Web Statistics The Sentiment Trader

Tuesday, 26 July 2016

Big bull Tom Lee admits: 'August scares us' and here's why

Big bull Tom Lee admits: 'August scares us' and here's why


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Big bull Tom Lee admits: 'August scares us' and here's why


Big bull Tom Lee admits: 'August scares us' and here's why
Big bull Tom Lee admits: 'August scares us' and here's why


Big bull Tom Lee admits: 'August scares us' and here's why

Big bull Tom Lee admits: 'August scares us' and here's why - here are the reasons??

Strategist Tom Lee is known for perennially serving as one of the biggest bulls on Wall Street, but when asked about the month ahead, he's striking a markedly cautious tone.

"August scares us," the co-founder of Fundstrat Global Advisors said Monday on CNBC's "Trading Nation." He pointed to two troubling stats in particular.

Lee observes that going back to 2009, the S&P 500 has fallen an average of 6 percent during the month of August — a stat that jibes well with the "sell in May and go away" line of thinking.

This adds up to a "pretty scary" outlook for next month, Lee said. However, after an August slip, Lee expects a fall rip.

Or, as the strategist memorably put it in a recent note to clients: "sell the beach, buy the teach."

More specifically, Lee says that once the S&P falls to 2,100, "we think you should buy it," in anticipation of a substantial rally to Lee's 2,325 year-end price target. It closed Monday at 2,168.48.

Indeed, the long-term minded "shouldn't do anything, because a 2 to 3 percent sell-off isn't enough to warrant a big shift in a portfolio. But 2 to 3 percent for an active manager is relative performance."

Further, the odds of a slip could be even greater this year, given that "the bond market has become a lot more volatile than equities, and whenever this happens, 68 percent of the time, the stock market falls in the following month."

Here is a daily chart of BONDS....man, Oh, Man, what a rollercoster ride ey? You can see the rising support line has been touched a few times but now. Hmmmmm. So its safe to say we are at a make or break area. 

Big bull Tom Lee admits: 'August scares us' and here's why
Big bull Tom Lee admits: 'August scares us' and here's why




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Monday, 25 July 2016

brent crude chart - the brent crude chart

Elon Musk sees Tesla becoming a renewable energy enterprise


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brent crude chart


brent crude chart
brent crude chart



brent crude chart

brent crude chart - what does it show here??

Oil prices rebounded from over three-month lows on Tuesday, lifted by a drop in the dollar, but concerns of ongoing oversupply weighed on markets and many traders are raising their bets on further price falls.

International Brent crude oil futures were trading at $44.93 per barrel at 0501 GMT, up 21 cents from their last close. U.S. West Texas Intermediate (WTI) crude was at $43.23, up 10 cents per barrel.

Brent hit its lowest level since May the previous day, while WTI hit its lowest level since April.

Traders said the higher prices were partly a correction after the previous day's sharp falls, and also reflected a more than 1 percent fall in the dollar against the Japanese yen on Tuesday.

As oil is traded in dollars, a drop in its value makes fuel imports cheaper for countries using other currencies, potentially spurring demand.

Hedge funds selling crude futures and options to close out these bullish positions has put downward pressure on oil prices in recent weeks.

You can see that the daily brent crude chart is in a downward channel right now, with a target of about 41.90 on the downside. It had not seen much love since the brexit drama. But we will keep an eye on this for our members! We have been in a down channel since the middle of JUNE so far, and things have not improved. Sellers keep coming in after a 1 or 2 day rally in brent crude. 







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Sunday, 24 July 2016

These safe havens are becoming danger zones: JPM

These safe havens are becoming danger zones: JPM


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These safe havens are becoming danger zones: JPM



These safe havens are becoming danger zones: JPM
These safe havens are becoming danger zones: JPM




These safe havens are becoming danger zones: JPM

These safe havens are becoming danger zones: JPM was talked about on many blogs today. But is this the case!??

As stocks and gold continue to climb in 2016, one of Wall Street's largest firms has a clear message for investors: There could be trouble brewing in this rally and These safe havens are becoming danger zones: JPM. Time will tell.

Prices on bullion and government debt, two of the safest of safe havens, have skyrocketed this year even as risk-sensitive assets have powered higheras well. According to some, that isn't a good thing.

"I believe we are seeing signs of froth in perceived safe assets," advised Stephen Parker, Head of Thematic Solutions for J.P. Morgan Private bank on CNBC's "Futures Now" last week.

Initially, Parker said, the optimism was warranted as fundamentals justified the risk rally. In particular, stronger-than-expected earnings, bolstered by top line revenue growth, have surprised to the upside, That "...is something we haven't seen in recent quarters," he said. Through Friday, 65 percent of earnings reports have come in above estimates led by beats from General Electric and Whirlpool, which has encouraged investors.

"You're seeing better signs of stabilizing economic growth," said Parker. "Economic surprises in the U.S. have reached their best levels since the beginning of 2015."

'Forced to chase' a rally

During the past 2 years, the Dow Jones Industrial Average and S&P 500 Index are up 8 and 10 percent, respectively. Furthermore, U.S. markets have continually weathered the fallout from bearish events like Brexit, volatile oil prices, terrorism and a global negative interest rate environment.
"Investors have been caught a little bit offside in terms of being too cautiously positioned," Parker said. "Fund managers are sitting on the highest levels of cash they've had since 2001. Now that markets are rallying, they're being forced to chase."

This is where Parker says the danger is for investors.

"You need safe haven assets to manage volatility," Parker said in reference to owning U.S. Treasuries. "But I think you need to be careful right now." These safe havens are becoming danger zones: JPM.... but still they show nice strength in the middle part of the year.

Investors appear to be heeding Parker's call, at least in the short term. U.S. bonds sold off last week, pushing yields to a six-week high (bond yields move inversely to prices). Notably, the U.S. 10-year yield rose above 1.60 percent for the first time since the Friday following Brexit.

In addition to bonds, Parker warned of the pitfalls that lie in sectors like utilities and consumer staples, as investors hunt for yield. Despite modest growth expectations, consumer staples trade at 22 times forward earnings and utilities, which historically trade at a 20 percent discount to the market. They are currently trading at a premium.

Parker explained that, with low U.S. interest rates, typical safe haven assets have gotten too expensive.

Notably, gold has been on a meteoric rise and is currently trading at levels not in nearly 2 years. From here, Parker said it may be time for investors to pivot away from expensive parts of the market, and get back into more cyclical sectors like consumer discretionary, technology and energy. He expects those assets to be supportive of U.S. markets in the long-term.

energy charts are slowly working off a huge sell off.....

These safe havens are becoming danger zones: JPM
These safe havens are becoming danger zones: JPM



Additionally, Parker urged investors to consider opportunities that exist in emerging markets now that global growth and commodities have stabilized. Meanwhile, the U.S. dollar, another safe haven, has settled in a less volatile range.

"Lower rates and a patient Fed are good for emerging markets," Parker told CNBC.

"Despite outperforming this year, emerging markets have lagged U.S. markets by over 70 percent since the end of 2012 and valuations remain attractive," he said. "Investors who have thrown in the towel on emerging markets in recent years are beginning to take another look."

In a research note to clients last week, Bank of America noted record flows into emerging market bonds, which jumped to nearly $5 billion this past week. That exceeded a record of $3.4 billion set just two weeks ago.

Year-to-date, EEM, the exchange traded fund made up of emerging markets equities in South Korea, China and Taiwan, is up 11 percent.







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