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Pravda Markets Report

Technical Monthly Review

November Edition

http://pravdaanalytics.com/


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Market Index Overview

Weekly Bar Chart

S&P 500 (SPY) index – as of close on Friday 11/04/16

Broad index is moving lower amid U.S. elections, earnings, and probable December rate hikes. Plenty of technical support

at current levels.

Don’t forget the big picture and take a look at the weekly chart, we are only a few percent away from all time market highs.


Market Direction Confirmation via Transports Sector Observation as per Dow Theory

Key premise of the theory states that both

the broad equity market index as well as

the transports index need to align in

market direction to confirm a bullish or

bearish trend. (additional rules apply)

Dow theory

Market Direction: Neutral

Dow Jones Industrial Average (DIA) is

below 1 of 2 key moving averages.

Dow Jones Transports Average (IYT) is

above both key moving averages.

Current Analysis

A confirmed bullish market is when:

Both indexes are exhibiting higher price

peaks and valleys on long term charts

Both indexes are above their respective

200 day moving average (orange)

Additional level of confirmation: index

above 50 day moving average (blue)

The Approach

Dow Jones Index Transports Index

Transports are holding strong above both key moving averages while the Dow broke below the 50 day moving average.

Market Direction is Neutral until the Dow pulls up above the 50 day MA. Alternatively, we formally enter Bearish Market

Direction if the Transports break below the 200 day MA together with the Dow.


Inverse Put Call Ratio

A unique oscillating indicator based on options activity. Coupled with a Bollinger Band to view overextended signals.

The crowd is fearful of a broader marker decline and is purchasing puts by the pound. Overextension below the Bollinger Bands

together with the fact that the indicator is below zero makes this analysis a candidate for an oversold flag on the market.


Social Media Sentiment

Chart

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S&P 500 BONDS GOLD

The sentiment chart shows the percentage breakdown in bullish and bearish sentiment shared by StockTwits users over time. It is

calculated on a rolling, 7 day basis.

The good people of the StockTwits lands are.. Bearish on stocks and bonds, bullish on gold.


Index Overview

Major indexes with key trend and support/resistance levels.

And down they all go.


A Closer Technical Look - Bonds

An important resistance level is located in the 133.75 area for three reasons:

1) Short term swing high before the last move down @ 133.75 (red line)

2) The orange 200 day moving average is hovering around the same area

3) The blue 50 day moving average will make its way down to this area in a few days given its slope down

A break of this line would not be good for bears.


A Closer Technical Look – Oil

Like equities, oil was stuck in a trading range. 2016 has seen lows of 26 in the beginning of the year recent highs of 52. The chart

observes a number of support levels on the daily charts. Holding the yellow 200 day moving average line would be key for the bulls.


A Closer Technical Look - Gold

Gold respected the support from the 200 day moving average (yellow line) in October.

The commodity also managed to close above all key moving averages in the first week of November as the stock market indexes

plummeted. Bulls will need to break through the Tier 1 resistance at 124.5 to reestablish a dominant trend.


Hook of death

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10-Year Treasury Constant Maturity Minus 3-Month Treasury Constant Maturity.

Inverted yield curve often precedes a major market decline. So far so good.


Rate Watch

Chart

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up

Fed Funds Rate @ 0.50: market projects at 66.8% chance that there will be a rate hire in December

Prime Rate @ 3.50: stable from a year ago

FOMC’s‏Rate‏Projection from the Dot Plot: currently projecting 2017 @ 1.00-1.25 % and 2018 @ 1.75-2.00%


Sector Analysis

Percent change chart since start of 2016

Outperformers: Energy, Materials

Underperformers: Health Care, Consumer Discretionary


Stock Averages

Number of Stocks Above 20-Day Moving Average

Indicator is in the oversold area (<30) and at the bottom of the Bollinger Band. Signal that the bears are over extended.


Economic Calendar

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October payroll figures were solid. Average hourly earnings and government payrolls increased. Unemployment is at 4.9%

Decline in imports helped to pull down the national trade gap, a plus for GDP. National deficit with China narrowed.


Headlines of the week

Notable‏covers‏and‏headlines‏from‏world’s‏most‏read‏publications

As Princeton economist Paul Krugman wryly noted, "Whom the Gods would destroy, they first put on the cover of Business Week."


Personal Finance - The Richest Man in Babylon

Make thy gold

multiply

Make of thy

dwelling a

profitable

investment

Guard thy

treasures from

loss

Seven Cures for a

Lean Purse

Start thy purse

to fattening

Control thy

expenditures Increase thy

ability to earn

Insure a future

income

Goddess of Good Luck smiles upon those who

work hard, save their money, and invest well.

She doesn't really patronize professional

gamblers, who always seem to end up poor

Meet the Goddess of Good Luck Five Laws of Gold (Money)

• Mentors, Books

• Seminars, Experience Learn

• Business, Investment

• Knowledge, Attitude, Skills

Master

Pay • Yourself first

• Save 10% of earnings

Invest

• Business

• Real estate

• Stocks

• Scams

• Trickeries

• Get rich schemes Avoid

The Richest Man in Babylon is a book by George S. Clason which dispenses financial advice through a

collection of parables. Through their experiences in business and managing personal finance, the

characters in the parables learn simple lessons in financial wisdom.


Investing & Trading Blueprint

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IBD's 10 Secrets to Success – great blueprint to improve your trading, investing, as well as every day

activities and personal goals:

Pravda‏Analytics



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Pravda Markets Report Technical Monthly Reviewpravdaanalytics.com/wp-content/uploads/2016/11/Pravda-Analytics... · Pravda Analytics Pravda Markets Report Technical Monthly Review