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Compression Week in the Stock Market

The big event for the stock market this week was the Federal Reserve Meeting on Tuesday-Wednesday. On Wednesday the Federal Reserve announced no change to interest rates but did say they plan to wind down their $4.5 trillion balance sheet starting in October. 

This is the balance sheet that they created thru the series of quantitative easings since the Financial Crisis.  This $4.5 trillion balance sheet is made up of treasuries and mortgage backed securities. 

So it is not unusual for the stock market to become a little cautious and tight during a Fed meeting but this tightness continued thru the remainder of the week. When you see the Dow Jones Industrial Average (DJIA) weekly chart in the video below, you will see why I am calling this a compression week.  It is one of the smallest weekly trading ranges in several months. 

Compression and expansion seem to cycle back and forth in the stock market.  So now that we have had a compression week, I am watching for some fireworks to happen in the market…it may take a couple of weeks.

This is like a flag being waved saying ‘hello, the market is telling you something’. Like a big cat watching you. You never know when if is going to explode into action.

In the video I review the DJIA daily and weekly charts, look at one of my key indicators and review 3 key ETFs.  This is just a brief snippet of what I provide my Insider Members in the Weekend Market Analysis video.  Also in today’s video I review Apple (AAPL), Facebook (FB) and Netflix (NFLX). 

Under Armour…we’re not there yet

This week was a big down week for Under Armour (UAA) dropping $8.43 (29%) to close at $20.70.  On January 31st, UAA reported disappointing earnings and forward guidance did not help.

By the way UAA is the ticker symbol for the Class A stock and replaced the original common ticker. UA is for the Class C stock.

Back on June 1, 2016 I posted a video in which I analyzed UAA’s stock.  In this video I talked about how I believed that UAA had undergone an extended wave 5 in its push to the top in September 2015, and would now have a significant correction.  Here is the weekly chart from that video. Continue reading

Semiconductor Stocks getting hit, but so are lots of Tech Stocks

This week the semiconductor stocks got hit very hard on Thursday. The supposed catalyst was indications that Apple was cutting back on iPhone 7 production.  But many tech stocks are also getting hit.

Some say it is a rotation into sectors like finance, infrastructure and energy. But some of this is also related to global commerce and sourcing. Fears of a trade war with China are not helping stocks like Apple. Continue reading

Has the Energy Sector Hit the Wall?

Today we look at the Energy Select Sector SPDR ETF (XLE) and ask whether the energy sector has hit the wall.

The XLE is one of the most active industry sector ETFs with a 50 day moving average of 95 million shares.  It tracks a market-cap weighted index of US energy companies in the S&P 500.  

Energy Sector

In the big decline from the peak in June 2014 to the low in January 2016, XLE smashed thru a major uptrend line from the 2002 low, in July 2015. It pulled back to it last November but then quickly fell away.

It has had a big move up off the January low, but running into significant resistance at 72.0. It has not broken down yet.  Watch for consecutive closes below the 10 week ema and then for the 10 ema to cross below the 21 sma.  Look at September 2014 and June 2015 for good examples.

Weekly April 2011 – Sept 2016

The top three holdings in the Energy Sector ETF are Exxon Mobil (XOM) at 18.65%, Chevron (CVX) at 14.81% and Schlumberger (SLB) at 8.83%. I’ll start with Exxon Mobil. Continue reading