Thursday, June 22, 2017

Jeff Gundlach Is So Worried About The Yield Curve. Why?

Jeff Gundlach, we love you, but the yield curve looks amazing. Not sure why you're trying to spook everybody. Reuters reported that Jeff Gundlach was worried about the yield curve. We'll try to explain what all that means.


First, Help Me..What's the Yield Curve?

This yield curve (below) compares the 10 year note yield to the 2 year treasury yield. When some combination of short term yields rise or the longer term yields fall it implies that bond investors don't expect much for the future. If growth were strong bond investors would demand higher yields down the road.  Lower yields longer term mean they don't expect growth or inflation.

When the yield curve goes negative, meaning that the 2 year yield is higher than the 10 year yield, it implies that an economic downturn is coming.

We're here to put everything in perspective that we're not even close to that setup.

Nowhere Near A Negative Yield Curve: In Fact This Curve Looks Amazing!

Please everybody look at this chart and let us know if this concerns you.

Jeff Gundlach Yield Curve
Chart Credential Small Print: St Louis Fed with Elazar Advisors official scribbles created by super-intelligent AI automation. They wrote this entire article so Jack Ma must be right that we're headed to a Matrix style-World War III. Oops we went off subject.




What you see in the above chart is that, yes, when the yield curve goes negative (blue line: right margin)... stocks (the red line) did drop.

That said it took a little while each time for stocks to drop after the yield curve went negative. More than that stocks didn't actually start dropping until the yield curve bottomed and started moving back up.

We're far from that scenario. 

So according to the above chart stocks should rocket higher as the yield curve drops until some time long after it goes negative and then reverses back up.

I think we have time, which is bullish.

Conclusion

Jeff?  Jeff? This worries you?


About Pro Trader: Pro Trader is the best way to have your arms around the markets, equities, gold, oil, stocks, news in the least amount of time. Have conviction what to do based on news, charts, pro analysis, live chat, in short sweet daily reports at the crack of dawn. 

Disclaimer: Securities reported by Elazar Advisors, LLC are guided by our daily, weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report. Portions of this report may have been issued in advance to subscribers or clients. All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks. #in, $spy, ^GSPC, INDEXSP:.INX, CME Globex: ES


Wednesday, June 21, 2017

Tech Boom Coming: What Stocks To Own?

We Launched Individual Stock Coverage 1 Month Ago

Performance + 15.5% Since Launch

We're about three months into this process and it looks like we could be headed for a multi-year bull market and tech boom.

After building confidence that this product was ready for PROTRADER our calls are up 15.5% (according to the Seeking Alpha position tracker). We don't like everything. We only want stocks that have great earnings upside this year and next year.

Tech Boom Coming: What Stocks To Own?

We see productivity bottoming and the last time that happened it led to a huge boom in the 1990s.

See here.


Above you have productivity which bottomed in the 90s and is likely bottoming now.

With AI and auto-everything the blue line is about to jump and take the red line (the market) with it, so we think.

Add to that a major upgrade cycle coming from the government upgrading all their old systems.

The question is what stocks to own?

Earnings Season Coming

Our specialty working at large hedge funds like SAC Capital (twice) and JLF Asset and mutual funds like Morgan Stanley was uncovering the stocks that have the big earnings upside based on working through fundamentals, speaking to management and building earnings models.

One of our jobs was to identify the trend. The next job is to find the best ways to play it.

We are offering ProTraders to give us their coverage list and we will parse through to help you decide which stocks have the most potential upside for this earnings season along with the next year or two.

We plan on following more than tech. Tech though can drive the entire market.

Conclusion

We have a ton of work ahead. We want focus our time based on what interests you the most.

Let's work together on this process. It's fun and potentially very very profitable.

We hope to pick up coverage on a few new companies each week and into earnings reports.

For those that know us you also get our regular macro coverage on the S&P 500, gold, oil, bonds, and currencies.

We look forward to working with you.

Go Here For More


All performance metrics are unaudited and exclude relevant transaction costs.
Past performance is not a predictor of future performance.
Individual stock performance based on the Seeking Alpha position tracker's report.

All investments have many risks and can lose principal in the short and long term. This service is for information purposes only. By using this service you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.


Tuesday, June 20, 2017

Government Tech Boom Upgrade Cycle Coming

Jared Kushner leads White House Office Of American Innovation


A major tech upgrade cycle is coming, this time from the government. Jared Kushner led a White House Office Of American Innovation meeting with top brass from the tech sector yesterday. 

Tech Spending Bill

cloud computing
They are moving through Congress to pass the Modernizing Government Technology Act which will shift $80B in annual spending to more modern systems including cloud services. The government will not only shift monies but will also add additional funds.

CNBC reported Mr. Kusher saying that government “systems are decades old” with two-thirds still legacy systems. CNBC also reported that President Trump’s director of strategic initiatives Chris Liddell said there is a “$1 Trillion opportunity over the next ten years.”

If this bill passes we are headed for a major government-led upgrade cycle. The government is already estimated to be about 20-40% of the total GDP spend.

Biggest Winners And Losers


The biggest beneficiaries are of course likely to be Amazon, Google and Microsoft. The biggest loser will likely be IBM who leads in government legacy systems. 

Tech Led Productivity Boom Coming

We recently reported that we think there is going to be a huge tech boom coming already anyway. Even though the Fed is scratching their heads wondering why productivity is so low, we think it's about to bolt higher.

If you consider the amount of automation and artificial intelligence being designed in to new products this stat below is about to take off.

More spending combined with a productivity jump can help further ignite this stock market rally led by tech growth rates reaccelerating.
tech boom nonfarm-business sector: real output per hour of all persons: productivity
St Louis Fed


















Conclusion

There are still tons of bears in the stock market but the economy and earnings have been picking up. A tech boom can add more fuel to this bull market.

Also thanks for the great reports from Anita Balakrishnan of CNBC

Disclaimer: Securities reported by Elazar Advisors, LLC are guided by our daily, weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report. Portions of this report may have been issued in advance to subscribers or clients. All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks. #in, $spy, ^GSPC, INDEXSP:.INX, CME Globex: ES

Monday, June 19, 2017

Catalysts This Week: S&P 500, Gold, Oil, Bonds, Dollar: Oh No We're 1% Off The Highs!

Bearishness
Picture: Oh No, We're 1% Off The Highs!


Every week or two we want to share with you what our Pro Traders receive daily each morning.  Please let us know if you have any questions. To find out more about Pro trader go here. This report does not include our individual stock calls or medium term calls that Pro Traders also receive daily.

LONG TERM VIEW
dow jones long term chart
Source Macrotrends.net


We have nine years left to go in this 16-17 year bull market cycle.

It's easy to be bearish. It's tough to be bullish. There are so many reports each day that call for a correction. Really, we are 1% from all-time highs and everybody can't wait for a correction. When the media changes to all expect new highs maybe we can back off a little. For now the economy and earnings are accelerating as the world stays skeptical.

The media is creating a ton of noise around President Trump which is also keeping people out of the market.

We are in very special times that most don't notice.  The good news combined with the bearishness has to be supportive of markets.

We're inventing a formula calling it the "bull market formula":

GF X NR = BM

Good Fundamentals X Negative Reports = Bull Market.

The more GF and NR, the more markets can go higher.

Pay attention to earnings, jobs, and actual fundamental news. Then compare that to the amount of scare calls going on in the world.

S&P 500: BULLISH 
S&P 500
Charts By Interactive Brokers

We are still very very bullish on stocks. No investing rule says the market needs to go up every day. There are trading methods though that do measure how little it takes to drum up a lot of bearishness.

The S&P 500 ETF SPY is down 1% from its highs over a few days and you have many many headlines citing the smartest people who expect a correction or crash. At least everyone's consistent. That is a sign of "bad news" "good action" and it is a very bullish indicator.

President Donald Trump Now Not Under Investigation

We reported last week that James Comey already said the President is not under investigation. That was enough for us. That President Trump's lawyers came out yesterday saying he is not under investigation is a bullish confirmation.

North Korean Leader Scared

CNBC reported that the North Korean leader Kim Jong Un is running scared. 

He's worried about being assassinated. That is critical. We'd guess that is based, in part, on intelligence he's received.

We've said over the last couple of months that we think the US, if anything, will be swift and either take out the leader or make him run. We did not expect the calamity of war that many fear.

The North Korean Leader's fear could be an early sign that this major global risk event is coming to a head and can soon be resolved peacefully. A scared leader is either ready to negotiate or run for cover.

Jobs Picking Up Again

Jobs improved last week as seen by jobless claims dropping. The drop-off in non-farm payrolls for May was due in part to a high jobless claims number the final week of May. Since then jobless claims are dropping which is bullish for a strong economy and stock market.

Earnings Stronger Thanks To The Dollar

We are in the final month of most companies' Q2. The lower dollar can benefit earnings as US goods are cheaper for foreigners. As the dollar drops US companies also report greater international earnings when converting foreign currencies back to dollars. That can add to Q1's earnings momentum which was the strongest in almost six years.

Strong jobs, strong earnings, many bearish headlines, and improving geo-politics all point to higher stocks in the future.

OIL: BEARISH
crude oil prices June 19 2017

Oil has a serious break below this mini-uptrend. For now we're staying bearish. 

Oil should have been moving up with OPEC cuts, summer driving season, and an economic pickup. That it's not is a sign of "good news," "bad action" which tells you something bigger is driving oil lower. 

Oil prices are a fundamental and technical readout. For now, the break says that supply is weighing and we have more downside.

GOLD: BULLISH
Gold prices and chart June 19, 2017

We do love gold short term. Gold looks like it's in an uptrend.

For now we have a window of opportunity for gold. With inflation low there is a chance that the Fed backs off from their extra rate hike later in the year. They've already hinted at it saying the debt ceiling issues could push off a hike.

(A note on the debt ceiling: We continue to think President Trump has enough votes when combining Democrats and less-conservative Republicans to pass a "clean raise" of the debt ceiling.)

The ECB and BOJ also remain dovish.

The Feds tapering of bond buying doesn't start in earnest until 2018. We have a window before that happens for rates to stay low which can benefit gold.
CPI pulling back was one reason for gold's weakness. Our take, for now, is that the lower inflation will keep rates low which is a benefit that can get gold bulls to buy.

BONDS: BEARISH 
Bond prices TLT and chart June 19, 2017

For now the pullback in stocks is helping investors continue to look for safe-havens. 

We are watching the top end of the uptrend line. If we close above it we will have to implement a stop-loss.

For now though we think stocks will go up thanks to higher earnings growth rates. Historically that is negative for bonds.

That said, bonds up is an incredibly bullish sign for stocks. Investors don't want to part with risk-free assets because they are generally scared. Investors are far from Euphoria and still in fear-mode. That gives upside visibility for equities.

US DOLLAR: BULLISH
US Dollar Chart And Prices June 19, 2017

We are sticking with our bottom-fishing call on the dollar. Many are short and concerned about President Trump investigations. James Comey confirming two weeks ago that Trump was not under investigation is bullish for the dollar.

Even though it was reported lastweek that Robert Mueller may now be investigating the President the dollar moved higher anyway. That is a bullish sign of "bad news" "good action" to tell you the dollar may have bottomed.

Also, low inflation as reported by now multiple months of a weak CPI can also give the dollar a lift. The less inflation there is the more purchasing power the dollar has.

With the dollar down in the dumps along with better fundamentals, it can easily have a short squeeze rally.


About Pro Trader: Pro Trader is the best way to have your arms around the markets, equities, gold, oil, stocks, news in the least amount of time. Have conviction what to do based on news, charts, pro analysis, live chat, in short sweet daily reports at the crack of dawn.

Disclaimer: Securities reported by Elazar Advisors, LLC are guided by our daily, weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report. Portions of this report may have been issued in advance to subscribers or clients. All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks. #in, $spy, ^GSPC, INDEXSP:.INX, CME Globex: ES, #Gold, $gld, #oil, $oil, $bonds, $tlt, #gold, #price #crudeoil

Thursday, June 15, 2017

What Does Ferris Bueller, Trump And The US Dollar Have In Common Today?

Picture Source: Ferris Beuller


[See if after reading this report you can figure out why we’re showing you a picture of Ferris Bueller. First one in comments with the right answer gets a shout out.]

First, Down To Business: The US Dollar!

Something happened pretty amazing to the US dollar today. It went up.

What’s so big about that, you may ask? 

Well the same news that has been killing the dollar since mid-May came out again today. This time the dollar went up.

Let’s review.

Rewind Back To The Comey Memo Leak May 16th

On May 16th The New York Times came out with a then-bombshell report that accused President Trump of obstructing justice when he asked James Comey, “I hope you can let this go.”

Last week in a sworn testimony Mr. Comey actually proudly admitted that he was the source of that potentially illegal leak. Mr. Comey and The Times claim that President Trump asked Mr. Comey not to investigate Michael Flynn and any potential Russian involvement.

Let’s see what the dollar did since then.

Chart By Interactive Brokers

If the President was ever convicted of obstructing justice there would be impeachment risk which would put the US in a political spiral. Dollar holders picked up on that and ran for cover.

Last Week June 8th: Comey’s Testimony

In last week's testimony however Mr. Comey was unable to accuse President Trump of actually obstructing justice.

When asked if Mr. Comey thought President Trump’s line was an obstruction of justice he said (thank you Politico),

“I don’t know, that’s Bob Mueller’s job to sort that out.”

Mr. Comey is an attorney, he knows the law. There was nobody else in the room with him and President Trump. Mr. Comey said there were no other requests from anybody to drop the Flynn case later on. Still Mr. Comey said “I don’t know” if President Trump obstructed justice.

That sounds awfully like President Trump was exonerated. There were no witnesses and the only legal-expert that was a witness doesn’t know.

Still he hinted that it will be up to Bob Mueller to sort that out.

Fast Forward To June 14th: Mueller?

This time The New York Times is trying to follow up their bombshell report from mid-May. They said that they were again leaked that this time in fact special counsel Robert Mueller may be looking into President Trump’s obstruction of justice. (Hmm, wonder who leaked that one.)

But the real news is what the dollar did this time.  Let’s see.

Chart By Interactive Brokers

Despite the same bad "obstruction of justice" news the dollar went up this time.

That is a sign that despite the “bad news” you have “good action.” That could be a sign that the dollar is trying to bottom.

Other Factors Helping The Dollar

The weak inflation numbers yesterday may have helped the dollar.

The dollar seemed to breathe a sigh of relief after the Fed announcement yesterday as well.  More rate hikes can help inflation stay low which helps the US dollar’s buying power.

The debt ceiling is certainly a risk for the dollar but it appears that the debt ceiling due-date keeps getting pushed out farther into the future. That can force traders to cover.

Frankly we expect President Trump to have enough Democrats and not-so-conservative Republicans to pass a “clean raise” of the debt ceiling. That would be very bullish for the dollar. Shorts would need to cover.

Bueller? Bueller? Mueller?

Mueller
Bueller
Did anybody figure out our first question why we’re showing you a picture of Ferris Bueller? First one in comments to figure this one out gets a big shout out.



And As A Bonus: Ferris Bueller On The US Dollar

“The US Dollar Moves Pretty Fast. If You Don't Stop And Look Around Once In A While, You Could Miss It.”


About Pro Trader: Pro Trader is the best way to have your arms around the markets, equities, gold, oil, stocks, news in the least amount of time. Have conviction what to do based on news, charts, pro analysis, live chat, in short sweet daily reports at the crack of dawn.


Disclaimer: Securities reported by Elazar Advisors, LLC are guided by our daily, weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report. Portions of this report may have been issued in advance to subscribers or clients. All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks. #in, $spy, ^GSPC, INDEXSP:.INX, CME Globex: ES

#ferrisbueller

Wednesday, June 14, 2017

Four Tricks From Chat How We Confirmed A Bull Market

Photo by Mike Mozart but see if you can discover through this report why we are showing you a Whopper.
Does anybody remember Friday or Monday? Goldman’s and Citron’s calls were supposed to crash markets. It’s ancient history already but there were about a million calls for a correction.

We want to review some chat quotes we had to Pro Traders on Monday in the wee-pre-market hours as we made a gameplan for the coming day.

From these quotes you’ll discover a few of our secrets how we use daily “action” to spot and confirm medium-term trends.

First What’s Action?

Action is the trading art of comparing what is “supposed” to happen versus what does happen. It's a mindset. The news isn't the only piece of information.

When you have news and reports you’d expect markets or stocks to move in a particular direction. If they are you have confirmation. If not they are telling you a powerful story that something is underlying pushing the other way.

We love to use action and Friday and Monday had big tell-tale signs of amazing bullish action.

How We Used Intraday To Confirm Our Medium Term Entry

Here's what we said on chat Monday, June 12, 2017: 6:02 AM EDT as bearish sentiment was sky high in the news and markets. Futures were looking down.

“A nice way to enter to make sure you’re not catching a falling knife is to see it move up higher than the first 30 minute range. Then see that the close closes higher than the open or not far off. This way you know the market’s not just going straight down on you.”

First, full disclosure, we did not write the chat nearly that clean. It's been mildly edited.

Let’s review the chart in relation to what we said still groggy after a few mochaccinos.

Many can tell you to buy or sell or be bullish but really to have confidence each day muscling through volatility, it takes a proper strategy, we think, short, medium and long term.

First Action Trick: Let’s first review the “30 minute range.”

We're now going to analyze our above quote.

Charts By Interactive Brokers


We were getting more bullish on NASDAQ ETF $QQQ Monday morning. As long as you saw the market not falling lower than the first 30 minutes you have a little more confidence to enter.

For QQQ it turned out that the low of the day was in that first thirty minutes. That was something we were looking for several hours previously in our gameplan.

Second Action Trick: Let’s review “closes higher than the open.”


Here you see QQQ giving you a second confirmation on Monday with the close higher than the open. The bearishness eased through the day.

Third Action Trick: Later In The Day: Boring Action Is Bullish

And for good measure we’re going to give you a third secret we said during the day.

On June 12, 2017: 2:33 PM EDT we pointed out the following,

“Slow boring follow through: bullish.”

Let's see.





We noted where we made the "boring" comment above.

The market wasn't doing anything and definitely wasn't living up to the hype of a big bearish day.

Fourth Action Trick: SPY Hardly Down, Are You Joking?

From the close on Thursday to the close on Monday the S&P 500 ETF SPY went from 243.78 to 243.36. It was down a whopping 40 cents.

Here's a Whopper.



After all of that reported "chaos" SPY was down $.40. That’s not so bad. That's a sign of "bad news" "good action." That's bullish.

For Fun, Other Elazar Quotes From Monday's Chat On Pro Trader

“Look there’s going to be a million down days. The market is so not used to having even one down day. It’s a little nuts.”

“The dip spooks people. Then it goes up. Then they miss it. Then they say [we’ll catch the] next dip and same thing.”

“These down moves have been opportunities but still you want to see the market not falling. Not falling is good. Open and close. That’s the gameplan that you can manage with a clear head.”


We had a million quotes on chat on Monday's Pro Trader, as we do most days. You can lean on us. That’s what we’re here for.

In the meantime, hope you enjoyed some of our "action" trading tricks.

#stockmarketmentoring
Full Disclosure: I/we do not own a Whopper and have no intention of buying or selling a Whopper today or in the next week.  We were not paid to advertise this Whopper even though it looks very yummy. If you do buy a Whopper we hold no responsibility for its contents.

About Pro Trader: Pro Trader is the best way to have your arms around the markets, equities, gold, oil, stocks, news in the least amount of time. Have conviction what to do based on news, charts, pro analysis, live chat, in short sweet daily reports at the crack of dawn.

Disclaimer: Securities reported by Elazar Advisors, LLC are guided by our daily, weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report. Portions of this report may have been issued in advance to subscribers or clients. All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks. #in, $spy, ^GSPC, INDEXSP:.INX, CME Globex: ES

Tuesday, June 13, 2017

Stock Market Mentoring


FANG FAAMG Tech Boom Coming: Sorry Goldman


Goldman decided to go bearish on their own version of FANG called FAAMG. FANG is Jim Cramer's well known acronym for Facebook, Amazon, Netflix and Google.

FAAMG??? It’s FANG!

First, we had a rant on Goldman where investing.com quoted us as saying,

“Goldman, c’mon, you can’t just change a catchy moniker to whatever you want. You can't call them FAAMGs after Jim Cramer coined the term FANG. Cramer's call is what it’s going to be. You can’t just call it whatever you want and include whatever stocks you want. Some things are sacrosanct in this business. If Cramer coins a term we all need to abide by it.

As we all know what Cramer says goes.

Key Stat Everybody Needs to Pay Attention To

OK now with that out of the way, the key stat that we don’t see anybody talking about is productivity.

Productivity is on its tail but previous moves up took tech stocks with it a la the 1990s.

Here’s the chart. A picture speaks a 1000-clicks (words).



Conclusion

If you look at the ‘90s’ productivity bottomed, taking the stock market higher with it.

With self-driving-this and AI-that we’re probably going into another tech boom thanks to productivity taking FANG, FAAMG, NASDAQ and every other four-letter, five-letter acronym under the sun up with it.

That’s one more reason not to be a bear.


About Pro Trader: Pro Trader is the best way to have your arms around the markets, equities, gold, oil, stocks, news in the least amount of time. Have conviction what to do based on news, charts, pro analysis, live chat, in short sweet daily reports at the crack of dawn.

Disclaimer: Securities reported by Elazar Advisors, LLC are guided by our daily, weekly and monthly methodologies. We have a daily overlay which changes more frequently which is reported to our premium members and could differ from the above report. Portions of this report may have been issued in advance to subscribers or clients. All investments have many risks and can lose principal in the short and long term. This article is for information purposes only. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC and their related parties harmless. Any trading strategy can lose money and any investor should understand the risks. #in, $spy, ^GSPC, INDEXSP:.INX, CME Globex: ES, $qqq, #fang, $amzn, $fb, $msft, $nflx, $goog.