CHART OF INTEREST
This morning we look at the QPI Advance Decline Model. This morning it moves from cash to sell for the first time since June of 2103.
Currently, our advance/decline model has been in cash. This morning there is a change. The model moves from cash to sell.
The model is simple. Track the daily changes to the NYSE and NASDAQ advancers and decliners over the past 10 trading days. When the model moves to below -200 on the 10 day moving average for two straight days we either go to cash or a sell.
We have been in cash since June 27th. It started to improve and moved back above +200 for two days on July 9th. However our proprietary RSI was above 70 so we stayed in cash until it moved below 50 then we would have gotten reinvested on the long side.
However, before this has happened the 10 day moving average moved below -200 for two straight says. As such, we move to a sell. This is our first sell since June of 2013 when the signal made 2.27%.
You have been warned.
This morning we get the latest Crude Oil Inventories. Each Tuesday we get an advance look at inventories when the API Weekly Petroleum Data is released. Yesterday, Cushing saw a draw of 808,000 barrels. Gasoline and distillates also had a draw.
However, this morning oil is flat to up slightly. Clearly, we could be in as good as it gets for oil. With President Trump pressuring for oil to fall, could crude drop from here? 10:30 will be get a better idea with the full inventory update.
In After Hours Trading
IPOs on deck of note Bloom Energy (BE) and Aquestive Therapeutics (AQST). Secondaries of note BLUE CADE CTLT RETA.
In After Hours Trading: SURPRISES RNR +.2.29 WRB +.57 USNA +.25 CSL +.25 HA +.13 TER +.10 CB +.06 TSS +.04. MISSES UMBF -.02. FLAT: .
Lower Guidance: .
Mixed Guidance: .
Positive Guidance: CR.
What's Happening This Morning
U.S. futures: S&P -4.50, Dow Jones -85, NDX -3.50 and Russell 2000 -1.30 with fair values flat. Asia and Europe lower.
Gold,silver and copper higher. WTI Crude and Brent Oil Futures mixed. Natural Gas is flat. $ is lower vs Euro, lower vs. Pound and lower vs. Yen. US 10 year Treasury price 119.58 with yields lower since yesterday. Prices as of 7:55 a.m. EDT.
Top Sectors Basic Materials and Industrial Goods.
Weak Sectors Services and Conglomerates.
One month winners Utilities, Healthcare and Consumer Goods.
Three Month Winners Utilities Conglomerates, Services and Technology.
Six Month Winners Services, Technology and Conglomerates.
One Year Winners All except for Utilities.
Year To Date Conglomerates, Services and Technology.
Earnings due after the close (by avg. trade volume): FB V PYPL GILD QCOM SU MDLZ LVS VRTX F XLNX MHK AMD EFX.
Earnings due tomorrow morning: BMY COP CELG AGN RTN CME PX VLO MMC BAX APD.
Rags & Mags: Inside Wall Street
Reported Earnings This Morning
Reported This Morning: SURPRISES GD +.34 DTE +.23 NSC +.17 SC +.17 PII +.16 R +.12 ROK +.12 TMO +.12 NOC +.09 BABY +.09 BA +.08 FCX +.08. MISSES DAN -.04 SIX -.05 TZOO -.05 WSO -.07 USG -.11 FCAU -.22 OC -.28. FLAT:
Lower Guidance: GM.
Current Morning missing: .
Mixed Guidance: .
Positive Guidance: GD PII IR GLW.
Yesterday saw 1331 stocks rise and 1559 fall on the NYSE. NASDAQ saw 967 rise and 2009 fall.
The SP 500 is back above its 50 day exponential moving average and is above its 200 day exponential moving average. The Russell 2000 is above its 50 day moving exponential average and is above 200 day exponential moving average.
The 10 day spread moving average of breadth moves below -200 for second day and now we move to a sell. The Madison Market Timing Indicator is still invested.
YTD 55% of stocks are higher and 45% are lower. Updated 7/20/18 close.
June New Home Sales are due out at 10:00 a.m. EDT and are expected to fall to 670,000 from 689,000.
Weekly Crude Oil Inventories are due out at 10:30 a.m. EDT.
$36 Billion in 5 Year Notes to be auctioned at 1:00 p.m. EDT.
President Trump meets with European Commissioner Jean-Claude Juncker and European Union Trade Chief Cecilia Malmstrom on tariff issues.
Conference & Analyst Meetings
Meetings, Conference Calls or Announcements of note, BIIB INST MDT.
Conference of Note
Alzheimer Association International Conference.
International AIDS Society Conference on HIV Science.
M & A News
This morning auto stocks are struggling as the cost of materials is hitting them. Fiat Chrysler (FCAU) missed estimates by $-0.22 with earnings of $0.62. This was lower than a year ago at $0.69. General Motors (GM) also lowered guidance. Ironic that autos are at the front of the tariff issue just as they get hit on the cost of goods sold side.
Why is the Russell 2000 in trouble here? Good question. The Russell has had the wind at its back as the U.S. Dollar rallied. Now that the U.S. Dollar is stalling so too is the Russell. Often the Russell leads the S&P 500 lower.
Technically we could argue it has made triple top. Clearly, this needs to be watched as well. If you are overweight small caps we would lower the exposure.
VIDEO OF DAY
Let’s go to the video. Yesterday CNBC interviewed hedge fund manager Leon Cooperman. This morning we look at a rather intimate moment with him.