Sycamore Market Analysis

Transcription

1 Sycamore Market Analysis September 30, 2015 The third quarter came to an end with big gains for stocks. The rally did not quite reverse the effect of selling on Monday though with the S&P 500 still down over.5% for the week. It looks like the S&P 500 may have successfully tested its August low, but we need a few more days to see if that is true. Q4 starts tomorrow and it may give the market a lift. Next week Q3 earnings reports will start to come in.

2 Price changes for closing date 9/30/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x 1.28 Nasdaq 100 Index ndx--x 2.39 Russell 2000 rut-x 1.55 SPDRs S&P 500 Trust Series ETF spy 1.87 SPDRs S&P Midcap Trust Series ETF mdy 1.33 PowerShares QQQTrust Ser 1 qqq 2.30 ishares Russell 2000 Index Fund ETF iwm 1.55 September 29, 2015 Selling continued to take the Nasdaq 100 and Russell 2000 down for significant losses today. The S&P 500 was actually up a fraction while the mid-caps were down slightly. There are so many bearish professionals now that it is hard to believe they are all right. It is almost never true that the majority is correct on the market direction but that seems to be the case now. What is bothering me is that selling hit some select stocks fairly hard today. Stocks such as Apple and Facebook dropped by about 3% each and they had been holding up fairly well in this latest bout of selling. Biotech ETFs reflect the heavy selling in biotech stocks. For example, XBI the S&P biotech sector ETF has dropped almost 34% from its recent high in late July. This sector has performed very well in recent years. It apparently got overvalued and that is now being adjusted. So stocks or sectors that have risen sharply may be more vulnerable to selling.

3 Price changes for closing date 9/29/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x -.09 Nasdaq 100 Index ndx--x -.49 Russell 2000 rut-x -.61 SPDRs S&P 500 Trust Series ETF spy.06 SPDRs S&P Midcap Trust Series ETF mdy -.17 PowerShares QQQTrust Ser 1 qqq -.52 ishares Russell 2000 Index Fund ETF iwm -.71 September 28, 2015 Heavy selling hit the market today with the indices down from 2.5% to almost 3%. It left the S&P 500 down almost 12% from the recent closing high on July 20 and less than 1% above the recent closing low on August

4 25. I have seen a lot of discussion of the question of whether or not the market will test that August low. If that is the case, the Russell 2000 already failed the test by closing well below its August low. It is not at all clear how low the market might go and when it might turn around. My advice is to raise cash to be ready when things bottom out. That should occur when fear levels are very high or after capitulation which happens when the selling gets extreme. After that prices usually rise quickly and we have a reversal. A classic example of this happened back in 1998 after the collapse of Long Term Capital. It happened on Thursday, October 8 and I remember the day very well. Jim Cramer devoted a whole chapter in his book Confessions of a Street Addict about it. It was such a classic reversal. I tried to place a lot of buy orders near the end of the day because I recognized it for what it was. But we are not likely to see such an occurrence because so many are aware of the capitulation pattern. Price changes for closing date 9/28/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x Nasdaq 100 Index ndx--x Russell 2000 rut-x -2.87

5 SPDRs S&P 500 Trust Series ETF spy SPDRs S&P Midcap Trust Series ETF mdy PowerShares QQQTrust Ser 1 qqq ishares Russell 2000 Index Fund ETF iwm September 27, 2015 Friday I sold IWM and QQQ as I recommended in Thursday s report, but my timing was not good. The market got a morning lift from Yellen s talk after the close Thursday giving both IWM and QQQ big upside price gaps. Their values held fairly well until about 1. I was travelling, so it looked like it might be better to delay the sales. However when I saw how much they declined by about 3, I decided to exit without capturing the morning gains and actually lost some from the prior day close. The price of QQQ and IWM both swung about 2.7% during the day from the high to the low. I am still showing the up channels in this report even though they are very weak. Losses for the week were heavy.

6 Weekly price changes for closing date 9/25/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x Nasdaq 100 Index ndx--x Russell 2000 rut-x SPDRs S&P 500 Trust Series ETF spy SPDRs S&P Midcap Trust Series ETF mdy PowerShares QQQTrust Ser 1 qqq ishares Russell 2000 Index Fund ETF iwm Channel values for 9/29/2015 Close date 9/25/2015 Center Support Resistance Last Close Equity 0% (-100%) (+100%) Close %Change Standard & Poors ( -63%) -.05 S&P Midcap 400 Index ( -79%) -.17 Nasdaq 100 Index ( -91%) -.85 Russell (-123%) SPDRs S&P 500 Trust Series ETF ( -59%) -.03 SPDRs S&P Midcap Trust Series ETF ( -78%) -.16 PowerShares QQQTrust Ser ( -90%) -.85 ishares Russell 2000 Index Fund ETF (-128%) Channels summary Annual Channel Trade Equity symbol growth width days Standard & Poors 500 sp-500 9% 4.8% 24 S&P Midcap 400 Index mid--x 16% 4.9% 24 Nasdaq 100 Index ndx--x 38% 5.8% 24 Russell 2000 rut-x 20% 5.2% 24 SPDRs S&P 500 Trust Series ETF spy 4% 5.3% 24 SPDRs S&P Midcap Trust Series ETF mdy 11% 5.1% 24 PowerShares QQQTrust Ser 1 qqq 34% 5.9% 24 ishares Russell 2000 Index Fund ETF iwm 19% 5.3% 24 September 24, 2015

7 The indices suffered losses again today, but it could have been much worse. SPY was down over 1.5% at the low today, but closed down only.34%. That was a significant loss for SPY, but it had a good recovery. The up channels are fading fast and in particular, the S&P 500 up channel has already faded away. My accelerator models are now giving negative signals and I recommend exiting from QQQ and IWM if you own them. I do not expect big losses from here, but it is prudent to move to the sidelines for a while. Better opportunities will likely present themselves in the next month. Channel values for 9/25/2015 Close date 9/24/2015 Center Support Resistance Last Close Equity 0% (-100%) (+100%) Close %Change Standard & Poors ( -67%) -.34

8 S&P Midcap 400 Index ( -81%) -.47 Nasdaq 100 Index ( -65%) -.29 Russell ( -88%) -.22 SPDRs S&P 500 Trust Series ETF ( -66%) -.36 SPDRs S&P Midcap Trust Series ETF ( -82%) -.47 PowerShares QQQTrust Ser ( -66%) -.36 ishares Russell 2000 Index Fund ETF ( -84%) -.17 Channels summary Annual Channel Trade Equity symbol growth width days Standard & Poors 500 sp % 4.8% 22 S&P Midcap 400 Index mid--x 23% 4.8% 22 Nasdaq 100 Index ndx--x 46% 5.7% 22 Russell 2000 rut-x 30% 4.9% 22 SPDRs S&P 500 Trust Series ETF spy 8% 5.3% 22 SPDRs S&P Midcap Trust Series ETF mdy 18% 5.% 22 PowerShares QQQTrust Ser 1 qqq 43% 5.8% 22 ishares Russell 2000 Index Fund ETF iwm 29% 4.9% 22 September 23, 2015 Indices closed with modest losses today after opening a bit lower. It was a see-saw day with swings up and down, but no major moves. The up channels weakened considerably as young up channels can do since they are short. We could use some good news to give buyers some reasons to buy stocks. In a week Q3 will end and earnings reports will start coming a few weeks after that. Maybe there will be some good reports to lift the market further but we need something sooner than that.

9 Channel values for 9/24/2015 Close date 9/23/2015 Center Support Resistance Last Close Equity 0% (-100%) (+100%) Close %Change Standard & Poors ( -72%) -.20 S&P Midcap 400 Index ( -84%) -.25 Nasdaq 100 Index ( -69%) -.01 Russell (-108%) -.26 SPDRs S&P 500 Trust Series ETF ( -71%) -.16 SPDRs S&P Midcap Trust Series ETF ( -87%) -.25 PowerShares QQQTrust Ser ( -69%).08 ishares Russell 2000 Index Fund ETF (-105%) -.30

10 Channels summary Annual Channel Trade Equity symbol growth width days Standard & Poors 500 sp % 4.5% 21 S&P Midcap 400 Index mid--x 34% 4.4% 21 Nasdaq 100 Index ndx--x 60% 5.3% 21 Russell 2000 rut-x 43% 4.3% 21 SPDRs S&P 500 Trust Series ETF spy 17% 5.% 21 SPDRs S&P Midcap Trust Series ETF mdy 29% 4.6% 21 PowerShares QQQTrust Ser 1 qqq 56% 5.4% 21 ishares Russell 2000 Index Fund ETF iwm 42% 4.3% 21 September 22, 2015 Losses were large today, but the indices closed well off their daily lows. Prices opened with big downside price gaps but they managed to close near their opening values after falling much lower. Even with all this action the indices established up channels. The up channel for the S&P 500 is weak and questionable, but the others look ok. Meanwhile the Chinese released some negative PMI data which may cause further selling tomorrow. So it is difficult to make purchases even though I think it is time.

11 Channel values for 9/23/2015 Close date 9/22/2015 Center Support Resistance Last Close Equity 0% (-100%) (+100%) Close %Change Standard & Poors ( -75%) S&P Midcap 400 Index ( -86%) Nasdaq 100 Index ( -78%) Russell (-119%) SPDRs S&P 500 Trust Series ETF ( -77%) SPDRs S&P Midcap Trust Series ETF ( -91%) PowerShares QQQTrust Ser ( -82%) ishares Russell 2000 Index Fund ETF (-112%) -1.52

12 Channels summary Annual Channel Trade Equity symbol growth width days Standard & Poors 500 sp % 4.4% 20 S&P Midcap 400 Index mid--x 43% 4.2% 20 Nasdaq 100 Index ndx--x 72% 5.1% 20 Russell 2000 rut-x 56% 4.% 20 SPDRs S&P 500 Trust Series ETF spy 26% 4.8% 20 SPDRs S&P Midcap Trust Series ETF mdy 39% 4.4% 20 PowerShares QQQTrust Ser 1 qqq 69% 5.3% 20 ishares Russell 2000 Index Fund ETF iwm 54% 4.% 20 September 20, 2015 Friday the market sold off as I expected after the Fed decided not to raise rates. The reaction came later then I thought, but in any case I expect it to be a temporary setback. While losses were large, for the week they were small and the Russell 2000 actually gained. The selling may carry over into Monday and I plan to use any pullbacks to make purchases. This week we should see the establishment of up channels for all the indices followed here and I am seeing a similar pattern in many individual stocks.

13 Weekly price changes for closing date 9/18/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x -.10 Nasdaq 100 Index ndx--x.01 Russell 2000 rut-x.48 SPDRs S&P 500 Trust Series ETF spy -.66 SPDRs S&P Midcap Trust Series ETF mdy -.53 PowerShares QQQTrust Ser 1 qqq -.21 ishares Russell 2000 Index Fund ETF iwm.47

14 Price changes for closing date 9/18/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x Nasdaq 100 Index ndx--x Russell 2000 rut-x SPDRs S&P 500 Trust Series ETF spy SPDRs S&P Midcap Trust Series ETF mdy PowerShares QQQTrust Ser 1 qqq ishares Russell 2000 Index Fund ETF iwm September 17, 2015 Stocks closed mostly down today after the Federal Reserve decided not to start raising interest rates yet. The S&P 500 was hit the hardest, down.26% while the Russell 2000 did the best with a gain of.47%. The selling was not as much as I expected after the Fed decision, but more could come tomorrow. So the market seems to have taken the decision fairly well and we may not see rates start to rise even this year. I am afraid that the longer the Fed waits the more of a problem it will be when it starts to move. In the meantime, I expect stocks to continue their rally and plan to use any pull backs to make additional purchases.

15 Price changes for closing date 9/17/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x -.08 Nasdaq 100 Index ndx--x.03 Russell 2000 rut-x.47 SPDRs S&P 500 Trust Series ETF spy -.22 SPDRs S&P Midcap Trust Series ETF mdy -.06 PowerShares QQQTrust Ser 1 qqq.04 ishares Russell 2000 Index Fund ETF iwm.34

16 September 16, 2015 Stocks again turned in good gains ahead of the Federal Reserve meeting tomorrow to announce their September decision about whether or not to start raising interest rates. It seems to me that the market has assumed the start of rate hikes. If that is true the market may sell off if the Fed decides to wait until December. Another two months of this uncertainty will hurt stocks in my opinion. I would expect a relief rally if the Federal Reserve does make its first move on interest rates tomorrow. Price changes for closing date 9/16/2015

17 Standard & Poors 500 sp S&P Midcap 400 Index mid--x.94 Nasdaq 100 Index ndx--x.54 Russell 2000 rut-x.79 SPDRs S&P 500 Trust Series ETF spy.87 SPDRs S&P Midcap Trust Series ETF mdy.95 PowerShares QQQTrust Ser 1 qqq.56 ishares Russell 2000 Index Fund ETF iwm.86 September 15, 2015 Stock indices did well today with gains ranging from 1% to 1.3%. The S&P 500 led the way for a change followed closely by the Nasdaq 100. It was a big move given that the end of the Federal Reserve meeting is Thursday and the results will be announced at about 2. If you wanted to buy QQQ below $105 it would have been very difficult today, but there were some opportunities yesterday. It would have been best to place limit orders with good til canceled timing. There very well could be more chances to make that purchase this week.

18 Price changes for closing date 9/15/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x 1.14 Nasdaq 100 Index ndx--x 1.20 Russell 2000 rut-x 1.08 SPDRs S&P 500 Trust Series ETF spy 1.25 SPDRs S&P Midcap Trust Series ETF mdy 1.18 PowerShares QQQTrust Ser 1 qqq 1.18 ishares Russell 2000 Index Fund ETF iwm 1.13 September 14, 2015 Indices pulled back modestly today. Modest by comparison to recent daily moves anyway. This week will resolve the questions about whether or not the Federal Reserve will start raising interest rates in September. There are many opinions on either side of the question. Secondly and more important for investors is what effect their decision will have on stocks. Again there are many opinions on both sides ranging from very bearish if they raise rates to bullish if they raise rates. If they do nothing opinions are mixed on the effects of that as well. So it could be interesting later in the week. Does this mean an investor should delay buy/sell decisions until after the Fed meeting? In my opinion the answer to that is no because regardless of the Fed decision a good deal is already factored into current prices and the net effect may be a sideways move.

19 Price changes for closing date 9/14/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x -.46 Nasdaq 100 Index ndx--x -.33 Russell 2000 rut-x -.37 SPDRs S&P 500 Trust Series ETF spy -.37 SPDRs S&P Midcap Trust Series ETF mdy -.51 PowerShares QQQTrust Ser 1 qqq -.30 ishares Russell 2000 Index Fund ETF iwm -.46 September 13, 2015

20 Stocks continued their recovery from the August 24 th sell-off. For the week the indices gained 2% to over 3% with the Nasdaq 100 leading the way. My accelerator models for all the indices are showing that we have passed bottoms. Given how volatile this market has been, it would not surprise me to see my accelerator models indicate another top within the next month, but it may not happen. We could see the formation of new up channels that carry on for months. For now I favor buying QQQ on dips below $105. Weekly price changes for closing date 9/11/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x 2.03

21 Nasdaq 100 Index ndx--x 3.31 Russell 2000 rut-x 1.90 SPDRs S&P 500 Trust Series ETF spy 2.15 SPDRs S&P Midcap Trust Series ETF mdy 2.15 PowerShares QQQTrust Ser 1 qqq 3.34 ishares Russell 2000 Index Fund ETF iwm 2.05 Price changes for closing date 9/11/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x.56 Nasdaq 100 Index ndx--x.63 Russell 2000 rut-x.41 SPDRs S&P 500 Trust Series ETF spy.45 SPDRs S&P Midcap Trust Series ETF mdy.63 PowerShares QQQTrust Ser 1 qqq.55 ishares Russell 2000 Index Fund ETF iwm.47 September 9, 2015 Stocks traded over a wide range today opening with an upside price gap for most indices, but the opening was close to the daily high. After the morning sell-off, it looked like a rally might start, but about 1:15 selling came in to drive stocks down for big losses. It looks like Apple led the market lower and it seems investors were disappointed with their new product launch today since they drove the stock down almost 2%. Of course the AAPL decline pulled down the Nasdaq 100, the S&P 500, and the Dow Jones Industrials. The selling could carry over into tomorrow and that would offer buying opportunities in my opinion.

22 Price changes for closing date 9/9/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x Nasdaq 100 Index ndx--x Russell 2000 rut-x SPDRs S&P 500 Trust Series ETF spy SPDRs S&P Midcap Trust Series ETF mdy PowerShares QQQTrust Ser 1 qqq ishares Russell 2000 Index Fund ETF iwm September 8, 2015

23 Gains were big enough today to nearly wipe out all of last week s losses. Last Thursday I recommended doing some buying and taking partial positions and that is what I have been doing with QQQ the Nasdaq 100 ETF and a few individual stocks. As of today I am ahead by a few percent and I expect to buy some more QQQ along with IWM and SPY especially if we have some pullbacks. In my opinion the correction is over. We had a 10% drop and for now that should be enough. Price changes for closing date 9/8/2015 Standard & Poors 500 sp

24 S&P Midcap 400 Index mid--x 2.41 Nasdaq 100 Index ndx--x 2.84 Russell 2000 rut-x 2.25 SPDRs S&P 500 Trust Series ETF spy 2.51 SPDRs S&P Midcap Trust Series ETF mdy 2.44 PowerShares QQQTrust Ser 1 qqq 2.82 ishares Russell 2000 Index Fund ETF iwm 2.29 September 7, 2015 Labor Day weekend started on a sour note with a very poor weekly performance. The indices were down from 2.3% to 3.4% with the Russell 2000 turning in the best results with the smallest decline for the week. Stocks are clearly having trouble finding their footing and it is still not obvious that a bottom has occurred. My accelerator indicator is showing we are about to turn up however. How long the upturn will last is anybody s guess, but I have been doing some bottom fishing in the hopes that a decent rally will occur especially in the Nasdaq 100 stocks. I think many investors are fearful of another sell-off but this group seems to be nearly balanced by those who are fearful of missing a big rally. We should expect more volatility this week.

25 Weekly price changes for closing date 9/4/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x Nasdaq 100 Index ndx--x Russell 2000 rut-x SPDRs S&P 500 Trust Series ETF spy SPDRs S&P Midcap Trust Series ETF mdy PowerShares QQQTrust Ser 1 qqq ishares Russell 2000 Index Fund ETF iwm Price changes for closing date 9/4/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x Nasdaq 100 Index ndx--x Russell 2000 rut-x -.78 SPDRs S&P 500 Trust Series ETF spy SPDRs S&P Midcap Trust Series ETF mdy PowerShares QQQTrust Ser 1 qqq ishares Russell 2000 Index Fund ETF iwm -.76 September 3, 2015 Indices closed in a mixed fashion today as if the market cannot make up its mind what to do. It certainly seems the market is fickle moving up and down by 2% to 3% per day. While the moves today were mixed, my accelerator models are all now positive. You can wait one more day before taking positions in QQQ, IWM, and SPY if you are still nervous and I would not blame you. It is time to do some buying, even if you want to just take partial positions.

26 Price changes for closing date 9/3/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x.49 Nasdaq 100 Index ndx--x -.51 Russell 2000 rut-x -.08 SPDRs S&P 500 Trust Series ETF spy.07 SPDRs S&P Midcap Trust Series ETF mdy.44 PowerShares QQQTrust Ser 1 qqq -.49 ishares Russell 2000 Index Fund ETF iwm -.16

27 September 2, 2015 Stocks made a sharp rebound today, but failed to gain back the big losses from yesterday. I would normally consider the gains today to be exceptional, but in this current market they seem more usual. The high volatility in this market makes it hard for individual investors to get ahead and avoid losses. My accelerator models are still looking OK and for the S&P 500 I think a positive turn is delayed a few days, barring any more huge selloffs. I hope to now add to my QQQ position. Price changes for closing date 9/2/2015

28 Standard & Poors 500 sp S&P Midcap 400 Index mid--x 1.43 Nasdaq 100 Index ndx--x 2.74 Russell 2000 rut-x 1.59 SPDRs S&P 500 Trust Series ETF spy 1.90 SPDRs S&P Midcap Trust Series ETF mdy 1.52 PowerShares QQQTrust Ser 1 qqq 2.82 ishares Russell 2000 Index Fund ETF iwm 1.80 September 1, 2015 September certainly started off on a sour note with all the indices followed here taking about a 3% hit. It was enough to disrupt my accelerator models which now do not look as healthy. I did take a small position in QQQ this morning on the assumption that it was just a morning sell-off based on what happened in China and that the market would turn back up in the afternoon. It did not work out as planned, so depending on what happens in the next few days I may sell my QQQ for a small loss.

29 Price changes for closing date 9/1/2015 Standard & Poors 500 sp S&P Midcap 400 Index mid--x Nasdaq 100 Index ndx--x Russell 2000 rut-x SPDRs S&P 500 Trust Series ETF spy SPDRs S&P Midcap Trust Series ETF mdy PowerShares QQQTrust Ser 1 qqq ishares Russell 2000 Index Fund ETF iwm -2.86