Jeffrey deGraaf, CMT, CFA 212-537-8822 [email protected] Adzhiashvili 212-537-8818 [email protected] Dempter, CMT 212-537-8821 [email protected]
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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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