What LIES Beneath!

The NYSE Composite is a stock market index covering all common stock listed on the New York Stock Exchange, including American depositary receipts, real estate investment trusts, tracking stocks, and foreign listings. Over 2,000 stocks are covered in the index, of which over 1,600 are from United States corporations and over 360 are foreign listings.

This is a broader view of what is going on in the stock market, as compared to the 30 stocks that make up the $DJIA or even the 500 in the S&P 500 $SPX.

Let’s take a look at what has been going on under the hood over the past 20 years!

NYA vs SPX 8 26 15

 

 

In the mid to late 90’s, the stocks that looked like the S&P 500, or were in the S&P 500, persistently outperformed the NYSE Composite, so there was a shorter list of stocks that were working to drive the market to new highs!

As the Tech bubble burst, money moved back into secondaries and markets were able to climb to highs again, but this time on the heels of more participants. This action continued into the Financial Crisis.

Since the bottom in 2009, it has paid handsomely to look like the S&P 500, which is indicated by the blue highlighted portion of the chart, vs. the larger part of the market.

Our take-away here is this:

1) Understand where the relative strength is.

2) Focus on what’s driving it under the hood.

3) It would be hard for your Money Manager(s) that operate outside the S&P 500 to deliver in the latest bull market.

4. Sometimes things are not what they appear! If you are long stocks, continue to focus on stocks from the S&P 500 inventory.

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Important Support and Resistance in Play Here!

 

This is a chart of Chevron, symbol $CVX.

We have talked about the bearish look to the chart for some time now, and it came close to reaching a downside Point & Figure target today.

What’s interesting here, is that when looking at very long term chart, Chevron continues to breakdown through a 40 year plus support line on a logarithmic chart! At the same time, it has managed to stop at 40 plus year 50% Fibonacci retracement of the entire move with a confluence of trend-line support!

 

CVX 8 24 15

 

There should be a big move coming from this Dow Component. It is as if half the last 40 years never happened.

Stay tuned,
cjsig

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Bio-wreck on course for Support!

The Biotech sector looks to be on course for the first downside price objective when you observe the price action of the Exchange Traded Fund $IBB 

The iShares Nasdaq Biotechnology ETF seeks to track the investment results of an index composed of biotechnology and pharmaceutical equities listed on the NASDAQ.

We noticed the right shoulder of a possible head & shoulder top was completing in a previous post here. Subsequently the neckline was violated, a bearish triangle formed and also broke down!

ibb 8 23 15

 

Looking at price objectives, the H&S, the Triangle and Trend Line Support suggests the ~ 320 area would be a reasonable target based on these confluences.

Enjoy the rest of your weekend!

cjsig

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Oil That Is?

Oil that is, Black Gold, Texas Tea…

Chevron Corporation, $CVX  is an American multinational energy corporation. One of the successor companies of Standard Oil, it is headquartered in San Ramon, California, and active in more than 180 countries.

We have been talking about this Potential Head & Shoulder Top in this Dow component all year!

CVX 8 20 15

 

The Head & Shoulder measured move looks like the ~ 60 area is possible objective. The first Point & Figure target is 61.

Of course, use your stops, great companies never drop this far!  ;>)

cjsig

 

John Butcofski
Independent Wealth Advisor  |  Avant-Garde Advisors
603-235-5010 Direct  |  866-956-1628 Fax
Shelby Twp., Michigan |  Portsmouth, NH |  www.avantgardewm.com

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The Homes Continue to get Bigger!

From the Wall Street Journal July 24, 2015:

New Home Sales Slump to Seven-Month Low

WASHINGTON — “New single-family home sales in the United States fell in June to a seven-month low, and May’s sales were revised sharply down, but the data released on Friday did little to change the belief that the housing market recovery was strengthening.”

Well if you were watching the chart action in the Home Builders. the relative strength of this group has been great all year!

The iShares U.S. Home Construction ETF made another 52 week high, following yesterday’s breakout.

ITB 8 18 15

 

High Relative and Absolute Strength here!

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The Pressure seems to be Building in this Group!

The Home Building stocks have been acting great as a group since the market bottomed last last October.

This gang has done very well for the the year, persistently outperforming the S&P 500.

The PowerShares Dynamic Building & Construction Portfolio (Fund) is an ETF based on the Dynamic Building & Construction IntellidexSM Index (Intellidex Index). The Fund will normally invest at least 90% of its total assets in common stocks that comprise the Index. The Intellidex Index thoroughly evaluates companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value. The Underlying Intellidex Index is comprised of common stocks of 30 US building and construction companies.

Now on to the Charts!

PKB vs SPX 8 10 15

We love when we get a price breakout, in this case to all time highs for this ETF, along when a relative strength breakout vs. the S&P 500 at the same time!

Thanks for stopping by our home, feel free to sign up for our email alerts when we post here.

cjsig

The Rental Spread is not Dead!

So what is a spread trade trade or also known as ratio trade, long short trade?

Here is a quick tutorial if you’re not familiar with the idea Spread’em

We like the idea of being long relative strength and short relative weakness.

UHAL vs CAR 7 9 15

 

Bullish breakout taking place with these 2 rental giants right now!

Enjoy and don’t forget your stops.

cjsig

Biotech or BioWRECK?

One of the favorites here, for using an ETF to play the Biotech Sector has been under pressure.

 The iShares Nasdaq Biotechnology ETF seeks to track the investment results of an index composed of biotechnology and pharmaceutical equities listed on the NASDAQ, Symbol $IBB

Yesterday’s action, looked to to us to finish off the right shoulder of a bearish Head & Shoulder Top pattern. For this to be completed, you need to see a break of the neckline, preferably on some heavy volume!

IBB 8 7 15

 

We got that today, along with the traditional bounce up to kiss the neckline goodbye. The good news for the bulls is that a bullish “Hammer” pattern formed at some support.

We love the H&S pattern and respect it, so be careful here if your long Biotech!

Have a great weekend everybody!

cjsig

We have Moved!

…..And we are very excited about it!

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Here is our press release from our new partners at Avant-Garde Advisors!

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Stay tuned , more exciting announcements to come.

cjsig

 

 

John Butcofski
Independent Wealth Advisor  |  Avant-Garde Advisors
603-235-5010 Direct  |  866-956-1628 Fax
Shelby Township, Michigan |  48316  |  www.avantgardewm.com 

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**Named to Financial Advisor Magazine’s “2013 Top 50 fastest Growing Firms in the Nation”

 

Any Bread to be Made Here?

Head and Shoulder Patterns can be wonderful at times.

We noticed that Panera Bread, symbol $PNRA broke out of a Bullish Head & Shoulder continuation Pattern.

Here is a review of this pattern H&S Continuation

PNRA 7 29 15

 

What adds some juice to this idea, is looking at it when plotted against the S&P 500.

PNRA vs SPX 7 29 15

 

In this case, another Bullish Head & Shoulder but this one is a bottom, not a continuation.

Both are very bullish, looking for 235 based on the measured move if we did our math right.

Thanks for stopping in to our place!

cjsig