Amsterdam Chapter Meeting Featuring Katie Stockton, CMT Tuesday, November 8th, 2016

Transcription

1 Amsterdam Chapter Meeting Featuring Katie Stockton, CMT Tuesday, November 8th, 2016

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4 Date: Tuesday, November 8th, 2016 Time:8:00 AM 9:30 AM Topic: Technical Tools for Trend Followers Technical tools help us identify trends and turning points, putting us in a better position to capture tradable market moves. An indicator that gives a clear buy or sell signal makes it more difficult for behavioural biases to sway our decisions. Anything that takes some gray area out of the markets is welcome, especially when trends are largely macro-driven as they seem to be these days. Katie Stockton, Chief Technical Strategist of BTIG, LLC, will present her current views and methodology, which employs a collection of tools that are designed for risk management, market timing, and alpha generation. Important concepts include support/resistance and relative strength, with a focus on indicators that provide an informational edge, such as the cloud model and DeMARK Indicators. Speaker: Katie Stockton, CMT

5 BTIG Technical Strategy November 2016 Katie Stockton, CMT Please see Analyst Certification and Important Disclosures on slides 37-38

6 BTIG Technical Strategy Our Toolbox Support & Resistance Moving Averages Peaks/Troughs Fibonacci Levels Cloud Model Trendlines and Price Patterns Three Classes of Indicators Trend-Following Overbought/Oversold Relative Strength Market Internals Volume Breadth Leadership Sentiment Trend-following MACD Moving Averages Cloud Model Overbought/Oversold Stochastic Oscillator DeMark Indicators TD Sequential TD Combo Divergence Analysis Relative Strength Comparative Ratios Relative Rotation Graphs (RRG) 6

7 The SPX is testing its 200-day MA ahead of the U.S. election 7

8 July s breakout targeted 2400 with a long-term time horizon 8

9 Small-cap stocks have (temporarily?) relinquished leadership 9

10 The NASDAQ Composite has reached new highs in a good example 10

11 There is evidence of risk-on in high yield versus Treasuries 11

12 Transports have captured relative strength, which tends to be bullish 12

13 Cumulative measures of breadth broke out in July 13

14 Oscillating measures of breadth have since become oversold 14

15 Intermediate-term oversold conditions are widespread 15

16 We pay attention to market internals at extremes Now: Brexit low: Feb low: Sources: CQG, Inc., Bloomberg Finance L.P., & BTIG LLC 16

17 Sentiment can be described as bearish, which is contrarian bullish Sources: CNN Money ( Bloomberg Finance L.P., & BTIG LLC 17

18 The long-term uptrend in growth versus value has reversed 18

19 We use the global RRG to identify emerging leadership 19

20 EAFE countries have seen a relief rally versus the U.S. 20

21 EM countries have exhibited improved momentum and relative strength 21

22 EEM has reversed its downtrend versus EFA 22

23 The AEX met resistance after undergoing a bullish reversal 23

24 The DAX has pulled back since its bullish reversal 24

25 The SMI has retreated within its gradual uptrend channel 25

26 The UKX has pulled back from important resistance 26

27 U.S. sector rotation has favored technology, financials, and energy 27

28 Financials have broken out; oversold sectors are rebounding Source: CQG Inc. 28

29 European sector rotation has favored banks, autos, and insurers SX3P - Food and Beverages SX4P - Chemicals SX6P - Utilities SX7P -Banks SXEP -Oil and Gas SXFP - Financial Services SXIP - Insurance SXKP - Telecommunications SXMP -Media SXNP - Industrial Goods and Services SXOP - Construction and Materials SX86P - Real Estate SX8P - Technology SXAP - Automobiles and Parts SXDP -Health Care SXPP - Basic Resources SXQP - Personal and Household Goods SXRP - Retail SXTP - Travel and Leisure 29

30 European banks have broken out despite negative sentiment 30

31 In the U.K., sector rotation has also favored financials Source: Bloomberg Finance L.P. 31

32 The U.S. market could use help from the healthcare sector Source: S&P Dow Jones Indices ( 32

33 WTI crude oil saw a sharp pullback following its breakout 33

34 Gold is holding support after a significant correction 34

35 The U.S. dollar has broken out, but is overbought 35

36 EUR/USD has broken down; GBP/USD is oversold within its downtrend 36

37 U.S. 10-year Treasury yields have broken out, targeting 2.0%+ 37

38 However, they remain in a multi-decade downtrend channel 38

39 U.K. 10-year yields have seen a relief rally within their downtrend 39

40 BTIG Technical Strategy Product Offerings Global Technical Strategy. Comprehensive weekly report covering our top-down view of global equity markets, in addition to various commodities, currencies and Treasury yields Stockton on Stocks. Weekly report designed for long/short idea generation among global equities in the U.S. and other developed global markets Technical Playbook. Daily report with our shortterm outlook for U.S. equities, including important market data and short-term trading signals for individual stocks plus global ETFs, futures and indices Ongoing Technical Flow. Timely technical recommendations, notification of breakouts/breakdowns and intraday analysis of S&P futures Project Work. Watch list monitoring, periodic portfolio reviews and customized analysis and screening 40

41 Disclosures Analyst Certification I, Katie Stockton, hereby certify that the views about the companies and securities discussed in this report are accurately expressed and that I have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report. Technical Research Disclosure This research report contains technical analysis and/or trading strategies that reference catalysts or events that may have anear-term impact on the market price of the equity securities discussed herein. Technical Research may discuss companies not currently covered by BTIG LLC. Recommendations are based on market/trend indicators, market internals, and price and volume studies. Such analysis and/or strategies may be directionally counter to another BTIG LLC analysts' published rating/price target for the stock. Any such analysis is distinct from and does not affect the BTIG LLC analyst's fundamental equity rating for such stocks, which reflects a stock's expected return as discussed in BTIG LLC's "Analyst Stock Ratings" disclosures. Regulatory Disclosures Analyst Stock Ratings Definitions BTIG LLC's ("BTIG") ratings, effective May 10, 2010, are defined as follows: BUY --A stock that is expected at initiation to produce a positive total return of 15% or greater over the 12 months following the initial recommendation. The BUY rating may be maintained following initiation as long as it is deemed appropriate, notwithstanding price fluctuations that would cause the target to fall outside of the 15% return. SELL --A stock that is expected at initiation to produce a negative total return of 15% or greater over the next 12 months following the initial recommendation. The SELL rating may be maintained following initiation as long as it is deemed appropriate, notwithstanding price fluctuations that would cause the target to fall outside of the 15% return. NEUTRAL -- A stock that is not expected to appreciate or depreciate meaningfully over the next 12 months. NOT RATED --A stock that is not rated but that is covered by BTIG. Distribution of Ratings and Investment Banking Clients BTIG must disclose in each research report the percentage of all securities rated by the member to which the member would assigna buy, neutral or sell rating. The said ratings are updated on a quarterly basis. BTIG must also disclose the percentage of subject companies within each of these three categories for whomthe member has provided investment banking services within the previous twelve months. Stocks under coverage as of the end of the most recent calendar quarter(september 30, 2016): 251 Distribution of BTIG s Research Recommendations (as of September 30, 2016): BUY: 54.6%; NEUTRAL: 41.8%; SELL: 3.6% Distribution of BTIG s Investment Banking Services (as of September 30, 2016): BUY: 78.9%; NEUTRAL: 15.8%; SELL: 5.3% For purposes of FINRA ratings distribution rules, BTIG's stock ratings of Buy, Neutral and Sell fall into Buy, Hold and Sell categories, respectively. Other Disclosures Additional Information Available Upon Request General Disclosures Research reports produced by BTIG LLC ("BTIG") are published for and intended to be distributed solely to BTIG institutional andcorporate clients. Recipients of BTIG reports will not be considered clients of BTIG solely because they may have received such BTIG report. 41

42 Disclosures The equity research analyst(s) responsible for the preparation of this report receives compensation based upon a variety of factors, including the quality and accuracy of research, internal/client feedback, and overall Firm revenues. BTIG reports are based on public information and BTIG considers the same to be reliable, comprehensive information, but makes no representation or warranty that the reports are accurate or complete. BTIG opinions and information provided in this report are as of the date of the report and may change without notice. This research report is not an offer to buy or sell or solicitation of an offer to buy or sell any security in any jurisdiction where such an offer or solicitation would be illegal. This research report was not drafted specifically for any particular individual or entity and is not a personal recommendation to participate in any particular trading strategy or transaction. Any recipient of this research report should obtain independent advice specific to their personal circumstances before undertaking any investment activity and must make their own independent evaluation of any securities or financial instruments. Facts, views or opinions presented in this report have not been reviewed by, and may not reflect information known to, employeesor other professionals in the?btig Group? (BTIG Group includes, but is not limited to, BTIG and its parents, subsidiaries and/or affiliates). BTIG Group employees, including Sales Representatives and Traders, may provide oral or written commentary or advice that may be inconsistent with the opinions and/or views expressed in this research report. BTIG Group employees and/or its affiliates not involved in the preparation of this research report may have investments in securities or derivatives of securities of companies mentioned in this report that are inconsistent with the views discussed in this report. Investors in securities products bear certain risks in conjunction with those investments. The value of, and income from, anyinvestments may vary because of changes in interest rates or foreign exchange rates, securities prices or market indexes, operational or financial conditions of companies or other factors withinorbeyond the companies control. Recipient of the research reports should be aware that investments in equity securities may pose significant risks due to the inherent uncertainty associated withrelying on forecasts of various factors that can affect the earnings, cash flow and overall valuation of a company. Any investment in equity securities should be undertaken only upon consideration of issues relating to the recipient s overall investment portfolio and objectives (such as diversification by asset class, industry or company) as well as time horizon and liquidity needs. Further, past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. There maybetime limitations on the exercise of options or other rights in any securities transactions. The trademarks and service marks contained herein are the property of their respective owners. Third-party data providers make no warranties or representations of any kind relating to the accuracy, completeness, or timeliness of the data they provide and shall not have liability of any damages of any kind relating to such data. The report or any portion hereof may not be reprinted, sold or redistributed without the written consent of BTIG. This report is intended only for use by the recipient. The recipient acknowledges that all research and analysis in this report are the property of BTIG and agrees to limit the use of all publications received from BTIG within his, or her or its, own company ororganization. No rights are given for passing on, transmitting, re transmitting or reselling the information provided. Jurisdiction and Dissemination BTIG is a U.S. broker-dealer and member of FINRA and SIPC. BTIG Australia Limited ACN , member of ASIC and ASX; BTIG Hong Kong Limited, an Exchange Participant of SEHK and licensed and regulated by the SFC; BTIG Ltd, member of the LSE, authorized and regulated by the FSA; and BTIG Singapore Pte Ltd, registered and licensed with MAS; are all separate but affiliated entities of BTIG. Unless governing law permits otherwise, you must contact a BTIG entity in your home jurisdiction for further information, or if you want to use our services in effecting a transaction. Issues and approved for distribution in the UK and EEA by BTIG Ltd. to eligible counterparties and professional clients only.issued and distributed in Australia to wholesale clients only by BTIG Australia Limited. In Singapore and Hong Kong, further information may be obtained from BTIG Singapore Pte Ltd and BTIG Hong Kong Limited, respectively. For a complete listing of BTIG LLC research disclosures, please visit 42