China Breaks Again

China Shanghai Composite IndexThe Shanghai Composite Index (SSEC) dropped over 5% today as a another leg down appears to be starting.  China is cracking down on some brokerages and this was given as the cause for the break but the press always looks for some kind of justification.

The SSEC has been in rally mode since the low on August 26th. It now appears to have broken that uptrend. Today’s move is the largest down day since August 25th. Next potential support in the 3265 – 3302 range.

Baltic Dry Index…Global Economy on its Knees

Baltic Dry IndexI’ve talked about  the Baltic Dry Index many times before. This index is created by the London Baltic Exchange and tracks shipping rates around the globe. They call it a  dry index because it measures the shipment of dry goods that are primarily considered raw material to either the production process or to products themselves.

Things like coal, iron ore, steel and cement. Material that drives the world’s economic engines.

Baltic Dry Index Plunges

The chart below shows that the Baltic Dry Index has just plunged to a new all-time low. In February it first broke to a new all-time low below the July 1986 level. But Friday the Baltic Dry Index fell even further to 498.

Baltic Dry Index


Leading Indicator

The Baltic Dry Index is seen as a leading economic indicator as it is clearly a reflection of the movement of the raw materials that drive economic expansion. Now the skeptics will say hold on here, the supply of ships also affects the price. And yes indeed it does.

And as the Baltic Dry Index rose to a record high in 2008, I can imagine the number of ships being built was increasing as they assume demand would go to the heavens. The experts are also quick to say that it takes about 2 years to build a new ship.

New Ship Construction

According to data attributed to IHS Global Limited, the orders for new dry bulk ships peaked around the end of 2008 and the peak in new ship construction occurred around spring of 2012…almost 4 years ago.

Yet the Baltic Dry Index has continued bouncing back forth drifting lower. And in February 2015 it plunged to an all-time low. This was followed by a bounce and new hope.

China Actions Speak Louder

But now a plunge since the end of July has resulted in a new all-time low of 498 on Friday. I find it very interesting the recent plunge began about the time that China started devaluing its currency. The first devaluation occurred on August 11 and was the largest single drop in 20 years.  Actions speak louder than words.

But no worries, the experts say it’s all because of a glut of ships.


Weekend Market Wrap

In this condensed version of the market analysis that I provide to my Insider Members I review the price action of the NYSE Composite Index (NYA).  I also review oil, gold and copper.

I then check out a couple of disasters in Chipotle Mexican Grill (CMG) and Nimble Storage (NMBL) and another stock that is reinforcing the picture of a struggling global economy…United States Steel (X).

Extremely Compressed…Again

The stock market barely moved today. It was extremely compressed. In fact it is the most compressed day for the SPX in months. Many times extremely compressed days like this occur at or near turning points.

In tonight’s Weekday Market Wrap video we look at the market action today and then check in on Apple (AAPL), Adobe (ADBE), Apache (APA), Boeing (BA) and Alibaba (BABA). Continue reading

Trend Day

The stock market pushed higher every hour today creating a solid trend day in the market and probably ran more than a few stops on the SPX. The DJIA was up 247 points today with the SPX up another 33 points and the Nasdaq up 89.

Advancing stocks led losers on the NYSE 3.3 to 1 and the volume was even more impressive with advancing volume leading declining volume by 8:1. The market has made a strong 3-day move of 3%.

In tonight’s video I look at the price action and talk about current scenarios. I also briefly check in on all trade ideas. Continue reading

Mixed Bag

The stock market ended the day little changed after pushing higher in the morning. The results were a mixed bag with DJIA and Nasdaq both up just slightly and the other indices down a few points.

The bounce in the market yesterday extended into the morning today but ran out of steam during the 3rd hour of trading. The afternoon had the market digesting news of terror activity in Germany. A stadium was evacuated after an ambulance was found packed with explosives. At least that was the initial report.

There was also news hitting the wire that a passenger tried to get into the cockpit of a British Airways flight from London to Boston. So the market was on edge, digesting these news reports.

In tonight’s video I look at the market action and check the 3 stocks that had the biggest percentages losses (of my list) today…SolarCity (SCTY), Canadian Solar(CSIQ) and Under Armour (UA). Continue reading

Bounce from Oversold

The stock market put its rally hat on today as it had a bounce from oversold conditions. The DJIA was up 237 points with the SPX up 30 and the Nasdaq up 56.

The breadth on the NYSE wasn’t super strong with 2.5 advancing stocks for every one declining stock.  And there were only 14 New 52 Week Highs vs 136 New 52 Week Lows on the NYSE.

In tonight’s Weekday Market Wrap video I look at today’s action and review two trade ideas entered today on Canadian Solar (CSIQ) and Apache (APA). Continue reading

Sunday Trade Ideas Video

In this Sunday Trade Ideas video I review the trade ideas that were entered and closed last week as well as those that are now open. These include Las Vegas Sands (LVS), Under Armour (UA), Visa (V), Alibaba (BABA), Chevron (CVX), Caterpillar (CAT) and Twitter (TWTR). There are two new trade ideas on Apache (APA) and Canadian Solar (CSIQ).

“It doesn’t matter how slowly you go as long as you don’t stop.”

– Confucius

Continue reading

Stock Market Decline…Most in 12 Weeks

Selling continues on Friday with the DJIA down 200, the SPX down 23 and the Nasdaq down 77 points. Almost all the indices closed the day and the week either on their lows or just fractionally off the lows. It doesn’t paint a pretty picture for Monday.

The stock market decline was the largest of the last 12 weeks. The last week to drop this much or more was the week ending August 21. That Friday was followed by the huge wave of selling on Monday August 24th.

In today’s video I talk about the “line in the sand” that, if crossed, confirms my Elliott Wave count. And when that happens we will be moving to new lows below 1867 on the SPX. So as I said in my post/video on October 31, “fasten your seatbelts”. Continue reading

They Shoot Retail Stocks Don’t They?

Shoot Retail Stocks Don't TheyAs I look at the stock market action today and recently, it is hard to miss the fact that retail stocks are getting killed. GoPro (GPRO) has been annihilated for a while now but Fitbit (FIT) is joining in as are many others.

As I look at my screen today: FIT -11%, GPRO -7%, Michael Kors (KORS) -5.6%, Lululemon Athletica (LULU) -7.4%, Under Armour (UA) -6.6%, Vipshop (VIPS) -30%, Nordstrom (JWN) -20% and on and on. I wonder what this is saying about the Christmas season. They shoot horses retail stocks don’t they?