DailyWatch May 31, 2016

 

 

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Symbol Futures Price Change % Change
/ES E-MINI S&P 2100 2.75 013%
/CL CRUDE OIL 49.49 0.16 032%
/GC GOLD 1240 4.30 0.35%
/ZB 30 YEAR BOND 161’25 1’04 0.70

Daily Market Summary

 

 

 

 

 

 

 

 

 

The S&P future broke through the 2080 level on its quest to take out the 2134 high. Its 2nd hurdle will be getting thru 2105.

The $50 mark seems to be tough for Crude Oil to break through. This would be a good spot  to go short    Oil stocks. Just watch the $50 level in/CL.  Continue reading “DailyWatch May 31, 2016”

DailyWatch May 27,2016

 

daily-watch-header-1  The S&P was able to stay above the 2080 close that we have been discussing for the last few weeks. This bodes well for a run at the 2134 high. Both the NDX and the Dow went into our most bullish State, State 1 yesterday. The VIX also went into State 8, suggesting another few weeks of positive movements for the Dow, NASDAQ and S&P. We must be cognizant that just a few days ago the NDX was in State 8 and today it is in State 1. The markets can move quickly, but for now it seems to be full steam ahead. Janet Yellen is speaking at 11:30 today, so be careful to watch and see if see how the markets react to her comments.

Gold and Crude Oil are in a slight pullback as money is being poured into equities.

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Stocks on the Move
LRCX-Lam Reaserch

LAm research

  • LRCX- LAM RESEARCH CORP
  • STATE 1
  • YESTERDAY’S CLOSING PRICE $81.02
  • TARGET PRICE  $88.75
  • AVERAGE DAYS IN STATE 1- 29DAYS
  • AVERAGE STATE 1 MOVE- 9%

Capmark Solutions LLC and/or its principals and employees will accept no liability whatsoever for any loss arising from any use of the Key2Options program. The information contained in this blog, or in other related resources is for educational purposes only. Neither Capmark Solutions LLC nor Key2Options, Inc. offer trading advice of any kind.

DailyWatch May 26,2016

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Symbol Futures Price Change % Change
/ES E-MINI S&P 2089.75 2.5 0.14%
/CL CRUDE OIL 50.21 0.52 1.01%
/GC GOLD 1228.70 4.40 0.36%
/ZB 30 YEAR BOND 162’13 .006 .12%

Daily Market Summary

The S&P futures broke thru the 2080 level we have been talking about finally! Our S&P model went into State 1 last night suggesting a 4% move to the upside.  Continue reading “DailyWatch May 26,2016”

Daily Watch – June 9 2016

 

Today’s Economic Calendar

8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:00 Wholesale Trade
10:30 EIA Natural Gas Inventory
1:00 PM Results of $12B, 30-Year Note Auction
4:30 PM Money Supply

 

Daily Market Summary

We expect to see some backing up as the S&P goes after all time highs. Futures are down about $8 this  morning. Are we oversold? Many in the investing community think so. Continue reading “Daily Watch – June 9 2016”

DailyWatch – May 20th 2016

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S&P futures are up 0.21% in morning trading
Crude oil futures are down 0.21%
Gold futures are up 0.10%
Bond Futures are down 0.29%

 

The S&P futures broke thru the 2030 level that we have been talking about for some time now, reaching 2022. The bears were not able to hold it, and the market closed back above 2030 and is currently trading at 2043. Continue reading “DailyWatch – May 20th 2016”

DailyWatch – May 19th 2016

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S&P futures are down 0.13% in morning trading
Crude oil futures are down 2.06%
Gold futures are down 1.62%
Bond Futures are up 0.25%

 

The S&P futures tested the 2030 level,  going as low as 2030.75 on Wednesday. In morning trading we are seeing the S&P trading at 2039. We will continue to watch for a breakout or breakdown of the trading range of 2030-2080. Continue reading “DailyWatch – May 19th 2016”

DailyWatch – May 18th 2016

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S&P futures are down 0.17% in morning trading
Crude oil futures are down 0.19%
Gold futures are down 0.39%
Bond Futures are down 0.17%

 

Turnaround Tuesday hits again. The S&P gave up its gains from Monday. We are still looking at the range of 2030 – 2080 on the S&P futures. We are close to the support level of 2030 as we are trading at 2036. Let’s see if the bulls can stage a rally today. Continue reading “DailyWatch – May 18th 2016”

DailyWatch – May 17th 2016

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S&P futures are up 0.02% in morning trading
Crude oil futures are up 0.02%
Gold futures are down 0.02%
Bond Futures are down 0.04%

 

S&P futures are flat this morning after a big up day yesterday. If you have been reading the blog in the past, we have talked about turnaround Tuesday. Basically, we see a moment opposite of Mondays move. Since we had a strong day yesterday, we would look for a down day today.   Continue reading “DailyWatch – May 17th 2016”

State Modeling™ Helps Predict When to Sell Stocks

Sell in May and go away?

There is an axiom in the market that suggest you should sell stocks in May and not get back into the market until November.

Many markets, especially commodity based markets have seasonality trends. For example, in the summertime we see an increase in oil prices due to the summer driving season. Often, we will see the stock price of oil companies’ rise during this period.

History suggest that this is more than a folksy axiom. Surprisingly, from 1950 through 2015, the average monthly returns for the S&P 500 from the November through April periods are dramatically higher than the May through October periods. Returns from November through April are 1.42% compared to 0.52%.

This year may have even more reasons to sell in May. One, we have a presidential election. Wall Street does not like uncertainty. The polls are tightening and quite frankly America doesn’t seem to be enthused by either candidate. This uncertainty leads to selling. The last three presidential races resulted in a loss in the stock market from May through October. In 2008 the loss was 27.3% in the Dow Jones Industrial Average.

This year could be worse. The one fundamental indicator I look at is the Price/Earnings Ratio. The price-to-earnings ratio (P/E) is a valuation method used to compare a company’s current share price to its per-share earnings. It can also be used on Indexes.  Dividing the common stock market share price (numerator) by earnings per share (denominator) produces the ratio. For example, let us do a sample calculation with company XYZ that currently trades at $100.00 and has an earnings per share (EPS) of $5.00. Using the previously mentioned formula, you can calculate that XYZ’s price-to-earnings ratio is 100 / 5 = 20.

Historically, The S&P 500 has averaged a P/E ratio of 16.67. Currently it is 25.68. With current earnings of $87.53 for the S&P 500, if you used its average P/E of 16.67, the Value of the S&P should be 1459. Currently The S&P 500 is trading at 2055. This would be a 29% movement to the downside if it reverts back to its historical average. Prior to the collapse in 2008, the P/E ratio was at 28.

Finally as of this writing, Our Major Indexes have just entered into a mildly bearish State 2 in the Key2Options Program for the first time in about 60 days. Our State Modeling predicts when stocks will go up (bullish) or when they will go down (bearish).

Characteristics of State Modeling

STATE TREND EXPECTATION BEHAVIOR
State 1 Bullish Extremely Bullish Price rise upwards
State 2 Bearish Pullback from uptrend Pullback from uptrend
State 3 Bullish Bullish Bulls and Bears are fighting aggressively but still mildly bullish
State 4 Bearish Moderate Bearish Lead indicator for upcoming sharp downtrend
State 5 Bullish Moderate Bullish Bulls and Bears are fighting aggressively but still mildly bullish
State 6 Bearish Bearish Expect new lows and sharp falls
State 7 Bullish Pullback from downtrend Pullback from downtrend
State 8 Bearish Extremely Bearish Price fall downward and expect new lows

States 1, 3, 5 and 7 are bullish States. States 2, 4, 6 and 8 are bearish States. State 1 and 8 are at the extremes of bullishness and bearishness.

This could be the sign of a small pullback or a prelude to a dramatic sell off in the coming months. Check with the Key2Options blog post at http://key2options.com/blog/ to stay up to date with the latest trends in the financial markets.