Market Newsletter for Wednesday Dec 5th, 2018 - free

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Table of Contents:

1. General Market Analysis: SPX and Other Major Indices 

2. Review of Select Sectors

3. Glance at Currencies and Commodities

4. Precious Metals and GDX

5. Trade Ideas (are you kidding?)

The market was bludgeoned on Tuesday, SPX lost 90 points or 3.25%, the Dow Jones lost 800 points or 3.1%, the Nasdaq lost 3.8%, and the Russell 2000 Small Caps lost 4.4%!  

Despite some bullish calls from various market commentators recently, Steve and I have always viewed the latest market rally as a corrective bounce in a longer term downtrend.  If you listened to my weekend newsletter I stated that a gap up on Monday in response to the G20 Tariff pause would be a good opportunity to sell and lighten up on long positions.  On Monday morning just after the opening bell I sent out an alert on the SPY system re-iterating that the big gap up on Monday morning would be a good opportunity to trim/lighten up on SPY and other longs.  Boy has that played out especially with today's huge sell off.  Also on the weekend I said to watch the VIX indicator, I said that the lower Bollinger Bands would likely act as support and that's exactly what happened, the VIX tagged the lower Bollinger Bands yesterday morning and that was the low. All year long each time the VIX has tagged the lower Bollinger Band it has rallied - this is something we also discussed early this year.  See VIX Chart

Today of course the market was scared by the move in bond markets, the yield curve (10 Year / 2 Year) fell once again and is getting close to par.  It won't take much for it to go negative now.  Remember I discussed the Yield Curve on the weekend and in Monday's newsletter.  Early this morning Banks/Financials and Transports were extra weak in response to the bond market as the flattening yield curve hurts their profits.  

One chart that someone pointed out to me earlier today was the FLOT ETF, which is Investment Grade Floating Rate Bonds.  HERE's a Chart, as you will see below there was a HUGE move in this instrument over the last couple days, even yesterday, this was a pre warning for the market of the issues underneath the surface in the credit markets.  

As far as the market, you know our bigger picture is one of caution/bear market.  On the weekend for the short term I discuss various scenarios to monitor from the ABC, to a triangle, etc, corrective patterns can take many forms. 

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Major Indexes Index Symbol ETF Symbol % G / L Day % G / L Week Close
Dow JonesINDU - WDIA - W -3.10% -2.00% 25,027.07
S&P 500SPX - WSPY - W -3.24% -2.18% 2,700.06
Wilshire 5000WLSH - W -3.38% -2.29% 27,796.93
NasdaqCOMPQ - W -3.80% -2.35% 7,158.43
NDX 100NDX - WQQQ - W -3.78% -2.21% 6,795.21
Russel 2000 (Small Caps)RUT - WIWM - W -4.40% -3.43% 1,480.75
Market Sectors Index Symbol ETF Symbol % G / L Day % G / L Week Close
TransportsTRAN - WIYT - W -4.39% -4.12% 10,374.07
BanksBKX - W -4.85% -4.73% 96.76
FinancialsXLF - W -4.35% -3.74% 25.96
BrokersXBD - W -4.10% -3.60% 253.04
XLE (Energy Select)XLE - W -2.87% -0.71% 65.64
Oil Service HoldersOIH - W -4.65% -1.27% 17.85
TechnologyXLK - W -3.79% -1.66% 66.81
SemiconductorSOX - WSMH - W -4.98% -2.44% 1,209.35
Communication Services XLC - W -2.95% -2.80% 43.75
RetailXRT - W -3.68% -2.37% 45.25
Consumer StaplesXLP - W -1.69% -1.60% 55.36
Consumer DiscretionaryXLY - W -3.60% -1.80% 106.05
IndustrialsXLI - W -4.25% -3.14% 70.26
Real EstateIYR - W -1.55% -1.09% 80.89
HomebuildersHGX - WXHB - W -4.84% -3.77% 256.06
MaterialsXLB - W -2.97% -1.26% 53.92
Metals And MiningXME - W -2.98% -0.31% 28.94
GDX Gold Miners ETFGDX - W 0.82% 2.67% 19.60
BiotechnologyBTK - WXBI - W -4.07% -2.94% 4,615.96
HealthcareXLV - W -2.23% -2.70% 93.28
DrugsDRG - W -1.46% -2.13% 596.16
UtilitiesUTIL - WXLU - W 0.17% 1.07% 749.84
Currencies Index Symbol ETF Symbol % G / L Day % G / L Week Close
US DollarUUP - W -0.19% -0.15% 25.88
EuroXEU - WFXE - W -0.08% 0.56% 113.44
YenXJY - WFXY - W 0.77% 0.69% 88.67
AustralianXAD - WFXA - W -0.27% 0.36% 73.38
British PoundXBP - WFXB - W -0.04% -0.29% 127.16
Chinese YuanCYB - W 0.51% 1.38% 25.68
Canadian DollarCDW - WFXC - W -0.48% 0.22% 75.41
Swiss FrancXSF - WFXF - W 0.05% 0.08% 100.25
Commodities Index Symbol ETF Symbol % G / L Day % G / L Week Close
CommoditiesDBC - W 0.06% 2.35% 15.65
Crude OilWTIC - WUSO - W 0.57% 4.56% 53.25
GasolineGASO - W 0.84% 2.96% 1.44
Natural GasNATGAS - WUNG - W 2.72% -3.36% 4.46
CopperCOPPER - WJJCB - W -1.80% -1.02% 2.76
AgricultureDBA - W -0.46% 0.00% 17.29
CornCORN - WCORN - W 0.72% 1.85% 384.75
WheatWHEAT - WWEAT - W 0.24% 1.31% 522.50
CoffeeBJO - W -2.04% -3.06% 41.78
SugarCANE - W -1.19% -0.93% 7.45
Precious Metals Index Symbol ETF Symbol % G / L Day % G / L Week Close
Gold MetalGLD - W 0.61% 1.37% 117.12
SilverSLV - W 0.96% 2.25% 13.62
PlatinumPPLT - W -0.38% 0.50% 76.03
PalladiumPALL - W 2.88% 5.03% 117.26
GDX Gold Miners ETFGDX - W 0.82% 2.67% 19.60
Bonds Index Symbol ETF Symbol % G / L Day % G / L Week Close
High Yield Corporate BondHYG - W -0.62% 0.07% 83.28
TLT 20 Year Bond ETFTLT - W 1.67% 2.40% 117.82
10 Year Treasury YieldTNX - W -2.27% -2.95% 29.24
30 Year Treasury YieldTYX - W -3.05% -4.02% 31.78

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Week of December 03 - December 07
Date ET Release For Actual Briefing.com Forecast Briefing.com Consensus Prior Revised From
Dec 03 10:00 ISM Index Nov 59.3 56.8 57.2 57.7
Dec 03 10:00 Construction Spending Oct -0.1% 0.3% 0.3% -0.1% 0.0%
Dec 03 14:00 Auto Sales Nov NA NA 4.27M
Dec 03 14:00 Truck Sales Nov NA NA 9.31M
Dec 05 07:00 MBA Mortgage Applications Index 12/01 NA NA 5.5%
Dec 05 14:00 Beige Book Nov NA NA NA
Dec 06 08:15 ADP Employment Change Nov 180K 192K 227K
Dec 06 08:30 Productivity-Rev. Q3 2.2% 2.2% 2.2%
Dec 06 08:30 Trade Balance Oct -$55.1B -$54.7B -$54.0B
Dec 06 08:30 Unit Labor Costs - Rev. Q3 1.2% 1.2% 1.2%
Dec 06 08:30 Initial Claims 12/01 230K 225K 234K
Dec 06 08:30 Continuing Claims 11/24 NA NA 1710K
Dec 06 10:00 Factory Orders Oct -1.8% -2.0% 0.7%
Dec 06 10:00 ISM Services Nov 59.3 59.0 60.3
Dec 06 11:00 Crude Inventories 12/01 NA NA +3.6M
Dec 07 08:30 Nonfarm Payrolls Nov 180K 189K 250K
Dec 07 08:30 Nonfarm Private Payrolls Nov 175K 185K 246K
Dec 07 08:30 Avg. Hourly Earnings Nov 0.3% 0.3% 0.2%
Dec 07 08:30 Unemployment Rate Nov 3.7% 3.7% 3.7%
Dec 07 08:30 Average Workweek Nov 34.5 34.5 34.5
Dec 07 10:00 University of Michigan Consumer Sentiment - prelim Dec 97.0 96.8 97.5
Dec 07 10:00 Wholesale Inventories Oct 0.7% 0.7% 0.4%
Dec 07 10:30 Natural Gas Inventories 12/01 NA NA -59 bcf
Dec 07 15:00 Consumer Credit Oct $14.0B $16.5B $11.0B

Economic Calendar

Stock Earnings Calender:

Click here for a list of Stocks that are reporting Earnings

**Generally we never hold a position into earnings since the risk/reward is too great

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