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Today's Stock Market Chart Setup Screams, "It's a Setup!" 6/11/21

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I just can't. 

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OK, let's zoom into the 30 minute bars and see if it makes any more sense.

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Well, no. But the 2-3 day and 5 day cycle projections are now both around 4260. I see no reason why they wouldn't get there. If they get through 4242, the odds are pretty good. If they clear 4246, it's a slam dunk.  

On the other hand, below 4235 looks kinda airy. So there's that. 

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Meanwhile, 

The Old Line Trading Firm of Dewey Cheatham Burnham and Howe

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Real Time Tax Data Shows Nirvana for Stocks and Bonds, But It’s Temporary

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THOUGHTS ON THE DOUBLELINE TOTAL RETURN BOND FUND

I always like to look at the portfolio composition of the DLTRBF to see how Jeffrey Gundlach is tracking.

Its outperforming the index (but given the index is treasury heavy thats a very easy thing to do....just stuff your fund with higher yielding mortgage bonds....a pretty easy thing to do....and outperformance is guaranteed).

A much better index to measure the fund's performance against would be a pure mortgage bond index.

Which given the myriad of mortgage bond tranches out there would be a fiendish beast to create.

But the fund is still down for the year.

Which means the fund has not been able to escape the detructive gravity of inflation. 

Looking at the internal composition of the fund it is nicely balanced between agancy and non agency debt.

Rather ying and yang.

But it is unbalanced in regard to duration....only 4 years.

This is good as the lower the duration the more protected the fund is against inflation.

It seems the fund owns all the old tranches that are about to run off.

Thus it is protected to a large extent from mortgage rate rises, which will lead to a sharp drop in mortgage refinancings and blow out the duration of most mortgage bond funds and lead to significant losses in value. 

It is also protected against housing price drops and mortgage defaults as the home owners for these mortgages that are about to run off would have built up significant equity in their houses.

The fund structure gives it "Double Insurance" and with the agency debt  implied guarantee from Uncle Sam "Triple Insurance".

Indeed one could probably replicate this stategy, at a lower cost to fund investors, with a low duration mortgage bond ETF.

It would need a catchy name for marketing purposes.

How about the "Old Growth ETF".

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Bears won the swing trade screen game again yesterday, with 31 sell signals vs. 20 buy signals. This compares with a 31-17 bear win yesterday, and all I can think is WTF! 

Back on May 14 we had a surge of 153 buy signals to 6 sells.  That showed thrust. It suggested a new bull swing phase. It never fully materialized but we still need to see substantially more sell signals to indicate a reverse thrust. So despite the preponderance of sell signals lately, there haven't been enough to reverse the tide. 

The 5 day total is now 97 buys to 116 sells, a spread of -19. That compares with -51 yesterday, which so far was the crest of net sell signals over the past couple of weeks.

That trend was diminishing, but positive, since a peak reading of +218 on Thursday, May 20 until June 2. It slipped to the sell side on June 3 and has been weakening since then. The averages can keep climbing on the strength of fewer winners while other stocks languish, but don't sell off much. But there's a tipping point somewhere. Where? We don't know. This is new data since March. 

I continue to think that without a big thrust on the sell side, this pattern can continue as an apparent consolidation. 

I screen all stocks and ETFs from the NYSE and NASD, excluding those with less than an average of 1 million shares per day traded, and selling for less than $6 per share.  The table below shows swing trade buy signals and sell signals from yesterday's action. The numbered columns represent the time frame of the support or resistance trend around which the signals were generated.  

Every weekend I use the previous week's screens to select charts that have potential for a move, and I post them for subscribers. 

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Today's output is below. This is raw data. These are not recommendations. The data represent charts that have triggered short term signals near key cyclical support or resistance levels. Pick through these and see if there are any that you like using your own charts. Feel free to post your charts here with comments. 

The number 1 indicates that the condition is true. 0 is false. The numbers on the right half of the chart represent the time frames in days of the support or resistance areas where the signal was triggered. 

Symbol Buy Sell 500 200 125 50
AEP.O 1 0 0 1 0 0
BMY 1 0 0 0 0 1
BSX 1 0 0 0 0 1
CHD 1 0 0 1 0 0
DUK 1 0 0 0 0 1
ENDP.O 1 0 0 0 0 1
EURN.K 1 0 1 0 0 0
HBM 1 0 0 0 1 0
KKR 1 0 0 0 0 1
MEDS.O 1 0 0 1 1 1
MRK 1 0 0 0 1 1
PPL 1 0 1 0 0 0
SIG 1 0 0 0 0 1
STM 1 0 0 0 0 1
TAK 1 0 0 0 0 1
TEVA.K 1 0 0 1 0 1
UNH 1 0 0 0 0 1
VOD.O 1 0 0 0 1 0
YUM 1 0 0 0 0 1
BBY 0 1 0 0 0 1
BLNK.O 0 1 0 0 1 0
BNGO.O 0 1 0 0 1 0
BYD 0 1 0 0 0 1
CAKE.O 0 1 0 0 0 1
CMRX.O 0 1 0 0 0 1
DRI 0 1 0 0 0 1
DVAX.O 0 1 0 0 0 1
EB 0 1 0 0 0 1
EC 0 1 1 0 0 0
EWJ 0 1 0 0 1 0
EXPI.O 0 1 0 1 0 0
FCEL.O 0 1 0 1 0 0
FSLY.K 0 1 1 0 0 1
FUV.O 0 1 0 0 1 0
GEVO.O 0 1 0 0 1 0
INO.O 0 1 0 0 1 0
IQ.O 1 1 0 0 0 1
KALA.O 0 1 0 0 0 1
MAR.O 0 1 0 0 0 1
NLSN.K 0 1 0 0 0 1
OCGN.O 0 1 0 0 0 1
PCAR.O 0 1 0 0 1 0
PHM 0 1 0 0 0 1
POWW.O 0 1 0 0 0 1
REGI.O 0 1 0 1 0 0
TLRY.O 0 1 0 0 1 0
TMHC.K 0 1 0 0 1 0
TOL 0 1 0 0 0 1
UA 0 1 0 0 0 1
UAA 0 1 0 0 1 0
Totals 20 31 4 7 14 30
5 day Total 97 116 Spread -19    

Here are a few sample charts from today's screen that look interesting. These are NOT RECOMMENDATIONS.  They're interesting for different reasons. Feel free to comment.

Click the chart to enlarge.

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Friday night short covering. 

And that's all she wrote for an amazing week. 

I have a couple Primary Dealer updates coming for you this weekend. 

Have a great weak end! 

Ciao

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