Kirkpatrick’s Weekly Market Strategist The technical stock market letter published weekly since 1976 MAY 25, 2018
Intermediate-Term Trend Table
Index Signal
BKX Dn BOND Dn UTY Up
Date
Sig Pr
Cur Pr
3/23 103.94 108.93 3/19 144 14/32 143 3/32 2/23 640 641
*Change from last week
long-term u.s. tREASURY bONDS The previous week the U.S. Treasury Bond future broke down through what used to be strong support, and this past week it broke upward through the old support/resistance level and the upper bound of the declining channel. It also broke about its ATR cover line. A positive crossover in the CMI will occur on Tuesday, giving us a confirmed buy signal. After all that back-andforth action in the bond market over the past three months, we really didn’t make much money timing the swings. It appears that the old buy signal in March is still valid. Comment: The position is now long
GOLD
The gold futures contract continues to behave similar to the bond market in that it also has traded in a strong downward channel and is presently flirting with the its upper bound. The bond market broke above that bound but gold has not. However, the DMI picture is almost identical to that of the bond market with a likely positive crossover to occur on Tuesday.
Conclusion: The position is flat.
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • May 25, 2018 • Page 1
Crude oil
You are likely sick of my mentioning wedges so frequently, but they are very important formations because, as just happened in the crude oil market, they have dramatic runs when their bounds are finally broken. In the oil market the wedge was a rising wedge, and these frequently break downward violently as occurred in the oil market on Friday. They also are often a test of the previous high, especially if that high had the markings of speculation as it did prior to the breakdown in February. Now that the wedge has ended, we know that the test of the old high is finished, and that the major portion of the decline has begun. Conclusion: The position is now short
Emerging stock markets The picture of the emerging markets ETF continues to be an enigma. Aside from the large downward wedge, a small downward channel has formed that is poorly defined but seems to be interacting with the larger wedge pattern. A declining wedge is usually resolved with an upward break, but that has yet to happen. The lack of swings in the DMI and the low level of the ADX suggest that volatility is low. This would bolster the thought that a sharp rally will occur soon but not enough to justify reversing the current short position. Conclusion: The position is still short.
bitcoin market
The Bitcoin price received a series of three signals, two sells and one cover. The reigning signal now is the sell signal. It was generated by the negative crossover in the DMI as well as a break of the ATR stop level. The real question at present is whether the price will break below its old low below $7,000. If it does, there is longerterm evidence that the long decline is over, but there will be lots of action before the price reaches that level. Conclusion: The position is short. www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • May 25, 2018 • Page 2
STOCK MARKET Trend Table
Index
Signal
DJIA Dn NDX Flat OEX Flat VIX Dn* * change last we ek
Date
Sig Pr
3/23/18 5/11/18 3/23/18 5/11/18
23,533 6,953 1,133
Cur Pr 24,735 6,961 1,195
The large symmetrical triangle in the stock market indexes formed almost perfectly. Each of the bounds nicely touched each of the reversal points. Thus when the stock market broke upward and out of the triangle, the price should have done one of two things: it should have run strongly upward producing small pennants and flags along its way, or it should have rallied for a while and then declined to the vicinity of the cradle, where the two bound cross each other, in a test that if successful would then be followed by the strong rally. It appears to me that the second alternative is the most likely. The action over the past two weeks cannot be characterized as the usual strong, breakout rally. The buy signal, produced by the breakout has not been followed by any kind of upward trend. It thus must be that the rise is weak, and the market will retrace to its cradle for a test of its underlying strength. At that point it can either break below
the cradle and collapse, or bounce off it and then trend upward. Because the rally has not gathered strength, for the immediate future a correction looks to be the most reasonable outcome. The momentum oscillators have both given sell signals, and sentiment, even with a flat price trend, is still overly optimistic, not favorable signs. Using the new parameters from last week, the performance of the NASDAQ 60-minute bar chart returned a net of -24.5 points or -$490. It looks as if I will have to try another short-term trading method.
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Market Timing
Intermediate-Term - The intermediate-term patterns in the S&P 500 and Dow Jones Industrial are both triangles, the Dow being closer to a descending triangle and the S&P being closer to a symmetrical triangle. In both cases, an upward breakout occurred, and prices should reach the parallel lines drawn on the chart above each triangle. However, as always, there is the possibility that the upward breakout was a false breakout, in which case the subsequent decline should reach the original lower objectives on lines parallel to the upper bounds. In the dual, filtered, simple moving averages in the S&P, we have to assume the market is still upward until the red line crosses below 1.00.
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BARGAIN LIST FOR 5/25/2018 52Wk Hi 52Wk Lo
Name
98.33
39.11 New Relic Inc
70.74
18.05 Solaredge Tech
137.59 59.91
66.06 Ralph Lauren Corp
Symb
NEWR
96.61
0.45 Up 99
SEDG
58.95
2.50 Up 97 86 67
RL
19.77 World Wrestling Ent WWE
29.20
8.81 Abercrombie & Fitch ANF
322.67 138.71 Align Technology I
1638.10 927.00 Amazon.Com Inc
ABMD ALGN
66.00
32.58 Atlassian Cls A Ord TEAM
46.90
14.25 Axogen Inc
59.80
202.88
40.65 Autohome Inc
ATHM
20.57 Axon Inc
AAXN
19.01 Baozun Inc Ads
36.51 Beigene Ltd Ads
371.60 184.53 Boeing Company 142.23 40.72
79.07 Burlington Stores 6.47 California Resour
26.91
11.47 Chegg Inc
46.15
20.50 Cree Inc
32.94 73.90 54.28 45.02 31.83 81.72 78.28 60.82
112.41 91.55 56.74 76.31 80.32 20.39 69.48
175.99 107.49 35.11
141.34 63.42
13.95 Comtech Telecom Co
AXGN BZUN BGNE BA
BURL CRC
CHGG CMTL CREE
13.50 Crispr Therapeutics CRSP 20.65 Delek US Holdings
DK
12.96 Etsy Inc
ETSY
13.12 Editas Medicine 35.33 First Solar Inc 44.30 Five Below Inc 35.44 Fortinet Inc 41.35 Grubhub Inc
38.47 Haemonetics Corp 30.35 Herbalife Ltd
23.46 Hollyfrontier Corp
EDIT FSLR FIVE FTNT GRUB HAE HLF
7.48 Karyopharm Therap
35.16 Kohl’s Corp
12.61 -0.17 Up 48 20 20
44.05 Loxo Oncology CS
8
394.28 -0.18 Up 99 89 97 318.54 15.89
1.50 Up 96 65 96 7.08 Up 92 93 70 0.25 Up 86
62.94 -0.98 Up 92
96 88
100.48 -1.23 Up 96 77 94 45.35 -0.15 Up 98
96
63.01
0.93 Up 99 95 91
189.7
1.84 Up 99
58.05 -0.45 Up 99 14 76 360.09 136.07
17.41 Macy’s Inc
M
26.85 Micron Technology
MU
MED
1/26/2018 238.98
64.98% 315.10
2/23/20181500.00 2/9/2018 3/2/2018
1/19/2018 5/4/2018 3/2/2018 3/9/2018
7.34% 1350.4
82.67 -80.78%
13.24
82.67
21.54%
75.55
38.75
62.61%
58.17 42.50 47.88
8.20% 6.71%
21.24%
48.68 33.74 49.36 36.69
5/4/2018
12.40%
2/2/2018 348.91 35.93
0.14 Up 95 83 32
3/9/2018
30.65
0.29 Up 99
52.08 -1.06 Up 98 83 36.53 -0.10 Up 88
60 10/20/2018 98
3/30/2018
98
3/9/2018
9
0.94 Up 97 90 88
68.25 -0.12 Up 55 87 54 71.41 -1.78 Up 76 85 59 60.37 -0.27 Up 95 85 85
101.78 -1.31 Up 93 86 94 0.28 Up 97 34 79
48.7 -5.16 Up 90 39 42
77.78 -0.58 Up 93 86 95 0.34 Up 98
0
165.71 -1.81 Up 99
0
4/13/2018 3/9/2018
7/28/2017 1/5/2018 4/6/2018
7/29/2016 2/9/2018
23.88
-9.85%
23.83
0.75%
25.51
44.28
17.62%
45.71 37.92 27.93
53.01% -3.67% 8.99%
48.87
39.66%
54.33
11.12%
72.37
-1.33%
37.92 168.41% 68.70
31.97%
4/13/2018
55.71
30.48%
5/4/2018
16.48
7.28%
5/11/2018 111.53 -56.33% 2/16/2018
67.37
106.18 -0.23 Up 97 81 80
4/6/2018
89.61
3/9/2018
88.96
0.10 Up 96 55
3.20% 309.05
35.57%
1/12/2018
63.87
4/20/2018 133.06
6
4/27/2018
61.35 -0.14 Up 97 91 55
3/9/2018
140.58 -0.35 Up 99 88 78
20.06% 139.85
33.82
0.77 Up 87 76 10
34.13
27.76%
4/28/2017 134.62 136.62% 237.77
5/18/2018
93
17.68
LOXO
21.45
14
0.54 Up 94
65.28
19.92
-0.64% 116.05
45.85
90.66
1/19/2018
4/6/2018 136.94
0.23 Up 98
30.44
12.48
0.06 Up 86 71 35
1.09 Up 88 80 47
26.84
69.94
16.19 -22.11%
3/23/2018 158.01
32.39 -3.84 Up 99 30.88
5/11/2018
0
KPTI
47.26 Lululemon Athletica LULU 40.00 Medifast Inc
25.45 -0.48 Up 94 99
72.69 -2.86 Up 99 94 18
KSS
P/L % TRL-STP
95
HFC
34.51 Interactive Brokers IBKR
COST
58.08 -0.70 Up 99 82 81
AMZN 1610.15
7.15 Array Biopharma Inc ARRY
DT PURCH
2.50 Up 97 37 41
BARGAIN LIST
403.45 134.39 Abiomed Inc
63.50
137.3
STOCKS DELETED
7.61 Petroleo Brasileiro PBR
107.54
CHG P&F RS EPS PS
STOCKS ADDED
17.20
18.78
Last
32.19 54.59
15.45% 2.21%
20.84 33.19 40.47 42.38 27.72 23.63 58.54 61.72 51.49 88.22 78.29 47.65 60.66 64.25 13.90 56.64
24.54% 121.56 18.49% 6.03%
90.74 26.26
58.03% 112.86 12.38%
45.72
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • May 25, 2018 • Page 5
52Wk Hi 52Wk Lo 111.36 72.85
Name
Symb
Last CHG
37.43 Netapp Inc
NTAP
39.11 New Relic Inc
NEWR
17.51 Nektar Therapeutics NKTR
354.36 144.25 Netflix Inc 98.33 60.00
16.64 Nutanix Inc
260.50 136.44 Nvidia Corp
NFLX NTNX
67.15 -0.93 Up 86 48 58
1/12/2018
62.77
96.61
1/25/2018
79.96 -0.62 Up 77 351.29
2.00 Up 98 86 94 0.45 Up 99
52.5 -2.86 Up 96
QEP
PTCT
5/18/2018
45.00
-1.16%
37.13
12.16 -0.88 Up 94 12 40
4/27/2018
12.10
44.48 -1.10 Up 97 12 30.8
99.01 Servicenow Inc
NOW
176.72
39.76 Shutterfly Inc
SFLY
70.74
119.00 58.46
81.55 Shopify Inc
18.05 Solaredge Tech 54.17 Splunk Inc 21.93 Square
327.91 159.44 Svb Financial Grp
SHOP SEDG
124.29 54.04 59.91 19.23
111.09 57.31
40.70 Trade Desk Inc
TTD
15.67 Twitter Inc
TWTR
16.19 Urban Outfitters
25.59 Weight Watchers In 60.23 Westlake Chemical 15.88 Whiting Petroleum
TWLO URBN WTW WLK WLL
19.77 World Wrestling Ent WWE 8.39 Wpx Energy Inc
51.86 Xpo Logistics Inc 24.71 Zendesk Inc
44.16 -1.01 Up 80 93 88
WPX XPO ZEN
1/12/2018
23.29
5/25/2018 137.30
68.26
143.64
0.59 Up 92
96
2/16/2018 137.53
2.50 Up 97 86 67
55.77
0.22 Up 95
34.47
0.77 Up 99 97
53.25
0.03 Up 99
42.19
0.00 Up 94 69 29
94 91 1
82.56 -0.43 Up 99 54 92 33.63
93
0.11 Up 95 99 91
79.72 -0.58 Up 97 86 67
3/2/2018 166.67
2/16/2018
61.73% 129.63 6.03% 147.74 4.44% 115.32
75.03
23.84%
75.62
3/2/2018 102.32
7.76%
91.86
5/25/2015
58.95
0.00%
52.49
5/4/2018
31.12
10.76%
27.3o
4/27/2018
41.65
27.85%
42.22
37.05
13.87%
5/11/2018 2/9/2018
2/23/2018 2/23/2018
75.61 31.51 59.44
48.84 -1.70 Up 99
54
4/13/2018
27.95
17.46 -0.42 Up 94
81
4/27/2018
16.99
56.33 -0.06 Up 98
94
5/25/2018
108.81 -0.64 Up 92 83 18 12/22/2018 3/23/2018
58.08 90.01 45.09
6.25%
49.18
3/9/2018
4/27/2018 305.61
118.26 -2.27 Up 85 84 42 12/22/2018 104.09 58.08 -0.70 Up 99 82 81
11.27
0.00% 112.58
23.69 286.87%
9/22/2017
58.95
0.50%
23.00
37.23
97
92.92 -0.85 Up 98 72 52
32.25%
94.39
-9.55%
96.04
1.66 Up 98
95
-5.40%
48.82
91.65
1.20 Up 92
42.85
83.29% 204.03
4/27/2018
0 11/10/2018
319.46 -2.83 Up 96 84 88
23.25 Twilio
83.98
2.50 Up 97 37 41
SIVB
SQ
56.66 43.58
84
110.26 -6.05 Up 93
12.25 Tenet Healthcare Cp THC
36.80
96
SPLK
34.80 87.80
137.3
0.79 Up 97
155.33 -2.84 Fl 65
28.82 Sarepta Therapeutic SRPT
76.16
2
1.20 Up 99
59.57 Sage Therapeutic Co SAGE
RSPP
0.00%
40.78
51.88
195.97
28.76 Rsp Permian Inc
RL
27.46% 273.55
13.37%
3/9/2018 109.96
12.23 Ptc Therapeutics
59.62
45.76
0.97 Up 83 87 94
OKTA
73.96
5/4/2018
104.02
7.02 Qep Resources
96.58
96.61
6.98%
42.24%
66.06 Ralph Lauren Corp
154.82
1/5/2018
TRL-STP
36.91
137.59
95.67
88
1/26/2018 275.60
62.17 Paycom Software Inc PAYC PBF
182.59
95
&P/L
32.50 146.03%
5/19/2017 136.00
18.48 PBF Energy Inc
51.51
98 11/10/2018
1.59 Up 85 88 95
46.40 13.74
PRICE
249.28
21.52 Okta Inc Class A
33.22
DT PURCH
NVDA
52.28
118.45
P&F RS EPS PS
44.11
4.53% 260.98 9.19% 6.73%
34.12%
75.61 27.06 33.94 57.16
13.61% 101.34 74.74%
40.29
2.77%
13.87
0.00%
20.89% 24.93%
48.90 86.75 44.66
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • May 25, 2018 • Page 6
ADDITIONS TO THE bargain list
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • May 25, 2018 • Page 7
deletions from THE bargain list
52Wk Hi52Wk Lo 12.75 47.00 27.45
125.79 22.42
NAME
ETF BARGAIN LIST
STOCKS ADDED TO THE LIST
7.40DB Oil Fund PS
SYM
LAST
CHG
P&F
RS
DT PUR
COST
DBO
12.03
-0.42 Up
88 5/25/2018
12.03
17.35Dynamic Energy Explor & Prod
PXE
25.47
-0.84 Up
89 5/25/2018
25.47
11.88US Brent Oil
BNO
15.04Direxion S&P Oil & Gas Expl Bu GUSH 80.90S&P Smallcap Health Care Port
PSCH
35.59 124.18 21.28
-3.87 Up 0.18 Up
-0.68 Up
96 5/25/2018
35.59
91 5/25/2018 124.15 90 5/25/2018
21.28
RS
COST
STOCKS DELETED FROM THE LIST (NONE)
ETF & ETN Bargain List
52Wk Hi52Wk Lo 12.75 47.00 27.45
125.79 34.67 22.42 42.11
NAME
7.40DB Oil Fund PS
SYM DBO
15.04Direxion S&P Oil & Gas Expl Bu GUSH 17.35Dynamic Energy Explor & Prod P PXE
LAST
12.03 35.59 25.47
80.90S&P Smallcap Health Care Port
PSCH
124.18
11.88US Brent Oil
BNO
21.28
12.36Ultra DJ-UBS Crude Oil Proshar UCO 10.01Velocity 3X Long Crude Oil Averages
UWT
CHG
P&F
-0.42 Up -3.87 Up -0.84 Up 0.18 Up
29.82
-2.74 Up
33.53
-4.80 Up
-0.68 Up
DT PUR
88 5/25/2018 96 5/25/2018 89 5/25/2018
12.03
%CHG
35.59
22.61
91 3/23/2018
28.29
5.41%
94 3/23/2018
31.68
5.84%
39.78
5.62%
90 5/25/2018
91.3
21.28
10.97 27.98
25.47
91 5/25/2018 124.15
TRL STP
109.72 24.56 18.78 33.27
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additions to the ETF BARGAIN LIST
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • May 25, 2018 • Page 9
Bargain List Rules Addition to Bargain list – Stock is added to the Bargain list when all of the factors below have been met: Relative Price Percentile > 97 50 day SMA Volume times Close = > $5,000,000 Last Price= > $10 Deletion from Bargain list – Stock is deleted from the Bargain list when any of the factors below are met: Relative Price Percentile = < 58 Sell on close below ATR Stop Line (solid blue)
Note: Relative percentiles are between 99 and 0, with 99 the highest.
Chart Legend On Daily and Weekly Price Charts upper portion Vertical black bars = weekly price range Dark red or blue line on price chart = the ATR stop Dashed blue lines indicate a trend line lower portion Red line - DIDark blue line - DI+ Green line - ADX On green line - red dash = signal at ADX peak dark blue dash = signal at ADX trough
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Glossary of Indicators KEVIN The KEVIN oscillator is simply the 8-day moving average of the daily up-volume divided by the total of daily up-volume and down-volume. It was presented to me by an old floor-trader friend named Kevin MacNamara, thus the name “Kevin.” I don’t believe you will find in it in any technical references, but as you can see, it is very simple and effective. FORWARD LINE
tion of a 20-day cycle lasts 10-days, ideally. We now plot the moving average ahead 10-days from the true plot (or 5 days from the current price). This is called the “forward line.” When the current 20-day cycle is rising, the forward line should be declining because it is half a cycle forward. Crossing above the forward line should ideally occur when the rise is half over. Breaking the forward line can thus be a means of estimating where the next target will be. Because the rise is half over when the forward line is broken, the second half should occur at roughly the same distance (if the cycle is valid and flat).
When analyzing the cyclical nature of price behavior, I find that moving averages are very useful to dampen shorter- and longer-term price trends. This allows me to concentrate on a specific cycle in the data. Without going into great detail, however, let me give you an example. Let’s say a stock index appears to have a 20-day cycle. Using a 10-day moving average, we eliminate the effects of price motion of 10 days and less, allowing us to concentrate on the next higher order cycle, in this case the 20-day and longer cycles. Half the suspected cycle length is usually the period for the calculating the moving average.
I know, it sounds complicated. It isn’t really, but does sound that way from my trying to describe it. The thing to remember is that if the forward line is broken, say from the upside, the downward price target will be the distance from the top price to the forward line projected below the forward line. If the price stops at the forward line, we know that the underlying trend is strong. If the price exceeds its forward line target, a larger trend reversal is likely developing
When we plot a moving average, however, it lags behind current price behavior because it is being affected by the past prices in the average. To be absolutely true, a moving average should be plotted half the period back from the present. Thus a 10-day moving average should be plotted 5 days behind the present. A moving average is not just an average of prices but also an average of time. The average of price in our example is 10-days, and the average of time is halfway through the period or 5 days earlier.
KIMM is used in the monthly overview as one measure of longer-term stock market momentum. It stands for Kirkpatrick Indicator of Market Momentum. It is a composite of the 12-week momentum of all stocks listed on the New York Stock Exchange. Each stock is given a weight of plus or minus one based on its 12-week price momentum, either upward or downward. The KIMM is the total of all the weights. Thus, a reading of +1000 says that the number of stocks with positive 12-week momentum is a plurality of +1000. That might be 2000 stocks with a plus rating and 1000 with a minus rating. The net is +1000. KIMM generally follows the market and is useful as an overbought/oversold intermediate-term oscillator. Generally, a bullish signal develops when the KIMM above the -1000 level from below, and a bearish signal develops when the KIMM declines below +1000 from above.
If a cycle of 20-days exists in the data, and we are representing it by a 10-day moving average plotted 5-days earlier, we will see the highs and lows in the average roughly 10-days apart - high to low and low to high. The full cycle would be from high to high or low to low of 20 days. The rising portion and declining por-
KIMM
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