DBA (Weekly)



A chart of that tight trading range on the INDU that Gary had mentioned in the previous post.


A Very Tight Range

The Dow Jones 30 Industrials have traded in a range (from high to low) of 1.4% over the past month. That’s the least volatile in history:


The likely result of this major decline in volatility will be a big expansion of the range.  Which direction stocks take as this develops is a tough call. 

Hat tip Charlie Bilello



New Cars Are Piling Up

Motor vehicle inventories have surged in late 2016:


Incentives and leasing deals are likely to become even juicier this spring.

Hat tip Soberlook.com

After Gaining Over 1% Over The First Five Days, What’s’ Next?

After the first five days of 2017 the S&P 500 was up 1.3%.  The odds of further gains throughout the rest of the year are quite strong.  88.5% of the time since 1950 stocks finished the year higher:


Hat tip Ryan Detrick


Stocks Do Go Down

A great article this week from Ben Carlson regarding stock market sell offs and crashes.  Key bit:  One of the hardest parts about the markets is the fact that you know (or should know) eventually they’ll go down. You just never know how much they’ll drop once they start to fall. For example, I took a look at all of the double digit losses in the S&P 500 from 1928 to 2016 along with a split by different magnitudes:


Breaking stock market losses down even further gives you a sense of how often these losses tend to occur over time. Here are the frequencies in which certain loss thresholds have occurred, on average, in this same time frame:

  • 5% losses three times a year.
  • 10% losses once a year.
  • 15% losses once every two years.
  • 20% losses once every three to four years.

      Read the whole thing: How Market Crashes Happen

They Love ’em Higher

Stocks that is, chart below shows the huge swing in sentiment from the November lows.  Nasdaq market timers are now 78% net long/28% net short.  That’s a 100% swing in net longs.  The Nasdaq Composite has gained over 6% since the November low:


Hat tip Urban Carmel

F (Weekly)


Small Business Optimism Skyrocketed In December

Quote of the year: “We’re feeling what not having hope feels like”, Michelle Obama(Dec. 16, 2016)


More here from NFIB.com:  Small business optimism rocketed to its highest level since 2004, with a stratospheric 38-point jump in the number of owners who expect better business conditions, according to the monthly National Federation of Independent Business (NFIB) Index of Small Business Optimism, released today.

“We haven’t seen numbers like this in a long time,” said NFIB President and CEO Juanita Duggan. “Small business is ready for a breakout, and that can only mean very good things for the U.S. economy.”

The Index reached 105.8, an increase of 7.4 points. Leading the charge was “Expect Better Business Conditions,” which shot up from a net 12 percent in November to a net 50 percent last month.

Hat tip Brian Gilmartin of fundamentalis.com

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As Money Managers and Traders, the mission of our Blog and Radio Show is to go on record and further educate our readers and listeners in technical analysis and proper money management across all asset classes.

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To Your Success,

Doug & Gary