VIX had an inside week, but closed above Long-term support at 11.37. It is on a weekly buy signal with further confirmation above weekly mid-Cycle resistance at 14.93and the Ending Diagonal trendline near 15.00. Could the initial foray in August have broken the trendline already?
(BusinessInsider) The New York Times’ DealBook had a great piece of journalism a couple of days ago about short VIX carry monkeys. Well, that is what I call them.
The article features a former Target logistics manager who has goosed his net worth up to $12 million by betting that the VIX will go down. He is in the process of raising $100 million for a VIX-smashing hedge fund.
SPX consolidates above Short-term support
SPX consolidated above Short-term support at 2455.38. A reversal beneath Short-term support may re-introduce the sell signal. Should SPX not break above its prior high the current formation suggests a probable decline to or below 2300.00. Note that the retracement rally was repelled by the lower trendline of the Ending Diagonal beginning in February 2016.
(Reuters) – The S&P 500 ended slightly lower on Friday as investors braced for potential damage from Hurricane Irma as it drove toward Florida, while a decline in big tech names like Apple and Facebook pushed the Nasdaq down more sharply.
The Dow eked out a gain, helped by a 4.0-percent rise in shares of insurer Travelers (TRV.N).
Insurer shares rose broadly, with the Dow Jones U.S. Insurance Index .DJUSIR up 2.1 percent, recouping some losses after being under pressure recently as the southern United States braced for another powerful storm closely on the heels of Hurricane Harvey.
NDX slips beneath its Cycle Top support
NDX slipped beneath its Cycle Top support/resistance at 5944.51. That is an initial sign of weakening and possibly a reversal. A decline beneath Intermediate-term support at 5809.76 and its Trump election trendline may produce a sell signal.
(SeekingAlpha) Technology shares have overtaken financial stocks as the top sector performer for the trailing one-year period based on a set of ETFs. The formerly high-flying financials have been clobbered recently, in part due to worries that falling bond yields and the blowback due to hurricanes striking the US will take a bite out of earnings for banks and insurers. Tech shares by contrast have been relatively steady this week, holding on to nearly all of the sector’s 2017 rally.
The Technology Select Sector SPDR ETF (NYSEARCA:XLK) is the top sector performer, posting a strong 24.7% total return for the past 12 months through yesterday (Sept. 7). That’s a comfortable lead over the number-two performance for the major US-sector landscape via the Financial Select Sector SPDR ETF (NYSEARCA:XLF), which is ahead by 22.0% on a trailing one-year basis.
High Yield Bond Index consolidates beneath its all-time high
The High Yield Bond Index consolidated this week, closing beneath its all-time high. The Cycles Model suggests its period of strength may be over. A sell signal may be generated should MUT fall beneath Intermediate-term support and its Ending diagonal trendline at 169.03.
You may wish to read the recent article in Financial Times.
(Bloomberg) Bond investors are playing a tricky game with lower-rated U.S. retailers, and they appear to be losing.
Here’s how it goes: Investors buy beaten-up bonds of struggling store operators and earn big regular payments for as long as they can. The bond buyers win if the companies remain solvent for longer than expected or even improve their outlooks. They can also win if the debt is relatively high in the capital structure and they’re able to recover more money than they put in if the company goes bankrupt.
USB breaks out
The Long Bond broke out to a new retracement high. Treasuries appear to be in a period of strength that may last another two weeks. Should the right shoulder of a potential Head & Shoulders reach proportionality, the rally may go to 165.00 or as far as the Cycle Top at 172.06.
