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Intraday Market Notes & Observations
Foreign currencies jump against the greenback
February 9, 2016

1:55 pm ET: Intraday support/resistance:
SPX 1832.7/1861.9
DTX 684.3/703.7
DJIA 15845/16055
Nasdaq 4210/4330
RUT 955/975
VIX 26.3/28.3 (rising VIX is bearish: VIX over 20 means bears are in control)
Trin range: 0.7 - 1.2 (neutral)
Average VWAPs: +69/-127 (bearish)

Investors continue to dump healthcare, biotech, internet, software
February 8, 2016

1:25 pm ET: Intraday support/resistance:
SPX 1826.75/1873.25
DTX 678.2/691.8
DJIA 15755/16150
Nasdaq 4229/4291
RUT 951.4/982.2
VIX 25.7/27.3 (rising VIX is bearish: VIX over 20 means bears are in control)
Trin range: 0.8 - 1.2 (neutral)
Average VWAPs: +73/-177 (very bearish)

Dismal LinkedIn report causing investors to flee riskier assets for the safety of utilities
February 5, 2016

2:05 pm ET: Intraday support/resistance:
SPX 1872/1913
DTX 693/707
DJIA 16155/16425
Nasdaq 4367/4493
RUT 989.7/1014.3
VIX 21.9/23.7 (rising VIX is bearish: VIX over 20 means bears are in control)
Trin range: 0.8 - 1.2 (neutral)
Average VWAPs: +59/-200 (very bearish)

Bulls cheer as Transports power higher
February 4, 2016

1:45 pm ET: Intraday support/resistance:
SPX 1900.5/1929.5
DTX 683.2/707.8
DJIA 16265/16510
Nasdaq 4464/4546
RUT 1008.5/1025.5
VIX 21.15/22.85 (VIX over 20 means bears are in control)
Trin range: 0.7 - 1.1 (bullish to neutral)
Average VWAPs: +81/-134 (bearish but bulls gaining strength)

Investors jumping into gold and yen/dumping internet, biotech, healthcare, consumer discretionary
February 3, 2016

2:00 pm ET: Intraday support/resistance:
SPX 1871/1914
DTX 665.6/687.4
DJIA 1596016280
Nasdaq 4417/4547
RUT 989/1017
VIX 21.4/24.2 (rising VIX is bearish; VIX over 20 means bears are in control)
Trin range: 0.8 - 1.3 (falling Trin is bullish)
Average VWAPs: +70/-157 (bearish but high +VWAPs indicate buying in gold miners & energy producers)

Distribution continues in biotech, foreign banks
February 2, 2016

1:55 pm ET: Intraday support/resistance:
SPX 1899.75/1937.25
DTX 675.75/694.75
DJIA 16110/16420
Nasdaq 4525/4590
RUT 1005/1030.6
VIX 21/22 (rising VIX is bearish; VIX over 20 means bears are in control)
Trin range: 1.3 - 1.9 (rising Trin is bearish; Trin over 1.5 is contrarian-->market reversal imminent?)
Average VWAPs: +45/-149 (very bearish)

Income stocks dominating the New Highs List
February 1, 2016

1:50 pm ET: Intraday support/resistance:
SPX 1920.3/1939.7
DTX 684.9/697.1
DJIA 16300/16460
Nasdaq 4565/4620
RUT 1020.6/1034.2
VIX 19.85/21.75 (VIX over 20 means bears are still in control)
Trin range: 0.85 - 1.35 (rising Trin is bearish)
Average VWAPs: +106/-50 (bullish)

Investors bidding up aero & defense stocks, REITs
January 29, 2016

2:00 pm ET: Intraday support/resistance:
SPX 1894/1932
DTX 669.4/687.8
DJIA 16090/16430
Nasdaq 4511/4589
RUT 1003.5/1026.5
VIX 19.75/21.75 (falling VIX is bullish but VIX over 20 means bears are still in control)
Trin range: 0.8 - 1.8 (Trin falling from early morning 1.8 reading is very bullish)
Average VWAPs: +121/-76 (bullish)

Big rotation out of healthcare/pharma and into utes/consumer staples
January 28, 2016

1:55 pm ET: Intraday support/resistance:
SPX 1873/1903
DTX 663/679
DJIA 15865/16105
Nasdaq 4448/4553
RUT 1000.4/1015.4
VIX 21.9/23.8 (VIX over 20 means bears are still in control)
Trin range: 1.05 - 1.65 (rising Trin is bearish but Trin over 1.5 is contrarian--could signal a pending reversal)
Average VWAPs: +71/-132 (bearish but bulls are still around)

Market mixed ahead of the Fed
January 27, 2016

1:45 pm ET: Intraday support/resistance:
SPX 1887.4/1917.6
DTX 681.2/692.8
DJIA 15990/16235
Nasdaq 4503/4569
RUT 1008.3/1023.3
VIX 21.5/23.5 (VIX over 20 means bears are still in control)
Trin range: 0.5 - 0.9 (Trin at or below 0.5 is contrarian)
Average VWAPs: +86/-78 (bull/bear battle)

Gold pushes above resistance
January 26, 2016

1:55 pm ET: Intraday support/resistance:
SPX 1878.8/1909.2
DTX 666.6/683.4
DJIA 15895/16225
Nasdaq 4504/4593
RUT 998.2/1020.6
VIX 21.9/24 (VIX over 20 means bears are still in control)
Trin range: 0.5 - 1.0 (falling Trin is bullish)
Average VWAPs: +129/-44 (bullish)

Investors shunning energy producers
January 25, 2016

2:00 pm ET: Intraday support/resistance:
SPX 1887.7/1906.3
DTX 667/677
DJIA 15965/16085
Nasdaq 4556.5/4590.5
RUT 1005.4/1019.4
VIX 22.25/23.75 (VIX over 20 means bears are still in control)
Trin range: 1.0 - 1.4 (rising Trin is bearish)
Average VWAPs: +56/-98 (moderately bearish)

Internet stocks stage strong rebound
January 22, 2016

1:40 pm ET: Intraday support/resistance:
SPX 1877.4/1907.6
DTX 670/688
DJIA 15905/16135
Nasdaq 4540/4585
RUT 999.8/1023.2
VIX 22.75/24.25 (falling VIX is bullish but VIX over 20 means bears are still in control)
Trin range: 0.95 - 1.3 (rising Trin is bearish)
Average VWAPs: +94/-75 (bulls with the edge)

Bulls trying to hang on
January 21, 2016

1:30 pm ET: Intraday support/resistance:
SPX 1849/1901
DTX 655.4/677.6
DJIA 15705/16095
Nasdaq 4432/4568
RUT 992/1018
VIX 24.55/28.45 (VIX over 20 means bears are in control)
Trin range: 0.5 - 0.8 (falling Trin is bullish but Trin near 0.5 is contrarian)
Average VWAPs: +71/-122 (bears gaining strength in mid-day trading)

Bulls step in mid-day to stop the hemorrhaging
January 20, 2016

2:00 pm ET: Intraday support/resistance:
SPX 1805/1877
DTX 640.3/666.7
DJIA 15450/15950
Nasdaq 4313/4487
RUT 958.5/994.5
VIX 26.9/32.1 (VIX over 30 is bearish contrarian)
Trin range: 0.9- 1.2
Average VWAPs: +256/-63 (extremely bullish to contrarian (!): rotation back into riskier assets--biotech, healthcare, pharma, IT and out of safer assets--utilities, staples, REITs)

Investors continue to dump riskier assets
January 19, 2016

1:50 pm ET: Intraday support/resistance:
SPX 1871/1901
DTX 663/677
DJIA 15970/16170
Nasdaq 4464/4550
RUT 992.2/1017.8
VIX 25.2/27.3 (VIX over 20 indicates bears are in control)
Trin range: 0.8 - 1.2 (falling Trin is bullish)
Average VWAPs: +47/-187 (very bearish: rotation continues out of biotech & energy pipelines and flowing into utilities and REITs)

***The Stock Market Cook Book is on hiatus until Dr. Kris recovers from the flu.***
January 13, 2016

Rotation out of biotech & healthcare continues
January 12, 2016

1:40 pm ET: Intraday support/resistance:
SPX 1907.6/1947.4
DTX 688.4/697.6
DJIA 16310/16590
Nasdaq 4625/4715
RUT 1031/1057
VIX 21.9/24.1 (VIX over 20 indicates bears are in control)
Trin range: 1.05 - 1.6 (rising Trin is bearish; Trin over 1.5 is contrarian)
Average VWAPs: +38/-162 (bearish)

Russell 2000 & Dow Transports sink to multi-year lows
January 11, 2016

2:10 pm ET: Intraday support/resistance:
SPX 1899/1936
DTX 678.5/699.5
DJIA 16220/16460
Nasdaq 4557/4683
RUT 1029.2/1052.6
VIX 25.2/27.8 (rising VIX is bearish; VIX over 20 indicates bears are in control)
Trin range: 0.8 - 1.25
Average VWAPs: +51/-148 (bearish: mass exodus out of biotech/pharma/healthcare)

Every cloud has a silver lining
January 8, 2016

One might construe that our first big El Nino storm is but a reflection of the bearish tone in the stock market. Here in Palm Springs, our first storm brought over 2 inches of rain--that's more than our average annual rainfall. Storms in the desert can be especially hazardous because of flash flooding leading to accidents, road closures, and traffic snarls. The other downside is that homeowners finally get to see if their roofs are waterproof. When the hot water went out, I found out the hard way that my roof is definitely in need of repair.

But there's always a bright side. Yesterday, I woke up to puffy clouds playing peek-a-boo with the freshly dusted snow-capped mountains. But the piece de resistance was the rainbow (shown above) that pierced the downtown air in front of Mt. San Jacinto. Since Palm Springs boasts at least 350 days of sunshine a year, this was a rare sight indeed. There's always a rainbow somewhere...

1:55 pm ET: Intraday support/resistance:
SPX 1929.6/1960.4
DTX 698.2/705.8
DJIA 16430/16650
Nasdaq 4663/4743
RUT 1052/1072
VIX 22.5/25.3 (VIX over 20 indicates bears are in control)
Trin range: 0.75 - 1.6 (bull/bear battle)
Average VWAPs: +52/-123 (bearish)

Gold breaking out in the continuing flight to safety
January 7, 2016

2:00 pm ET: Intraday support/resistance:
SPX 1941.7/1985.3
DTX 695.5/718.5
DJIA 16510/16890
Nasdaq 4672/4788
RUT 1059/1091
VIX 22.4/25.2 (rising VIX is bearish; VIX over 20 indicates bears are in control)
Trin range: 0.8 - 1.05 (bullish to neutral (!))
Average VWAPs: +53/-194 (bearish: rotation out of biotech, consumer discretionary, internet, semis, aero & defense, auto components & auto parts retailers; into gold & silver and their miners (GLD, IAU, SLV, GDX, GDXJ, SIL))

Investors ditch high risk issues in a continuing flight to safety
January 6, 2016

2:00 pm ET: Intraday support/resistance:
SPX 1983.3/2011.7
DTX 720.5/733.5
DJIA 16845/17155
Nasdaq 4814/4866
RUT 1092.5/1109.5
VIX 20.2/21.8 (rising VIX is bearish; VIX over 20 indicates bears are in control)
Trin range: 1.05 - 1.7 (bearish/contrarian)
Average VWAPs: +55/-107 (bearish: rotation out of biotech, consumer discretionary and into multi-utes, consumer staples (especially tobacco--MO, RAI, PM))

Bulls trying to recover from their New Year's hangover
January 5, 2016

1:55 pm ET: Intraday support/resistance:
SPX 1999.1/2020.9
DTX 727.4/738.6
DJIA 17005/17195
Nasdaq 4863/4927
RUT 1104.3/1112.7
VIX 19.45/21.05 (falling VIX is bullish; VIX over 20 indicates bears are still in control)
Trin range: 1.0 - 1.8 (rising Trin is bearish but Trin at 1.8 is contrarian)
Average VWAPs: +87/-66 (rotation out of healthcare, biotech and into airlines/air freight, utes, REITs)

Global sell-off rings in the New Year
January 4, 2016

1:55 pm ET: Intraday support/resistance:
SPX 1976.8/2038.2
DTX 725.9/749.1
DJIA 16935/17405
Nasdaq 4838/4902
RUT 1096/1134
VIX 20.95/23.55 (rising VIX is bearish; VIX over 20 indicates bears are in control)
Trin range: 0.65 - 1.1 (bullish to neutral (!))
Average VWAPs: +90/-84 (bull/bear battle)

Merry Christmas & Happy Holidays!
December 24, 2015














Happy holidays from all of us at the Stock Market Cook Book. We will be returning to our regularly scheduled programming on January 4th.

Oil pops fueling the Santa rally
December 23, 2015

1:15 pm ET: Intraday support/resistance:
SPX 2042.5/2063.8
DTX 751.2/762.8
DJIA 17430/17610
Nasdaq 5020/5040
RUT 1139/1156
VIX 15.6/16.2 (falling VIX is bullish but VIX over 15 is overall bearish)
Trin range: 0.5 - 0.9 (falling Trin is bullish but Trin at or below 0.5 is contrarian)
Average VWAPs: +91/-48 (bullish)

Is Santa staging a late season rally?
December 22, 2015

2:15 pm ET: Intraday support/resistance:
SPX 2020.5/2041.5
DTX 742/752
DJIA 17240/17440
Nasdaq 4964/4995
RUT 1123.7/1136.3
VIX 16.8/18.2 (falling VIX is bullish but VIX over 15 is bearish)
Trin range: 0.6 - 0.85 (falling Trin is bullish)
Average VWAPs: +116/-45 (bullish)

Markets mixed in light holiday trading/Oil continues to slide
December 21, 2015

Today's money flow:
Into: Cruise lines (CUK, RCL)
Out of: Oil producers

1:45 pm ET: Intraday support/resistance:
SPX 2005.1/2022.9
DTX 734.3/744.7
DJIA 17105/17275
Nasdaq 4929/4971
RUT 1120.6/1130.4
VIX 18.8/20.2 (VIX above 20 means bears are in control)
Trin range: 0.8 - 1.2 (neutral)
Average VWAPs: +73/-67 (bull/bear seesaw on low volume)

Gold, oil drop to multi-year lows/Dollar pops
December 17, 2015

Today's money flow:
Into: Food products, Oil/gas producers & MLPs, Utilities
Out of: Banks, Resorts/Restaurants

1:50 pm ET: Intraday support/resistance:
SPX 2043.6/2076.4
DTX 757.5/776.5
DJIA 17525/17795
Nasdaq 5017/5089
RUT 1135.4/1151.4
VIX 16.15/19.85 (falling VIX is bullish but VIX above 15 is bearish overall)
Trin range: 1.5 - 2.5 (extremely bearish/contrarian--market reversal to the upside imminent?)
Average VWAPs: +65/-80 (bull/bear battle)

Markets mixed ahead of Fed rate decision
December 16, 2015

Today's money flow:
Out of: Healthcare providers, pharma, food products, airlines
Into: Biotech, MLPs

1:45 pm ET: Intraday support/resistance:
SPX 2040.1/2059.9
DTX 755/765
DJIA 17450/17690
Nasdaq 4978/5037
RUT 1131/1141
VIX 18.85/20.65 (falling VIX is bullish but VIX above 20 indicates bears are still in charge)
Trin range: 0.85 - 1.3 (rising Trin is bearish)
Average VWAPs: +72/-77 (bull/bear standoff)

Santa rally not dead yet
December 15, 2015

Today's money flow:
Out of: Auto parts retailers, aerospace & defense
into: Biotech, financials, software

1:45 pm ET: Intraday support/resistance:
SPX 2025/2054
DTX 750.75/758.75
DJIA 17340/17630
Nasdaq 4984/5027
RUT 1117/1135
VIX 20/22 (falling VIX is bullish but VIX above 20 indicates bears are still in charge)
Trin range: 0.6 - 0.9 (bullish)
Average VWAPs: +96/-60 (moderately bullish but bears are still hanging around)

Bulls and bears going head to head
December 14, 2015

Today's money flow:
Out of: Mild selling pressure in biotech, healthcare, aerospace & defense
into: Solar

2:05 pm ET: Intraday support/resistance:
SPX 1993.25/2021.75
DTX 739.6/754.4
DJIA 17140/17380
Nasdaq 4872/4958
RUT 1108.75/1127.25
VIX 23.7/26.8 (rising VIX is bearish; VIX above 20 indicates bears are in charge)
Trin range: 0.65 - 1.4 (bull/bear battle)
Average VWAPs: +87/-82 (bull/bear battle)

S&P, Russell 2000, Nasdaq break support levels as VIX leaps over 20
December 11, 2015

Today's money flow:
Out of: All sector etfs in the red
into: Gold, treasuries, Yen

1:40 pm ET: Intraday support/resistance:
SPX 2011/2047
DTX 753/766
DJIA 17175/17575
Nasdaq 4940/4996
RUT 1123.75/1146.25
VIX 20.9/25.1 (rising VIX is bearish; VIX above 20 indicates bears are in charge)
Trin range: 1.05 - 1.3 (bearish)
Average VWAPs: +51/-106 (bearish)

Bulls desperately trying to keep Nasdaq above 5000
December 10, 2015

Today's money flow:
Out of: chemicals, REITs, rails, MLPs (yesterday's darling)
Into: biotech, healthcare providers, pharma, oil & gas explorers/producers

1:45 pm ET: Intraday support/resistance:
SPX 2045.7/2064.3
DTX 762.9/775.1
DJIA 17475/17665
Nasdaq 5019/5066
RUT 1144/1153
VIX 18.45/19.75 (VIX above 15 is bearish overall)
Trin range: 0.6 - 0.8 (bullish!)
Average VWAPs: +112/-42 (bullish)

Rotation out of internet stocks and into MLPs
December 9, 2015

1:40 pm ET: Intraday support/resistance:
SPX 2034.7/2080.3
DTX 757/773
DJIA 17390/17770
Nasdaq 5000/5106
RUT 1142.5/1165.5
VIX 16.65/20.35 (rising VIX is bearish; VIX above 15 is bearish overall; VIX over 20 indicates the bears are in charge)
Trin range: 0.5 - 0.9 (bullish!)
Average VWAPs: +34/-175 (very bearish)

Investors dumping transports & industrials
December 8, 2015

1:40 pm ET: Intraday support/resistance:
SPX 2049.1/2073.9
DTX 758.2/786.8
DJIA 17465/17705
Nasdaq 5046/5114
RUT 1151.3/1164.9
VIX 16.5/18.5 (rising VIX is bearish; VIX above 15 is bearish overall)
Trin range: 0.85 - 1.4 (rising Trin is bearish)
Average VWAPs: +114/-64 (heavy rotation out of transports, chemicals, machinery and into healthcare, pharma, biotech, oil and gas producers)

Bulls can't lift the Santa rally off the tarmac
December 7, 2015

1:50 pm ET: Intraday support/resistance:
SPX 2061.4/2090.4
DTX 786.5/801.5
DJIA 17615/17895
Nasdaq 5060/5140
RUT 1159/1183
VIX 15.6/17.4 (rising VIX is bearish; VIX above 15 is bearish overall)
Trin range: 1.0 - 1.2 (neutral to bearish)
Average VWAPs: +153/-112 (bearish)

Bulls fight to get the Santa rally back on track
December 4, 2015

2:05 pm ET: Intraday support/resistance:
SPX 2051/2096
DTX 783.2/798.8
DJIA 17485/17875
Nasdaq 5043.5/5156.5
RUT 1170.5/1185.3
VIX 14.85/17.65 (falling VIX is bullish; VIX over 15 is bearish overall)
Trin range: 1.0 - 1.3 (rising Trin is bearish!)
Average VWAPs: +134/-48 (bullish)

Support fails for Dow Transports indicating further downside
December 3, 2015

2:05 pm ET: Intraday support/resistance:
SPX 2050/2085
DTX 784.7/805.3
DJIA 17520/17780
Nasdaq 5035/5145
RUT 1177.3/1196.7
VIX 15.85/18.55 (rising VIX is bearish; VIX over 15 is bearish overall)
Trin range: 0.7 - 1.1 (falling Trin is bullish!)
Average VWAPs: +35/-256 (bearish/contrarian)

Transports derail the market
December 2, 2015

2:00 pm ET: Intraday support/resistance:
SPX 2085.75/2104.25
DTX 802.25/819.75
DJIA 17800/17900
Nasdaq 5138/5177
RUT 1195/1205
VIX 14.7/15.7 (rising VIX is bearish; VIX over 15 is bearish overall)
Trin range: 0.9 - 1.15 (rising Trin is bearish)
Average VWAPs: +39/-129 (bearish; major rotation out of railroads)

Indecision marks the first day of December
December 1, 2015

1:40 pm ET: Intraday support/resistance:
SPX 2083/2101
DTX 808.1/816.9
DJIA 17720/17920
Nasdaq 5117/5147
RUT 1194.8/1203.2
VIX 15.25/16.35 (falling VIX is bullish but VIX over 15 is bearish overall)
Trin range: 0.65 - 0.9 (falling Trin is bullish)
Average VWAPs: +79/-62 (rotation out of aerospace & defense and back into biotech)

Market slumps, biotech sells off as November draws to a close
November 30, 2015

1:40 pm ET: Intraday support/resistance:
SPX 2082.2/2093.8
DTX 809.5/823.5
DJIA 17715/17835
Nasdaq 5089/5141
RUT 1195.1/1204.9
VIX 15.5/16.9 (rising VIX is bearish; VIX over 15 is bearish overall)
Trin range: 0.9 - 1.3 (neutral to bearish)
Average VWAPs: +50/-110 (heavy rotation out of biotech)

Happy Thanksgiving!
November 26, 2015












The Stock Market Cook Book will be back on Monday, December 1st. Have a good holiday!

Rotation out of aero & defense and into oil drillers/explorers/producers
November 25, 2015

1:35 pm ET: Intraday support/resistance:
SPX 2086.3/2094.7
DTX 813.5/819.5
DJIA 17800/17860
Nasdaq 5101/5129
RUT 1188.5/1199.5
VIX 14.8/15.9 (falling VIX is bullish but VIX over 15 is bearish overall)
Trin range: 1.1 - 1.6 (bearish/contrarian)
Average VWAPs: +72/-52 (rotation out of aero & defense and into oil & gas)

Investors paying up for retailers
November 24, 2015

1:45 pm ET: Intraday support/resistance:
SPX 2070.3/2094.7
DTX 808.5/821.5
DJIA 17685/17895
Nasdaq 5050/5115
RUT 1172.9/1186.3
VIX 15.4/17.2 (VIX over 15 is bearish)
Trin range: 0.6 - 0.8 (bullish)
Average VWAPs: +128/-32 (bullish; heavy buying in retail stocks)

Major resistance putting pressure on transports
November 23, 2015

2:00 pm ET: Intraday support/resistance:
SPX 2087.6/2095.6
DTX 825.25/832.75
DJIA 17790/17870
Nasdaq 5102/5128
RUT 1173.75/1186.25
VIX 15.4/16.6 (VIX over 15 is bearish)
Trin range: 0.85 - 1.3 (rising Trin is bearish)
Average VWAPs: +64/-73 (rotation out of aerospace & rails; into retail & biotech)

Transports retesting 3 month resistance level
November 20, 2015

Intraday notes (2:15pm ET): The Santa Claus rally or not the Santa Claus rally--that is the question. And one that could be answered soon depending on the action in the Dow Transports, an index that is widely considered to be a leader in market direction. This index has been slumping since February and lately has been under consolidation. The 832 level (8320 on some charts) is proving to be an area of strong resistance. It's been tested twice and the index is testing it again today. A break above it would give legs to a rally continuation and a heightened probability that Santa will indeed be coming to town.

1:20 pm ET: Intraday support/resistance:
SPX 2082.4/2099.2
DTX 826.2/835.8
DJIA 17730/17930
Nasdaq 5095/5115
RUT 1168.4/1181
VIX 15.6/16.4 (falling VIX is bullish but VIX over 15 is bearish overall)
Trin range: 1.25 - 1.45 (bearish!)
Average VWAPs: +76/-70 (rotation out of consumer staples and into consumer discretionary)

Healthcare/biotech/pharma getting slammed on United Health warning
November 19, 2015

2:10 pm ET: Intraday support/resistance:
SPX 2078.25/2086.75
DTX 818.1/825.9
DJIA 17680/17780
Nasdaq 5067/5093
RUT 1163.7/1172.3
VIX 16.25/17.25 (falling VIX is bullish but VIX over 15 is bearish)
Trin range: 0.85 - 1.1 (neutral)
Average VWAPs: +62/-97 (heavy rotation out of healthcare/biotech/pharma)

Investors are bullish ahead of Fed minutes release
November 18, 2015

1:50 pm ET: Intraday support/resistance:
SPX 2052/2074
DTX 806.3/818.7
DJIA 17485/17675
Nasdaq 5002/5043
RUT 1153.4/1165.6
VIX 17/19 (VIX over 15 is bearish)
Trin range: 0.65 - 1.2 (bullish to neutral)
Average VWAPs: +93/-60 (bulls with the edge)

Market digesting yesterday's gains
November 17, 2015

1:50 pm ET: Intraday support/resistance:
SPX 2048.3/2066.7
DTX 801.4/814.6
DJIA 17455/17600
Nasdaq 4978/5026
RUT 1152.5/1167.5
VIX 17.45/18.55 (rising VIX is bearish and VIX over 15 is bearish)
Trin range: 0.7 - 1.25 (rising Trin is bearish)
Average VWAPs: +66/-85 (bears with the edge)

Paris terrorist attacks sparks interest in aerospace/defense stocks
November 16, 2015

Intraday notes (1:45pm ET): Investors are bidding up shares of aerospace and defense companies on heightened fears of more terrorist attacks. Defense stocks gaining in the 3%-4% range today: L3 Communications (LLL), Lockheed-Martin (LMT), Northrup-Grumman (NOC), Huntington-Ingalls (HII), and Raytheon (RTN) which is today's biggest winner of the group. The stock jumped out of recent consolidation gaining nearly 4% to hit an all-time high.

1:25 pm ET: Intraday support/resistance:
SPX 2019.4/2058.6
DTX 792.1/803.5
DJIA 17210/17440
Nasdaq 4909/4951
RUT 1140.75/1150.25
VIX 18.45/20.55 (falling VIX is bearish; VIX over 20 means bears are still in control)
Trin range: 0.7 - 1.15 (falling Trin is bullish)
Average VWAPs: +105/-44 (bullish)

Friday the 13th hexes the market as some major averages slice through support levels
November 13, 2015

2:10 pm ET: Intraday support/resistance:
SPX 2025.4/2044.6
DTX 799.8/809.2
DJIA 17260/17440
Nasdaq 4931/4989
RUT 1144.4/1159.6
VIX 18.2/20.4 (rising VIX is bearish; VIX over 15 is bearish overall; VIX over 20 means bears are in control)
Trin range: 1.1 - 1.6 (bearish to contrarian)
Average VWAPs: +78/-94 (major rotation out of restaurants, retail and internet companies and into healthcare, pharma, biotech, and chemical companies)

Market gearing up for next major move--but will it be up or down?
November 11, 2015

2:10 pm ET: Intraday support/resistance:
SPX 2075/2087
DTX 817.75/825.25
DJIA 17695/17805
Nasdaq 5064/5111
RUT 1177.5/1190
VIX 15/16 (falling VIX is bullish but VIX over 15 is bearish overall)
Trin range: 1.1 - 1.4 (bearish to contrarian)
Average VWAPs: +68/-91 (bears with the edge)

Downbeat iphone sales forecast putting pressure on tech & semis
November 10, 2015

Intraday Notes (2:10pm ET}: The risk-on trade is back as investors bid up biotech, healthcare, pharma, IT, and beverage makers/distributors. Rotation out of REITs continues as the probability of a December rate hike increases. Tech giant Apple (AAPL) has significantly lowered orders from its iPhone parts suppliers indicating a slow down in orders. (Certainly, the continued decrease in Chinese imports has something to do with it.) In commodities, so-called softs (mostly agriculturally based commodities) continue to melt down. Commodity etfs hitting all-time lows today are soybeans (SOYB), corn (CORN), and livestock (COW). That's good news for the consumer and for companies that use these products (think restaurants); not so good news for the farmer, but that's why the futures market was invented).

2:00 pm ET: Intraday support/resistance:
SPX 2070/2076
DTX 814.4/825.6
DJIA 17655/17755
Nasdaq 5051/5081
RUT 1177.5/1185.5
VIX 15.65/16.95 (falling VIX is bullish but VIX over 15 is bearish overall)
Trin range: 1.1 - 1.45 (bearish to contrarian)
Average VWAPs: +115/-64 (bullish)

December rate hike fears fueling jump in volatility
November 9, 2015

1:45 pm ET: Intraday support/resistance:
SPX 2063.5/2096.5
DTX 803/823
DJIA 17600/17900
Nasdaq 5067/5133
RUT 1178/1200
VIX 15.15/17.35 (rising VIX is bearish; VIX over 15 is bearish)
Trin range: 0.95 - 1.35 (bearish)
Average VWAPs: +74/-78 (bull/bear battle)

Positive jobs data putting pressure on REITs as dollar soars
November 6, 2015

1:50pm ET: Intraday support/resistance:
SPX 2080/2102
DTX 814.4/823.6
DJIA 17750/17910
Nasdaq 5093/5147
RUT 1181.75/1198.25
VIX 14.4/16 (falling VIX is bullish; VIX over 15 is bearish)
Trin range: 0.7 - 1.0 (bullish)
Average VWAPs: +124/-81 (bullish but high negative VWAPs reflect a flight out of REITs on anticipation of a rate hike (due to today's positive jobs numbers); rotation out of biotech continues)

Market digesting recent gains as rotation out of biotech & pharma continues
November 5, 2015

2:00pm ET: Intraday support/resistance:
SPX 2090.4/2109.6
DTX 814/824
DJIA 17780/17940
Nasdaq 5095/5155
RUT 1179.75/1194.25
VIX 15/16 (rising VIX is bearish; VIX over 15 is bearish)
Trin range: 1.0 - 1.5 (bearish to contrarian)
Average VWAPs: +103/-76 (bullish but high negative VWAPs reflect the continued rotation out of biotech and pharma)

Media stocks getting clocked on lowered Time-Warner cable forecast
November 4, 2015

12:25 pm ET: Intraday support/resistance:
SPX 2095.4/2114.6
DTX 813.1/821.3
DJIA 17815/17965
Nasdaq 5117.5/5162.5
RUT 1184.8/1196.2
VIX 13.95/15.65 (rising VIX is bearish; VIX over 15 is bearish)
Trin range: 0.9 - 1.5 (bearish)
Average VWAPs: +74/-95 (rotation out of biotech, media, oil, pharma and into healthcare, tech)

Bulls lead the charge into November
November 2, 2015

1:25 pm ET: Intraday support/resistance:
SPX 2080.75/2099.25
DTX 813.2/821.8
DJIA 17655/17825
Nasdaq 5061.5/5115.5
RUT 1162/1178
VIX 14.1/15.5 (VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 0.85 - 1.0 (bullish to neutral)
Average VWAPs: +125/-48 (bullish)

Rotation out of regional banks and into oil refiners/producers
October 30, 2015

2:00 pm ET: Intraday support/resistance:
SPX 2084.1/2094.5
DTX 811.4/817.6
DJIA 17730/17800
Nasdaq 5066/5086
RUT 1162.9/1168.1
VIX 14/15.4 (VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 0.85 - 1.25 (neutral)
Average VWAPs: +118/-63 (bullish)

Market taking a post-FOMC breather
October 29, 2015

1:55 pm ET: Intraday support/resistance:
SPX 2082.6/2091.4
DTX 805.25/813.75
DJIA 17680/17770
Nasdaq 5065/5085
RUT 1165.6/1178.4
VIX 14.55/15.45 (VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 0.85 - 1.25 (neutral to bearish)
Average VWAPs: +79/-163 (bearish; big rotation out of biotech & pharma)

Morning rally sez no rate increase expected from Fed today
October 28, 2015

1:50 pm ET: Intraday support/resistance:
SPX 2066.5/2085.5
DTX 800.25/810.75
DJIA 17585/17725
Nasdaq 5020/5080
RUT 1145.5/1174.5
VIX 14.35/15.25 (falling VIX is bullish; VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 1.0 - 2.0 (bearish contrarian)
Average VWAPs: +144/-56 (bullish)

Transports lead the market back down
October 27, 2015

1:45 pm ET: Intraday support/resistance:
SPX 2054.6/2070.4
DTX 800.75/827.75
DJIA 17535/17635
Nasdaq 5005/5040
RUT 1137.5/1158.5
VIX 15.3/16.1 (rising VIX is bearish; VIX over 15 is bearish)
Trin range: 0.95 - 1.25 (neutral to bearish)
Average VWAPs: +60/-107 (bearish)

Consumer discretionary etf retesting all-time high
October 26, 2015

1:45 pm ET: Intraday support/resistance:
SPX 2066.5/2078.5
DTX 826.8/832.2
DJIA 17600/17660
Nasdaq 5013/5052
RUT 1158.4/1166.6
VIX 14.45/15.45 (falling VIX is bullish; VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 0.85 - 1.15 (neutral)
Average VWAPs: +92/-67 (rotation out of energy, semis, software, staples and into retail, hotels/restaurants/travel)

Rush out of retail & REITs; Rush back into healthcare/pharma/biotech
October 23, 2015

1:55 pm ET: Intraday support/resistance:
SPX 2058.2/2081.8
DTX 820.5/831.5
DJIA 17525/17675
Nasdaq 5000/5040
RUT 1153.6/1166.4
VIX 13.25/15.35 (falling VIX is bullish; VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 0.8 - 1.2 (falling Trin is bullish)
Average VWAPs: +128/-102 (stampede back into healthcare/pharma/biotech; stampede out of retail & REITs)

Dollar pops/Euro drops
October 22, 2015

2:05 pm ET: Intraday support/resistance:
SPX 2021.9/2059.1
DTX 812.5/827.5
DJIA 17180/17520
Nasdaq 4862/4928
RUT 1147/1161
VIX 14.5/15.9 (VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 1.0 - 1.2 (neutral)
Average VWAPs: +77/-184 (stampede out of healthcare/pharma continues)

Bears take over as aggressive selling in healthcare continues
October 21, 2015

1:35 pm ET: Intraday support/resistance:
SPX 2018/2038
DTX 811/822
DJIA 17195/17315
Nasdaq 4935/4905
RUT 1147/1167
VIX 14.4/16.1 (VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 1.1 - 1.5 (bearish)
Average VWAPs: +36/-166 (bearish)

Investors continue to dump biotech/healthcare/pharma
October 20, 2015

2:05 pm ET: Intraday support/resistance:
SPX 2021.9/2039.1
DTX 807.9/819.1
DJIA 17150/17270
Nasdaq 4866/4909
RUT 1158.4/1169.6
VIX 14.7/16.5 (rising VIX is bearish; VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 0.8 - 1.1 (bullish to neutral)
Average VWAPs: +46/-157 (bearish)

VIX testing bull/bear dividing line
October 19, 2015

2:00 pm ET: Intraday support/resistance:
SPX 2022.3/2035.7
DTX 804/814
DJIA 17130/17250
Nasdaq 4866/4919
RUT 1155/1169
VIX 14.75/16.25 (falling VIX is bullish; VIX under 15 is bullish/VIX over 15 is bearish)
Trin range: 1.0 - 1.3 (neutral to bearish)
Average VWAPs: +51/-109 (bearish)

Transports turn back down leading the other averages
October 16, 2015

1:50 pm ET: Intraday support/resistance:
SPX 2019.8/2030.7
DTX 802.5/821.5
DJIA 17090/17220
Nasdaq 4847/4883
RUT 1151.75/1165.25
VIX 15.55/16.95 (falling VIX is bullish; VIX over 15 is bearish overall)
Trin range: 0.95 - 1.25 (neutral)
Average VWAPs: +47/-110 (bearish)

Gold moving up
October 14, 2015

1:45 pm ET: Intraday support/resistance:
SPX 1993.5/2009.5
DTX 806.25/813.75
DJIA 16950/17110
Nasdaq 4770/4820
RUT 1139.5/1153.5
VIX 17.3/18.9 (rising VIX is bearish; VIX over 15 is bearish overall)
Trin range: 0.7 - 1.15 (falling Trin is bullish)
Average VWAPs: +96/-70 (bull/bear standoff)

Bears trying to move back in
October 13, 2015

1:45 pm ET: Intraday support/resistance:
SPX 2005.7/2022.3
DTX 807.1/824.9
DJIA 17025/17175
Nasdaq 4807/4858
RUT 1156.3/1169.7
VIX 16.15/17.35 (rising VIX is bearish; VIX over 15 is bearish overall)
Trin range: 0.8 - 1.2 (neutral)
Average VWAPs: +39/-115 (bearish)

Market consolidating before earnings resume tomorrow
October 12, 2015

1:40 pm ET: Intraday support/resistance:
SPX 2010.5/2019.5
DTX 818.2/826.8
DJIA 17065/17145
Nasdaq 4818/4847
RUT 1159.5/1166.5
VIX 16.2/17.8 (falling VIX is bullish but VIX over 15 is bearish overall)
Trin range: 1.1 - 1.9 (bearish to contrarian)
Average VWAPs: +70/-73 (bull/bear battle)

Bulls trying to maintain momentum
October 9, 2015

2:00 pm ET: Intraday support/resistance:
SPX 2005/2020
DTX 819.9/828.1
DJIA 17020/17110
Nasdaq 4799/4841
RUT 1161.25/1168.75
VIX 17/18.4 (VIX over 15 is in bear territory)
Trin range: 0.9 - 1.3 (neutral to bearish)
Average VWAPs: +67/-86 (bull/bear seesaw)

It's official: Death cross in the US dollar etf (UUP)
October 7, 2015

1:20 pm ET: Intraday support/resistance:
SPX 1976.5/1999.5
DTX 797.75/812.25
DJIA 16765/16965
Nasdaq 4729/4791
RUT 1134.5/1147.5
VIX 18.5/19.75 (falling VIX is bullish but VIX over 15 is in bear territory)
Trin range: 0.9 - 1.5 (bearish/contrarian)
Average VWAPs: +111/-65 (moderately bullish but bears still in the picture)

Buying action in MLPs indicate possible stabilization in oil prices
October 6, 2015

2:05 pm ET: Intraday support/resistance:
SPX 1968.4/1991.6
DTX 794.6/807.4
DJIA 16735/16865
Nasdaq 4711/4783
RUT 1126.4/1143.6
VIX 18.8/20.6 (VIX above 20 is overall bearish)
Trin range: 0.65 - 0.85 (bullish)
Average VWAPs: +62/-129 (bearish)

Traders stampede out of healthcare-related stocks
October 5, 2015

Market Notes (1pm ET): The good news is that the VIX closed under 20--the first time it did that in a month and a half. While this is indeed good news for the bulls, this rally, sparked by the expectation that the Fed won't raise rates at least until 2016, could be short-lived. One indicator turned contrarian today: the #Advancing issues - #Declining issues. Today that value closed at +2370. Values above +2000 and below -2000 are regarded as extremes. History has shown that a market reversal frequently occurs when this value reaches an extreme level. We shall see if this holds true tomorrow.

1:30 pm ET: Intraday support/resistance:
SPX 1954.3/1994.7
DTX 788.3/805.7
DJIA 16500/16800
Nasdaq 4740/4770
RUT 1115.8/1139.2
VIX 19.05/20.45 (falling VIX is bullish; VIX dropping below 20 is showing some bullish strength)
Trin range: 0.6 - 0.85 (bullish)
Average VWAPs: +88/-101 (stock rotation)

Bad jobs report sparks risk-on trade
October 2, 2015

1:35 pm ET: Intraday support/resistance:
SPX 1893.7/1936.3
DTX 768.3/783.7
DJIA 16015/16385
Nasdaq 4552/4668
RUT 1080.6/1100.4
VIX 21/24.5 (falling VIX is bullish but VIX above 20 is overall bearish)
Trin range: 0.65 - 0.8 (bullish)
Average VWAPs: +212/-36 (extremely bullish)

Death cross forming in USD/Golden cross forming in Euro
October 1, 2015

1:35 pm ET: Intraday support/resistance:
SPX 1897.75/1927.5
DTX 775.4/782.6
DJIA 16050/16350
Nasdaq 4554/4626
RUT 1082.3/1103.7
VIX 23.1/25.4 (VIX above 20 is overall bearish)
Trin range: 0.7 - 1.5 (rising Trin is bearish; Trin over 1.5 is contrarian)
Average VWAPs: +50/-117 (bearish)

Bears take a day off as miserable third quarter draws to a close
September 30, 2015

After-hour market notes (4:30pm ET): While today's session ended on an up-note, the quarter ended on a down-note. In fact, this was the worst quarter in four years. Some of today's bullish activity was likely fueled by end-of-quarter stock rotation by fund managers and from positive news on the US jobs front. M&A activity in the chip sector helped the rally in the tech-laden Nasdaq and heavy buying/short-covering in MLPs (a badly beaten down group) lifted the energy sector.

But I wouldn't let today's bullish action cloud the overall bearishness of this market. The VIX is still over 20, death crosses have formed in all of the major averages and in nearly all sector etfs (exceptions are insurance, internet, consumer discretionary, and some banks). Third quarter earnings season begins next week which will be closely watched especially in terms of future guidance. If the overall earnings picture comes in weaker than expected, I wouldn't be surprised to see a jump in volatility and acceleration to the downside.

Note that while the market closed on a bullish note, the Trin closed right at 0.50--a bullish/contrarian value. When this happens, the market typically reverses to the downside meaning that tomorrow's open could be rocky.

1:40 pm ET: Intraday support/resistance:
SPX 1887/1917
DTX 769/781
DJIA 16050/16300
Nasdaq 4543/4617
RUT 1087.25/1098.75
VIX 24.25/26.25 (VIX above 20 is overall bearish)
Trin range: 0.55 - 0.9 (bullish; Trin under 0.5 is contrarian)
Average VWAPs: +99/-67 (bulls with the upper hand)

Russell 2000 breaks major support
September 28, 2015

1:50 pm ET: Intraday support/resistance:
SPX 1883.8/1929.2
DTX 769.2/784.8
DJIA 15985/16315
Nasdaq 4549/4665
RUT 1086/1122
VIX 24.95/27.55 (rising VIX is bearish & VIX above 20 is overall bearish)
Trin range: 0.9 - 1.6 (rising Trin is bearish; Trin over 1.5 is contrarian)
Average VWAPs: +33/-297 (extremely bearish/contrarian)

Mixed movement in major averages as investors rotate out of riskier assets
September 25, 2015

Intraday Notes (1:50pm ET): The reason for today's divergence in the movement of the Nasdaq and the Russell 2000 (RUT) compared with the SPX, DTX, and DJIA is because of stock rotation. Investors are dumping biotech, pharma, and medical supply makers--industries that have enjoyed extended rallies--and putting the proceeds into aerospace & defense, consumer staples, consumer discretionary, electric utilities, and regional banks.

1:30 pm ET: Intraday support/resistance:
SPX 1936/1954
DTX 778.4/792
DJIA 16205/16495
Nasdaq 4725/4785
RUT 1131.3/1146.7
VIX 20.8/23.2 (falling VIX is bullish but VIX above 20 is overall bearish)
Trin range: 0.8 - 1.1 (neutral to bullish)
Average VWAPs: +69/-168 (rotation out of riskier assets/bearish)

Bears make another charge as the VIX jumps
September 24, 2015

1:45 pm ET: Intraday support/resistance:
SPX 1905.2/1934.8
DTX 773/785
DJIA 15990/16260
Nasdaq 4658/4722
RUT 1122.1/1137.9
VIX 23/25.5 (rising VIX is bearish & VIX above 20 is overall bearish)
Trin range: 0.8 - 1.4 (neutral to bearish)
Average VWAPs: +89/-74 (still a bull/bear battle)

Bulls & bears duke it out/Miner etf (XME) hits all-time low
September 23, 2015

1:55 pm ET: Intraday support/resistance:
SPX 1932.5/1949.5
DTX 780.5/790.5
DJIA 16195/16355
Nasdaq 4535/4781
RUT 1136.8/1149.2
VIX 21.15/23.25 (VIX above 20 is overall bearish)
Trin range: 0.8 - 1.5 (neutral to bearish/contrarian)
Average VWAPs: +70/-84 (bull/bear battle)

Death cross in consumer staples as bears seize control of the market
September 22, 2015

1:55 pm ET: Intraday support/resistance:
SPX 1928.6/1961.4
DTX 784.1/807.9
DJIA 16160/16480
Nasdaq 4704/4776
RUT 1131.6/1158.4
VIX 22.25/24.25 (rising VIX is bearish & VIX over 20 is overall bearish)
Trin range: 1.0 - 1.4 (bearish)
Average VWAPs: +41/-114 (bearish)

Bears continue to build strength
September 21, 2015

1:55 pm ET: Intraday support/resistance:
SPX 1953.6/1979.6
DTX 803.6/816.4
DJIA 16380/16580
Nasdaq 4786.5/4881.5
RUT 1156/1178
VIX 20.4/22.6 (VIX over 20 is overall bearish)
Trin range: 0.9 - 1.3 (neutral)
Average VWAPs: +34/-176 (very bearish)

Bears back in control as Fed fails to prop up market
September 18, 2015

1:50 pm ET: Intraday support/resistance:
SPX 1955.3/1989.7
DTX 806.5/821
DJIA 16305/16675
Nasdaq 4821/4879
RUT 1164.7/1175.3
VIX 21/24 (rising VIX is bearish and VIX over 20 is overall bearish)
Trin range: 1.2 - 1.8 (very bearish/contrarian)
Average VWAPs: +47/-131 (bearish)

Fed leaves rates unchanged, but not market volatility
September 17, 2015

2:05 pm ET:
***No intraday support/resistance levels can be determined today because of market volatility. ***

Metals moving up on an otherwise quiet day
September 16, 2015

1:45 pm ET: Intraday support/resistance:
SPX 1978/1997
DTX 812.25/819.75
DJIA 16595/16755
Nasdaq 4848/4892
RUT 1165.4/1176.6
VIX 21.05/22.95 (falling VIX is bullish but VIX over 20 is overall bearish)
Trin range: 0.55 - 0.85 (bullish to contrarian)
Average VWAPs: +83/-50 (mildly bullish)

Bulls take charge--for now
September 15, 2015

2:00 pm ET: Intraday support/resistance:
SPX 1954.3/1980.7
DTX 802/814
DJIA 16380/16620
Nasdaq 4802/4865
RUT 1154/1164
VIX 22.25/23.75 (falling VIX is bullish but VIX over 20 is overall bearish)
Trin range: 0.6 - 0.9 (bullish)
Average VWAPs: +110/-43 (bullish)

Market muted awaiting Thursday's Fed decision
September 14, 2015

1:50 pm ET: Intraday support/resistance:
SPX 1943/1963
DTX 799.9/805.7
DJIA 16310/16450
Nasdaq 4773/4832
RUT 1148.8/1159.2
VIX 23.65/26.35 (rising VIX is bearish and VIX over 20 is very bearish)
Trin range: 0.85 - 1.35 (falling Trin in bullish)
Average VWAPs: +49/-62 (bull/bear see-saw)

The market gets a wedgie
September 11, 2015


























The major averages appear to be on the verge of completing negative chart patterns boding further downside. The S&P 500, Dow Industrials, and the Russell 2000 are forming classic bearish pennant formations while the Dow Transports and the Nasdaq are nearing completion of bearish wedge formations. (The above chart of the SPY, the S&P 500 tracking stock, illustrates the pennant formation.)

A brief explanation of flags, pennants, and wedges for those unversed in technical analysis. Flags, pennants, and wedges are all minor variations on the same theme and on a chart they look like what their names imply. They are considered to be continuation patterns meaning that they tend to occur in the middle of an uptrend or a downtrend. A true formation of this type is nearly always accompanied by a contraction in volume (see the above chart), and if that doesn't occur, the formation should be viewed with a healthy degree of skepticism.

One can also use these formations to estimate the magnitude of the uptrend or the downtrend once the pattern is completed. Technicians typically set a price target that reflects the magnitude of the rise (or drop) before pattern formation. In the case of the SPY above, one can use the major support level of 205 as the upper bound and the pennant nose price near 195 as the lower bound. This gives a 20 point difference making the projected price target in the region of 175--that's about 10% to the downside.

Bulls & bears at a stand-off
September 11, 2015

1:55 pm ET: Intraday support/resistance:
SPX 1937.6/1956.4
DTX 799.7/805.3
DJIA 16295/16405
Nasdaq 4763/4814
RUT 1142/1156
VIX 24.1/25.9 (falling VIX is bullish but VIX over 20 is very bearish)
Trin range: 1.25 - 1.7 (bearish/contrarian)
Average VWAPs: +83/-45 (moderately bullish)

Bulls take their turn on the market seesaw
September 10, 2015

1:45 pm ET: Intraday support/resistance:
SPX 1937.2/1965.8
DTX 795/808
DJIA 16210/16450
Nasdaq 4746.5/4833.5
RUT 1146.5/1160.5
VIX 24.45/27.25 (falling VIX is bullish but VIX over 20 is very bearish)
Trin range: 0.75 - 1.25 (bullish)
Average VWAPs: +118/-45 (bullish)

Rally fades as VIX volatility jumps
September 9, 2015

Intraday Notes (2:30pm ET): If you think the bears have polished off their picnic, think again. Yesterday's rally caught many (including myself) by surprise as I thought that the release of much worse than expected Chinese trade data would sink global markets. Apparently not, but whatever euphoria sparked yesterday's rally seems to be wearing off today. A tip-off that this sell-off could continue is the jump in VIX volatility. The VVIX jumped over 9% and the shorter-term VIX volatility index, VXST, gained over 7%. The VWAPs are strongly negative (at the time of this writing) and the Trin has quickly moved back into bear territory. With all of these factors leaning in favor of the bears, it's not unreasonable to think that we're in for another leg down.

2:00 pm ET: Intraday support/resistance:
SPX 1953.8/1988.6
DTX 794.2/807.8
DJIA 16335/16665
Nasdaq 4787/4863
RUT 1153.8/1170.2
VIX 22.25/25.25 (falling VIX is bullish but VIX over 20 is very bearish)
Trin range: 0.65 - 1.5 (rising Trin is bearish)
Average VWAPs: +50/-148 (bearish)

Bulls get a second wind
September 8, 2015

1:35 pm ET: Intraday support/resistance:
SPX 1924/1960.75
DTX 781.4/797.8
DJIA 16110/16470
Nasdaq 4748/4792
RUT 1139/1161
VIX 24.6/26.4 (falling VIX is bullish but VIX over 20 is very bearish)
Trin range: 0.55 - 1.2 (bullish)
Average VWAPs: +92/-51 (bullish)

Bears feasting on Chinese internet, healthcare, pharma, and REITs
September 4, 2015

1:25 pm ET: Intraday support/resistance:
SPX 1902/1948
DTX 777/787
DJIA 15930/16370
Nasdaq 4647/4713
RUT 1127.5/1142.5
VIX 22.7/30 (VIX over 20 is very bearish)
Trin range: 0.8 - 2.2 (extremely bearish/contrarian)
Average VWAPs: +30/-107 (bearish)

Market setting up for next leg down
September 3, 2015

1:50 pm ET: Intraday support/resistance:
SPX 1945/1975
DTX 785.4/794.6
DJIA 16250/16550
Nasdaq 4700/4800
RUT 1140.4/1157.6
VIX 23.45/27.25 (VIX over 20 is overall very bearish)
Trin range: 0.55 - 1.05 (bullish/contrarian)
Average VWAPs: +36/-158 (very bearish)

Death Cross forming in small-cap Russell 2000
September 2, 2015

1:25 pm ET: Intraday support/resistance:
SPX 1916.5/1938.5
DTX 768.9/783.1
DJIA 16060/16290
Nasdaq 4660/4710
RUT 1127/1137
VIX 28.05/30.45 (falling VIX is bullish but VIX over 20 is overall very bearish)
Trin range: 0.7 - 1.5 (falling Trin is bullish)
Average VWAPs: +107/-42 (bullish)

A few stocks bucking the trend
September 1, 2015

The bears are showing that their picnic isn't over with yet. Technically, we appear to be on track to retest last week's lows in the major averages and possibly a new relative high in the VIX. If you want to know just how bad it was today, there were only three stocks to make the New Highs List:

Trevena (TRVN, $9.09) soared over 50% today on 100x normal volume (yes, you read that correctly) on good clinical trial results of its post-op pain medication. An article in Barron's is giving a price target of $20.
Sharps Compliance (SMED, $7.53) was mentioned to subscribers last October as an Ebola play. Today, the stock broke above its $7 ceiling on heavy volume. Zack's has it on its #1 buy list and thinks the stock is under-valued and under-followed--a diamond in the rough, as it were.
Workhorse Group (WKHS, $0.41) jumped 28% on 6x volume on no discernible news. The company makes electric supply vehicles (think delivery service trucks) and package delivery drones that work off the trucks. I really like this idea but right now at least, betting on drones is a risky proposition as communities aren't certain how to deal with them. Check out their website. This company could either be a hero or a zero.

Death Cross in S&P 500 confirmed
September 1, 2015

1:55 pm ET: Intraday support/resistance:
SPX 1918/1970
DTX 768/783.5
DJIA 16020/16530
Nasdaq 4655/4722
RUT 1128.5/1151.5
VIX 29.9/33.1 (rising VIX is bearish and VIX over 15 is bearish)
Trin range: 0.8 - 1.85 (rising Trin is bearish but Trin over 1.5 is contrarian)
Average VWAPs: +52/-83 (currently tilted towards the bearish side)

Heavy rotation out of healthcare/internet/REITs into oil companies
August 31, 2015

2:00 pm ET: Intraday support/resistance:
SPX 1966/1989
DTX 785/793
DJIA 16445/16655
Nasdaq 4776/4834
RUT 1159/1165.4
VIX 26.65/29.35 (VIX over 15 is bearish)
Trin range: 0.7 - 1.9 (intraday falling Trin is bullish)
Average VWAPs: +82/-135 (high values on both sides indicate rotation)

Oil/Precious metals/Greenback notch higher
August 28, 2015

2:50 pm ET: Intraday support/resistance:
SPX 1975.2/1994.6
DTX 785.1/794.5
DJIA 16535/16785
Nasdaq 4788/4837
RUT 1149/1164.5
VIX 25.7/27.9 (VIX over 15 is bearish)
Trin range: 0.55 - 1.05 (bullish)
Average VWAPs: +82/-70 (moderately bullish but bears gaining momentum)

Impending Death Cross in the S&P 500
August 27, 2015

Market Notes (4:45pm ET): As noted below, the major averages did stage a reversal around 2pm ET but shot back up going into the close. While bulls may interpret this as a victory, the fact that the Trin fell back down to close at 0.38 should give them pause. This is still a very contrarian number and we could easily see a sell-off on tomorrow's open. What I find interesting is that all of today's positive economic good news was largely ignored by Wall Street who instead focused on vague comments by FOMC members (currently attending the Jackson Hole summit) saying that they may change their stance on raising interest rates in September and postpone it. I'm wondering if they read today's news before making those comments...

In other bearish news, the S&P 500 is on the verge of making a Death Cross (when the 50 dma crosses under the 200 dma). This is one Death Cross to take seriously as both the 50 dma and the 200 dma have rolled over. Note that both the Dow Transports and Dow Industrials are already well into the bear side of their Death Crosses.

Bulls flexing their might but how long can they defend the fort?
August 27, 2015

Market Notes (2:25pm ET): Predicted intraday support/resistance levels are showing that there's more room left for all the major averages to move to the upside. However, today's Trin levels are the lowest I've seen in years (or maybe ever!) and that could be a big problem for the bulls. Trin levels at or below 0.50 indicate such extreme bullishness that it's actually contrarian. Historically, when Trin levels do enter contrary territory the market tends to sharply reverse. In short, if you bought this bounce, you may wish to consider booking profits--and kudos to lucky you!

[Note: Bearish readings occur when the Trin moves in the 1.5 to 2.0 range. Extremely bearish readings are found above 2.0 and are very rare.]

2:05 pm ET: Intraday support/resistance:
SPX 1942.75/2002.5
DTX 768.4/789.6
DJIA 16285/16695
Nasdaq 4743/4833
RUT 1133.8/1161.2
VIX 24.45/27.55 (VIX over 15 is bearish)
Trin range: 0.28 - 0.56 (extremely contrarian)
Average VWAPs: +142/-60 (bullish but bears starting to gain some ground intraday)

Bulls trying to gain a toehold
August 26, 2015

2:05 pm ET: Intraday support/resistance:
SPX 1872.75/1917.5
DTX 746.7/763.3
DJIA 15675/16125
Nasdaq 4518/4642
RUT 1102.5/1122.5
VIX 30.85/36.15 (VIX over 15 is bearish)
Trin range: 0.55 - 1.0 (bullish/contrarian)
Average VWAPs: +112/-49 (bullish but bears still in the picture)

Bears gearing up for another onslaught
August 25, 2015

2:15 pm ET: Intraday support/resistance:
SPX 1887/1948
DTX 756.7/777.3
DJIA 15880/16315
Nasdaq 4600/4690
RUT 1117/1133
VIX 28.1/33.9 (VIX over 15 is bearish)
Trin range: 0.55 - 0.9 (bullish/contrarian)
Average VWAPs: +59/-133 (bearish)

Extreme volatility is manna for day traders
August 24, 2015

There's nothing to say about today's market action that hasn't already been voiced a thousand times in the financial media already. As I predicted on Friday, we did see a huge drop on the open, but what I didn't count on was how soon the rally actually began. Savvy momentum traders could have pocketed a bundle today but it was those still holding long positions who felt the hurt. The good news is that stocks recovered quite a bit from their opening price (well, it's sort of good news). The bad news is that I don't think the carnage is over by any means. Markets eventually revert to the mean and as we noted on Friday, that mean value is around 1380 for the S&P--still a long way to go from here. The best way to ride this out is to be in cash (or play the short side) and wait until we see signs of a bottom before taking on any long positions.

If you're thinking of buying put protection, now is NOT the time to do so. Why? Because volatility is through the roof. (The VIX hit its highest value today in over six years.) Volatility is a major component in options pricing making them too expensive to buy at this time. (Although if you want to sell them, that's another story but you'd be better be well-versed in the mechanics of options trading.)

For you daytraders with iron-clad stomachs, you may wish to consider jumping in and out of triple-levered etfs. Here are some of the more liquid etfs and etns that are moving in this market:

On the short side: Russia (RUSS, $60), China (YANG, $141), Oil (DWTI, $232), Gold Miners (DUST, $27), Junior Gold Miners (JDST, $11), Energy (ERY, $38), Emerging Markets (EDZ, $62), S&P 500 (SPXS, $24).

On the long side: Russia (RUSL, $11), China (YINN, $17), Oil (UWTI, $0.7), Gold Miners (NUGT, $3), Junior Gold Miners (JNUG, $8), Energy (ERX, $25), S&P 500 (SPXL, $67), Emerging Markets (EDC, $11).

Liquidity is especially important in fast-moving markets and you shouldn't have much trouble getting your trades executed in any of the above vehicles. Important Note: I strongly recommend NOT holding a posi
Recent Articles
The Myth of Diversification
December 15, 2015 at 4:50 pm

***We will be running the “Best Of” articles from previous years.***  This article originally appeared here on 7/11/14 and has been republished elsewhere.

Everyone assumes that broad asset class diversification in an investment portfolio is advantageous. The major benefit is to reduce the risk associated with events that can trigger a decline in any one asset class. By holding a variety of asset classes that are mostly uncorrelated with one another, the investor hopes to avoid those catastrophic occurrences that completely wipes out years of gains such as what happened during the credit crisis of 2008. Further, diversification makes financial planning more reliable and predictable by reducing the variations in portfolio performance from year to year.

Simply put, diversification is a sound investment practice.

But exactly how much risk reduction, in actual numbers, is obtained through application of this philosophy? That was the question I was pondering and was wondering if, indeed, asset class diversification is all that it’s cracked up to be.

Let’s find out.

[Disclaimer: First of all, nothing that follows is an attempt to challenge the precept of broad diversification as an indispensable investment tool, so don't get scared. Consider this analysis to be an exercise in quantitatively determining the relevance of just how much risk can be reduced by adding more asset classes to one's portfolio.]

Setup

The ideal tool for performing the analysis in this article is Modern Portfolio Theory (MPT). This Nobel Prize winning approach utilizes complex mathematics to tell you how to best allocate your funds among various asset classes to minimize risk.

Risk can be looked at as fluctuations in portfolio returns. In MPT, risk is measured by a statistical term called the standard deviation. It is this quantity that MPT seeks to minimize in recommending portfolio allocations. [The software used in the analyses conducted here is the SMC Analyzer. Click here for more info.]

The portfolios considered here used monthly total return data taken from January 1928 through May 2011 for each of the following ten asset classes:

  1. Large-cap U.S. Stocks
  2. Small U.S. Stocks
  3. Long-Term Corporate Bonds
  4. Long-Term Government Bonds
  5. Intermediate-Term Government Bonds
  6. 30-day U.S. Treasury Bills
  7. Real Estate Investment Trusts (REITs)
  8. International Stocks
  9. International Bonds
  10. Gold

Each of these asset classes are themselves composed of a broad diversification of assets within that class. This article does not address that need, only the benefits of diversification among various classes.

Baseline

The methodology used in this analysis was to first establish a baseline return/risk table using all ten candidate asset classes (Table 1 below). You’ll see that the table contains certain measures of risk defined as follows:

  1. Standard Deviation – statistical measure of portfolio return fluctuation around the target return
  2. Probability of Loss – chance of that portfolio losing value in any one year
  3. Sharpe Ratio – a measure of risk versus reward with larger numbers being better

This baseline data is shown in Table 1 along with the current ten asset class portfolio allocations (through May 2011.)

Table 1. Baseline portfolio incorporating all ten candidate asset classes. Click to Enlarge

(Click to enlarge.)

Methodology

The next step was to remove each asset class one by one in each of successive rounds and to assess its effect on the measures of risk. At the end of each round we chose to eliminate that asset class that increased the measures of risk the least [sentence corrected]. This was repeated for eight rounds until only two asset classes remained. Eliminations required examination of 52 separate portfolios (10+9+8+7+6+5+4+3).

By using the above measures of risk as our benchmark, asset classes were eliminated from consideration in each successive round in the following order:

  1. International Bonds
  2. Long-Term Government Bonds
  3. Real Estate Investment Trusts
  4. Gold
  5. International Stocks
  6. 30-day U.S. Treasury Bills
  7. Large U.S. Stocks
  8. Either Intermediate-Term Government Bonds or Long-Term Corporate Bonds depending on target return

Results

Tables 2a and 2b show the measures of risk using only two asset classes in the MPT analysis. There are two tables because different asset class combinations are preferable for the most conservative portfolios (target returns up to and including 7%) and the more aggressive ones (target returns 8% and above).

Table 2a. Two asset class allocations and risk measures for conservative portfolios

Required Standard Probability Sharpe Small Medium-Term
Annual Deviation Of Ratio Company Government
Return Loss Stocks Bonds
5.5% 4.6% 0.12 1.19 1.8% 98.2%
6.0% 5.3% 0.13 1.14 10.1% 89.9%
7.0% 8.7% 0.21 0.81 25.0% 75.0%

 

Table 2b. Two asset class allocations and risk measures for more aggressive portfolios

Required Standard Probability Sharpe Small Long-Term
Annual Deviation Of Ratio Company Corporate
Return Loss Stocks Bonds
8.0% 12.8% 0.27 0.62 34.3% 65.7%
9.0% 17.3% 0.30 0.52 50.4% 49.6%
10.0% 22.4% 0.33 0.45 66.3% 33.7%
11.0% 27.8% 0.35 0.40 82.1% 17.9%
12.0% 33.6% 0.36 0.36 97.8% 2.2%
12.1% 34.4% 0.36 0.35 100.0%

You can see from the tables that returns are best realized by small-cap stocks and medium-term government bonds in conservative portfolios, and by small-cap stocks and long-term corporate bonds (investment grade) in the more aggressive ones. The inclusion of small-cap stocks especially in the more aggressive portfolios should come as no surprise because it is this asset class that is capable of generating the highest returns over the long haul. In fact, it is because of using only small-cap stocks to generate returns in the two candidate model that returns below 5.5% are completely unachievable (but so are very low levels of risk).

Now let’s see how these results compare to the classical model of using ten asset classes.

Comparison of results

Table 3 presents the risk differences associated with reducing ten asset classes to only two.

Table 3. Risk difference between two and ten asset classes

Required Standard Probability Sharpe
Annual Deviation Of Ratio
Return Loss
6.0% 0.2% 0.01 -0.04
7.0% 0.4% 0.01 -0.03
8.0% 0.4% 0.01 -0.03
9.0% 0.5% 0.00 -0.02
10.0% 0.6% 0.01 -0.01
11.0% 0.7% 0.01 -0.01
12.0% 0.2% 0.00 0.00

Discussion

What this analysis shows is truly astonishing and surprising. You can see that the reduction in the number of asset classes has a relatively insignificant effect on risk. I’m betting few folks would have expected this result!

To summarize all this into one number, you are increasing your overall level of portfolio risk by only about 1 part in 20 by decreasing the number of candidate asset classes from ten all the way down to two. This is based on the general numerical increase in the values of the risk measures as measured from their baselines.

An historical comparison

Looking at this from a historical perspective, let’s see how well a portfolio with only two asset classes would have fared against a traditional portfolio with all ten. Table 4 shows the results of actually following the recommended MPT allocations–with monthly rebalancing–from January of 1928 through May of 2011.

Table 4. Comparison of actual returns achieved utilizing ten asset classes versus two asset classes.

Required Ten Asset Classes Two Asset Classes Differences
Return Return SD Return SD Return SD
6.0% 7.1% 7.3% 8.0% 8.9% 0.9% 1.6%
7.0% 8.2% 10.1% 9.1% 11.1% 0.9% 1.0%
8.0% 8.6% 12.6% 10.2% 13.5% 1.6% 0.9%
9.0% 9.1% 14.5% 10.9% 15.7% 1.8% 1.2%
10.0% 10.1% 16.7% 11.4% 17.6% 1.3% 0.9%
11.0% 10.9% 18.8% 11.7% 19.2% 0.8% 0.4%
12.0% 11.8% 19.9% 11.8% 20.5% 0.0% 0.6%

 [To read this table, the Return under each model is the actual return the portfolio would have realized at the required return level given in the first column, and SD is the risk defined by the standard deviation.]

Let’s look at an example. To achieve a 10% required compounded average annual return, a ten candidate asset class portfolio would have achieved its goal and would have actually returned 10.1% at a risk of 16.7%. That same 10% targeted return attempted using only two asset classes would have actually produced a greater return, 11.4%, with only a slightly higher standard deviation of 17.6%.

It is interesting to note that the portfolios composed of only two asset classes exceeded their targets more so than their ten asset class counterparts. This is due to the fewer choices available to the mathematics of MPT in its attempts to achieve, at least, the required return while also minimizing the level of risk. But in so doing, the level of resultant risk is commensurately slightly higher.

Conclusion

The takeaway from this article should be to note that it doesn’t take broad asset class diversification to adequately achieve one’s investment goals with a reasonable level of reward versus risk. So all of you lazy Lisas and Larrys out there can sleep easier knowing that your nest egg needn’t be diversified among more than the two carefully selected asset classes discussed above for you to realize your desired long-term return at minimum risk.

There are also some practical advantages of choosing the two asset class approach over the ten asset class model. One is the amount of time and inconvenience it may take to rebalance many asset classes every month. The other, and possibly more important advantage, is the amount of coin you might save in trading fees. That alone could well justify the small increase in risk!

Pat Glenn contributed to this article.

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