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Trade Idea of the Day Presented by: Ulli... The ETF Bully

S&P 500 And Nasdaq Eke Out New Record Highs

S&P 500 And Nasdaq Eke Out New Record Highs from Ulli... The ETF Bully [Chart courtesy of MarketWatch.com] Moving the Markets After the break through the glass ceiling yesterday, the major indexes managed to maintain upward momentum to score gains for the 6th consecutive day recovering all... Read More

US Crude Production Hits 21-Month Highs As Rig Count Rises For 19th Straight Week

For the 19th week in a row, the number of US oil rigs rose (up 2 to 722). This is the largest number of oil rigs since April 2015 as Lower 48 crude production (much to the chagrin of OPEC) surges to its highest since August 2015. Lagged WTI prices lead rising rig counts...NOITE - if the relationship holds then we would expect the rig count rised to stall here... And rising rig counts lead US crude production... And this is why it matters... And prices are holding their post-OPEC losses... “It was so well telegraphed a lot of people were probably thinking they’d take it the extra mile,”...

Q2 GDP Forecasts

From Merrill Lynch: [T]he data [today] pushed down 2Q GDP tracking by a tenth to 2.5% qoq saar. The main drag was from the weak durables report, while revisions to 1Q GDP caused some modest shifts in the 2Q components. From the Altanta Fed: GDPNow: The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 3.7 percent on May 26, down from 4.1 percent on May 16. The forecast for second-quarter real residential investment growth fell from 8.3 percent to 3.1 percent after Tuesday's housing related releases from the U.S. Census Bureau and...

Without FANG Stocks, the Market Has Gone Nowhere For Three Months

For weeks I’ve been noting that stocks are being driven by a market rig. By way of review, that rig is as follows: 1) Someone slams the VIX lower. 2) This forces risk-parity funds to buy stocks, usually the FANGs or large-cap Tech names (Facebook, Apple, Netflix, Google). 3) FANGs rally, which due to the weighting in the S&P 500, forces the overall market higher. The last point is key. When you remove the influence of FANG stocks (Facebook, Apple, Netflix, and Google) by giving every company in the index equal weighting, you find that the market has yet to reclaim its former peak May peak...

As Markets Hit Record Highs, Stock Ownership Is Down (Except For Old & Rich People)

Gallup released a poll Thursday showing that overall stock ownership among US adults remains 8 percentage points below its pre-crisis level. But even as the crisis appears to have scared many Americans away from owning stocks, there are two demographic subgroups where ownership has held firm: Adults aged 65 and older and those with an annual household income of $100,000 or more. The data is from Gallup’s annual “Economy and Personal Finance” survey, which asks US adults whether they personally or jointly have money invested in the stock market, including in...

Wards Slashes 2017 Auto SAAR Forecast; Sees May Sales Down 1.9% YoY

With the bottom seemingly falling out from under the auto market over the past several months, all eyes will be looking to May sales for confirmation of whether the recent 17-18mm unit SAAR range is truly a 'plateau' (Ford's description, not ours) or the peak of another massive auto bubble. In their monthly preview, Wards has decided to play in safe in May by forecasting a flat-ish MoM SAAR of 16.9mm units, which is down roughly 1.9% YoY. The seasonally adjusted annual rate for the month will be 16.9 million vehicles, down from 17.3 million last year. "While consumers will see substantial discounts this Memorial Day weekend, they are...

Philly Fed: State Coincident Indexes increased in 41 states in April

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for April 2017. Over the past three months, the indexes increased in 46 states and decreased in four, for a three-month diffusion index of 84. In the past month, the indexes increased in 41 states and decreased in nine, for a one-month diffusion index of 64. Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed: The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment...

Fed Minutes Hint at Rate Hike in June, Slow Balance Sheet Unwind

Minutes from the Federal Reserve's May 2-3 meeting showed that policymakers anticipate a rate hike soon, possibly in the central bank meeting next month. At the same time, by agreeing to shrink the balance sheet gradually over a number of years, the Federal Open Market Committee has minimized possibilities of market gyrations and its impact on economic growth. The Fed also moved toward a consensus on a proposal to gradually unwind the massive balance sheet built up over the course of the asset buying program that was the core of Fed's quantitative strategy... But the Fed does not want to reduce the massive $4.5 trillion balance sheet at one go. Rather, it plans to let it shrink as the securities mature...

Junk Bonds; Dual upside breakout taking place!

So Goes Junk, So Goes Stocks? Most of the time this is true. Stocks historically want to see Junk moving higher, not diverging against them. Below looks at Junk Bond ETF JNK over the past few years. JNK started heading lower back in 2014, diverging against stocks, sending a concerning message to them. JNK hit a low in February of last year and has been heading higher ever since, sending a positive message to stocks. JNK for the past few months has chopped sideways, just below 2-year falling resistance, which looks to be the top of a narrowing pennant pattern. At the same time it was dealing with pennant pattern resistance, it looks to have formed a bullish ascending triangle...

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