Top Advisors Corner

April 2017

Top Advisors Corner

Tom McClellan: High-Yield Bond A-D Line

by Tom McClellan

Junk bonds are the canaries in the stock market’s coal mine.  If you want to know ahead of time that trouble is coming for the stock market, then one of the best places to look is the high-yield (or junk) bond market.  The movements of prices among these bonds correlates much more closely to the stock market than to T-Bonds.  More importantly, when liquidity gets tight, the junk bonds are the first to be sold by traders wanting to lessen their portfolio risk.  We can see the importance of this message in this week’s chart, which features A-D data Read More 

Top Advisors Corner

Tim Ord: The Ord Oracle April 26, 2017

by Tim Ord

SPX Monitoring purposes;  Long SPX on 4/24/17 & 2374.15. Monitoring purposes GOLD: Neutral Long Term Trend monitor purposes: Neutral. How the March 1 high is tested will tell a lot about the strength of the market.  A strong rise through the March 1 high would be a longer term bullish sign.  A test of the March 1 high on lighter volume with the McClellan Oscillator weakening would put the uptrend in question.  Either way, market should at least test the March 1 high and we will see what develops there.  Long SPX on 4/24/17 at 2374.15. Read More 

Top Advisors Corner

Tom McClellan: Is Iron Ore Weighing Down Stock Market?

by Tom McClellan

Some U.S. stock market investors are getting worried about the price of iron ore in China.  This week’s chart helps to show why. One analyst who noticed this relationship was Alastair Williamson of Stock Board Asset, who published this Tweet on April 18, 2017: It is definitely an intriguing chart, and a relationship I had not explored before.  I have come across a large number of interesting intermarket relationships like this one, and it is always fun to find (or be shown) a new one.  But not all of them have merit.  So what I’d like to do is Read More 

Top Advisors Corner

Tim Ord: The Ord Oracle April 19, 2017

by Tim Ord

SPX Monitoring purposes; Long SPX on 4/12/17 at 2344.93. Monitoring purposes GOLD: Sold GDX 4/18/17 at 24.27 near break even; Long GDX on 4/13/17 at 24.54. Long Term Trend monitor purposes: Neutral. This week is option expiration week which normally has a bullish bias.  The chart above is the VIX.  The VIX normally trades opposite of the SPY.  Today the VIX was down (showing less volatility) and the SPY was down.  Its common for the VIX to lead the way (in the opposite direction) for the SPY and today’s down VIX suggests the SPY should be going up.  A positive Read More 

Top Advisors Corner

Tom McClellan: Gold Resolves Some Bearish Divergences

by Tom McClellan

A week ago, it was not looking good for the gold bulls.  The dollar price of gold had not yet made a higher high, even though the Japanese yen had already pushed to a higher high.  When divergences like that happen, it is typically bearish news for both gold and the yen. But what looked like a bearish divergence then has now been resolved in favor of the bullish case.  The price of gold has now joined the yen in making higher highs.  This is an important point for all chartists to understand: just because you see what looks like a divergence Read More 

Top Advisors Corner

Tim Ord: The Ord Oracle April 12, 2017

by Tim Ord

SPX Monitoring purposes; Sold 4/5/17 at 2352.95= .4% gain; Long SPX on 3/24/17 at 2343.98. Monitoring purposes GOLD: Sold GDX at 24.33 on 2/22/07 = gain 20.15%; Long GDX on 12/28/16 at 20.25. Long Term Trend monitor purposes: Neutral. Yesterday we said, “It common for a pull back the week before option expiration week. Option expiration week is next week.”  Well there was a pull back today, though not much. Today the VIX hit and closed at a four month high. The previous times the VIX hit 14 range (today’s high was 15.88) the market was near a low and we expect Read More 

Top Advisors Corner

Mary Ellen McGonagle: India's Proposal and Then Implementation of "Trump-Like" Policies Appears Close to Taking Hold.

by Mary Ellen McGonagle

It was with great fanfare that Narendra Modi was elected in May of 2014 as the Prime Minister of India. Since taking office, Modi’s administration has increased spending on infrastructure, reduced spending on health care and social welfare programs and has attempted to reform a fractured tax system.    Sound familiar?   While India is a very different country than the U.S., their economy now seems to be stabilizing and is on a path to growth 3 years after their new PM with similar policy promises to Trump, was swept into office. Consumer confidence in India is at a high Read More 

Top Advisors Corner

Tom McClellan: AAII Survey Readings Nearing A Bottom Indication

by Tom McClellan

 The bullish percentage in the AAII survey has been falling during 2017, and is getting close to a low enough reading to mark a good bottoming indication for prices.  That fits well with my expectation from other sources for a low this month.  But before you go interpreting the AAII numbers, it is best to understand some of their quirkiness.  The raw data come from responses by AAII members on that organization’s web site, and the data are published weekly at http://www.aaii.com/files/surveys/sentiment.xls.  One problem that this survey method creates is that Read More 

Top Advisors Corner

Tim Ord: The Ord Oracle April 5, 2017

by Tim Ord

SPX Monitoring purposes;  Long SPX on 3/24/17 at 2343.98. Monitoring purposes GOLD: Sold GDX at 24.33 on 2/22/07 = gain 20.15%; Long GDX on 12/28/16 at 20.25. Long Term Trend monitor purposes: Neutral. March 1 appears to have been a Buying Climax as volume jumped near 50% compared to volume days leading up to it.  The March 1 high came in near 240 range (SPX 2400 range) and may develop into a resistance area if tested on light volume.  The second window up from the bottom is the SPY/VIX ratio with a 2 period moving average.  When this ratio turns up than SPY is Read More 

Top Advisors Corner

Tom McClellan: Lumber and Eurodollars: A Curious Intermarket Relationship

by Tom McClellan

Intermarket relationships are fun.  They often reveal surprising relationships, and those relationships are all the more fun when they offer us insights from which we can make money. This week, we look at the important data from the Commitment of Traders (COT) Report, which I have previously shown have importance for the stock market.  See this, and this, and also this.  You might wonder, who cares about COT data for eurodollar futures.  Well, you would, if you knew the great leading indication it gives for the stock market a year later.  But Read More