MidWeek Commentary

HI Financial Services Commentary 04-06-2016

RECORDING Market Commentary 04-06-2016

HI Financial Services Commentary 04-06-2016

Don’t let fear of failure discourage you.  Don’t let the voice of critics paralyze you – whether that voice comes from the outside or the inside. – Deter F. Uchtdorf

 

I’m going to go over that quote – I’m shocked at what people have done year to date

#1 Selling out in February for more than a ytd 10% loss and #2 still haven’t put 10% of their portfolio back into market

#3 Lost 50% of their 7 figure portfolio spread trading without ever adjusting I SAY OVER AND OVER trading is a process.

DON’T just place a trade and wait to see if it works – THAT’S STUPID !!!!!!!!!!!!!!

#4 Lost hope in the process and went to asset allocation funds

I’m shocked we are back to break even on the markets !!!!!

I Think that we are still the best house in a really, really ugly global neighborhood.

Hurley-Investments-CTA3 

NOW: Our view of SPX turns NEUTRAL today, despite only one close below the 5DMA. We’re taking this step because:

  • The 10DMA is now falling after 33 days of ascent
  • MACD is falling. The hourly chart also has bearish divergence on at the 4/4 peak.
  • The April 1 rally was probably a false bullish signal because it resulted from the start of Q2.
  • The index is near resistance at the late-Dec high around 2081
  • Earnings season starts in 2-3 weeks with financials, many of which have already warned of poor results.
  • Junk bonds and energy in general are also looking weak. HYG and XLE have both made lower highs since mid-March. These have been canaries in the coal mine that have led the SPX.
  • The collapse of the PFE-AGN deal adds to political risk in the healthcare space and mergers in general. Political risk hasn’t been a significant ingredient in this market for years but it could increase as elections approach.

Levels:

  • Support is at 2034 on /ES or $203.90 on SPY.
  • Next support is a zone between 2012 and 2020 on /ES, the lows of 3/24 and 3/29. This matches $201.65 to $202.50 on SPY. If SPX begins a skid lower we would expect the lower end of this zone to be tested and not rush buying the top.
  • Below this, SPX likely has support somewhere around 2000 because this level has served as a pivot at various times since August 2014.
  • First resistance is the same as yesterday, around 2049.50 on /ES or $205.40 on SPY. This kept the index in check overnight.
  • There is potential resistance at 2060 or $206.40 on SPY, the intraday breakdown level on 4/4.
  • The highest resistance is around 2071.50 on /ES or $207.60 on SPY. This roughly matches the highs of 4/1 and 4/4.

GAME PLAN: We won’t have a game plan because we are NEUTRAL. However, there may be follow-through to the upside if SPY breaks $205.40 and downside on a move below$203.90.

 

5-day chart w/15min candles

Screen Shot 04-06-16 at 04.18 PM

ECODATA & CALENDAR:

Crude-oil inventories are due at 10:30 a.m ET. Last night’s API report was strong at -4.3mln vs +2.9mln est.

The biggest item is FOMC minutes at 2 p.m. ET, although voting member Loretta Mester also speaks at 12:20 p.m. (She was hawkish on 4/1).

  • Thursday: Retailer comp sales, jobless claims, natgas inventories. Key earnings: CAG KMX RAD | RT
  • Nothing

WHAT WILL CHANGE OUR OUTLOOK:

  • We will go BULLISH if SPX closes above the 4/4 close of 2073.
  • We will go BEARISH if the 20DMA on SPX turns negative.

LONG TERM VIEW: Our longer-term view is NEUTRAL, with the potential for new highs or new lows depending on the economy.

  • SPX is in a range between 1812 and 2130. The Feb 2014 low around 1730-1740 is the next likely support if it breaks.
  • Long-term momentum is neutral, with SPX range bound and moving averages convoluted.
  • We see strength in the economy — especially after the March regional Fed indexes and ISM beat estimates. Nonetheless, there remains a widespread belief to the contrary.
  • We also see the likelihood of earnings to improve as the USD weakens and inflation rises. We believe this is not yet priced in an could serve as a positive catalyst as we work through earnings season.
  • SPX probably needs to retest at least 2000 and possibly 1950. It is also due for a pullback to its 50DMA.

What’s happening this week and why?

Fed minutes said “global concerns” justify waiting to raise rates

Factory Orders -1.7 vs est -1.7

Trade Balance 47.1 vs est 46.2

ISM Services 54.5 vs est 54.0

 

Where will our market end this week?

Continue higher but not a lot higher

DJIA – Double bottom, bullish and now bouncing off over bought on the RSI

      Screen Shot 04-06-16 at 04.19 PM 

SPX –  Ditto the DJIA

 Screen Shot 04-06-16 at 04.20 PM

COMP – Bullish but defending the 200 SMA and still has room to run

 Screen Shot 04-06-16 at 04.20 PM 001

 

Where Will the SPX end April 2016?

04-06-2016           +2.5%

 

 

What is on tap for the rest of the week?=

Earnings:

Tues:          CREE, DRI, WBA

Wed:          APOL, STZ, BBBY, MON, QIHU

Thur:          KMK, CAG, RT, PSMT

Fri:            

 

Econ Reports:

Tues:           Trade Balance, ISM Services

Wed:          MBA, Crude, FOMC Minutes

Thur:          Initial, Continuing Claims, Consumer Credit

Fri:             Wholesale Inventories

 

 

Int’l:

Tues –         FR:DE:EMU: PMI Composite

Wed –         DE: Industrial Production

Thursday –  EMU: ECB Minutes

Friday –    

Sunday –    JP: Machine Orders, CN: PPI, CPI

 

 

How I am looking to trade?

Screen Shot 04-06-16 at 04.42 PM

AAPL set for earnings and I will let half the shares get called away

BABA can also get called away for all I care

BIDU June 200 calls that were put on when it was closer to $155 a share

 Screen Shot 04-06-16 at 04.43 PM

DIS – Protective put for earnings out to June

F – Protective Put for earnings out to June

FB – Already set for earnings

Screen Shot 04-06-16 at 04.45 PM

V – I will collar out to June long puts at $77.50 and roll the short calls to the Jan 17 85 strike

Just for fun I places a Sept 20/28 VIX Bull call for $1.70 and I placed it when the VIX was at 13.44

 

Questions???

www.hurleyinvestments.com 

www.myhurleyinvestment.com = Blogsite

customerservice@hurleyinvestments.com = Email

 

Diversifying Disney: Delights And Drawbacks $DIS
http://www.seekingalpha.com/article/3963563

 

Smart Money Sees Google Differently Than Facebook

http://seekingalpha.com/article/3963355-smart-money-sees-google-differently-facebook?app=1&auth_param=vnn53:1bg851s:50e74eef4d5a25ad96fb12326c102db1&dr=1#alt1

 

Expanding Our Horizon: Visa

http://seekingalpha.com/article/3776006-visa-wonderful-company-fair-price-long-term-investor

 

Keep Your Eye On The Prize Offered By Driverless Cars

http://www.forbes.com/sites/chunkamui/2016/04/05/eye-on-driverless-prize/?utm_campaign=yahootix&partner=yahootix#77af6aa33516

 

Ford’s Valuation: 2009 All Over Again

http://seekingalpha.com/article/3962760-fords-valuation-2009?app=1&auth_param=vnn53:1bg217j:3b53816abe8df08ad33c74bf23f9e4c3&dr=1

 

U.S. auto sales forecast to increase 8% in March

http://seekingalpha.com/news/3169938-u-s-auto-sales-forecast-increase-8-percent-march?app=1&dr=1#email_link

 

Despite What You Read, Facebook Is Not A Short

http://seekingalpha.com/article/3961680-facebook-322-billion-valuation-high#alt1

 

Consumer spending on services on the rise

http://email.seekingalpha.com/news/3169590/track?type=click&mailingid=3169590&messageid=2900&databaseid=&serial=2900O3169590O1458913251371.0.92df1c4b90c4a2ee148dafdae29199c5&emailid=33283235&userid=33283235&extra=&&&3000&&&http://seekingalpha.com/account/email_auth?auth_param=vnn53:1bfafv6:b8774cf53667c1f0286932b20f5816c6&ref=http%3A%2F%2Fseekingalpha.com%2Fnews%2F3169590-consumer-spending-services-rise%3Fsource%3Demail_rt_mc_readmore%26app%3D1%26dr%3D1%23email_link

 

It’s Better To Buy Shares Of Baidu Than Of Yandex

http://seekingalpha.com/article/3960553-better-buy-shares-baidu-yandex?source=email_rt_article_readmore&app=1&auth_param=vnn53:1bf5nfv:2b0691d9532c28dc0e1c80be06f4e36d&dr=1

 

It’s not a bull or a bear market, it’s a ‘bunny’

http://www.cnbc.com/id/103491080

 

  Baidu: Cruisin’ In The USA

http://seekingalpha.com/article/3960052-baidu-cruisin-usa?app=1&auth_param=vnn53:1bf13bs:42c0d88c6acde32f31d97af588edcb6f&dr=1

 

Continued Good News For Ford

http://seekingalpha.com/article/3960093-continued-good-news-ford?app=1&auth_param=vnn53:1bf1tld:c19f1f7a46901d00ffcbe7b2b57db1dd&dr=1

 

Will Apple Get Imagination?

http://seekingalpha.com/article/3960255-will-apple-get-imagination?app=1&auth_param=vnn53:1bf328c:dc36854d1fc3712d53e8ab1ed7d9ffec&dr=1

 

Apple: Better, Faster, Cheaper Is Not Disruptive Innovation, But Is That OK?

http://seekingalpha.com/article/3960351-apple-better-faster-cheaper-disruptive-innovation-ok?app=1&auth_param=vnn53:1bf3j3c:884064bb34e04721bae6407d0bc9132a&dr=1

 

7 traits successful people share

http://www.cnbc.com/id/103462563

 

Invest In A Recession-Proof Business: Disney

http://seekingalpha.com/article/3960025-invest-recession-proof-business-disney?app=1&auth_param=vnn53:1bf0pc6:c71b51591f1829a1f8ffa514a6903f68&dr=1

 

Facebook: Trading At A 10% Discount?

http://seekingalpha.com/article/3959942-facebook-trading-10-percent-discount?app=1&auth_param=vnn53:1bf05s1:77f1d7aeed341c6d72a2e3a671bda81f&dr=1

 

5 things you don’t know about your 401(k) plan

http://www.cnbc.com/id/103480865

 

BIDU: Will Baidu Stock Go Higher?

http://seekingalpha.com/article/3959238-will-baidu-stock-go-higher?source=email_rt_article_readmore&app=1&auth_param=vnn53:1beleus:02255a62f8df5b5b89ada13e32c51e10&dr=1#alt1

 

Can Apple Sustain Its Growth In This Rapidly Growing Market?

http://seekingalpha.com/article/3959256-can-apple-take-india#alt1

 

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