Kirkpatrick’s Weekly Market Strategist The technical stock market letter published weekly since 1976 JUNE 29, 2018
Intermediate-Term Trend Table
Index Signal
BKX Dn* BOND Up UTY Up
Date
Sig Pr
6/29 103.39 6/22 143 31/32 6/22 648
*Change from last week
Cur Pr
103.39 145 663
long-term u.s. tREASURY bONDS
My doubts evaporated this past week when the long-term bond price rallied on Wednesday. I keep forgetting that the bond market is so much slower than the stock market. Anyway, the action last week suggests that the prices are in an advancing channel, possibly a rising wedge. In any case, the stop should be placed just below the trend line and follow it up until it is broken.
Conclusion: The position is long.
GOLD
In the gold price a small symmetrical or pennant formed last week and broke downward on Wednesday. These patterns are frequently midpoint patterns marking the halfway point of the decline. If we follow that logic, the projection for the bond future is 1220-1230. I’m not confident with this projection as I am with all price projections because most of the time they are inaccurate. Nevertheless, the evidence suggests a continuation of the price decline that began last week.
Conclusion: The position is short.
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • June 29, 2018 • Page 1
Crude oil
The crude oil price is now close to its longerterm upward channel bound around 75. Its rise this past week was somewhat of a surprise and uncharacteristic of oil prices, but in trader jargon “we’ll take it.” As the price approaches that longer-term upper channel bound, the ADX will peak and give us an early warning that the rise is losing momentum. At the same time the DI+ will peak, and the DI- will bottom. If you look at the immediate past in the chart, you will see that these indicators are already at levels seen in previous short-term peaks.
Conclusion: The position is long.
Emerging stock markets
In the emerging markets ETF, exit point for shorts will occur when the price crosses the lower bound of the previous declining channel. That is not a buy level, however, because often the price will retrace back to the earlier panic low in a test of that low and give a better price for going long.
Conclusion: The position is short.
bitcoin market The bitcoin price broke its lower declining wedge bound but so far has yet to enter a panic period. This maybe a warning of a later breakout upward from the wedge, a more common result from such patterns. We don’t know that yet and should remain short until some worthwhile evidence appears. Conclusion: The position is short.
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STOCK MARKET Trend Table
Index
Signal
DJIA Dn* NDX Up OEX Flat VIX Dn * change last week
Date
Sig Pr
6/29/18 6/8/18 6/8/18 6/8/18
24,241 7,176 1,222
Cur Pr 24,241 7,041 1,159
From the very short-term, the oscillators of momentum and the moving average of the call/put ratio show deep oversold levels on the charts. This bolsters the bullish case that feels the diamond patterns will be broken by an upward thrust. By calling for a breakdown, I am separating myself from conventional technical analysis.
Almost all major indexes have now broken their rising trend lines and given thereby a sell signal when their respective DMI’s developed negative crossovers. This occurs when the DIcrosses above the DI+. In addition to the trend line break in the indexes, I see a “diamond” pattern has developed after the break in the S&P 500, shown in the chart with light blue dashed lines, and in the Dow Jones Industrial. Prices will break out of this pattern on Monday or Tuesday and are expected to be downward. If so, they often are also midpoint formations and project to 2,640 and in the Dow Industrial to 23,500. Another downward break such as this would be unusual only because it would be suggesting that the longer-term market is also heading downward. But this need not be the case because breaks from diamond patterns can go either way, up or down. So, wait until midweek before participating in the stock market.
I had to redo the optimization of the NQ for range and Bollinger Band this week and found a formula that seems to work well. We will test it over the next few weeks. It is a range chart with a range of 8 at 60 minute intervals. To test the ideal range and intervals would be laborious. The results maybe lucky, but they test well in a walk-forward optimization and would have gained $18,265 over the past week. We’ll see about the future.
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • June 29, 2018 • Page 3
Market Timing
Intermediate-Term - This picture is not final yet, in other words, there is still a possibility of prices rising, but the evidence against is slowly squeezing into the formations that are unfolding. The two most important levels from the intermediate-term view are the cradles in each of the market indexes above. In the S&P 500, the critical level is 2,600 where the two bounds of the earlier symmetrical triangle cross. In the DJIA the critical level is 23,300. In the DJIA, the configuration is a little different than the S&P. It is more of a descending triangle than a symmetrical one, and as a result, it has a flat lower bound between 23,300 and 23500 that since February has held the line three times. If this zone is penetrated, especially if the S&P coincidently breaks 2,600, the spectre of a damaging bear market looms ahead.
STOCK SELECTION
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52 w HI52 w LO
NAME
BARGAIN LIST FOR 6/29/2018 SYM
LAST
WK CHG
P&F
RS
EPS
P/S
87
94
DT PURCH
PRICE
P/L
STOP
STOCKS DELETED FROM THE BARGAIN LIST 220.10 118.45 13.74
121.64
44.56 Beigene Ltd Ads
BGNE
153.73
-0.91 Up
67
7.02 Qep Resources
QEP
12.26
-0.04 Up
92
64.50 Paycom Software Inc 55.97 Splunk Inc
PAYC SPLK
98.83 99.11
-1.20 Up 0.92 Up
48 50
12
0
3/23/2018
40
4/27/2018 3/2/2018
102.32
-3.14%
3/2/2018
38.75
63.05%
92
3/9/2018
158.01
-2.71%
109.96 -10.12% 12.10
1.32%
BARGAIN LIST COMPLETE 71.00
20.57 Axon Inc
450.93 139.49 Abiomed Inc
371.55 148.01 Align Technology I 17.34
9.04 Adv Micro Devices
29.20
8.81 Abercrombie & Fitch Company
1763.10 931.75 Amazon.Com Inc 20.21
7.15 Array Biopharma Inc
119.50
44.12 Autohome Inc
158.23
79.07 Burlington Stores Inc
53.95 67.41 29.76 34.61 64.95 46.46 50.67 73.90
122.98 61.57
102.10 45.02 45.88 71.60
103.99 49.65 66.32 68.75
120.07 96.84 83.28 56.74 49.60 26.48 20.39 79.92
208.95 129.79
14.30 Axogen Inc
21.39 Baozun Inc Ads 11.93 Chegg Inc
17.11 Comtech Telecom Co 28.52 Coupa Software Inc
6.47 California Resources Corp
20.50 Cree Inc
15.55 Crispr Therapeutics Ag 61.37 Deckers Outdoor Corp 20.65 Delek US Holdings 42.62 Dexcom
15.28 Editas Medicine 13.58 Etsy Inc
34.39 Exact Sciences Cor 44.30 Five Below Inc
24.30 21st Centry Fox Class B 35.44 Fortinet Inc
16.96 Canada Goose Holdings Inc 42.42 Grubhub Inc
38.47 Haemonetics Corp
25.97 Hollyfrontier Corp 30.35 Herbalife Ltd
19.13 Huazhu Group Ltd 7.17 Immunomedics Inc
8.00 Karyopharm Therapeut
36.21 Kohl’s Corp
69.00 Loxo Oncology CS
56.56 Lululemon Athletica
AAXN
63.18
-0.86 Up
99
95
92
342.14
-1.66 Up
96
66
96
ABMD
409.05
AMD
14.99
ALGN
AMZN 1699.80 ANF
24.48
ATHM
101.00
BURL
150.53
CHGG
27.79
ARRY AXGN BZUN CMTL COUP CRC
CREE
16.78
-4.89 Up -0.32 Up -1.65 Up -1.13 Up -0.12 Up 0.03 Up
50.25
-1.15 Up
54.70
0.15 Up
-1.45 Up 0.19 Up
31.88
-0.18 Up
45.44
0.57 Up
62.24
0.67 Up
41.57
-0.86 Up
DECK
112.89
-3.12 Up
DXCM
94.98
CRSP DK
EDIT ETSY EXAS FIVE FOX
FTNT GOOS
58.76 50.17
59.79
-0.69 Up
42.19 97.71 49.27 62.43 58.85
HFC
68.43
HTHT IMMU KPTI KSS
LOXO LULU
0.71 Up
-0.02 Up
104.91
HLF
-0.06 Up
35.83
GRUB HAE
-0.03 Up
89.68
-0.05 Up -1.83 Up -0.06 Up -0.02 Up 0.65 Up
-0.67 Up 0.28 Up 1.45 Up
53.72
-0.01 Up
23.67
0.57 Up
41.99 16.99
-0.16 Up 0.04 Up
72.90
-0.81 Up
124.85
-0.09 Up
173.48
3.65 Up
98 96 92 81 84
90 98 93 86
91
77
91
78
98 96 97 93 98
14 94
99
94 94 98 72
61 83
99
91
98
74
93
85
92 97 99 89 95 95 93 88 98 93
1/26/2018
238.79
71.30%
368.76
50
6/15/2018
16.34
-8.26%
12.85
1/19/2018
19.92
22.89%
21.45
94
1/19/2018
82.57
22.32%
88.57
37
4/6/2018
136.94
5/4/2018
23.88
71 8
96 97 74 93 31
18 93 87 33 94 39 74
4/28/2017
2/9/2018 5/4/2018 3/9/2018 3/9/2018
6/22/2018
56
10/20/2017
98 40
5/18/2018 3/30/2018
3/9/2018
96
6/15/2018
59
6/22/2018
95
6/22/2018
78
2/9/2018
85 94 17 45 90
1/5/2018 4/6/2018
7/29/2017 4/13/2018 5/11/2018 6/8/2018
99
6/15/2018
0
5/4/2018
91
54
12
1/12/2018
98
68
83
4/6/2018
98
0
4/20/2018
18.24%
16.37%
23.45
62.97
-1.16%
33.82
22.92%
44.28 37.92 27.93
26.47% 28.55%
51.06%
14.91%
1.90% 2.15%
37.92 176.66% 30.54% 22.83%
111.53 -51.83% 47.90 -12.34% 23.47
0.85%
63.87
14.14%
89.61
39.33%
16.48 133.06
29.23 39.87 40.47
81.57
-5.51%
54.33
55.71
50.70
-4.60%
35.01%
68.70
26.04
102.71
13.30%
72.37
57.61
43.21
-7.20%
68.34 -12.51% 48.35
37.92
133.36
4.01%
45.71
14.49
9.92%
30.65
99.56
3/9/2018
-1.47%
14.24%
35.93
290.48
13.32% 1450.79
47.88
6/22/2018
98
69
42.50
121.65
4/13/2018
92
17.03
6/8/2018
9
92
128.95 165.33%
2/23/2018 1500.00
96 22
69 97
97
51.59
3.09%
30.38%
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • June 29, 2018 • Page 5
48.16 27.72 32.92 49.17 83.43 43.55 56.10 49.53 91.34 82.94 68.04 47.63 38.43 17.42 13.90 61.76
134.70 109.91
52Wk Hi 52Wk Lo 41.33
Name
Symb
Last
CHG P&F
RS
17.41 Macy’s Inc
M
37.43
-1.05 Up
96
325.98
14.93 Madrigal Pharmaceuticals Inc
MDGL
279.69
1.73 Up
99
179.52
40.00 Medifast Inc
MED
160.16
2.89 Up
99
54.24
22.49 Momo Inc Ads
MOMO
43.50
-0.92 Up
95
64.66
26.85 Micron Technology
MU
52.44
-0.70 Up
77
41.80 New Relic Inc
NEWR
100.59
-0.17 Up
97
423.21 144.25 Netflix Inc
NFLX
391.43
-3.99 Up
98
188.59 103.00 Servicenow Inc
NOW
172.47
0.06 Up
83
111.59
79.75
37.55 Netapp Inc
NTAP
78.53
1.22 Up
95
64.87
18.62 Nutanix Inc
NTNX
51.57
-0.34Flat
89
269.20 138.58 Nvidia Corp
NVDA
236.90
-3.96 Up
62
61.00
21.52 Okta Inc Class A
OKTA
50.37
-0.01 Up
97
50.99
19.46 PBF Energy Inc
PBF
41.93
0.35 Up
90
52.95
14.56 Ptc Therapeutics
PTCT
33.73
1.55 Up
96
EPS 56
PS
DT PURCH
PRICE
&P/L
TRL-STP
7
4/27/2018
32.19
16.28%
31.03
0
6/22/2018
291.25
-3.97%
274.42
88
82
3/8/2018
88.96
80.04%
131.48
82
82
6/8/2018
52.01 -16.36%
40.04
87
46
3/9/2018
54.59
-3.94%
45.72
95
1/25/2018
96.61
4.12%
87.98
94
1/25/2018
275.60
42.03%
331.32
95
3/2/2018
166.67
3.48%
153.23
63
1/12/2018
62.77
25.11%
65.66
89
1/5/2018
36.91
39.72%
43.61
94
5/19/2017
136.00
74.19%
212.22
96
5/4/2018
45.76
10.07%
45.54
86 64 88 12
2
5/18/2018
45.00
-6.82%
40.60
86
1/12/2018
23.29
44.83%
26.12
164.49
44.00 Restoration Hardware Holdings RH
139.70
-2.14 Up
98
93
29
6/22/2018
151.35
-7.70%
125.67
145.94
70.36 Ralph Lauren Corp
RL
125.72
-1.22 Up
87
26
38
5/25/2018
137.30
-8.43%
118.82
100.34
39.76 Shutterfly Inc
SFLY
90.03
-0.59 Up
94
72
51
2/16/2018
75.03
19.99%
80.46
30.12 Shake Shack Inc
SHAK
66.18
-0.89 Up
98
50
84
6/8/2018
65.18
1.53%
56.65
83.16 Shopify Inc
SHOP
145.89
-0.66 Up
87
96
2/16/2018
137.53
6.08%
127.47
SIVB
288.76
-2.89 Up
81
86
4/27/2018
305.61
-5.51%
268.14
52.49
17.43%
48.69
23.69 457.96%
102.67
69.96 175.11
329.65 159.44 Svb Financial Grp 69.40 176.50
85
22.66 Square
SQ
61.64
0.09 Up
96
92
3/9/2018
32.80 Sarepta Therapeutics
SRPT
132.18
-1.57 Up
99
97
9/22/2018
285.74 140.45 Stamps.Com Inc
STMP
253.05
4.70 Up
93
70
90
6/15/2018
47.63
19.72 Tal Education Group
TAL
36.80
-0.86 Up
65
87
92
6/8/2018
63.65
27.30 Teladoc Inc
TDOC
58.05
0.35 Up
98
94
68.75
33.16 Atlassian Cls A Ord
TEAM
62.52
0.40 Up
86
88
38.81
12.25 Tenet Healthcare Corp
THC
33.57
-1.04 Up
98
97
94.64
40.70 Trade Desk Inc
TTD
93.80
1.59 Up
99
54
62.34
23.25 Twilio
TWLO
56.02
0.18 Up
99
47.79
15.67 Twitter Inc
TWTR
43.67
-1.12 Up
98
99
48.24
16.68 Urban Outfitters Inc
URBN
44.55
-1.46 Up
93
27.79
10.94 Valeant Pharmaceuticals Intl
VRX
23.24
-0.13 Up
93
55.33 Wayfair Inc
W
118.76
0.12 Up
15.88 Whiting Petroleum Corp
WLL
52.72
-0.30 Up
119.84 56.47 19.23
-9.98%
231.82
46.80 -21.37%
34.88
6/22/2018
61.60
-5.76%
48.40
3/2/2018
58.17
7.48%
49.21
1
5/4/2018
31.12
7.87%
29.13
93
5/11/2018
75.61
24.06%
75.61
93
4/27/2018
41.65
34.50%
46.62
94
2/9/2018
31.51
38.59%
35.00
82
30
2/23/2018
37.05
20.24%
38.20
3
21
6/8/2018
25.79
-9.89%
21.33
98
45
6/22/2018
114.84
3.41%
91.61
99
57
4/13/2018
27.95
88.62%
40.99
WPX
18.03
-0.21 Up
92
81
4/27/2018
16.99
6.12%
13.87
105.73
31.66 Weight Watchers International WTW
101.10
2.06 Up
99
86
75
2/23/2018
59.44
70.09%
79.12
75.07
20.09 World Wrestling Entertainment WWE
115.49 60.26
8.87 Wpx Energy Inc
281.10
72.82
-1.53 Up
99
83
86
5/25/2018
58.08
25.38%
61.30
54.34 Xpo Logistics Inc
XPO
100.18
0.43 Up
62
83
16
12/22/2017
90.01
11.30%
92.68
25.09 Zendesk Inc
ZEN
54.49
-0.30 Up
94
94
3/23/2018
45.09
20.85%
47.58
AVERAGES
-0.31
92.5 71.9 67.3
28.97%
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deletions from THE bargain list
www.charleskirkpatrick.com • kirkco@capecod.net • © 2018 Kirkpatrick & Company, Inc. All Rights Reserved • June 29, 2018 • Page 7
ETF BARGAIN LIST 52Wk Hi 52Wk Low NAME
SYMB
LAST
CHG P&F
RS
DT PURCH
DBO
11.98
0.43 Up
79
5/25/2018
22.42
12.05 US Brent Oil
47.00
15.04 Direxion S&P Oil & Gas Expl Bul GUSH
27.45
17.35 Dynamic Energy Explor & Prod
12.75 132.70 64.13 34.67
7.47 DB Oil Fund PS
BNO
83.33 S&P Smallcap Health Care Port
PSCH
31.34 Ultrapro QQQ Proshares
TQQQ
12.66 Ultra DJ-UBS Crude Oil Pro AVERAGES
PXE UCO
21.16 39.60
130.64 26.80
0.76 Up 3.54 Up 0.00 Up 0.70 Up
61.08 -0.62 Up 30.38
2.66 Up
83 97 90 90 90 87 88
5/25/2015 5/25/2018
PRICE
-4.41%
10.97
-3.99%
35.59
-4.24%
12.03 124.15
6/15/2018
62.74
3/21/2018
STOP
21.28
5/25/2018 5/25/2018
P/L
25.47 28.29
18.78 27.98
4.75%
117.35
0.00%
48.48
1.22% -4.91%
22.73 24.56
-1.65%
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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
Description of Notes on DMI max diff model charts Length = smooth = LAG = PCUP= PCDN=
The length of the DMI in bars sometimes the dmi is smoothed with an average calculation. SOMETIMES THE DMI IS LAGGED BY A NUMBER OF BARS
PERCENTAGE RETRACEMENT OF DI+ MINUS DI- TO GIVE A SELL SIGNAL PERCENTAGE RETRACEMENT OF DI- MINUS DI+ TO GIVE A BUY SIGNAL
entry stop: le= The percent that the price must rise above the signal bar high to confirm a buy signal. se= the percent that the price must decline below signal bar low to confirm a sell signal. exit stop: stop or stop and reverse percentage from initial signal entry. lx= The percent that a price must decline from the first entry. sx= the percent that a price must advance from the first entry.
or if a trailing stop the period is 20 bars and the number of atr is marked with an “x”,
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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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