January 26, 2014 - Weekly Wall Street View

January 26, 2014 - Wall Street Weekly View

The Wall Street Weekly View is one of the many services that TA Today provides to it's subscribers. It is an in depth look, once a week, at the technical and fundamentals that are driving price action and how that affects that TA Today portfolio which many subscribers use as either their investment direction partially or fully.

This particular weekly view has been opened up to public viewing due to the potentially significant changes that are starting to occur.

Link to Notes




Wall Street Weekly View
January 26, 2014

Technical Picture
    A definite changes has occurred

    No longer strictly bullish short term or intermediate term

    MTTF's resetting & trend transitioning short and
        Intermediate term

        - Only technology sector remains bullish now

        - Two sectors transition to sideways (XLY, XLE)
        - Other sectors now in range of resets (XLB, XLI)
    Range trade breakout to downside
        - Target is another 10pts downside on ^SPX
        - Retest/Regenerate failed on ^DJI and ^SPX

    Bottom Line
        1) Range trade likely to set up now on intermediate
            term time     frame    
        2) Assuming bottom doesn't fall out of market this
            week, SPLs will form on Dec 16 weekly bars
        3) ^DJI already has that formation off of Dec 9 bar

Fundamental Picture
    Domestically - Economic reports have shown weakness
        despite Fed saying there would be strength
    Internationally - France we know has issues. This week
        attentioned turned back to China with bad PMI Wed
        showing contraction

    Liquidity Trap - From Keynesian economics it is explained
        as a situation where interest rates are low and savings
        highs which makes monetary policy ineffective.

        Austrian economics would simply say that the real
            problem is not about liquidity but about
            malinvestments and that is the result of increased
            central planning (govt and Fed)

    Regardless of which school of thought you subscriber to, it
        is an issue in both. Of course they have different
        prescitpions on how to get us to spend our money again
        - very different views (QE vs withdrawal of intervention)

    UPCOMING DATA - Not that much economic data this
        week other than Fed decision. Expectation is for more
        tapering to be announced to tune of 10B

        Following week sees lots of data with new month flash
        PMIs and employment data

Portfolio Positioning
     - 70% invested
     - 24% strictly long; almost all in core long positions
      - 56 in spread trade (gold and emerging markets)
     - This limits our risk greatly at this uncertain time and is
        why we were shifting money over past month and
        making only short term trades

    General Thoughts
        1) Too early to abandon idea that bull market is done
        2) Having said that, we could be in for a deep correction
        3) Technically it will depend on what kind of bounce
            develops and from what levels
        4) Focus has to shift from speculation to capital