The Right Shoulder

By: Stock Barometer | Wed, May 14, 2014
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5/14/2014 5:49:46 AM

Good morning Traders,

The more it gets talked about, the less likely it will happen. Here's what I'm talking about:

NASDAQ Advancing Stocks

The action in Bonds is a little concerning - if the economy is taking off, then bonds should be dropping. They're not:

Bonds

On the bullish front, bonds will eventually sell off and that will result in another leg higher in the stock market.

Things should start to get a little weak:

Intermediate Term Spread Indicator Chart

But what's holding the selling back is the fact that everyone is betting on it.

Equity Put/Call Ratio Chart

So while we could see a push lower, fear is already at a peaking level, so it shouldn't be too bad.

On the sentiment front, the data is coming in overly bullish, which is bearish.

Investors Intelligence % Bulls - % Bears Chart

As for the barometer:

Daily Stock Barometer Chart

Price action normally breaks out of this pattern, here I would be concerned with a break higher since we're positioned for a move lower. We'll give it a little more time.

And there are a lot of other things going on in our services. Our oil service is long oil options. Our natural gas service is short natural gas. And our trader Gregory Clay is positioning in more options trades geared towards income. Visit www.stockbarometer.com to learn more.

As for oil:

Oil Chart

Our model shows oil advancing into year end. We get inventory numbers tomorrow which have been building, but the underlying global tensions can cause price to go up, even if demand is lower.

In our stock options speculator service, we are close to issuing some PUT trades if we get the market to turn lower. In the interim, we'll hold off.

Regards,

 


 

Stock Barometer

Author: Stock Barometer

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