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Thursday, June 28, 2018 8:10:39 AM
NASDAQ Breaks Down Technically, Utilities Pop
By: Almanac Trader | June 27, 2018
Bearish seasonal forces have teamed up with trade trepidations to spook the market over the past week to put NASDAQ into a technical indicator breakdown situation. As you can see in the chart above NASDAQ has dropped sharply over the last five trading sessions. It closed just above its pink line 50-day moving average. A breach of the 50-DMA, would be a harbinger of lower prices toward the red line 200-DMA or even lower.
With all of the geopolitical rhetoric and midterm machinations fomenting uncertainty and fear in the market, this is shaping up to be a typically weak midterm election year “Worst Six Months” and Q3 looks like it will be especially troublesome and volatile.
In the lower panes of the chart you can see the breakdown in Stochastics, Relative Strength and MACD. NAS also closed below next month’s blue-dotted line pivot point after failing at red-dotted line pivot point resistance. Next month’s green-dotted line pivot point support at about 7324 looks like it could be the next stop.
Meanwhile Utilities as represented by SPDR Utilities (XLU) in the solid dark green line in the chart has been on a tear. Utilities have a bullish seasonality from March-October and XLU is an excellent Worst Six Months or “Sell in May” positon. (I picked up some XLU at about 50.23 for just this purpose a little while back.)
Our NASDAQ Best 8 Months MACD Seasonal Sell Signal that we issued last Thursday looks rather timely so far. The next day we sold IWM, IYW, XLK and QQQ and other underperforming technology and small cap related positions. In preparation for this Sell Signal, which can come any time after June 1, we prepared a Defensive Stocks for the “Worst Months.”
These 21 stocks were selected from the top performing sectors for the “Worst Six Months.” The sectors we focused upon were Healthcare, Information Technology, Consumer Staples and Utilities. Due to their defensive nature and interest rate sensitivity, many consumer staples and utilities stocks were not in favor and many did not exhibit the technical strength we frequently require. But, this also meant many of these stocks were not trading at 52-week or all-time highs and had more attractive valuations than other corners of the market. As I said, utilities have popped since this Defensive Basket was released on June 14.
Our underlying theme was to find reasonably priced stocks within the four sectors that have exhibited the most consistent returns during the “Worst Six Months.” Yields for this basket of stocks range from a low of 1.75% by Church & Dwight (CHD) to a high of 5.48% by Southern Co (SO). The entire basket average yield is 2.81%.
http://jeffhirsch.tumblr.com/post/175316569593/nasdaq-breaks-down-technically-utilities-pop
• DiscoverGold
Click on "In reply to", for Authors past commentaries
By: Almanac Trader | June 27, 2018
Bearish seasonal forces have teamed up with trade trepidations to spook the market over the past week to put NASDAQ into a technical indicator breakdown situation. As you can see in the chart above NASDAQ has dropped sharply over the last five trading sessions. It closed just above its pink line 50-day moving average. A breach of the 50-DMA, would be a harbinger of lower prices toward the red line 200-DMA or even lower.
With all of the geopolitical rhetoric and midterm machinations fomenting uncertainty and fear in the market, this is shaping up to be a typically weak midterm election year “Worst Six Months” and Q3 looks like it will be especially troublesome and volatile.
In the lower panes of the chart you can see the breakdown in Stochastics, Relative Strength and MACD. NAS also closed below next month’s blue-dotted line pivot point after failing at red-dotted line pivot point resistance. Next month’s green-dotted line pivot point support at about 7324 looks like it could be the next stop.
Meanwhile Utilities as represented by SPDR Utilities (XLU) in the solid dark green line in the chart has been on a tear. Utilities have a bullish seasonality from March-October and XLU is an excellent Worst Six Months or “Sell in May” positon. (I picked up some XLU at about 50.23 for just this purpose a little while back.)
Our NASDAQ Best 8 Months MACD Seasonal Sell Signal that we issued last Thursday looks rather timely so far. The next day we sold IWM, IYW, XLK and QQQ and other underperforming technology and small cap related positions. In preparation for this Sell Signal, which can come any time after June 1, we prepared a Defensive Stocks for the “Worst Months.”
These 21 stocks were selected from the top performing sectors for the “Worst Six Months.” The sectors we focused upon were Healthcare, Information Technology, Consumer Staples and Utilities. Due to their defensive nature and interest rate sensitivity, many consumer staples and utilities stocks were not in favor and many did not exhibit the technical strength we frequently require. But, this also meant many of these stocks were not trading at 52-week or all-time highs and had more attractive valuations than other corners of the market. As I said, utilities have popped since this Defensive Basket was released on June 14.
Our underlying theme was to find reasonably priced stocks within the four sectors that have exhibited the most consistent returns during the “Worst Six Months.” Yields for this basket of stocks range from a low of 1.75% by Church & Dwight (CHD) to a high of 5.48% by Southern Co (SO). The entire basket average yield is 2.81%.
http://jeffhirsch.tumblr.com/post/175316569593/nasdaq-breaks-down-technically-utilities-pop
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
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