Tag Archives for " donald trump "
US Dollar Update: Nailed It…Again…
In this video update we revisit the US Dollar Index (UUP) as it has been under heavy pressure. Just recently it tested the key $24 level which was the 2016 low and a level we said would get tested based on a simple and objective method. In this video you will: Hear the analysis that got us to this point See how you could have made money off the bottom Find out where this is headed next
Continue Reading -->Resistance and Support Ahead of Trump’s Big Speech
The Russell 2000 is popping 0.6% today while the major averages are only barely green. On Friday, it nearly tested that descending trendline from which the recent little rally erupted. Has resistance become support? I assume if the Russell can hold this 1380-1400 range, I assume the bears don’t stand much chance of finally breaking the bull. Looking ahead, the next major potential catalyst is President Trump’s address of Congress tomorrow. The big question is how much will he detail will he offer? Trump won the election on sweeping generalities, but there’s a lot of demand on him to get down to brass tacks. Since Trump is a typical CEO (long on broad visions, short on the details that get left to underlings), expectations are extraordinarily low in this regard. However, I would not be so quick to count him out completely. From about August 2016 until the election in November 2017, Trump cut through the competition like a hot chainsaw through butter. He was the hammer for a while… and now he’s the nail. For the past month or so, he’s been hammered relentlessly and is in need of a win. The bar is low. And perhaps by offering even minimal ‘real’ information on tax reform, infrastructure spending, and health care, markets may respond very favorably. Why? Because they’re not expecting much. It’s the equivalent of a company heading into earnings after getting a bunch of downgrades and estimate cuts — it doesn’t take much positive news to start a countertrend rally. There’s also the possibility that Trump offers significant details to confound his critics. And if indeed Trump does deliver, the Russell may really rip.
Continue Reading -->Not Even Trump Can Help Twitter!
Yesterday after the close, Twitter (TWTR) announced yet another disappointing quarterly earnings report. On the surface, Twitter has the wind at its back. We just had the craziest Presidential election in history, and the most active global news flow I’ve ever seen. Black Lives Matter. Migrant crisis. Syria. The Brexit. Italy’s No Vote. Right wing nationalist movements rising worldwide. There’s never been more stuff to talk about! Heck, President Trump Tweets so often that you’d think he owns the stock. Plus, Twitter gets a staggering amount of exposure from the media. Athletes and celebrities’ feeds are constantly promoted on the mainstream media. Yet Twitter’s ad revenues DECLINED year-over-year in Q4. Facebook (FB) grew ad revenues by 53%! And Facebook has a revenue base that’s 10 times as big! So what’s the deal here? Aside from the fact that Twitter is not user-friendly and offers little in the way of instant gratification — Facebook has the greatest advertising platform the world’s ever seen. It has in-depth personal information on almost 2 billion people. Think about it. Odds are, Facebook knows: 1) Your full name, age, location, marital/family status, and employment history 2) All of your hobbies and personal interests 3) Your political affiliation 4) What websites you visit 5) What companies you buy from 6) Who you talk to 7) Where you go Twitter surely has some of this data, but it also has some major disadvantages: 1) A smaller user base, and smaller data set 2) More anonymity Speak to anyone in the Internet marketing world, and you’ll know that businesses are tossing huge sums of money at Facebook and Instagram ads. Twitter? Not many folks seem to care.
Continue Reading -->Bears Scream After the Donald Trump Bump
The ISE Sentiment Index is one of my favorite sentiment measures. It is a call-put ratio (as opposed to a put-call ratio) that uses opening long customer options transactions to judge sentiment. It excludes trades like short puts (which are bullish positions) and trades from market makers and firms, which to me makes it more useful than straight put-call ratios. As of yesterday’s close, the ISE’s 10 day moving average was just 67. That is an all-time low, and it’s likely to go even lower tomorrow. As of 10:30 a.m. ET, the ISE was at just 44. If it closes at 44, the 10-day moving average will be down to 66. Over time, the ISE has fallen as equity options have increased in popularity as a hedging instrument, even for credit investors looking for protection in illiquid assets like high-yield bonds. But still, this is a pretty depressed reading. It’s lower than readings seen at the August 24, 2015 mini-crash. And prior to this 10-day stretch, the ISE averaged 87 this year. And the 10-day moving average bottomed at 76 during the February mess. In my experience, when you have technically stretched markets and bearish sentiment, we tend to see a stalemate. That said, other sentiment indicators I follow like the CNN Fear/Greed Index and AAII Sentiment paint a slightly different picture. But after the 2-day Trump bump, it’s safe to say fear is setting in again. Check out this chart of the S&P 500 against the ISE Sentiment Index: As you can see, when the ISE gets to these depressed levels, the market tends to bounce. However, we’re in uncharted waters from a political standpoint, and it still feels like we’re in an “anything goes” environment.
Continue Reading -->Bears Trump Bulls Ahead of the Presidential Steel Cage Match
Permabulls always say everyone’s bearish. And permabears always say everyone’s bullish. Neither side ever provides evidence for their views. So I regularly run through a variety of sentiment measures to get an accurate reflection of the market’s mood. According to 5 sentiment measures I track, traders are certainly looking bearish heading into November 8’s Presidential election. Donald Trump’s wild-card image seems to be roiling traders’ nerves because of all the possible variables. Does he win? Does he lose? Does he lose and contest the outcome? Who really knows at this point? So let’s drill down to the numbers: 1) AAII Sentiment – Bearish The latest AAII Sentiment Survey shows that just 23.6% of individual investors are bullish, well below the long-term average of 38.5%. But what’s really interesting is that bullishness has been below the long-term 38.5% average for 51 straight weeks, and 84 of the last 86. 2) ISE Sentiment – Bearish The ISE Sentiment Index is at just 31 this morning — that’s just 31 calls for every 100 puts. And the 10-day moving average is 80 — that’s the type of reading you see after a major volatility spike, not before one. 3) CBOE Equity Put-Call – Bearish The CBOE Equity-Put Call ratio has been over 1 for the past 4 days. That indicates serious bearishness. 4) CNN Fear & Greed Index – Bearish The Fear & Greed Index is at 17. F&G operates on a 1-100 scale, and 50 is neutral. This 17 reading indicates extreme fear. 5) VIX Spread – Bearish The 3-month VIX spread is at -0.3, which indicates traders are pricing in high near-term volatility. This is bearish. ********* So we have all 5 of these sentiment indicators pointing bearish, and they’re likely to get more bearish as traders hedge against possible post-election downside. Interestingly, I hear a lot of traders chattering about going long into the election on the assumption that downside is already priced in. We’ll certainly see!
Continue Reading -->Morning Call Express: Debating Times
In today’s Morning Call Express, T3 Live Chief Strategic Scott Redler breaks down the market action following the first US Presidential debate between Donald Trump and Hillary Clinton.
Continue Reading -->The Morning Hammer: Round 2 for the Bears!
Friday was the first -1% down day in the SPX since June 27 — and it was an ugly one. The SPX and Nasdaq each fell -2.5% while the Russell 2000 dropped -3.1%. And the VIX spiked an incredible 40% to 17.56. Many traders blamed the initial weakness on hawkish comments from Boston Fed President Eric Rosengren, who is a voting member of the Federal Open Market Committee. That obviously impacted the lousy action in US Treasuries and gold, but didn’t seem to fully explain the broader downturn in the market. Crude was slumping and the ECB disappointed, but to me the real factor was time. Volatility is mean-reverting and after an extended period of failures, the bears were due for a victory. The news is the justification after the drop — not the cause of the drop itself. As my friend Jeff Cooper says, “the news breaks with the cycles.” We’re seeing some follow-through this morning. European and Asia markets are off. WTI crude is down -2.4% to $44.80, breaking its 50 day moving average. The yen is soaring. German bunds and US Treasuries are falling. Gold is getting hit. SPX futures are down -0.7%, which doesn’t exactly spell disaster, but it’s clear that traders are feeling very, very spooked about what’s to come this week. SPX sliced through the key 2147 level Friday, and it’s below the 20/50 day moving averages. The 200 day is below at 2057. The 2090-2120 range looks key short-term. I really wonder what happens at the open: I wonder if traders will dump in the hopes of avoiding a catastrophe. Full disclosure: I have a position in VIX calls and that makes chaos my friend. Traders seem to be worried about Democratic Presidential candidate Hillary Clinton’s pneumonia scare, which could presumably help Donald Trump’s chances. In fact, the Mexican peso, which has been tracking Donald Trump’s perceived odds of winning, is down on this news today! BofAML actually issued a note today saying the market is not paying sufficient attention to Trump, who has been moving up in battleground states. The market is largely assuming a Clinton victory (which partially explains the weakness in biotech). I believe Trump has a better chance of winning than most people assume, and I would not count him out until the votes are tallied.
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