SentimenTrader Blog

2019-06-14 | Jason Goepfert | Daily Report

The Up Volume Ratio is close to triggering another Zweig Breadth Thrust, unusual during a healthy market; Equity hedge funds look to be less than 20% exposed to stocks, the lowest since 2014; ETFs that cater to quick-fingered traders have seen a big inflow during this rally; Hedgers are buying heating oil, selling gold and corn

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2019-06-14 | Jason Goepfert | Premium

Here's what's piquing my interest so far on a choppy Friday.Bond FlowOver the past 8 sessions, corporate bond ETFs LQD, HYG, and JNK have seen steady inflows. To a near-record degree, in fact. That happened in the midst of a nice run in January of this year, with no ill effect. But it also happened prior to a tough couple of months for the funds in 2015 and '16.Recession ModelSome recession models continue to show a relatively high, and increasing, probability of recession within the next 6 ...

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2019-06-14 | Jason Goepfert | Lite

A tale of two sectorsMost utility stocks have been rising over the past 3 weeks and are trading above their 50-day averages. Few energy stocks can boast the same.When there has been this wide of a divergence between those two sectors, the broader market had a strong tendency to rise with only one (small) loss over the next 3 months.Utility stocks tended to perform better than energy stocks going forward, suggesting there wasn’t much of a mean-reversion thing going on.A terrible few weeksOil ...


2019-06-13 | Jason Goepfert | Daily Report

Over the past 3 weeks, most utility stocks have traded above their 50-day averages, while few energy stocks have; Energy stocks usually rallied longer-term after big drops in crude oil; The NYSE Cumulative Advance/Decline Line set a new high, leading the S&P 500; The AAII Bull Ratio has averaged barely 40% over the past 5 weeks

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2019-06-13 | Jason Goepfert | Study

The rally over the past week has been impressive, and its breadth has been expanding. Enough securities have been rising that the NYSE Cumulative Advance/Decline Line made a new high on Thursday.This is typically taken as a sign of healthy and liquid markets and has done an admirable job of it over the years. The A/D Line gave a heads-up on potential trouble last fall, and potential good vibes earlier this year. When it hit a new high while the S&P was modestly below its own high, the index ...

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2019-06-13 | Jason Goepfert | Study

The starkest divergence among the sectors at the moment is between utility and energy stocks. Nearly 80% of utes are trading above their 50-day averages, while fewer than 10% of energy stocks are. Over the past three weeks, the difference between them has grown historically wide.Below, we can see the S&P 500's returns following any day when an average of more than 70% of utility stocks trading above their 50-day average during the past three weeks, compared to fewer than 10% of energy ...

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2019-06-13 | Jason Goepfert | Lite

First cutThe probability that the Fed will cut rates is rising. It’s still only about a 20% chance in June but more than 80% in July. That will end the longest-ever streak with steady or rising rates. Following these “first cuts”, stocks have done either poorly, or really well, with no middle ground, but the positives mostly offset the negatives.During the next month, all but two of the cuts led to a jump in stocks, and those two losses were minor. The risk/reward was skewed heavily to the ...


2019-06-12 | Jason Goepfert | Daily Report

The Fed is potentially on track to cut rates, ending a record streak of steady or rising rates; The dollar has struggled after the first cut, while defensive stocks did the best; Optimism on gold has jumped 30% in only 2 weeks; Crude oil fell more than 2.5% in 6 out of the past 15 sessions; Korea's Kospi McClellan Oscillator is very high

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2019-06-12 | Jason Goepfert | Premium

Here's what's piquing my interest so far today.ReversalsYesterday I made a brief mention of the reversal pattern over the past two days, where SPY hit its highest level in a month intraday but reversed to close in the bottom third of its range both days.For those wanting more detail, here are SPY's returns going forward. The worst was 4 days later (not shown) but we can see from the table it wasn't necessarily a rally-killer. Generally weak returns, though.Fleeing FundsAccording to the ...

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2019-06-12 | Jason Goepfert | Lite

A defensive new high listAcross the equity market, securities at a 52-week high have expanded. Same goes for companies within the S&P 500. And within that index, it’s been more of the defensive sectors that have seen the best participation.While that suggests a potentially worrisome risk-off mentality, it has not been a bad sign. The S&P 500's forward returns were good, and generally better than times when non-defensive sectors dominated the new highs.As far as the sectors themselves go, ...


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