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>>> Xenon Pharmaceuticals Inc. (XENE), a clinical-stage biopharmaceutical company, engages in developing therapeutics to treat patients with neurological disorders in Canada. Its clinical development pipeline includes XEN496, A Kv7 potassium channel opener that is Phase III clinical trials for the treatment of KCNQ2 developmental and epilepsy encephalopathy; and XEN1101, A Kv7 potassium channel opener, which is in Phase II clinical trial for the treatment of epilepsy and other neurological disorders. The company's product candidates also comprise NBI-921352, a selective Nav1.6 sodium channel inhibitor that is in Phase II clinical trials for the treatment of SCN8A developmental and epileptic encephalopathy, and other potential indications, including adult focal epilepsy; and XEN007, A central nervous system-acting calcium channel modulator, which is in Phase II clinical trials.
It has a license and collaboration agreement with the Neurocrine Biosciences, Inc. to develop treatments for epilepsy; and with Flexion Therapeutics, Inc. to develop PCRX301 (XEN402, a Nav1.7 inhibitor) for the treatment of post-operative pain. Xenon Pharmaceuticals Inc. was incorporated in 1996 and is headquartered in Burnaby, Canada.
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>>> War inflation is slowing. Here’s the S&P 500 level where a Bank of America strategist says investors should ‘gorge’ on stocks.
Market Watch
July 15, 2022
By Steve Goldstein
https://www.marketwatch.com/story/war-inflation-is-slowing-heres-the-s-p-500-level-where-a-bank-of-america-strategist-says-investors-should-gorge-on-stocks-11657884920?siteid=bigcharts&dist=bigcharts
Are we past the worst financial side effects of Russia’s invasion of Ukraine?
Michael Hartnett, chief investment strategist at Bank of America, created a war inflation chart. It’s a simple index of Brent crude oil BRN00, 2.54%, European natural gas and wheat W00, -2.61% prices — the three commodities mostly clearly tied to the direction of the conflict.
Wheat prices have dropped 44%, Brent oil has dropped 24% and European gas has dropped 21% from their peak. Hartnett says it doesn’t make sense for Russia to close the Nord Stream 1 gas pipeline indefinitely. That pipeline is shut until July 21 for scheduled maintenance.
Hartnett, who’s been pessimistic on stocks, said there are risks to the consensus view of both a shallow recession, and that shallow recession will kill inflation, allowing a pivot by the Fed to refocus on growth. He says in real terms — that is, adjusted for inflation — policy rates are still deeply negative, at -6.7% in the U.S., -8.8% for the eurozone, -6.1% in the U.K. and -2.5% in Japan.
A spiking dollar DXY, -0.54%, he adds, often portends credit events, as it did in 1998, 2008 and 2020. The dollar reached new 20-year highs this year as the greenback rallied against the euro and the Japanese yen.
All that said, he gave levels where investors want to buy stocks. A S&P 500 SPX, 1.69% at 3,600 would be grounds to “nibble,” at 3,300 would be room to “bite,” and at 3,000, it would be time to “gorge.”
The S&P 500 index ended Thursday at 3,790.
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Yep, they look very close. I really think BABYF and RIBT could buck the market falling with the right business improvement. I repeat, in the big bear market from March 2000 unitl October 2002. BYI, Bally Technologies rose 108 fold in the exact same 30 months that the S&P 500 lost 50% of it's value and the internet laden NASDAQ down 66%, Bally has long since been bought out, but I still see their slot machines bring made that exploded in 2000 with Indain and other casino's opening up around the world in mass.
A good stock today in a bad market could get a lot of support from all the groups of Twitter traders looking for a good stock?
No sense in piling in the cash until news comes out though, in both cases.
The RIBT and BABYF charts are now looking pretty similar, and not the type of chart that gives a reliable signal either way. Both very ambiguous at the moment.
With the broader market, I figure it will likely be weak in the the lead up to the next Fed meeting (July 26, 27), and come down to test the June lows (3637 on the S+P 500). Could break below that to test 3600 or even lower, but then a relief rally after the Fed meeting. Under 3600 there is a support level from the 50% Fibonacci area (~ 3562), and then 3500.
https://investorshub.advfn.com/Market-Timing-41300
Fwiw, I've been buying 1 share of SPY or VOO every trading day for a week or so, with plans to continue at 1 share/day through the rest of the year. So that's the current 're-entry' strategy. If things really tank then will probably increase the amount/day, but will try to keep it disciplined, with the purchases spread out over time.
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The news is minimal, IMO. Russia to ban rice exports and teaming up with India and all their rice. Having trouble finding the article, but lots of talk at TW.
Big move for RIBT, but I don't see any news. Any idea what's going on? Crazy stock..
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Another test of the 200 MA for RIBT. Assuming the Redditt players are the primary movers right now, and they are going by standard TA signals, the 200 MA needs to hold or next support looks like the low .40s area (April, May lows). Holding the 200 MA doesn't look too promising at the moment, but will see what happens.
BABYF still floundering. What a turkey, but I guess this is how things roll in the microcap realm.
Silver is looking very weak. I figure it could fall back into the teens in the months ahead.
Bonds rallying, with 2 and 3 year Treasury yields back under 3%.after being up in the 3.5% range a few weeks ago.
SURG still sideways on low volume, and no sign of index fund buying.
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RIBT went through the 100 and slightly through the 200 and closes near the 100.
It lost 35% of it's value in 5 days with NO news. But I have never owned a stock with reddit traders all over it at Twitter. Reddit traders are not investors, they like swings and Virtu, market maker holding RIBT shares, accuse of wrong doing with GME, I look for big things yet, but not this close to the 4th. Next week will be maekr slow. RIBT has a SH meeting the 14th, news ahead of it?
https://www.ft.com/content/b1798a5f-2529-4d6f-a11b-08a5aa99fe63
PJ Matlock, posting at RIBT Twitter and tweeting no other stocks since early May, and he has slowed down the last week, let it fall and buy after selling near the last top?
https://player.fm/series/penny-lane-podcast/the-ceo-of-fintwit-pj-matlock
https://gothammag.com/pj-matlock-on-atlas-trading-the-largest-stock-trading-chat-room
RIBT, connext the February bottom and May bottom exrended , it is right on the channel line today. Connect the 2022 tops excleding the .70 March spke and you have aparrell linbe tio the bottoms. My hopes is this is the bottom today.
https://stockcharts.com/h-sc/ui?s=RIBT&p=D&yr=0&mn=7&dy=0&id=p06333596127
Looks like a test of the 200 MA soon for RIBT. But at least that's better than BABYF, which is down 90% from the 2020 peak, and still hasn't found a bottom.
But none of this will matter if the recent solar mass ejection hits the Earth (article below). EMP / Electromagnetic Pulse is an interesting topic -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=163973623
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=166484910
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=167687488
>>> A huge solar eruption could be hurtling towards the Earth
June 28th, 2022
By Joshua Hawkins
https://bgr.com/science/a-huge-solar-eruption-could-be-hurtling-towards-the-earth/
For the past few weeks, astronomers have been watching Sunspot AR3038. The sunspot was facing Earth and astronomers expected it to die off. However, it instead grew to three times its size. As a result of that growth, the sunspot has created a coronal mass ejection (CME). Unfortunately, astronomers aren’t sure whether this solar eruption is heading to Earth or somewhere else.
A huge solar eruption may be heading to Earth
The European Space Agency (ESA) spotted the CME on Sunday, June 26 using its Computer Aided CME Tracking (CACTus) system. The tool works autonomously using an algorithm that searches data from the Large Angle and Spectrometric Coronagraph Experiment (LASCO). From there, astronomers can confirm the data picked up by CACTus using other tools, like NASA’s Solar Dynamics Observatory (SDO).
This provided us with proper images of the sunspot that erupted over the weekend. Unfortunately, though, a power shutdown at Stanford University, where the SDO’s instruments store their data, has made it impossible for astronomers to verify whether the solar eruption is heading towards Earth or not.
What we do know is that the sunspot was pointed at Earth at one point. However, because we cannot look at the data from the SDO, it’s impossible to say whether it had moved or not before the solar eruption took place. If it didn’t, then that means all of the energy that the CME ejected could be heading towards Earth.
Should we be worried?
The short answer here is maybe. It really all depends on whether or not the solar eruption is heading towards Earth or somewhere else. Unlike solar flares, which are weaker outbursts of energy, CMEs are massive and can lead to geomagnetic storms. That’s because the energy and material from the CME collide with our planet’s own magnetic field.
As a result, if the eruption is hurtling towards us, it could cause massive outages. A powerful geomagnetic storm caused by a CME has the potential to knock out entire power grids. It can also interfere with important radio communications for days and can cause issues with navigational systems. Luckily, super-powerful storms like that are rare.
With the SDO offline, it’s hard to say whether the solar eruption is heading towards Earth. But scientists are looking at other instruments to see if they can garner any clues as to which direction it is heading. If it was pointed towards Earth at the time of the eruption, astronomers expect the CME to hit sometime on June 29.
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Silver looks poised to test the 20 level, and then it wouldn't be surprising to see a return to the teens (15-20 range), based on the chart anyway. One crappy looking chart.
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RIBT has used the 34 day MA many times for support, but the last cande tail10 days ago went a bit lower. I cand draw a couple of lower channel lines ignoring the May .402 and it also sits on them too, Hope it holds. With the reddit boys in the stock, they like volatility to make many trades.
https://stockcharts.com/h-sc/ui?s=RIBT&p=D&yr=0&mn=7&dy=0&id=p18712776970
>>> Axsome Therapeutics Stock Soars on Proposed FDA Labeling for Depression Drug
Barron's
By Angela Palumbo
June 27, 2022
https://www.barrons.com/articles/axsome-stock-fda-labeling-depression-drug-51656340089?siteid=yhoof2
Axsome is reviewing the proposed labeling from the FDA.
Shares of Axsome Therapeutics AXSM +39.44% were soaring Monday after the biopharmaceutical company announced some good news in an attempt to gain Food and Drug Administration approval of AXS-05, its drug for major depressive disorder.
In a filing with the Securities and Exchange Commission, Axsome (ticker: AXSM) announced that it had received proposed labeling from the FDA last Friday related to its new drug application for AXS-05.
Shares of Axsome were 36% higher on Monday to $33.69. The stock was on pace for its third best one-day percentage gain on record and its best one-day performance since December 2019, according to Dow Jones Market Data.
Back in August 2021, the FDA had informed Axsome that its review of the new drug application for AXS-05 would not be completed by the Prescription Drug User Fee Act target action date of August 22, 2021.
Shares for the biopharmaceutical company have fallen 11.8% in 2022 and have dropped 54% in the past 12 months.
Axsome said that it was reviewing the proposed labeling and will reply to the FDA to secure a final labeling agreement.
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Looks like RIBT is testing the 50 MA, so will be interesting to see what happens next. There has been a considerable amount of momentum built up over the last 6 months, but looks like the volume has been trailing off after peaking in May. You said they need to trade over 1.00 for a week or so by Sept to avoid delisting, reverse spilt, etc, so could be various factors at work driving the stock's movements.
BABYF has been a dog, but at some point there should be a dead cat bounce. A lot of 'oy veys' lately from followers of this stock lol..
SURG - no signs of buying from the index funds, but I wonder if they bought in earlier, during that May 23 high volume day (?)
AXSM - a biotech I've followed loosely for several years (see next post). No position, but should be interesting. They have a new drug for depression up for approval, but the FDA has been stonewalling for some reason. I figure the FDA is using the current lack of effective depression treatments as a key rationale for getting the various 'psych-meds', ketamine derivatives, Psilocybins, etc legalized and on the market under the guise of medical treatments. Hence the FDA is stonewalling on other more traditional depression med programs.
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Not enough fear yet for the bear to end.
Fwiw, it's probably too early, but I decided to sell the rally and take profits. A 3.7% gain over two weeks isn't too shabby, all things considered. The rally might have more to go, but in a bear market the general rule is to sell the rallies.
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>> Ease in <<
Fwiw, the only stock allocation I have right now is a small position in the S+P 500 (SPY). A few weeks ago I decided to start easing back in with 1 share of SPY per day, and am now up to 8 shares, so around $3000. The idea was to keep buying 1 share/day for the rest of the year, and gradually re-build the stock side.
But the temptation will be to take profits during the periodic rallies, so will see what happens. It's now $125 in the green, which isn't much, but it's no fun watching profits evaporate, so will probably sell when this current rally starts to fizzle.
The obvious near term target for the S+P 500 is the 50 MA (4065), so another 4% rise from here. But I'll probably take profits around 4000 if it gets there. I figure the S+P 500 will eventually get down into the 3600-3000 range over the next year, and then the 'averaging back in' strategy can be done more earnestly, and hopefully as a buy/hold.
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I am with you gfp, this is no time to not use caution, no "all in" bets. Ease in.
The SURG chart setup does look promising for another leg up. They are entering the Russell Microcap Index, so one might expect a surge of buying.
I see what you mean about the 1 share in AH at 5.22, but that share 'might' just be an odd lot portion from the flurry of buy orders at the close. There were a bunch of buys in the final seconds of trading, including one big one for ~ 15,000 shares. As you said, next week should be interesting :o)
One would think there could be significant buying from index ETFs, but I haven't followed enough of these 'index addition' plays to know how they typically act, or whether the index ETFs are able to buy well ahead of time (?) If they can, then the current move might be muted.
But based solely on the chart, it looks poised to break up thru the 5 resistance level.
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$SURG surged after hours. might watch it closely on the open.
https://finance.yahoo.com/quote/SURG/options?p=SURG
But a PR came out before the market opend, go figure or is something else going on. Then I check the trades and the after hours only trade was 1 share at $5.22.
LOL I will still watch pre market and the open enyway. Neww a good laugh.
https://finance.yahoo.com/news/analysts-expect-surgepays-inc-nasdaq-115319267.html
https://ih.advfn.com/stock-market/NASDAQ/surgepays-SURG/trades
The SURG gap looks more or less 'filled' I would say, close enough anyway. The chart looks like it's going to spurt up to 6 in the near/mid term, but after that is less certain. The 6 area was the center of trading last year from June-Nov, so represents a key resistance level, part of a broader resistance band from 4-8.
>> Orion board >>
I used to check there for ideas back 'in the day', and it's a good site. Unfortunately back then I hadn't learned any TA yet, so not a good outcome. Then I subscribed to Stockcharts.com to learn the basics. I ultimately decided against active trading in general, but the charts are still extremely useful.
While I don't actively trade much, I did decide upon several basic ground rules, for example - Don't trade a stock you don't know reasonably well, and - Don't trade a stock you wouldn't be willing to hold longer term (since you might get stuck with it if the trade goes against you).
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Thanks gfp. I was researching how "filled gaps" do after they fill the gap. Based on the close candle, not the tail it had not filled the 11/21 gap and that $4.99 resistance in several places in 2021 and now a bull flag with that $4.99 upper resistance.
I would say buy on a close above $4.99, but watch it do that then 2 days later crash, lol.
SURG is the only stock outside of RIBT I have posted on in months, and you saw it. And I should have posted it there, sorry about that. You are a good guy and deserve my respect.
https://stockcharts.com/h-sc/ui?s=SURG&p=D&yr=1&mn=0&dy=0&id=p95304789598
RIBT has a gap to fill at $2.08 back from 11/19. So I am checking to see percentages of what happens after it fills. Recent gaps, like 4 months or less, no clear help. And gaps over 4 months that fill are too few so far in my search to make any determination.
I want to see how spikes do after day 1,2,3 or such. Hoping RIBT gets a spike to like $3,$4 , lol. Check out the other 3 stocks charts on this guys list below, HUSA, NINE, IMPP--- Yes, I am a dreamer.>>>
https://insiderfinancial.com/4-penny-stocks-to-buy-amid-high-inflation-husa-nine-impp-ribt/183285/
SURG does have an interesting looking chart for a possible trade. The chart setup looks like it's getting ready to move up thru 5, and it just had a golden cross.
I see on Wednesday they announced they'll be added to the Russell Microcap Index, to become effective on June 24. So could be considerable buying by numerous index funds.
Business-wise, they occupy some interesting niches, although the stock hasn't done very well over time, based on the chart. SURG has a very small float per Yahoo Finance (8.2 mil shares), and a considerable short position, ~7% of the float, so could be some short covering. Revenue is $62 mil, which grew 92% in recent quarter, although net income is a negative ~$10 mil, and cash flow is also negative.
Anyway, looks like it might be a good idea for a near term trade. Longer term maybe not so great, but would have to do more research.
One thing about the fintech related areas that worries me for the longer term is what will happen when the CBDC/Central Bank Digital Currency enters the picture? I think that's a concern Wall St is having over fintech sector in general, even big names like Visa and the banking sector itself. There is uncertainty over what role they will have under the coming CBDC paradigm, when every transaction will (presumably) go thru the Fed/central bank.
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Fwiw, I decided to start nibbling yesterday on the S+P 500. Just 1 share so far (SPY), but the idea will be to slowly average in with 1 share/day for the next 6 months.
I'm figuring the S+P should bottom somewhere in the 3600-3000 range, which would represent a 25-37% decline from the Jan peak. Right now it's down only 22%, but I figure it's best to at least get the re-entry process started, even if it's somewhat early.
One advantage of a gradual re-entry strategy is psychological. Compared to having no stocks at all, there will be less 'missing out' angst during the bounces. And if the market keeps dropping there is also less angst because you are accumulating more cheap shares. A bonus aspect with this approach is that you can always take profits during the bounces, at least that is an option.
Anyway, will see how it goes. I tried this approach a few times in the past, but as soon as the market had a decent bounce, I took the profits. But unless someone is a 'buy/hold forever' investor, there has to be some type of re-entry plan, and this gradual approach has some advantages. The automatic nature of the purchases should be a plus, and help minimize the emotional aspects.
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Makes me wonder about the current world figures.
Yes, 'Strange days have found us', as the Doors sang about back in the day.
Concerning the general NWO topic, I think the domestic control grid is basically a done deal, just needing to be implemented (CBDCs, smart grid, etc).
Mainly what is still left to do is on the international side. The Western globalists need to somehow weaken and subdue China and Russia, but are way behind the curve, so there's a fair amount of desperation.
The Western oligarchy can pull together as a unified cartel for extended periods, but as their goal approaches, they increasingly jockey for position among themselves like Mafia families. There is a fair amount of lunacy among the globalists, in part from inbreeding (link below), plus the usual egomania, hubris, and psychopathy. Unfortunately us small fry are caught in the middle.
The Habsburgs & The consequences of inbreeding -
It sure seems to me they have a game plan and in the end we will see how vaccines, high priced food and energy, "peaceful protest" that burn down a police station and several small and big business , how all this fits together. I doubt we will like it.
But that said, the big money controls all he politicians and use their clout to control people who work for them. All of this commotion, IMO, is meant to scare and not destroy the big business or markets. It is the big power who will benefit, IMO. The charts are not calling for the end of the world YET.
OK, no more rants here on this technical board.
They should just do like Kissinger (and Jim Rickards) said, and end that Ukraine war. All they have to do is draft a binding agreement saying that Ukraine will never join NATO, and that Russia will get the Donbass, and that would be the end of it. Sanctions could be quickly removed and trade resumed, etc. But no, the globalists have an intractable case of Optico-rectitis (head up butt syndrome), and would prefer to destroy their own global economy and financial system. Bunch of dolts.
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Why would anybody what the US military to help when they could not defeat the Taliban?
>> 3/4 point <<
Well at least they're getting it over with. The expectations now look like 3/4 point this week, another 3/4 in July, then 1/2 in Sept, and some combination of 1/2 or 1/4 each in Nov and Dec, depending on the data (no Fed meeting in Oct).
Front loading it is probably not such a bad idea since rates were/are so ridiculously low. Better to get on top of the inflation aggressively and then back off later if the economic numbers start to tank.
Of course a better solution would be to just end the war in Ukraine, which would quickly cut the inflation rate in half. But that's too logical for the current brain-addled world leadership to grasp.
Davos luminaries at a breakout session -
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>>> Interest rates: Goldman Sachs sounds alarm on potential aggressive hikes
Yahoo Finance
by Brian Sozzi
June 13, 2022
https://finance.yahoo.com/news/interest-rates-goldman-sachs-235446403.html
Monday night's WSJ story about interest rates was heard around the world, including among the top strategists at Goldman Sachs and Evercore ISI.
WSJ previewed Tuesday's Federal Reserve policy decision, strongly suggesting that a 75 basis point rate hike was on the table. Market participants had previously generally assumed that a 50 basis point rate hike was most likely as the Fed looks to tackle red-hot inflation.
The story sent Wall Street scrambling into the evening hours to recalibrate rate expectations, suggesting the potential for another rocky session for stocks on Tuesday after a drubbing on Monday.
Here are two notes from Wall Street that are getting the attention on after-hours trading desks:
Goldman Sachs Chief Economist Jan Hatzius
Client note headline: "Revising Our Fed Forecast to Include 75bp Hikes in June and July Following a Hint in the Wall Street Journal"
"Our best guess is therefore that the article is a hint from the Fed leadership that a 75bp rate hike is coming at the June FOMC meeting on Wednesday," the usually-upbeat Hatzius wrote. "We have revised our forecast to include 75bp hikes in June and July. This would quickly reset the level of the funds rate at 2.25-2.5%, the FOMC’s median estimate of the neutral rate. We then expect a 50bp hike in September and 25bp hikes in November and December, for an unchanged terminal rate of 3.25-3.5%."
Hatzius also struck a downbeat tone on economic growth.
"The additional tightening of financial conditions on Friday and Monday, driven by a rise in terminal rate expectations to about 4%, would imply a meaningful further drag on growth that goes somewhat beyond what we think policymakers intend at this point or should be targeting to have the best chance of bringing down inflation without a recession," Hatzius added.
Evercore ISI Strategist (and former NY Fed EVP) Krishna Guhu
Client note headline: "WSJ Report Puts Us On Alert for Fed 75BP Hike This Week; We Think Mistake and Bad for Risk"
Guhu pulled no punches in his flash note to clients after the WSJ story dropped.
"We take seriously a report from the WSJ’s [Nick] Timiraos that suggests the Fed could surprise the markets with a 75bp rate hike this week," Guhu stated. "While the article is carefully written with many caveats and policy alternatives, we think it de facto tees up a 75[bp] this week. This is not what we anticipated, not what we think is optimal policy, and, separately, not in our view good for markets."
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I see the S&P down 6%
https://finviz.com/futures.ashx
Looks like this could be an ugly week for stocks. I see the S+P 500 futures are already down 1.2%, and the Fed's rate decision is on Wed. That 8.6% inflation number on Friday surprised Wall St and does not bode well.
I know you aren't into charts, but the main indices have shown some strange chart behavior lately. After bottoming on May 20 (the S+P 500's icy brush with the 20% bear market level), they had that strong bounce and it looked like all the main indices would soon test their 50 MAs. But they stalled short of the 50 MAs and went sideways for 8 trading days. On the chart it looks like the 50 MAs emitted some type of odious repellent or something. A very strange looking chart pattern, and one that might suggest some type of intervention by the 'powers that be', like the PPT/Plunge Protection Team working in reverse.
That's not as far fetched as it sounds. Both Dudley and Kashkari of the Fed have basically said that the Fed needs to tank the stock market as a tool in the fight against inflation (links below). They probably don't want a crash, but would benefit if the mindset of 'buy the dip' was broken. It looks like that mission is well on the way to being accomplished -
Dudley -
>>> "If Stocks Don’t Fall, the Fed Needs to Force Them" <<<
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=168481987
Kashkari -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=168919600
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Might sound gory, but poor people eat pet food, it is cheaper. Recession might help CHWY?
>> CHWY <<
Yes, a lot of bargains out there. Down 75% yikes.
CHWY is in the broad ETF (PAWZ), and this seems like a good vehicle for the sector. But still too early to get back into stocks imo. Fwiw, I figure 3200-3600 range on the S+P 500 to start easing back in, but in no rush if a recession looms..
ProShares Pet Care ETF (PAWZ)
************************************************
IDEXX Laboratories Inc IDXX 10.52%
Zoetis Inc Class A ZTS 9.95%
Freshpet Inc FRPT 8.92%
Chewy Inc CHWY 8.85%
Dechra Pharmaceuticals PLC DPH.L 8.35%
Trupanion Inc TRUP 4.87%
Merck & Co Inc MRK 4.47%
Nestle SA NESN 4.31%
Pets at Home Group PLC PETS.L 4.03%
Covetrus Inc CVET 3.61%
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Time again for The Chew? Stories say people abandoning pets for higher costs of owning, and some saying more bought pets because of COVID, I don't know.
https://stockcharts.com/h-sc/ui?s=CHWY&p=D&yr=5&mn=0&dy=0&id=p10177089445
>>> ‘We’re in a radically different world’: A chief investment officer at Ray Dalio’s Bridgewater says stocks will crash another 25% if Fed stays on its current course
Fortune
by Marco Quiroz-Gutierrez
June 9, 2022
https://finance.yahoo.com/news/radically-different-world-chief-investment-205757518.html
If the Federal Reserve stays on its current course of major interest rate hikes, stocks may drop another 25%, according to a top executive at Ray Dalio’s Bridgewater Associates hedge fund.
Bridgewater Associates co–chief investment officer Greg Jensen said inflation is not going away, which could force the Fed to continue hiking interest rates, likely more than Wall Street currently anticipates.
“We’re in a radically different world,” Jensen said in an interview with the Financial Times. “We’re approaching a slowdown.”
Jensen, who leads investments for Bridgewater Associates alongside co-CIO Bob Prince, said the Fed could engage in drastic quantitative tightening by selling off securities in its portfolio, a common tactic to combat inflation. To reduce inflation to its 2% target, the central bank could rely on that strategy in a big way, which could “crack the economy and probably crack the weaker [companies] in the economy,” he told the Financial Times.
Inflation, which has consistently been above 8% for the past two months, is a major concern for both investors and consumers. Although the minutes from the Fed’s meeting last month strongly point to at least a half-percent interest rate hike in June, this move won’t be known until the central bank meets next week. In May, the Federal Reserve raised interest rates by half a percent for the first time in two decades.
Bridgewater Associates has already been preparing for a broad selloff in the U.S. government bond market, but it has also bet that U.S. equities will continue to fall, even after more than $7 trillion in market value has already been wiped out from blue-chip stocks in the S&P 500 in 2022.
As U.S. stocks experience one of their worst yearly starts in history, several top economists have sounded the alarm about a possible recession. Nobel Prize–winning economist and Yale professor Robert Shiller said in an interview with Bloomberg on Wednesday that there is a “good chance” the next few years will bring a recession in the U.S. Another economist, Mohamed El-Erian, chair of Gramercy Funds Management and former CEO of Pimco, echoed Shiller’s opinion in a CNBC interview on Wednesday, in which he said he worries the U.S. could face stagflation—when costs rise while economic growth slows—and that investors should be looking to reduce their investments.
Although the economy could face major consequences if the Fed follows through with major interest rate hikes, ultimately, Jensen said the Fed will probably accept an inflation rate above its 2% target. He noted that the stock market selloff and high unemployment caused by significantly higher interest rates may be too much for policymakers to take.
On Friday all three major indexes, the S&P 500, the Dow Jones industrial average, and the Nasdaq Composite, fell in anticipation of the upcoming consumer price index report. Economists surveyed by Bloomberg expect the consumer price index in May to be the same as in April, at 8.3%.
This story was originally featured on Fortune.com
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>>> 3 ETFs to Avoid for the Next 10 Months
Investor Place
Nicolas Chahine
May 17, 2022
https://finance.yahoo.com/news/3-etfs-avoid-next-10-161016104.html
Wall Street often overshoots, so investors should know these ETFs to avoid.
ProShares UltraShort 20+ Year Treasury (TBT): The Fed’s hawkish rhetoric is not permanent.
Energy Select Sector SPDR Fund (XLE): The theme is long in the tooth.
Financial Select Sector SPDR Fund (XLF): Could be collateral damage in the war on inflation.
Today’s picks of ETFs to avoid is likely going to upset a few readers. Just know that this is a price action thing, not an emotional list. The current state of the equity market is in shambles because of outside factors. The Federal Reserve’s hawkish rhetoric and the war in the Ukraine are the prime reasons for fear. Even Bitcoin is crashing.
However, the price action in all sectors is coming along proper chart technical paths. Nothing has yet gone rogue from that perspective. Eventually this too shall pass, and investors should be doing homework now. Part of it is finding potential pitfalls like in these ETFs to avoid. Those opinions may turn out to be nothing, but it doesn’t hurt to be overly cautious.
A basic premise I have is to seek the lowest hanging fruit. So if I can avoid easy potential mistakes, I hop to it. We have opportunities in so many great company stocks. Therefore I can easily resist the temptations of chasing current hot ETF themes. This is a mere cautionary note to not blindly buy into these popular talking points.
ETFs to Avoid: ProShares UltraShort 20+ Year Treasury (TBT)
Central banks had been in quantitative easing (QE) programs for years. They ratcheted those after the pandemic lockdowns. Now the Fed has deployed its counter measures with a harsh quantitative tightening (QT) stint. The news of it a few weeks ago launched a sharp rally in bond yields. The ProShares UltraShort 20+ Year Treasury (NYSEARCA:TBT) was the beneficiary of that trend. Conversely, the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) corrected hard on the news.
The chart technicals suggest that the TBT stock may have run its course. At least the easy part of the rally has already transpired. From here the upside should be much more difficult. The Fed hawkish rhetoric will soon go stale. These are turbulent tickers, so if it can’t rally then the drop is more likely the next direction. Chasing rallies too late is often the pitfall of most retail investors. This earns the TBT its spot on my list of ETFs to avoid for the next few months.
ETFs to Avoid - Energy Select Sector SPDR Fund (XLE)
When it comes to a hot topic, oil prices is a prime example from Main Street to Wall Street. The recent surge made it a problem for all Americans. I currently pay over $7 per gallon in California and it could rise further. But I bet that there is a limit where the politicians would have to step in. So far they’ve talked about fixing the problem, but they haven’t seriously intervened.
The price of oil has limits especially when supply can change at the drop of a hat. This is a rigged market — pun intended — so logic need not apply. The Energy Select Sector SPDR Fund (NYSEARCA:XLE) is my highest concern on this list of ETFs to avoid. Chevron (NYSE:CVX) and Exxon (NYSE:XOM) comprise 44% of the whole thing. I am always leery of an ETF that is so heavily dependent on just two stocks.
Chevron and Exxon are great companies and I’ve written about buying them on the cheap. But up at these levels the downside risks may easily outweigh the upside potential. I would avoid shorting them or the XLE, but it would be prudent to seek fallen angel stocks instead.
ETFs to Avoid: Financial Select Sector SPDR Fund (XLF)
Ever since the 2008 global financial disaster, bank stocks have turned their metrics around. Banks are now fortresses at least until we discover a new way to break the world. The companies in the Financial Select Sector SPDR Fund (NYSEARCA:XLF) all are on solid footing. My issue with the ETF that represents them is merely cautionary. I fear it could be collateral damage in the war on inflation.
The Fed spent years pumping banks with extra freebies to reflate the economy. Now they are intent on poisoning the heck out of it. This means that the banks could be squarely in its evil sights. For that, I place the XLF on my list of ETFs to avoid for at least 10 months.
Companies in it are great, starting with Berkshire Hathaway (NYSE:BRK.B) and JPMorgan (NYSE:JPM). Clearly these are pristine management teams that rarely are cause for concern. Even though enough steam has come out of the XLF, there is more technical weakness in the chart.
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VERU - nice chart setup, though the outcome will depend upon the FDA -
>>> Veru Inc. (VERU), an oncology biopharmaceutical company, focuses on developing medicines for the management of cancers. Its commercial products comprise FC2 female condom/internal condom for the dual protection against unintended pregnancy and the transmission of sexually transmitted infections for ministries of health, government health agencies, U.N. agencies, nonprofit organizations, and commercial partners. The company's development drug candidates include Enobosarm, an oral selective androgen receptor agonist that is in phase III clinical trial for the treatment of AR+ ER+ HER2- metastatic breast cancer; Sabizabulin, which is phase IIb clinical trial for the treatment of AR+ ER+ HER2- metastatic breast cancer; Enobosarm + abemaciclib combination therapy, which is in phase III clinical trial for the treatment of AR+ ER+ HER2- metastatic breast cancer; and Sabizabulin + enobosarm combination therapy, an oral targeted cytoskeleton disruptor plus selective androgen receptor agonist, which is in phase II clinical trial for the treatment of metastatic triple negative breast cancer. Its drug candidates also comprise Sabizabulin, which is in Phase II clinical trial for the treatment of metastatic castration and androgen receptor targeting agent resistant prostate cancer; VERU-100, a GnRH antagonist peptide injection, which is in Phase II clinical trial for the treatment of advanced hormone sensitive prostate cancer; Zuclomiphene Citrate, which is in Phase II clinical trial for treating hot flashes; and Sabizabulin, which is in phase III clinical trial for the treatment of SARS-CoV-2 in subjects at high risk for acute respiratory distress syndrome. In addition, the company is advancing a new drug formulation for the treatment of men with lower urinary tract symptoms from an enlarged prostate. The company was formerly known as The Female Health Company and changed its name to Veru Inc. in July 2017. Veru Inc. was incorporated in 1971 and is headquartered in Miami, Florida.
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>>> Nowhere to Hide
BY JAMES RICKARDS
MAY 16, 2022
https://dailyreckoning.com/nowhere-to-hide-2/
Nowhere to Hide
Investors don’t need to be told about the recent stock market crashes. The Dow Jones index is down 12.5% since early January. The S&P 500 is down 16.1% in the same period. The Nasdaq Composite is down an even more spectacular 26.5% this year. It lost more ground today.
This puts the Nasdaq solidly into a bear market (down 20% or more from an interim peak) while the Dow and S&P 500 are both in correction territory (down 10% or more from an interim peak).
The Dow was up slightly today, but the S&P was down again. On current trends, the S&P 500 may break into bear market territory in a matter of days with the Dow not far behind.
This collapse coming so soon after the market crash of March 2020 may surprise some investors, although this outcome was predicted in my last book The New Great Depression, published last year.
We could get into the reasons for the recent market swoon, like the Fed’s taking away the punch bowl, but the reasons almost don’t matter at this point.
What truly is surprising is that the stock market is not alone in its recent dismal performance.
The Great Crypto Crash
U.S. Treasury bonds, foreign currencies, gold and other commodities have all declined sharply side by side with stocks. There are good reasons for this, including the prospect of a recession that could cause stocks, gold and commodities to fall in sync.
Still, the market carnage doesn’t end there. The biggest collapse among major asset classes is in Bitcoin and other cryptocurrencies.
The price of Bitcoin has fallen over 55% since last November, when Bitcoin peaked at around $69,000. As I write this article, Bitcoin is trading at $29,647.
As is so often the case, gullible investors jumped in when Bitcoin was riding high. Now, 40% of all Bitcoin investors are underwater on their holdings. Like the saying goes, nobody blows a whistle at the top.
So much for Bitcoin being the new inflation hedge!
And the damage is by no means limited to Bitcoin. Huge losses have arisen in other popular crypto currencies such as Ethereum (down 57% over the same period), XRP (known as Ripple) and Solana.
Still, neither of those crypto collapses was the most spectacular. A crypto currency called Luna fell from $116.84 on April 5, 2022, to $0.0062 on May 16, an incredible 99.9% crash in less than six weeks.
That’s not just a crash, it’s a complete wipe-out. It just shows you how crazy speculative manias can become, completely unhinged from reality.
Contagion
The danger in these types of collapses goes beyond the losses to individual investors who happen to hold the coins. Such losses are indicative of a wider global liquidity crisis emerging. It’s a reminder of how deeply interconnected today’s markets are.
It comes back to contagion.
Unfortunately, over the past couple of years, the world has learned a painful lesson in biological contagions. A similar dynamic applies in financial panics.
It can begin with one bank or broker going bankrupt as the result of a market collapse (a “financial patient zero”).
But the financial distress quickly spreads to banks that did business with the failed entity and then to stockholders and depositors of those other banks and so on until the entire world is in the grip of a financial panic as happened in 2008.
Disease contagion and financial contagion both work the same way. The nonlinear mathematics and system dynamics are identical in the two cases even though the “virus” is financial distress rather than a biological virus.
As one market crashes, investors in other markets sell assets to raise cash and the collapse virus quickly spreads to those other markets. In a full-scale market panic of the kind we saw in 1998 and again in 2008, no asset class is safe.
Investors sell stocks, bonds, gold, cryptos, commodities and more in a mad scramble for cash.
Each Crash Is Bigger Than the Last
And unfortunately, each crisis is bigger than the one before and requires more intervention by the central banks.
The reason has to do with the system scale. In complex dynamic systems such as capital markets, risk is an exponential function of system scale. Increasing market scale correlates with exponentially larger market collapses.
Today, systemic risk is more dangerous than ever because the entire system is larger than before. This means that the larger size of the system implies a future global liquidity crisis and market panic far larger than the Panic of 2008.
Too-big-to-fail banks are bigger than ever, have a larger percentage of the total assets of the banking system and have much larger derivatives books.
To understand the risk of contagion, you can think of the marlin in Hemingway’s The Old Man and the Sea. The marlin started out as a prize catch lashed to the side of the fisherman Santiago’s boat.
But once there was blood in the water, every shark within miles descended on the marlin and devoured it. By the time Santiago got to shore, there was nothing left of the marlin but the bill, the tail and some bones.
The point, again, is that today systemic risk is more dangerous than ever, and each crisis is bigger than the one before. Remember, too-big-to-fail banks are bigger than ever, have a larger percentage of the total assets of the banking system and have much larger derivatives books.
The Fed Has No Answers
The ability of central banks to deal with a new crisis is highly constrained by low interest rates and bloated balance sheets, which exploded even higher in response to the pandemic. You see how much damage the Fed’s recent rate hikes and end of quantitative easing have caused.
The Fed’s balance sheet is currently about $9 trillion, which it’s just beginning to reduce. In September 2008, it was under $1 trillion, so that just shows you how bloated the Fed’s balance sheet has become since the Great Financial Crisis.
How much the Fed can drain from the balance sheet without triggering another serious crisis is an open question, but we’ll likely get the answer at some point.
The threat of contagion is a scary reminder of the hidden linkages in modern capital markets.
The conditions are in place.
But you can’t wait for the shock to occur because by then it will be too late. You won’t be able to get your money out of the market in time because it’ll be a mad rush to the exits.
The best description I’ve ever heard of the dynamic of a financial panic is, “Everybody wants his money back.”
We seem to be headed to that state of affairs at a rapid rate.
The solution for investors is to have some assets outside the traditional markets and outside the banking system.
Regards,
Jim Rickards
for The Daily Reckoning
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S+P 500 teetering near support, but still early. Going into the close this afternoon should 'tell the tale'.
Doesn't appear to be much enthusiasm for a bounce, and just a matter of time before the flush comes, which then triggers Wall Street short algos.
Alternately, there might be a bounce and temporary reprieve, but not looking good.
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'Flush' is at hand? The S+P 500 looks poised to fall into bear market territory, possibly today. Here are the key support levels to watch (approx), but not looking good folks -
38.2% Fibonacci Retracement --- 3858
20% Bear Market level ------------- 3855
Once broken, next support looks like the 3600 area (Sept 2020 high).
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>>> Short Sellers Line Up Against Stocks as Bearish Bond Bets Vanish
Bloomberg
by Katie Greifeld
May 19, 2022
https://finance.yahoo.com/news/short-sellers-line-against-stocks-172712124.html
(Bloomberg) -- High-profile warnings over a possible US recession has investors bracing for a slowdown.
Short interest in the $352 billion SPDR S&P 500 ETF Trust (ticker SPY) as a percentage of shares outstanding is above 7%, close to the highest since March 2020, IHS Markit Ltd. data show. Meanwhile, bets against the $19.5 billion iShares 20+ Year Treasury Bond exchange-traded fund (TLT) have shrunk to just 3.5%, the lowest since September 2020.
The dynamic highlights the building anxiety over the US economy as price pressures boil over. Federal Reserve chairman Jerome Powell said Tuesday that “growth has to move down” for inflation to cool, and as a result, there “could be some pain involved” in restoring price stability. While that environment would likely benefit long-dated Treasuries, equities would struggle, according to Peter Tchir of Academy Securities.
“We are starting to shift from ‘inflation’ fears to ‘recession’ fears, so I think that positioning is consistent with a ‘recession’ outlook,” said Tchir, the firm’s head of macro strategy. “I think ‘recession’ is premature, but it’s something I’m seeing more people talk about and put on trades to reflect.”
SPY has dropped 18% so far this year, with the S&P 500 close to bear-market territory. The hottest inflation readings in four decades has TLT lower by more than 20% in 2022, though a bid has returned to bonds over the past week amid the market turmoil.
More than $32 billion has been pulled from SPY alone this year, putting the world’s largest ETF on track for the worst year of outflows ever. On the other side of the trade, more than $49 billion has flooded into fixed-income funds even though roughly 96% of bond ETFs have posted year-to-date losses.
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Kashkari : Fed needs to tank the stock market as a policy tool, to reduce the 'wealth effect'. Wrecking the public's 'balance sheets' will reduce demand and help fight inflation. This was the same basic message that Dudley gave in early April (link below) -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=168481919
>>> Strong household finances may mean Fed must do more: Kashkari
Reuters
May 19, 2022
https://finance.yahoo.com/news/strong-household-finances-may-mean-214955892.html
(Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari on Thursday suggested that because household finances are in some cases in better shape than before the pandemic, the Fed may end up needing to raise rates further to bring inflation under control.
"Are these stronger balance sheets leading people to spend more, or be more confident, to just change their behavior, their spending patterns, and is that more sustainable - in which case maybe the Fed has to be even more aggressive," Kashkari told the Urban Institute.
That could mean difficult tradeoffs for the Federal Reserve, which is already raising rates faster than it has in decades to cool inflation running at a 40-year high.
Fed policymakers expect to get the target range for short-term interest rates, now at 0.75%-1%, a full percentage point higher by July, with more though potentially smaller rate hikes to follow.
The "plausible" hope, Fed Chair Jerome Powell said this week, is that heavier borrowing costs will drag down demand for labor enough to slow wage gains that might otherwise fuel inflation, but not so much that businesses resort to mass layoffs that could trigger a recession.
Kashkari said that because so much is beyond the Fed's control - supply chains, for instance, which in their currently tangled state are pushing upward in prices in ways that are only getting worse with China's COVID-19 lockdowns and Russia's invasion of Ukraine.
"We know we have to get inflation down; we are doing everything we can to achieve a 'soft landing,' but I'll be honest with you: I don't know the odds of us pulling that off," Kashkari said.
A rout in equities including an 18% drop in the S&P 500 Index since its Jan. 3 record close may help the Fed out, by reducing spending and therefore demand.
"The wealth effect is a real thing...those who have stocks have higher 401Ks, they feel more confident, they go out and spend more, when those things come down, it may change their behavior," Kashkari said. Though the Fed does not target stock prices, "we do pay attention to that feedback."
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>>> Broader stock market is looking ominous, and the S+P 500 could fall through key support soon. It tested the key 20% bear market level (~3855) last Thursday and bounced, but I figure this time that support will likely fail. If so then next support should be ~ 3600, based on the chart.
Still early, but I'm working on a strategy to gradually re-enter the stock market over the next 6 months or so, using a daily/weekly incremental cost average approach. Small amounts each week spread out over time. Starting to see some nice bargains out there, but still early. With a recession, I figure we may see the S+P 500 at 3400 or lower. At 3400 the total drop from the Jan high (~ 4800) would be only 29%, so the bottom could be lower, but 3400 may be close enough. Time will tell..
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>>> When is it safe to start buying stocks again? We’re not there yet, but these are the six signs to look for
MarketWatch
May 11, 2022
By Michael Brush
https://www.marketwatch.com/story/when-is-it-safe-to-start-buying-stocks-again-were-not-there-yet-but-these-are-the-six-signs-to-look-for-11652297223?siteid=yhoof2
Extreme negativity is only one indicator. Six market professionals explain what they track.
Big stock market drawdowns like the current one often end with a selling frenzy, called capitulation.
So, you’ll want know how to spot capitulation — a sign that it’s safer to start buying. To find out, I recently checked with several of my favorite market strategists and technicians. They offer the following indicators.
In fairness to them, they all look for a combination of confirming signals.
“It’s a basket of things, but when they start to pile up, it gives me more confidence,” says Larry McDonald of the Bear Traps Report. In the interest of brevity, however, I cite only one or two signals each.
Look for peak negativity among investors
Verdict: We are not there yet.
While several investor sentiment opinion polls suggest extreme negativity, you don’t see the same signal when you look at what they are actually doing with their money, says Michael Hartnett, Bank of America’s chief of investment strategy.
Since the start of 2021, investors put $1.5 trillion into mutual funds and exchange traded funds. So far, they’ve only taken out around $35 billion.
“That is not capitulation,” says Hartnett.
For that, he’d like to see $300 billion in withdrawals, particularly if it happened fast. Likewise, stock allocations are at 63% among portfolios in Bank of America’s private client network. For capitulation, we’d need to see that drop to the mid-50% range. “This just isn’t it,” he says.
Look for a peak fear index
Verdict: Not there yet.
The Chicago Board Options Exchange’s CBOE Volatility Index VIX, +0.09% tracks investor fear, based on positioning in the options market. Higher means more fear. The VIX recently touched 35, but that’s not high enough to signal capitulation, says Bob Doll, chief investment officer at Crossmark Global Investments. He’d like to see moves closer to 40. He also wants to see more stocks hitting the 52-week low list, and more stocks trading below their moving averages.
“We have evidence of some capitulation, but probably not enough to call it a significant bottom,” says Doll.
Look for a spike in the put/call ratio
Verdict: Not there yet.
Investors buy put options when they’re bearish. They buy calls on a bet that stocks will rise. So, the overall put/call ratio tells you how scared investors are. Higher means more fear. Leuthold Group chief investment officer Doug Ramsey calls this his “desert island sentiment indicator.”
To smooth out volatility, he tracks a three-day average. Since 2014, capitulation bottoms happened when this ratio moved to 0.85 or higher, as you can see in the chart below from Ramsey. It was recently at around 0.7. So, it’s not there yet.
“A heck of a lot of damage has been done. Investors are scared, but not genuinely panicked,” says Ramsey. “I don’t think we are close to a final low.”
Look for a spike in the number of stocks getting trashed
Verdict: The low is in — tradable bounce ahead.
To identify capitulations, McDonald at the Bear Traps Report tracks how many stocks are down a lot. For what he calls the “classic pukes,” he looks for a sharp contraction in the number of stocks on the New York Stock Exchange (NYSE) above their 200-day moving averages. When this falls into the 20% range, this suggests capitulation. It was recently at 28%. That’s close enough considering the following confirming indicators.
McDonald cites the elevated ratio of decliners to advancing issues on NYSE (seven to one), one of the highest levels in the past five years. And the large number of stocks recently hitting new lows on Nasdaq. That was 1,261 on May 9, also near the high for the past five years.
The upshot: “There’s a 95% chance we have seen capitulation for a tradeable bounce,” concludes McDonald. It could create a 20%-30% upside move.
But this will merely be a rally in a sustained bear market that will carry on for a year or two.
He cites two reasons. First, most investors are down a lot, and they just want their money back.
“The average investor is so torched right now,” says McDonald. “They will sell strength.”
Next, the Federal Reserve is going to “break something” with its aggressive rate hikes. Likely candidate: Something in the commercial real estate market.
“You have skyscrapers in all the big cities empty, and loans are starting to come due,” says McDonald. “There could be big default cycle.”
Look for a high-volume blow-off
Verdict: Not there yet.
One good sign of capitulation is a “selling climax” marked by a sharp move down on big volume, says Martin Pring, publisher of the InterMarket Review investment letter and author of “Investment Psychology Explained,” one of my favorite market books. Often this can happen with a big whoosh down in the morning and a recovery, followed by relative calm. So far, we have not seen a high-volume selling climax.
Look for a big decline in margin debt
Verdict: Not there yet.
Jason Goepfert at SentimenTrader likes to see a big reduction in brokerage account margin debt as a sign of capitulation. How big? He looks for a 10% drop year over year. The current decline is just 3% to $799 billion.
Goepfert has at least 12 capitulation indicators, and only three suggest we are there. They are: The initial public offering drought; several consecutive weeks of $10 billion equity fund outflows; and extreme lows in investor sentiment surveys.
Among other signs, he’d still like to see at least 40% of NYSE stocks at 52-week lows (we are near 30%); fewer than 20% of S&P 500 SPX, +0.10% stocks trading above their 200-day moving averages (currently 31%); and a spike in correlation among stocks in the S&P 500.
When investors hate everything, it’s a sure sign they probably can’t get much more bearish.
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Looks like silver just broke support. Next support should be 20, and then 18 (2019 highs).
While gold and silver have a history of falling during big stock market drops (2008/09, 2020), there may be some other factors at work in the current drop -
- Gold - Since Russia has now pegged the ruble to gold (domestically), it would be in the US/West interests to see gold lower in order to weaken Russia.
- Silver - The silver price generally follows gold, but another factor is silver's key role in solar panels, so there is an incentive for globalists to want lower silver prices.
- Inflation - The Fed is struggling to contain high inflation, and high gold/silver prices work against that goal.
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Looks like a test of the 20% bear market area (3840) should be next for the S+P 500. The Nasdaq is now down almost 30%, which is what it was down at the bottom of the Mar 2020 Covid crash. The Russell 2000 is also down approx 30%.
Current summary -
S+P 500 (SPX) --------- down 18% ---- (RSI - 32)
Dow 30 (DJIA) ---------- down 14% ---- (RSI - 34)
Nasdaq (COMPX) ----- down 30% ---- (RSI - 31)
Russell 2000 (IWM) --- down 30% ---- (RSI - 29)
Volatility Index ($VIX) --------- 33 ------ (RSI - 58)
Death Cross - Mar 14, 2022
__________________________________________
S+P 500 Support Levels - (approx)
*****************************
200 MA --------------------------------- 4493
50 MA ----------------------------------- 4383
Feb-Mar closing lows --------------- 4150
Feb-Mar intraday low --------------- 4120
Round Number support ------------ 4000
Current level ------------------------- 3964
20% Bear Market level ------------- 3840
38.2% Fibonacci Retracement --- 3800
_______________________________
Sept 2020 high ----------------------- 3600
50% Fibonacci Retracement ----- 3500
Feb 2020 high ------------------------ 3400
Sept-Oct 2020 lows ----------------- 3200
61.8% Fibonacci Retracement --- 3200
__________________________________________
>>> Cash Is the Only Winner in a Market Gripped by Stagflation Fear
‘We’re holding our cash with both hands:’ BlackRock’s Rieder
Investors are pouring cash into ETFs tracking Treasury bills
Bloomberg
ByDenitsa Tsekova and Cecile Gutscher
May 9, 2022
https://www.bloomberg.com/news/articles/2022-05-09/cash-is-the-only-winner-in-a-market-gripped-by-stagflation-fear?srnd=premium
Investors are eschewing almost everything except cash in this selloff.
The Bloomberg Dollar Spot Index has trumped all other assets this month, notching a 0.6% advance at a time when stocks and bonds are tumbling. Investors have poured cash into an exchange-traded fund tracking Treasury bills for five weeks, clocking up the biggest inflows since 2020.
It all shows that investors are focused on one thing right now: capital preservation. Slowing economic growth, persistent inflation and more Covid lockdowns in China have combined to make a toxic investing landscape. Even commodities, a favorite inflation play, succumbed to the global selloff on Monday.
“Any time you see this type of market volatility, investors flock to the safety of cash, and you’re absolutely seeing that dynamic now,” said Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors.
“Instead of a shift out of stocks and into a mix of bonds and cash, the moves into cash are being funded by the sales of both stocks and bonds. That’s resulted in a huge spike in the demand for cash,” he added.
No Escape
With so many assets underwater, investor grab cash to limit losses
It’s a theme being repeated in the halls of the biggest investment houses. As BlackRock Inc.’s Chief Investment Officer for Global Fixed Income Rick Rieder put it last week, “we’re holding our cash with both hands.” His firm has been adding more quality trades, reducing junk bonds in favor of investment-grade credit and top-rated asset-backed securities.
Treasury bills enjoy biggest five-week inflow in pandemic era
Paul Tudor Jones, CEO and chief investment officer of Tudor Investment Corp, has said he’s not sure if this will be a time where you are actually trying to make money.
“You can’t think of a worse environment than where we are right now for financial assets,” he told CNBC this month. “Clearly you don’t want to own bonds and stocks.”
Paul Tudor Jones Tells CNBC Capital Preservation Most Important
While stock and bond markets have been sliding all year, the moves have become especially sharp since the Federal Reserve’s 50-basis point rate rise last week. The hike stoked fear that the U.S. economy is on the brink of falling into stagflation -- a mix of rising costs, falling employment and slow growth.
Investors flocked to the $17 billion SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (ticker BIL) adding $3.3 billion since the start of April, according to data complied by Bloomberg. The $18 billion iShares Short Treasury Bond ETF (SHV) has seen a $2.2 billion cash injection in the past seven weeks.
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Looks like the place to be right now is on the sidelines, ie cash and T-Bills. Everything else risks being sucked into the vortex of the bear market.
For the S+P 500 the current level to watch is 4000, and below that is the key 20% bear market level of 3840.
When the S+P 500 has dropped 20% (currently 16%), Jim Rickards says that level will usually alter the Fed's decision making process. But this time, who knows, since inflation is running so hot. The Fed is severely boxed in and have little choice but to keep tightening and push the economy into recession. So it could be a prolonged bear market.
Fwiw, I'll probably just sit on the sidelines in cash and not get too clever with it. Rather than trying to profit from the bear (going short, trying to hedge in sectors like energy, commodities, etc), I figure not losing money will be a victory, and then in the aftermath one can go bargain hunting.
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