly wedge looks fugly on the highs.
USDMXN – Peso
This. I think I am the only one posting about the Peso going to get stronger. This is a weekly chart of the peso below. Look at this rising upper trend line it has been hugging since 2014. It has touched this, plus the upper end of the BB’s. I see the peso getting stronger here. I was in some and then got scared out because of the inauguration (You never know how high these can go), but now I am looking to buy peso’s here against the highs. My target would be the election unwind back towards 19. Under 20 can come fast.
USDJPY – Yen
This is what led the SPX up. If you look at the charts overtime SPX appears to be in trouble they ramp the USDJPY to prop up and pin the market. EVERY SINGLE TIME. So when this finally rolls over, which I believe it has obviously started, look out below in stocks. I see the USDJPY testing 110-111 and that is almost a given here.
IBB – Biotech
This is an important spot. Right on the moving average line that has been saved week after week. You can see this weekly diamond that has been built, which ever way it breaks is the way I would be playing this. Above 275 you are long, and below 265 you are short.
My Favorite chart here. The failed weekly breakdown and rising up from the grave. I think that 1.08 is a given and since I believe the dollar is coming down (fast) my target for the Euro in 2017 is 1.12-1.15, or higher.
DXY – Dollar
Buy Euros, SELL DOLLARS. The euro and emerging markets are saying the dollar is wrong, very wrong in a big way. Emerging markets are beginning to boom, the pound and euro are ripping, and the world reserve currency is killing the rest of the world. Not Anymore. I am expecting this next 100 test to fail and a test of 97 is in the cards in the coming weeks.
See you next week.