Pravda analytics technical monthly review for december 2016

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Pravda Markets Report

Technicals Monthly

December Edition

http://pravdaanalytics.com/


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Market Index Overview

S&P 500 (SPY) index – as of close on Friday 12/09/16

The broad market index continues into new highs in early December for a potential Santa Clause rally.

The 200 day moving average held in November around election time and ignited the rally.

Index broke previous highs (2) set in August around 2200.

There is no overhead resistance as the 2200 level breaches in late November.

Current target is at 3300 which is a measured move of the July rally (blue line).

Don’t forget the big picture and

observe the monthly chart


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

Dow Jones Industrial Average (DIA) is

above key moving averages.

Dow Jones Transports Average (IYT) is

above key moving averages.

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.


Inverse Put Call Ratio

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

The crowd is overzealous and is loading up on calls while the market breaks into new highs.


Social Media Sentiment

Chart

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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 lands are.. Bullish on stocks, bonds, and gold.


Index Overview

Major indexes with key trend and support/resistance levels.

Green across the board.


A Closer Technical Look - Bonds

Bonds are breaking down as Equities rally in lieu of a developing interest rate environment.

1) Support can be found at 115 and 113

2) Overextended rally might find a pause and rally back up to the 20 day moving average (light blue line)

3) Resistance overhead is at the November gap down indicated by red lines.


A Closer Technical Look – Oil

Oil is shooting up to 2016 highs of low 60s as headline news dominate the tape. Break of the 52 resistance was key in breaking out

of the range bound trading. Overhead resistance is low 60s in red. A lot of layers of support below in blue.


A Closer Technical Look - Gold

Gold follows Bonds and explodes down after breaking its 200 day moving average in November around 120.

The break of the 115.3 support now turn that area into overhead resistance. Targets are at the 106 level with the eventual

physiological 100 level or resistance.


Hook of death

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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.


Rate Watch

Chart

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e: cm

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up

Fed Funds Rate @ 0.50: market projects a 94.9% chance that there will be a rate hire in December

Prime Rate @ 3.50: stable from a year ago

FOMC’s‏Rate‏Projection from the Dot Plot: currently projecting 2017 @ 1.00-1.25 % and 2018 @ 1.75-2.00%


Sector Analysis: month over month performance

Outperformers: Financials and Energy

Underperformers: Health Care and Consumer Staples


Stock Averages

Number of Stocks Above 20-Day Moving Average

Indicator is in the overbought area with over 76% of all stocks above their 20 day moving averages.


Economic Calendar

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October payroll figures were solid. Average hourly earnings and government payrolls increased. Unemployment is at 4.9%

Decline in imports helped to pull down the national trade gap, a plus for GDP. National deficit with China narrowed.


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

