Monday, 29 August 2016

BAC - rising on rate hike hopes

Whilst the main market saw broad gains, there was similar strength in financials, with Bank of America (BAC), settling +0.3% @ $15.84, the best level since early January. The $18 threshold remains critical, as its held as resistance for the better part of three years.


BAC, daily



BAC, monthly



Summary

A fifth consecutive net daily gain for BAC, as the market is trying to re-price ahead of an increasingly anticipated second rate hike.

To be clear, I do not expect a hike ahead of the US election. Instead, a rate hike of 25bps at the FOMC of Dec'21st looks probable.
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From a pure price perspective, $18 remains the critical threshold. Any monthly close >$18 would bode for much higher levels in 2017.
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*BAC remains my most favoured financial stock within the Dow'30.

Friday, 26 August 2016

TVIX, UVXY - the run of horror concludes

With equities seeing a fair amount of chop, market volatility began to pick up, and that saw the 2x lev' bullish VIX instruments of TVIX and UVXY manage net weekly gains of 5.3% and 5.5% respectively. Broadly though, the market looks comfortable into mid/late September, and the decay looks set to resume.


TVIX, daily



UVXY, daily



Summary

First, an update on the VIX, which saw a net weekly gain of 20.4%.



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As for TVIX and UVXY....

So.. a moderate net weekly gain, after 8 straight weeks of horror.

A sporadic weekly gain is to be expected.

As ever... mid/long term holds simply never end well, due to the statistical decay factor.
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yours truly has zero interest in being long the VIX, as equities still look set for the sp'2200s into September, and that will result in the VIX 11/10s... perhaps even single digit VIX - something not seen since Feb'2007.

Thursday, 25 August 2016

NFLX - breaking upward

Whilst the main market traded broadly flat - ahead of the Yellen, there was notable strength in Netflix (NFLX), which settled +2.2% @ $97.32. With an upgrade from William Blair to $145, today saw a clear technical upside break, next clear resistance is the giant psy' level of $100.


NFLX, daily



NFLX, monthly



Summary

First.. the upgrade...



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As for NFLX.... we have a clear short-term break above declining trend/resistance.

The $100 threshold will offer some very strong resistance - see bigger monthly chart. Considering underlying strength in the main market, it would seem NFLX will manage to break back above $100, giving clarity that the downward trend that stretches back to the Dec'2015 high of $133.27 has concluded.

NFLX continues to churn out some of the best shows. Yet, as a company, the valuation is frankly... ludicrous.

Yours... a fan of the shows... but not of any company with a forward PE >100.

Wednesday, 24 August 2016

GDX - miners having serious problems

Whilst the main market saw moderate weakness, there was increasing upset after a mysterious 'big seller' in the Gold market, which resulted in the related miners unravelling across the day. The ETF of GDX saw a sig' net daily decline of -7.0% @ $26.98. Near term outlook is bearish. Mid term.... borderline bullish.


GDX, daily



GDX, monthly



Summary

Suffice to add... today's daily candle sure was ugly.

The bigger trend since the Jan' low in the $12s, is clearly still intact. However, any price action in the $26s in September will be enough to provisionally break rising trend.

Tuesday, 23 August 2016

BAC - financials remain poised

Whilst the main market closed a little higher, there was more notable upside in Bank of America (BAC), which settled +1.2% @ $15.36. The financials are unquestionably still struggling as int' rates remain at emergency levels. However, a second rate rise before year end would certainly give the excuse for a break 'up and away'.


BAC, daily



BAC, monthly



Summary

Suffice to add... short term, BAC is now trading above the late April high. Next resistance is not until the mid/upper $17s.

Critical resistance remains around the $18 threshold. Any monthly close >$18 would be extremely bullish for financials, and the broader US market in 2017.
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*of the financials in the Dow, BAC remains my most favoured.