Sector Update - Biotechs & Utilties Stand Out

Biotechs Weekly

Biotechs have been taken out to the woodshed ever since July of 2015.  The reasons are numerous from Activist' disagreement (Valeant), overvaluation, & even negative political targeting by both parties.  Regardless, the $XBI looks to be acting healthier & to have formed a bottom on the weekly chart above.  A close above $61 will pique my interest into starting a position. 

Utilities Weekly

Utilities have seen the best sector performance of 2016 with a 19.8% increase.  They have come in some on the weekly chart above & the $XLU is testing it's 10 Week Moving Average.  It has held this line well in its run up in 2016.  I'll be watching closely for a close above $51.25 on Friday to put on a position. 

Global Market Update - Keeping a Close Eye on Europe; Especially Germany

Europe Weekly

Europe has been in a major downtrend since June 2014.  It has been acting much better recently, & I will be watching a few major ETF's closely.  

Above is the $VGK, which represents large cap European companies.  It's most heaviest weighting is in the United Kingdom (~31%), with France (~14%), Switzerland (~14%), & Germany (~13%) having a big impact as well.  It's heaviest sector is Financials, which make up close to 19% of the fund.  It currently yields ~3.3%, but is only paid out annually towards the end of December.  The Expense ratio is very nominal at 0.12%, as most Vanguard funds are.  

Between the continued fallout of Brexit & the risk associated with European Financials, this one could certainly turn back down at the drop of a dime.  I'll be watching the $50 area for a weekly close, before I put on a position.  

Taking a closer look at the European Markets, Germany has broken above it's 50 Week Moving Average (a very bullish first step in hammering out a long term bottom).  The $EWG also closed right at $26.50, which was it's most recent high from April.  I like this to test $27 in the upcoming week.  If we get a higher close on the weekly chart above, I will likely leg into a small position.  

Good luck & God bless!

US Macro Update - August 15, 2016

SPY Weekly

The $SPY finished slightly higher & with a Doji candle on the weekly chart above.  A Doji candle represents a neutral candle & illustrates the indecisiveness of the overall market.  The market got a big boost from a beaten down retail sector with Macy's ($M), Nordstrom ($JWN) & others beating on  their quarterly earnings.  The $SPY looks good overall with both the 10 Week & 50 Week Moving Averages rising.  I'm waiting for a pullback to the 10 Week Moving Average (~$211) to add to any long positions.

IWM Weekly

The Small Cap Index is looking to play catchup & break out to it's all time highs above $127.50.  The $IWM is still about 4% below it's all time highs, and if this were to happen it would be a very bullish signal for the overall market.  

QQQ Weekly

The Nasdaq chart has the best look of the major US indices.  The $QQQ has gone straight up since the Brexit scare in June.  I'd wait for a pullback to the $115ish area before looking to add to any positions.  

The US Indices all look good at this juncture.  We are pretty much finished with the majority of earnings season at this point.  The market will be reliant on central bank speak/decision-making and economic data in what should be light trading up until after Labor Day Weekend.  I won't be adding to any long positions in the $SPY unless we get about a 2-3% pullback.  

Good luck & God bless!

US Macro Update - August 10, 2016

SPY Weekly

The SPY broke above $213.78 a few weeks back & has held up nicely.  The 50 Week Moving Average is finally perking up for the first time in the past year.  The 10 Week Moving Average (Red Line above) is sitting between $210-$211.  I'll be waiting for a pullback to this area before adding anything to my position.  Overall, it is a very bullish chart.

GLD Weekly

Gold is also still acting very healthy.  The precious metal took a hit on the big NFP/Jobs number last Friday, but this is likely just a healthy pullback before another move higher.  

TLT Weekly

Long dated Treasuries have been a huge performer this year.  They are digesting the recent breakout above $138.50.  As long as it holds the $136.50 area on a closing basis, I like this to also continue higher.  

The US indices are hitting new all time highs almost on a daily basis.  The fact that safe havens like the $TLT & $GLD are still holding up well, gives me pause & is preventing me from aggressively adding to any long term US equity positions.  Overall I believe the US markets look complacent, but like them to continue to grind higher.  

Good luck & God bless!

The Gold to Platinum Ratio Explained

20 Year Chart Gold Platinum Ratio

Historically, Platinum has traded at a premium to Gold.  In other words, one ounce of Platinum is normally more expensive than one ounce of Gold.  The median over the past 20 years is around 0.8 (which also aligns with the historical average), meaning Platinum has traded at a 20% premium to Gold (on average).

Currently the ratio stands at 1.17, and has traded above 1.35 as recently as 6 weeks ago.  The chart above illustrates that the ratio is falling, which means the price of Platinum has outperformed Gold in the short term.  If you are bullish precious metals in general (which I am), I highly recommend you take a look at investing in Platinum as opposed to Gold via the $PPLT (most liquid Platinum ETF).

If you are an aggressive trader, you can look to put on a pairs trade by buying Platinum ($PPLT) and shorting Gold ($GLD) until this ratio normalizes.

Good luck & God bless!