Countinuation Pattern
Updated
From August to End of Oktober we saw some very impressive developments
- The CNN Great & Fear Index was falling from extremely overbought conditions to extreme fear before Nov. 8, lower than February 2016
- In October 2016 the net outflows from us funds rises to 47 b USD
- US Funds hat the highes cash ratios since 2001 and higher than 2008 (!)
- US-Stockmarket Index like SPX or DJIA had the longest loosing streak since 1996
- The CBOE Total Intraday Put/Call Ratio rose to 1,53 and stayed high for a couple of days
But all in all Dow Jones and S&P-500 Index didn´t loose so mutch ground. Finally the expactations on a "Trump"-sell off had been so high, that it was more likely that this expectations will not be reached.
The result was one of the most dramatic rise in stockmarket prices ever seen wich most of the Investors in Europe even did not trust until now and did not participate at any (!) time, but still betting on CFD´s every day, that US-Stockmarkets will turn arround. Everyone might guess, how much money got lost.
The question is now: What happens next. Europeans retail investors have a clear view: The next crash is to start today. I am not following candelstick pattern very strict and especially not on a monthly basis. But i have an eye on everything what Thomas Bulkowski calls like this, especially if the Investors Sentiment is declining clearly for 3 month in a row:
thepatternsite.com/Rising3Methods.html
Also i have an eye on any continuation pattern if the majority of Investors for a long time have been bearish before a stockmarket suprisingly headed higher like we have seen since November 9th.
investopedia.com/articles/technical/02/021102.asp
As i said before: I do not follow strict this patters but they might give an idea that this stockmarket rise is not over yet even everyone might feel this. The target for me looks like higher than 20k so that i say the Dow will reach 21.000 bevore a major downturn might occur. For me it looks like that beyond the earning season in Q1 2017 stockmarkets will go lower and not before.
- The CNN Great & Fear Index was falling from extremely overbought conditions to extreme fear before Nov. 8, lower than February 2016
- In October 2016 the net outflows from us funds rises to 47 b USD
- US Funds hat the highes cash ratios since 2001 and higher than 2008 (!)
- US-Stockmarket Index like SPX or DJIA had the longest loosing streak since 1996
- The CBOE Total Intraday Put/Call Ratio rose to 1,53 and stayed high for a couple of days
But all in all Dow Jones and S&P-500 Index didn´t loose so mutch ground. Finally the expactations on a "Trump"-sell off had been so high, that it was more likely that this expectations will not be reached.
The result was one of the most dramatic rise in stockmarket prices ever seen wich most of the Investors in Europe even did not trust until now and did not participate at any (!) time, but still betting on CFD´s every day, that US-Stockmarkets will turn arround. Everyone might guess, how much money got lost.
The question is now: What happens next. Europeans retail investors have a clear view: The next crash is to start today. I am not following candelstick pattern very strict and especially not on a monthly basis. But i have an eye on everything what Thomas Bulkowski calls like this, especially if the Investors Sentiment is declining clearly for 3 month in a row:
thepatternsite.com/Rising3Methods.html
Also i have an eye on any continuation pattern if the majority of Investors for a long time have been bearish before a stockmarket suprisingly headed higher like we have seen since November 9th.
investopedia.com/articles/technical/02/021102.asp
As i said before: I do not follow strict this patters but they might give an idea that this stockmarket rise is not over yet even everyone might feel this. The target for me looks like higher than 20k so that i say the Dow will reach 21.000 bevore a major downturn might occur. For me it looks like that beyond the earning season in Q1 2017 stockmarkets will go lower and not before.
Trade active
The opinion that the US-Stockmarkets will rise no matter what will be the result of the 2016 Election was developed by me over the last weeks before the election. The Sentiment of especially German (!) retail Investors is still (!) so negativ that you can not discuss any positive momentum on a website like thisin Germany.This is the reason why i am here: The German "Angst". Today in a mayor German Investors Plattform allmost 100% of commenting users are shorting any market and everyone is quite sure, that this momentum from today will end in sharp decline in all stockmarkets all over the world.
The most accurate news source for professional stockmarket information in Germany, the "Handelsblatt.com" wrote on Friday, that the 30 German DAX-Companies are going to pay in 2017 the highes quarterly / yearly dividend ever. This will be the result of record earnings in 2017. So how can a Stockmarket crash, if shareholders can expect the highes return ever?
The reason for this expactations ist the "German Angst" of german retail investors. Those folks wich have been totaly optimistic and buying long positions until the very end when the DAX fellt to 8.800 Points are now buying puts. Even in the USA everybody knows what "Angst" means a further rise is based on fear.
Trade active
CoT-ReportWhat i am watching closely right now is the CTFC CoT report:
cftc.gov/dea/futures/deacmelf.htm
What you can see there is that non comercials missing the last 15 trading days. You can see this in this impressiv chart wich shows you with the "red line" how large "the miss" is. For my opinion this will turn arrount bevor year end and will push the stockmarket higher again.
wellenreiter-invest.de/Cot-daten/s-und-p-500-index
My bias here is neutral as well but i am watching the US-Stockmarkets for another up move before end of the year.
Note
Reduced Taxex Means Higher Earnings How much the Trump tax cuts might help corporate profits
Bob Pisani | @BobPisani
45 Mins Ago
Corporate tax cuts: How big an impact on corporate profits?
I've written often that the markets are expensive, and the reason they are expensive is that traders have levitated themselves into believing that earnings are going to expand in 2017 due to a vague combination of tax cuts, infrastructure spending and lower regulations.
It's a powerful combination, but there's not much flesh on the bones. Today Michael Thompson, president and chairman of Standard & Poor's Investment Advisory Services, and his team made a stab at estimating the impact on earnings from corporate tax cuts.
Their conclusion: The impact could be significant. But there's a lot of "ifs."
Why focus on corporate tax cuts? Because it's the only thing in the "Trump rally" that has any kind of plausible numbers associated with it.
President-elect Trump's proposed nominee for U.S. Treasury secretary, Steve Mnunchin, said on our air yesterday that the administration was still targeting a reduction in the corporate tax rate from 35 percent to 15 percent.
The current 2017 estimate for the entire S&P 500 is roughly $131 per share. Thompson estimates that every 1 percentage point reduction in the corporate tax rate could "hypothetically" add $1.31 to 2017 earnings.
So do the math: If there is a full 20 percentage point reduction in the tax rate (from 35 percent to 15 percent), that's $1.31 x 20 = $26.20.
That implies an increase in earnings of close to 20 percent, or $157.
What does that mean for stock prices? The S&P is currently trading at a multiple (PE ratio) of 17, high by historical standards. Applying that 17 multiple to earnings of $157, we get a price on the S&P 500 of roughly 2,669 for 2017.
That is 469 points or roughly 20 percent above where it is today.
That's a lot.
cnbc.com/2016/12/01/how-much-the-trump-tax-cuts-might-help-corporate-profits.html?__source=yahoo|finance|headline|headline|story&par=yahoo&doc=104141318
Note
CoT Report: Large Specs net short bei 139k (!)wellenreiter-invest.de/sites/default/files/xs-und-p-500-index-cot-daten.png.pagespeed.ic.DYd-tZ1Kn3.png
Note
It looks like that it might not be possible to discuss USD 30 YT here on Trading View.This Chart is showing an interesting pattern on a weekly base.
930e888ea91284a71b0e-62c980cafddf9881bf167fdfb702406c.r96.cf1.rackcdn.com/data/tvc_f33b7157f6a4e14ad555c14263c76932.png
If you open this chart you might see that interest rates went maybe to high and a kind of "sell the news" pull back might occur. Lower interest rates might keep a bit the fears away from investors about high valuations and P/E Ratios.
Trade closed: target reached
Trade closed manually
Even i believe the DJIA might go higher this trade is closed after a net gain of 1.000 PointsNote
Trade was closed as written above. Starting by January 1th. focus turned away from USA back to Europe. Europe since than outperforming US-Stockmarkets.So lets have a look on Bulkowskis continuation pattern and whats happen in the past month:
Note
As written above the expectation was that the DJIA reach first 21.000 before any major downturn might occur. Past three month the DJIA had the chance to start at least a short term downmove - but shortsellers failed to start this move. Logical and supported and powered by a ramp (triangle) the most important stockmarket in the world is heading higher now aiming 24.000 points.
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