#$ewi

[jlfmi]

High Low Friday – 2/7/2020

Here are some of the most noteworthy new highs and lows across the markets for Friday,February 7, 2020.

Johnson & Johnson $JNJ Breaking Out To New All-Time Highs

Biotech ETF $IBB Testing ~5-Year Highs

Italian Stocks Testing Decade Highs

Oil & Gas Exploration & Production ETF $XOP Hitting All-Time Lows

Industrial Metals Hitting 3-Year Lows

United Arab Emirates ETF $UAE Drops To All-Time Low

If you’d like to see these charts as they come out in real-time, follow us on Twitter and StockTwits. And if you’re interested in the daily “all-access” version of all our charts and research, please check out our site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!

_____________

Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

[jlfmi]

Mama Mia! Potential Breakout A Decade In The Making

After moving sideways for the past 10 years, Italian stocks may finally be on the verge of a breakout.

While U.S. indices once again plumb their post-correction lows, it is important to remember that there is a whole world of potential investments out there. In other words, you don't have to just trade the S&P 500. Some global stock indices are holding up much better than the U.S. currently. And thanks in part to a weakening Euro, many of those countries reside in Europe, including our "Mystery Chart Of The Day" on Twitter and StockTwits: Italy.

Following a mammoth 2-year bear market into early 2009, Italy's benchmark FTSE MIB Stock Index doubled itself into October of that year, peaking just north of the 24,000 level. It has not been higher since. It has made a few runs at that level over the past 9 years, including a few times in 2015 as well as this past January. But it just never could get over that hump. It may be on the verge of doing so now, however.

While the MIB has not decisively broken those October 2009 highs, it has in recent days closed above the slightly down-sloping trendline connecting the peaks of the past 10 years. What's more is the fact that the chart pattern since 2009 could be interpreted as a large (and bullish) cup-&-handle formation. Furthermore, the pattern post-2015 could also be interpreted as such. Obviously, if those interpretations are correct, it could mean major positive ramifications for Italian stocks in the near-term.

But aren't the PIIGS in dire shape, financially, you might ask? And isn't the recent rally all a result of the falling Euro? The answer to both of those questions may be affirmative. But you know what, our attitude is it doesn't matter. That's because while the rationale may be a mystery, prices would suggest that Italy is poised for a major breakout and potentially substantial up-leg.

So how can one take advantage of this opportunity? In a Premium Post at The Lyons Share, we discuss our strategy for taking advantage of this potential opportunity in Italy, including selecting the best vehicle and some pitfalls to watch out for.

If you’re interested in the “all-access” version of our charts and research, please check out our new site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!

_____________

Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

[blainerollins]

Weekly Research Briefing: The Early Catch...

October 23, 2017

Early corporate earnings have arrived and the reception is positive. Some big moves to the upside in IBM, Grainger, United Healthcare, Danaher and PayPal more than offset the disappointments in United Airlines, Genuine Parts and Procter & Gamble. The big surprise was at IBM where the company finally posted an upside revenue beat and forecast for acceleration, which was broad-based across divisions. This sent the perennial shorts scrambling to cover their positions and likely caused some long only tech money to finally shift into the name. No more kicking sand in Watson’s face.

This week will give us even more earnings data points to look through and evaluate. As we raise the bar for earnings expectations given last week’s results, there are a few other important items to keep an eye on. Over the weekend, Abe showed Theresa May how to win a super-majority as his party solidified their power within the Japanese government. Their stock market rewarded 14 straight days of gains with a 15th day. In the U.S., Congress will be legislating over tax reform while the POTUS makes his final decision on the next Fed Chair. It looks like a Powell/Taylor/Yellen decision but with the situation so fluid, maybe another name will emerge this week. Expect the bond market to be on edge for a final decision. Bond investors seem to be frightened of Taylor and like Powell. If it were up to me, I’d stand pat with Yellen. She has done a good job and the markets have rewarded. There is no way that I could fire any woman with the tidal wave of ‘girl power’ that has just washed over the globe. I would be very, very long the Wonder Woman ETF right now.

Like the 361 Capital Weekly Research Briefing? Share with a colleague now.

Why earnings are important to the market…

@HayekAndKeynes: Some perspective on the magnitude of the earnings collapse during the financial crisis & why this bull market has had such a strong recovery

Corporate Earnings and Revenues beat rates are mixed with last quarter, but the post earnings stock movement has been much better than three months ago…

@bespokeinvest: From this week’s Bespoke Report, note how much better companies have been performing on earnings so far this season compared to last:

This will be another big week of earnings releases…

Bespoke has this good cheat sheet for you.

(@bespokeinvest)

It was a risk-on week for the markets last week…

Bonds and Gold were lower, while Equities and JunkBonds were higher. The U.S. Dollar strength held back International assets.

(10/20/2017)

Within the International Markets, check out this run in Japan…

15 straight days of gains ties their record. Economic data points and politics seem to be all headed in the right direction. No question about whether or not to own the market. Your main decision is do you go long the currency or hedge it out.

(@bespokeinvest)

Just recovering back to levels from 21 years ago…

The Nikkei is up 13% this year, nearly all of it since early September after having vastly underperformed most global equity markets in 2017.

The market’s recent move higher has come in spite of the yen’s overall strength against the U.S. dollar: In the past, Japanese stocks have tended to perform well when the yen is weak, as that helps the profits of the country’s big exporting companies.

Analysts and investors cite strengthening domestic corporate earnings and signs of a strengthening economy as catalysts for the Japanese market’s recent surge to its highest level since 1996. It isn’t overly expensive, either. The Nikkei trades at about 17 times projected earnings over the next 12 months, roughly around its five-year average, according to FactSet. By comparison, many other markets, including the U.S., sport valuations that are much higher than average.

(WSJ)

To read the full 361 Capital Weekly Research Briefing, please click here

Subscribe Now to receive the Weekly Research Briefing in your inbox Follow Us on Twitter @361Capital Follow Us on LinkedIn

[jlfmi]

Time For Investors To Get PIIGY?

A composite of the so-called “PIIGS” markets in Europe is testing 7-year highs.

The PIIGS have been the topic of our Charts Of The Day and blog posts periodically over the past few years. Of course, “PIIGS” is the not-so-affectionate acronym for “Portugal, Italy, Ireland, Greece and Spain” -- the countries at the root of the Eurozone economic and debt struggles in recent years. Typically, the occasion of one of our PIIGS posts is to point out potential problems based on the behavior of the countries’ stock markets. Today, it is a different story as we are actually highlighting a potentially positive development among the PIIGS. Of course, as with most inflection points, a potential positive is often also a potential negative as well should prices inflect in the opposite direction.

So what is this potentially positive action in the PIIGS? Years ago, we constructed a “PIIGS Composite” by combining the main stock indices of the 5 countries in a equally-weighted manner. Unlike much of the world in which equity markets have, for the most part, rebounded substantially since the financial crisis, the PIIGS have continued to flounder for the past 8 years since the 2009 low. And, in fact, as measured by our Composite, the PIIGS actually went to substantial new lows during the teeth of the Eurozone crisis in 2012.

At the moment, things are looking brighter, however, as we mentioned. Specifically, we see the PIIGS Composite presently testing 7-year highs, marked by peaks in 2011, 2014 and 2015.

So what will the PIIGS do next? Will they be rejected here at the former peaks -- or will momentum propel the PIIGS to new multi-year highs? We will cover our thoughts on this topic in a Premium Post at The Lyons Share, including what this current action means for European equities in general. And we will break down the 5 individual PIIGS markets in order, from least to most attractive. If you’ve been considering subscribing to The Lyons Share, now is the perfect time to join as our Spring Sale is offering members BIG savings.

_____________

Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.

[kimblecharting]

Banks facing most important price point in years!

Banks in the states and around the world remain an important influence to the broad markets.

Below looks at the patterns of banks in Europe (EUFN) and Italy (EWI) and why they are at one of the most important price points in years!

CLICK HERE TO ENLARGE CHART ABOVE

When EUFN and EWI started heading lower in 2015, the broad markets in the states struggled to move higher. When these ETF's hit falling channel support earlier this year and rallied, so did the broad markets in the states.

Now the S&P is testing 2015 highs at the same time that EUFN and EWI are testing falling channel resistance at (1).

We humbly feel what happens at (1) above with these bank ETF's, while have a large impact on stocks in the states going forward.

See more of our research and membership options at Kimble Charting Solutions. 

[kimblecharting]

Would Jesse James rob these banks today?

Jesse James was once ask, "why do you rob banks?" His answer, that is where the money is.

From an investing point of view over the past couple of years, investors have been robbed of opportunities if they have owned the banks, as the banks have under performed the broad markets for the past 18-months. Is this trend about to change?

Below looks at Banks in the States, Europe and Italy

CLICK HERE TO ENLARGE CHARTS ABOVE

XLF looks to be forming a multi-year pennant pattern and it is making an attempt to breakout at (1) above. The other two charts look at banks in Europe and Italy, which reflects that both are inside of uniform falling channels.

For Europe and Italian banks to send a risk on message to banks and the broad market in general, they need to breakout above falling resistance at (2).

We humbly feel that portfolio construction between now and the end of the year will be greatly influenced by what the price action of banks, in the states and Europe/Italy.

Financials were one of the best performing sectors last month, while the broad market was quiet. Most quality bull markets in stocks have seen banks going along for the ride. What EUFN and EWI does at (2), should be huge towards if the S&P 500 can solidly breakout above 2,150 resistance zone.

[kimblecharting]

Worlds stock markets want this support to hold, says Joe Friday

Much of the media continues to express concerns over the Brexit vote. The charts below reflect what Europeans and investors in the US were concerned about, long before and after the vote.

The 2-pack below looks at ETF's that focus on banks in Europe and Italy.

CLICK HERE TO ENLARGE CHART ABOVE

Both of these ETF's started falling hard back in 2014, long before the Brexit vote. The large declines now have EUFN testing 2011 lows and EWI is now testing lows that took place during the financial crisis. Once these banks started heading down in 2014, broad based indices in the states (NYSE, Wilshire 5000, Valu Line Geometric, Russell 2000) peaked and started heading lower.

Joe Friday Just The Facts- Indices in the states are influenced by the banks in Europe. World hopes that these banks find support at these levels.

See more about our research and membership options at Kimble Charting Solutions.