It is said that an image is worth a thousand words. This chart presents a possible roadmap for monitoring the risk of a major peak and bear market by comparing the technical similarities between the prior two market tops and where we are today. 

….continue for the 3 signs and summary HERE

Todd Market Forecast for Thursday June 4, 2015  

Mon- Friday after 6:00 P.M. EST

DOW                                                    -170 on 1650 net declines

NASDAQ COMP                                  – 40 on 1200 net declines

SHORT TERM TREND                          Bearish

INTERMEDIATE TERM TREND             Bullish

STOCKS:  Pessimism about Greece (again) caused selling in Europe which didn’t help our markets. Also concern about the non farm payrolls to be released at 8:3 EST on Friday played a roll. This is the most market moving of all economic releases.

GOLD:  Gold lost $9. The reason cited was that the IMF stated that inflation remained elusive. Gold traders seem to think that the IMF knows what it’s talking about.    

CHART: The advance decline line continues to underperform. There are no absolutes, but this is normally not a good sign going forward.

BOTTOM LINE:  (Trading)

 Our intermediate term system is on a buy from Feb. 20, 2015.

System 7   We are long the SSO from 67.93. If there are more declining issues than advancing ones at 3:45 EST, sell at the close.    

System 8   We are in cash. Stay there.               

GOLD  We are in cash. Stay there.     

News and fundamentals:  New jobless claims were 276,000, in line with expectations. On Friday we get the dreaded non farm payrolls.

Interesting Stuff   Hedge fund manager John Paulson gave $400 million to Harvard’s engineering school. Harvard now has a total endowment of $36.4 billion. So what do they do with it? Do they use it to open opportunities for students??

TORONTO EXCHAN GE:   Toronto dropped 135.

S&P/TSX VENTURE COMP: The TSX lost 7.

BONDS:  Bonds had a decent rebound.                              

THE REST:  The dollar was slightly higher. Silver and crude oil got clobbered.                

We’re on a sell for bonds as of June 3.                     

We’re on a sell for the dollar and a buy for the euro as of June 2.                       

We’re on a sell for gold as of May 19.                       

We’re on a sell for silver as of May 19.                        

We’re moving to a sell for crude oil as of today June 4.                             

We’re on a sell for the Toronto Stock Exchange as of May 6.    

We’re on a sell for the S&P\TSX Venture Fund as of October 30.    

We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.  

Sent to subscribers on June 4, 2015, 6:02 AM.

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)

Our intraday outlook is bearish, and our short-term outlook is bearish:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish

The main U.S. stock market indexes gained 0.2-0.4% on Wednesday, as investors reacted to some economic data announcements, among others. The S&P 500 index remains relatively close to its May 20 all-time high of 2,134.72. The nearest important level of resistance is at around 2,130-2,135. On the other hand, support level is at 2,100. There have been no confirmed negative signals so far. However, we can see negative technical divergences:

Larger Chart

Expectations before the opening of today’s trading session are negative, with index futures currently down 0.6-0.8%.

The European stock market indexes have lost 1.4-1.9% so far. Investors will now wait for economic data announcements: Challenger Job Cuts report at 7:30 a.m., Initial Claims, Productivity at 8:30 a.m. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it trades close to the level of 2,100. The nearest important level of support is at 2,090-2,100, marked by recent local lows. On the other hand, resistance level is at 2,120, among others, as the 15-minute chart shows:

Larger Chart

The technology Nasdaq 100 futures contract (CFD) broke below the level of 4,500. The nearest important level of support is at around 4,480, marked by previous local lows. On the other hand, resistance level is at 4,530-4,550, as we can see on the 15-minute chart:

Larger Chart

Concluding, the broad stock market extended its short-term consolidation on Wednesday, as the S&P 500 index got closer to its late May all-time high again. There have been no confirmed negative signals so far. However, we continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,140, and potential profit target is at 1,980. You can trade S&P 500 index using futures contracts (S&P 500 futures contract – SP, E-mini S&P 500 futures contract – ES) or an ETF like the SPDR S&P 500 ETF – SPY. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts

With Q1 earnings largely in the books (over 97% of S&P 500 firms have reported), today’s chart provides some long-term perspective on the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today’s chart illustrates the dramatic nature of the earnings plunge during the financial crisis as well as the recovery that followed — a recovery that took earnings from levels not seen since the Great Depression to a new record high. More recently, however, S&P 500 inflation-adjusted earnings have begun to pull back and are now 6% off of their record highs — a significant concern going forward.

Quote of the Day
“Why is there so much month left at the end of the money?” – anonymous

Events of the Day
June 06, 2015 – Belmont Stakes
June 14, 2015 – Flag Day

Stocks of the Day
— Find out which stocks investors are focused on with the most active stocks today.
— Which stocks are making big money? Find out with the biggest stock gainers today.
— What are the largest companies? Find out with the largest companies by market cap.
— Which stocks are the biggest dividend payers? Find out with the highest dividend paying stocks.
— You can also quickly review the performance, dividend yield and market capitalization for each of the Dow Jones Industrial Average Companies as well as the performance of the  Dogs of the Dow.

STRATEGY OF THE WEEK

This week, I ran the Stockscores Simple Weekly Market Scan strategy in search of longer term position trades based on the weekly chart patterns. Here are two that look good:

STOCKS THAT MEET THE FEATURED STRATEGY

1. T.AGT
T.AGT has been trending sideways for about 8 months but last week, broke through resistance with an abnormal price move. This should set up for the resumption of the long term upward trend. Support at $28.50.

2. PLAB
For over a year, PLAB could not make a move through $9.50 until two weeks ago when it made a strong break through resistance on abnormal volume. This should set up for a new upward trend, although it may take a few weeks for the short term profit takers to finish. Support at $8.50.

…..read Tylers full newsletter entitled “Just Say No“