Pravda analytics technical monthly review for december 2016

‫‏‬Pravda
Analytics
Pravda Markets Report
Technicals Monthly
December Edition

Pravda Analytics | Copyright © 2016 | All rights reserved
Market Index Overview
S&P 500 (SPY) index – as of close on Friday 12/09/16
The broad market index continues into new highs in early December for a potential Santa Clause rally.
The 200 day moving average held in November around election time and ignited the rally.
Index broke previous highs (2) set in August around 2200.
There is no overhead resistance as the 2200 level breaches in late November.
Current target is at 3300 which is a measured move of the July rally (blue line).
Don’t forget the big picture and
observe the monthly chart

Market Direction Confirmation via Transports Sector Observation as per Dow Theory
Key premise of the theory states that both
the broad equity market index as well as
the transports index need to align in
market direction to confirm a bullish or
bearish trend. (additional rules apply)
Dow theory
Market Direction: Bullish
 Dow Jones Industrial Average (DIA) is
above key moving averages.
 Dow Jones Transports Average (IYT) is
above key moving averages.
Current Analysis
A confirmed bullish market is when:
 Both indexes are exhibiting higher price
peaks and valleys on long term charts
 Both indexes are above their respective
200 day moving average (orange)
 Additional level of confirmation: index
above 50 day moving average (blue)
The Approach
Dow Jones Index Transports Index
Transports and the Dow are holding strong above both key moving averages indicating a Bullish environment.

Inverse Put Call Ratio
A unique oscillating indicator based on options activity. Coupled with a Bollinger Band to view overextended signals.
The crowd is overzealous and is loading up on calls while the market breaks into new highs.

Social Media Sentiment
Chartsource:StockTwits
S&P 500 BONDS GOLD
The sentiment chart shows the percentage breakdown in bullish and bearish sentiment shared by StockTwits users over time. It is
calculated on a rolling, 7 day basis.
The good people of the StockTwits lands are.. Bullish on stocks, bonds, and gold.

Index Overview
Major indexes with key trend and support/resistance levels.
Green across the board.

A Closer Technical Look - Bonds
Bonds are breaking down as Equities rally in lieu of a developing interest rate environment.
1) Support can be found at 115 and 113
2) Overextended rally might find a pause and rally back up to the 20 day moving average (light blue line)
3) Resistance overhead is at the November gap down indicated by red lines.

A Closer Technical Look – Oil
Oil is shooting up to 2016 highs of low 60s as headline news dominate the tape. Break of the 52 resistance was key in breaking out
of the range bound trading. Overhead resistance is low 60s in red. A lot of layers of support below in blue.

A Closer Technical Look - Gold
Gold follows Bonds and explodes down after breaking its 200 day moving average in November around 120.
The break of the 115.3 support now turn that area into overhead resistance. Targets are at the 106 level with the eventual
physiological 100 level or resistance.

Hook of death
https://fred.stlouisfed.org
10-Year Treasury Constant Maturity Minus 3-Month Treasury Constant Maturity.
Inverted yield curve often precedes a major market decline. So far so good.

Rate Watch
Chartsource:cmegroup
 Fed Funds Rate @ 0.50: market projects a 94.9% chance that there will be a rate hire in December
 Prime Rate @ 3.50: stable from a year ago
 FOMC’s‫‏‬Rate‫‏‬Projection from the Dot Plot: currently projecting 2017 @ 1.00-1.25 % and 2018 @ 1.75-2.00%

Sector Analysis: month over month performance
Outperformers: Financials and Energy
Underperformers: Health Care and Consumer Staples

Stock Averages
Number of Stocks Above 20-Day Moving Average
Indicator is in the overbought area with over 76% of all stocks above their 20 day moving averages.

Economic Calendar
http://www.bloomberg.com/markets/economic-calendar/
http://www.marketwatch.com/Economy-Politics/Calendars/Economic
October payroll figures were solid. Average hourly earnings and government payrolls increased. Unemployment is at 4.9%
Decline in imports helped to pull down the national trade gap, a plus for GDP. National deficit with China narrowed.

Headlines of the week
Notable‫‏‬covers‫‏‬and‫‏‬headlines‫‏‬from‫‏‬world’s‫‏‬most‫‏‬read‫‏‬publications
As Princeton economist Paul Krugman wryly noted, "Whom the Gods would destroy, they first put on the cover of Business Week."

Personal Finance - The Richest Man in Babylon
Make thy gold
multiply
Make of thy
dwelling a
profitable
investment
Guard thy
treasures from
loss
Seven Cures for a
Lean Purse
Start thy purse
to fattening
Control thy
expenditures
Increase thy
ability to earn
Insure a future
income
Goddess of Good Luck smiles upon those who
work hard, save their money, and invest well.
She doesn't really patronize professional
gamblers, who always seem to end up poor
Meet the Goddess of Good Luck Five Laws of Gold (Money)
• Mentors, Books
• Seminars, ExperienceLearn
• Business, Investment
• Knowledge, Attitude, SkillsMaster
Pay
• Yourself first
• Save 10% of earnings
Invest
• Business
• Real estate
• Stocks
• Scams
• Trickeries
• Get rich schemes
Avoid
The Richest Man in Babylon is a book by George S. Clason which dispenses financial advice through a
collection of parables. Through their experiences in business and managing personal finance, the
characters in the parables learn simple lessons in financial wisdom.

Investing & Trading Blueprint
http://www.investors.com
IBD's 10 Secrets to Success – great blueprint to improve your trading, investing, as well as every day
activities and personal goals:

Pravda analytics technical monthly review for december 2016

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