32 straight days Dow has closed below the 50-day Moving Average, but above the 200-day Moving Average.  Only 11th time since 1900, but this one is 2.2% from new highs – closest ever.
The S&P 500 is currently down 3 straight months, but down 1.02% in Aug/Sept/Oct. That is the smallest 3 mo losing streak ever.

As we’ve mentioned numerous times before, something has to give.  Hat tip Ryan Detrick.

Jesse Felder Sees Trouble Ahead

Hedge fund manager Jesse Felder believes the probability of a market crash is as high as its ever been.  Key bit from   In an interview with Real Vision TV, Felder expresses his concern that the lack of volatility will inevitably create more volatility, the likes of which have never been seen before.  “I’m not calling for a stock market crash. I think that’s asinine, but, and nobody knows the timing or anything, but if you want to look at what’s the probability of that type of an event, it’s probably got to be as high as it’s ever been,” Felder said in the interview.

Link to Mr. Felder’s interview is here:  <iframe src=”″ width=”640″ height=”360″ frameborder=”0″ webkitallowfullscreen mozallowfullscreen allowfullscreen></iframe>

More from


Goldman Sachs Cuts Earnings Forecast

All is not rosy despite near record equity prices.  Goldman Sachs is cutting their S&P 500 earnings forecast for the next three years.  Key bit:  We cut our S&P 500 earnings estimates for each of the next several years. Our revised operating EPS forecasts now equal $105 (2016), $116 (2017), and $122 (2018) reflecting annual growth of 5%, 10%, and 5%, respectively. Low interest rates and peaking margins constrain profit growth in Information Technology, Financials, and Telecom and drive the reduction in our index-level EPS forecast.


Some color from  With Q3 earnings season looking unexpectedly strong after the first 2 weeks of reporting, which granted have focused on the otherwise strong banks and tech companies with energy and retail still to come, with some 80% of companies beating expectations and hope returning that this may be the quarter when the 1+ year long earnings recession find ends, moments ago Goldman’s David Kostin poured cold water over the S&P’s earning prospects when earlier this morning the strategist announced that he is “trimming our S&P 500 earnings forecasts” for the next three years.

Interesting.  Read the rest of the article here:



Earnings So Far

Some excellent data from Bespoke Research on earnings season so far:  So far this earnings season, the average stock that has reported has gained 0.22% on its earnings reaction day.  (For stocks that report in the morning, its earnings reaction day is that trading day.  For stocks that report after the close, the earnings reaction day is the next trading day.)


More here:  Above is a list of the stocks that have performed the best on their earnings reaction days this season. The 37 stocks listed all gained 5% or more, with VOXX blowing away the field at +49%!  Netflix (NFLX) ranks second best so far with a one-day gain of 19.03%, followed by Banc of California (BANC) at +18.38%.  Other notables on the list of this season’s winners include Paypal (PYPL), Harley-Davidson (HOG), American Express (AXP), UnitedHealth (UNH), and Mattel (MAT).

Some very positive reactions by investors to better than expected earnings. 

Hat tip


Interesting data point for the day:  The Dow 30 Industrials have closed below the 50 day moving average and above the 200 day moving average for 30 straight sessions.  That’s the longest streak of this nature in 41 years.  Talk about range bound!


Hat tip Ryan Detrick

Investor Optimism Continues To Decline

Key bit from AAII:  Optimism among individual investors about the short-term direction of stock prices fell to an unusually low level, one not seen since last June. The latest AAII Sentiment Survey also shows an increase in pessimism and a decrease in the percentage of investors describing their outlook as neutral.

Bullish sentiment, expectations that stock prices will rise over the next six months, declined 1.7 percentage points to 23.7%. Optimism was last lower on June 22, 2016 (22.0%). This week’s drop puts optimism below its historical average of 38.5% for the 50th consecutive week and the 83rd out of the past 85 weeks.


As contrarians we view this extensive negativity as potential catalyst for higher equity prices.

American Express Tops The Dow

American Express posted its largest gain since the summer of 2009 today after reporting very impressive earnings results:


We are long AXP in most managed accounts and will be adding on weakness.  More here from

Mental Stops vs. Hard Stops and Discipline

About 75% of the time we use Mental Stops instead of Hard Stops.

Why?  Because Hard Stops (orders placed that are resting orders) become a target.  IOW – traders will run the stops to take investors/traders out of the position only to watch price reverse and go higher.   This is shown in the example below with AAPL today.

A Mental Stop is not a resting order placed into the accounts.  Therefore a Mental Stop (a number in your head or that you are watching) is not triggered.  If breached on a close – you then need to make a decision as to where to exit.

The advantage of a Hard Stop is if price continues to fall, – you were hopefully out at, or near the hard stop price.  In the end – it all boils down to discipline.  Stick with and hold true to the system that works for you.  Learn from what you did right and acknowledge what you did wrong.

A losing trade does not mean you did it wrong and a winning trade does not mean you did it right.   The worst case in when you do something wrong or break your rules – and it’s a winner.  That’s not discipline – that’s closer to luck.


Housing Starts Collapse

Housing data is weak again.  The August numbers were bad but September is even worse.  Key bit: 

Following August’s disappointing dump in Housing Starts (and Permits), September data is an utter disaster. Against expectations of a 2.9% rise, Housing Starts plunged 9.0% in September to 1.047mm – the weakest since March 2015. Year-over-year, Starts have crashed almost 12% – the most since April 2011, driven by a collapse in multi-family housing. Permits offered some hope for the future (although current starts suggests historical permits were a weak indicator).

For the first time since June 2014, Housing Starts fell for 2 months in a row, crashing 12% YoY…


The disconnect continues…

Hat tip

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Welcome fellow traders and investors!

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.

Our methods are not the traditional advice you hear repeated and repackaged over and over again, but that’s exactly the point and the reason why we know how to advance and prosper in every kind of market.

To Your Success,

Doug & Gary