Weekend April 27, 2014
Last Weekend we noted the markets were getting more defensive. This week is likely the last week that might be up, even then if a rally happens it is likely it will result in lower highs across many indexes.
Biotech
From its blow off top, the biotech index has declined some 600 points. MACD is headed down, and this is a weekly chart.
Amazon - the Leader of the Internet Pack - Daily
Amazon trades at a 514.97 p/e after losing a fourth of its value this year.
On page B 14 of the Weekend WSJ Amazon the Never Ending Story notes that yes sales wre up 23% but the stock fell a whopping 9% Friday on continued capital expenditures. This is a daily chart but demonstrates how fast AMZN is falling.
Amazon has a fabulous service product, I use them all the time. But the inability to turn this into a profitable company with reasonable returns has investors running out the door.
Texas Instruments
The next sentence perfectly sums up the summer months ahead.
TXN could lose one third of its value and then just test the 200 week MA.
NDX NASD 100
This chart really looks awful.
CCH has spent the year in decline.
The uptrend from October has been broken and backtests of that line have failed.
The MAs have flattened.
One can see a head and shoulders pattern with a neckline about 3490. A weekly close under that will likely turn this index downfor the summer, at least.
TLT bonds versus NDX
Our call to go long bonds was correct. Bonds turned up relative to stocks in January, made ahigher low in March, and are off again. The 50 day MA has crossed two of the MAs showing good strength.
Oil via USO Outperforming Stocks
One can argue oil is still consolidating versus stocks.But the MAs are moving up. This looks like a prepartion for a big break out to the upside ala 2008 or at leat an outperformance of stocks by oil.
Oil Service XES
XES reached the top of its uptrend channel. It might pull back to the lower uptrend line. It has done this each time the RSI has been this overbought.
The Single Best Indicator NYSE Advance Decline Line
So far no signs of slowing but it is also the highest aove the 200 week MA that it has been since the crash of 2008. But with the single best indicator stil headed up the fireworks may not have ended.
Caution Takes Center Stage - Utilities and REITs
As investors have moved out of biotech, semis, and internet stocks. more conservative plays like Utilities and REITs have gained favor.
After May Go Away
I had been looking for a final top the first weekend of May. Unless stocks can Friday's big down day, things are looking very toppy here. We have ben writing about this for some time and now that time is here.
Thanks for reading The Market Perspective
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