degraaf’s weekly survival guide to the markets · tdg gpc fl kr clx abt hum pgr fisv adp vz fox...

Jeffrey deGraaf, CMT, CFA 212-537-8822 technical@renmac.comMichail Adzhiashvili 212-537-8818 madz@renmac.comKevin Dempter, CMT 212-537-8821 kdempter@renmac.com

sales@renmac.com

Important legal disclaimer on last page

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deGraaf’s Weekly

Survival Guide to

the Markets

October 30th, 2018

1

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2600 Support / 2765 Resistance

2

2765 Resistance at

200-day

Global Equities Remain a Concern

3

Stocks Weakened on 30-yr Breakout

4

Our Trend Model Has Deteriorated

5

Not catastrophic, but suggests a higher bar for oversold conditions should be heeded. Trends are now negative….burden of proof on the

bulls.

Deepest Oversold Since 2016

6

20-day Highs and Lows Diverging

7

A spike in 20-day lows is a sign of indiscriminant selling, and positive divergence suggests differentiation

(a positive but temperamental development).

Not Impressed by TRIN

8

Not suggestive of the washouts we’ve seen

historically.

10-day Up/Down Volume Ratio is Oversold

9

Oversold in Uptrend

Oversold in Downtrend

Bullish Thrust

Put/Call Data Modest

10

Passive Liquidation Has NOT Occurred

11

Still a relatively new indicator, but recent track record has been decent

tactically.

QQQ ETF Flows NOT Liquidating

12

Good tactical indicator for

technology flows, not liquidating.

I.I. Bull Bear Ratio to 1963

13

One of the oldest measures of sentiment, but how does it

work?

14Level

Mom

entum

SPX Return History Give Bull/Bear

Today

Improving on Bull/Bear Data

15

Too Many Bulls

Too Many Bears

Oversold Overbought

Most Sectors Now Oversold

16

Stable Rankings Note Convexity Trade

17

Interest rate convexity trade

Industry Internals Deteriorated

18

Strongest Trends

Weakest Trends

Expect near-term rallies to be concentrated in industries with weak trends. They tend to be

traps.

High Beta Still Under Pressure

19

We’d expect high beta to dominate a bounce….its failure would suggest

additional downside pressure.

Internal Laggards vs Leaders

20

The performance of weak trends vs. strong trends has been persistent.

Bounces are likely to see this revert. If you are playing for the bounce, focus on the oversold weak trends, but don’t overstay your welcome. Strategic players should use the general market weakness to buy

oversold leaders, and not focus on short-term rallies.

Industry Group Seasonality for November

21

Best Performers

Worst Performers

Semis Seeing Liquidation

22

Energy ETF Liquidating

23

Oversold but Broken

24

Relative Strength High

25

26

Top Technically Ranked S&P 500 Names

New entrants

highlighted in

green

New entrants

highlighted in

red

Industrials: Cons Disc. : Cons Stp: Health Care: Fins: Tech: Comm Services: Utilities:

TDG GPC FL KR CLX ABT HUM PGR FISV ADP VZ FOX EXC AEE

HRS M ORLY COST CHD EW CVS FIS DXC CTL GOOG EVRG AWK

UTX DG TIF SYY UNH UHS FLT GPN DISCK TRIP ES AES

TXT JWN AAP WBA ESRX MRK V ACN DISCA GOOGL NEE NRG

LLL KSS ULTA MDLZ WCG LLY IT TTWO LNT

BA TGT BBY MKC HSIC PFE PAYX DIS FE

HD LOW K HCA ILMN TSS ATVI CMS

AZO TJX ADM AET TMO MA NFLX DTE

ROST HRL CNC PKI VRSN VIAB PEG

TSCO MO ANTM IQV BR FOXA WEC

Energy: Materials: Industrials: Consumer Disc.: Financials: Tech:

FTI ALB WRK AOS BWA MHK WFC WDC

HAL DWDP FCX FBHS APTV PHM PNC MU

SLB LYB NEM MAS GT NWL FITB SWKS

COG EMN PNR F EBAY PBCT KLAC

EQT VMC CMI HOG IVZ AMAT

MLM DE GM AMG MCHP

AVY SWK WHR INTC

SEE ITW DHI LRCX

PKG AAL LEN

IP LEG

Renaissance Macro Research, LLC Global Disclaimer

27

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