pravda analytics technical monthly review for march 2017

Pravda‏Analytics

Pravda Markets Report

Technicals Monthly

March 2017 Edition

http://pravdaanalytics.com/


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Market Index Overview – S&P500 (SPX) as of close Friday 3/3/17

February sprinted into new high with strong momentum. The short term 8 and 21 moving averages haven't had a bear cross since

November of 2016 while the 21 day moving average was not even tested (by price) in February. A retracement to the 21 is overdue.

Don’t forget the big picture and

observe the monthly chart


A Closer Technical Look – Bonds (TLT) as of close Friday 3/3/17

Bonds continue sideways action after finding support in December at $117. Will continue to monitor two things: Fed, key

support/resistance lines below:

*short term crossover confirmation: a direction short term trend signaled by the shorter term moving average (8 day – thin red line) crossing

above or below the longer term moving average (21 day – thin blue line)


A Closer Technical Look – Oil

Oil continues to slowly grind higher. Break of the 52 resistance was key for bulls in breaking out of the range bound trading. That 52

area is now viewed as support and should not break if the bulls continue to push price up.

Price has been choppy and intertwined with the two short term moving averages.


A Closer Technical Look - Gold

Gold‏continues‏to‏struggle‏below‏the‏200‏day‏moving‏average.‏Gold’s‏relationship‏with‏bonds‏has‏long‏decoupled‏as‏gold‏shows‏

relative strength against bonds.

Bulls will have to find support at the 50 day moving average near $115 to remain in control of the uptrend that kicked off in January

of 2017. Note key levels and comments below:

*short term crossover confirmation: a direction short term trend signaled by the shorter term moving average (8 day – thin red line) crossing

above or below the longer term moving average (21 day – thin blue line)

Note: below is the GLD gold ETF chart as opposed to the /GC gold futures contract which is a x10 price multiple.


Sentiment – CNN Greed and Fear Index- FAIRLY GREEDY

The Index continues to be elevated as the market breaks into new highs.

What is this? CNN's Fear & Greed Index tracks seven indicators of investor sentiment. Investors are driven by two emotions: fear

and greed. Too much fear can sink stocks well below where they should be. When investors get greedy, they can bid up stock prices

way too far.

“Be‏Fearful‏When‏Others‏Are‏Greedy‏and‏Greedy‏

When Others Are Fearful”‏– Warren Buffett


Sentiment – AAII Investor Sentiment Survey- NEUTRAL

Both bullish and bearish sentiment has increased over the last month while the neutral consensus declines.

What is this? The AAII Investor Sentiment Survey has become a widely followed measure of the mood of

individual investors. The weekly survey results are published in financial publications including Barron's

and Bloomberg and are widely followed by market strategists, investment newsletter writers and other

financial professionals.

Last Month:


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10-Year Treasury Constant Maturity Minus 3-Month Treasury Constant Maturity.

Inverted yield curve often precedes a major market decline. So far so good.


Inverse Put Call Ratio

A unique oscillating indicator based on options activity coupled with a Bollinger Band to view overextended signals.

Options activity is neutral as the put-call ratio is close to 1 and in the middle if the range. S&P500 = orange line.


Stock Averages

Number of Stocks Above 20-Day Moving Average

The market is in a neutral state with a near 50/50 split of stock trending up and down.


Sentiment – ISE Sentiment Index - NEUTRAL

The Index is in line with the 20-day moving average at a neutral state.

What is this? ISEE is an indicator of bullish/bearish investor sentiment that is computed using a unique calculation methodology and

proprietary ISE option trade data. Unlike traditional put/call ratios, ISEE is based on opening long customer transactions only. Trades

by market makers and firms are excluded as these tend to skew sentiment value. As a result, ISEE provides a more accurate

reflection of true investor sentiment.


Market Direction Confirmation via Transports Sector Observation as per Dow Theory

Key premise of the theory states that both

the broad equity market index as well as

the transports index need to align in

market direction to confirm a bullish or

bearish trend. (additional rules apply)

Dow theory

Market Direction: Bullish – with caution

Dow Jones Industrial Average (DIA) is

above key moving averages.

Dow Jones Transports Average (IYT) is

above key moving averages; however, the

50 day moving average line has been

chopping above and below price.

Current Analysis

A confirmed bullish market is when:

Both indexes are exhibiting higher price

peaks and valleys on long term charts

Both indexes are above their respective

200 day moving average (orange)

Additional level of confirmation: index

above 50 day moving average (blue)

The Approach

Dow Jones Index Transports Index

Transports and the Dow are holding strong above both key moving averages indicating a Bullish environment.


Social Media Sentiment

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S&P 500 BONDS GOLD

The sentiment chart shows the percentage breakdown in bullish and bearish sentiment shared by StockTwits users over time. It is

calculated on a rolling, 7 day basis.

The good people of the StockTwits are extremely bullish Bond and Gold.


Currencies

Key support/resistance and trend lines for currencies


Rate Watch

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Fed Funds Rate @ 0.75: market projects a 80% chance that there will be a rate hike in March

Prime Rate @ 3.75: a quarter percent move up from a year ago

FOMC’s‏Rate‏Projection from the Dot Plot: currently projecting 2017 @ ~1.50 % and 2018 @ ~2.00%


Sector Analysis: year to date performance

Outperformers: Health Care and Consumer Discretionary

Underperformers: Utilities and Energy


Economic Calendar

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The Econoday consensus for February nonfarm payrolls is a solid 195,000 in what would mark only limited give back from January's

surprisingly strong 227,000 gain.

In further strength, forecasters see a 1 tenth dip in February's unemployment rate to 4.7 percent and a sizable 0.3 percent increase

in average hourly earnings that could raise talk of wage inflation.

The average workweek is expected to hold steady at 34.4 hours. If the report meets consensus, chances for a rate hike at the mid-

month FOMC would increase further.


Headlines of the week

Notable‏covers‏and‏headlines‏from‏world’s‏most‏read‏publications

As Princeton economist Paul Krugman wryly noted, "Whom the Gods would destroy, they first put on the cover of Business Week."


Personal Finance - The Richest Man in Babylon

Make thy gold

multiply

Make of thy

dwelling a

profitable

investment

Guard thy

treasures from

loss

Seven Cures for a

Lean Purse

Start thy purse

to fattening

Control thy

expenditures Increase thy

ability to earn

Insure a future

income

Goddess of Good Luck smiles upon those who

work hard, save their money, and invest well.

She doesn't really patronize professional

gamblers, who always seem to end up poor

Meet the Goddess of Good Luck Five Laws of Gold (Money)

• Mentors, Books

• Seminars, Experience Learn

• Business, Investment

• Knowledge, Attitude, Skills

Master

Pay • Yourself first

• Save 10% of earnings

Invest

• Business

• Real estate

• Stocks

• Scams

• Trickeries

• Get rich schemes Avoid

The Richest Man in Babylon is a book by George S. Clason which dispenses financial advice through a

collection of parables. Through their experiences in business and managing personal finance, the

characters in the parables learn simple lessons in financial wisdom.


Investing & Trading Blueprint

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IBD's 10 Secrets to Success – great blueprint to improve your trading, investing, as well as every day

activities and personal goals:

Pravda‏Analytics

