Archive for the ‘Chart of the Day’ Category

Higher Mortgage Rates And The Housing Market

Will higher rates damage residential real estate?  A history:


As always, great stuff from Charlie Bilello



Furious TBT(Ultra Short Bonds)Call Buying This Morning


The TBT(ProShares Ultra Short 20+ Year Treasuries)has had a rough week.  The ETF moves is the  inverse(double)of the TLT(iShares Barclays 20+ Year Treasury Bond Fund).  With bonds mounting a powerful rally off the March lows the inverse funds(TBT/TBF)have been especially weak.  Bob has pointed out that today’s call volume in the TBT has been extremely robust.  16,000 April 37 calls have been purchased between $1.08 and $1.19 just as the TBT begins to test a very solid support zone.  This support area, which includes the summer highs as well as the October peak, runs from $37.20 to $36.80.  Also in this area is the upward sloping 50 day moving average.  In addition, the 1/3 retracement level of the powerful rally off the September/December double bottom equates to the summer highs.  We continue to expect rates to creep higher throughout the year and are trading in and out of TBT and TBF.  The current set up may provide a low risk buying opportunity although we are not adding to our small TBT/TBF positions yet. 

At time of publication we are long both the TBT and TBF in some managed accounts.

Hat tip Bob von Halle

Warning Signs From The IPO Market?



Hat tip


Manufacturing Leads Earnings


From the desk of Ryan Detrick:   Manufacturing leads earnings by about 6 months. With manufacturing making a new cycle high recently, this bodes well for continued strong earnings growth …

Rollbacks matter…



Merck Continues To Base Near Major Support


During the February flush Merck dipped down to major support near the multi month 2017 lows: stock has continued to base since then but has had trouble gaining noticeable traction.  Recent option activity paints a more bullish picture for the stock.  We remain positive on the current bottoming pattern.  Here’s a closer look at Merck’s option activity from Bob von Halle:    Over 12,000 May 55 calls have been bought today around $1.95, which is a significant amount of one day activity in this name. That adds to the large open interest in the April 57.5 and April 60 call strike prices that have 17,000 and 13,000 outstanding contracts respectively. Implied volatility is modest at around 19%. Next earnings report not due until May 1st, which will capture today’s activity. 

We are long MRK in most managed accounts.



Whiskey Weakens

All bubbles eventually burst…


Whiskey prices ran up a significant premium versus other liquors from 2002 to 2014, but the trend is now reversing sharply.

Hat tip Bespoke Research

Warming Up To Welltower


Shares of healthcare REIT Welltower may have put in a major bottom.

WELL began this week with a 2.2% gain putting it in the top 10 S&P 500 gainers list.  This impressive move, on accelerating trade, pushed shares to new March highs.  After a extremely deep pullback from the 2017 peak, which drove shares over 20% lower, WELL is setting up for a healthy rebound.  In the near term investors should take on a much more positive view of the name. 

Trading notes:

At the early March lows WELL was the furthest its been below its 40 week moving average since early 2009. 

Since the mid February low the stock has been tracing out a bullish divergence in its daily MACD indicator.

WELL now has a very solid support zone nearby.  The top band is marked by the initial March high($54.20)as well as last week’s high($54.05).  On the downside, a close back below $52.20 would clearly violate last week’s low sending a clear warning sign that a more drawn out basing process is ahead. 

Initial upside target is the declining 50 day moving average currently resting at $57.55.

We do not have a position in WELL. 


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