The Week Ahead

Well there's certainly been no lack of news and some that would break out the tinfoil hats and say, "There are few coincidences", while the way government is run may be interesting, there are some other words spoken recently that do pertain to us and I would say, There are no coincidences and I'll get to those in a moment.

First the open of futures for the new week, the Kiwi had a nasty surprise open, but not too many of us are trading the Kiwi.

Lets start with the Nikkei 225 futures...

 This is the 5 min chart, it's not looking great for the Nikkei 225 futures. Interestingly 3C weakness turned to price weakness at "A" and hasn't recvoered, but seen a deeper divegrence.

 The 30 min chart shows the 5 min chart to the far right, what I think is interesting here is the 4 stages of a trend I talk about and they can be in any trend timeframe whether weekly, daily or intraday. 

Stage 1 accumulation and we even have a typical double bottom base with 3C positive divergences.

Stage 2 "Mark Up" in green

To the left we see stage 3 "Distribution and we see the same right around the current area and back to the left after stage "3"...

Stage 4 "Decline". It looks like the Nikkei is heading toward stage 4 soon.

This 4 hour chart shows the 30 min trend above to the far right as part of a much larger Stage 4 (the green should have been marked stage 2 (mark up), so it looks like a shorter trend top in a much bigger trend transitioning to decline.

As for US Index futures tonight, there's not much excitement and I don't like 1 min. charts for overnight, but on Friday after HYG was used just as predicted Thursday, the market really seems to be grabbing at any straw after the USD/JPY could only push it up overnight and a trading day before failing.

 All of these charts are similar, this ES 5 min shows 3C weakness and Friday weakness on the NFP in price, 3C hasn't recovered.

The same is seen in NQ with what is a longer trend.

And the same in Russell 2000 futures.

As for Gold where a recent call was opened...

 On the gold futures a negative 3C divergence brings gold down, but there's a nice positive in to the Friday lows, I still like this as a short term position.

The GLD 4 hour chart though, and those of you who have been around probably remember when we called either an intermediate or primary top in gold, gold moved to a primary downtrend.

However this 4 hour chart makes me wonder if gold will just make another longer term leg lower or if it is working on a longer term base, for now we'll get through the short term GLD long (Call).

As for Oil (what a week for oil with the news)...

 Oil futures (Brent) 5 min look like there could be a move to the upside, it doesn't look huge.

However the 4 hour chart ted to confirm what I've been expecting, Oil looks to be making a larger top, I think there will be some neat opportunities in energy and oil this week.

I looked at the 10 year US treasury and I'm not sold, but it's TLT, the 20 year + that I like and the 30 year treasury futures look a lot better to me than the 10 year.

 The 30 year really popped Friday morning on the Non-Farm Payrolls, we had entered a position (add-to) the day before. The very short term 1 and 5 min charts look as if it will give some of that back, but I'm interested in the longer term here, it always has been.

This 4 hour chart looks a WHOLE lot like the long term TLT charts, the distribution and recent positive divergences, I don't pretend to know why, I just try to follow where the money is going, I have several speculative thoughts, but that's neither here nor there.


WHAT WAS INTERESTING AND TO ME, BEYOND COINCIDENCE... was news out of several MAJOR Private Equity Funds.

I believe the last 4 times GS came out with a FREE trade rec'd for us, people they'll NEVER do business with, the trades went EXACTLY the opposite of what they said, I think the last was "Buy the EUR/USD" and it was promptly stopped out on a WIDE stop.

Do I think GS was wrong? No, I don't, I think they don't give out free research they pay a lot of money for to make you money, I think they were on the opposite side of that trade recommendation and I know there have been more, but I seem to remember the last 4 in a row going against their recommendation and I'm sure they made out well.

Along those same lines... Last week we saw 3 MAJOR Private Equity funds come out in unison, in fact on the same day, 8/1. First Apollo's Leon Black at the Milken Institute in late April said that they've been SELLING EVERYTHING NOT NAILED DOWN OVER THE LAST 15 MONTHS and have taken out $13 bn in realized gains.

I believe the quote was, "The market is too pricey... in our view, priced for perfection" (if you are a seller of course).

So last week when Apollo followed by Blackstone and then the Private equity mega-fund, Fortress (as if Apollo and Blackstone weren't mega-funds) have said in several ways they are selling, have been selling for a long time or are basically out, one was to an investor call.

I believe the quote there was, "There's been more UNCERTAINTY "fed" into the markets" and if there's one thing smart money hates, its uncertainty.

15 months of straight selling huh? I don't find it hard to believe, we've seen a lot of it, BUT THAT IS A LOT OF SELLING, NOT A 20% PULLBACK.

Then we get this very handy chart from B of A, net institutional sales vs net retail buys...

 It looks like the last serious accumulation area for smart money was right around late December or November of last year.

The point is, when 3 huge, well respected private equity funds come out in chorus and say, "It's time to sell the market", they aren't doing retail any favors, retail can't do business as accredited investors with these guys, it's like the GS situation.

In my view, the 3 saying the same thing all last week would mean they either want to buy, or they are in place to sell and just need to change retail sentiment a but which we saw last week was off the charts with a Tweet that summed up sentiment, a long retail trader who had EVERYTHING in and was looking for a way to put more in.

Like I said, if they are saying, "Sell", there's two reasons in my view, they want to buy and I really doubt that up here with the F_E_D taper coming or they want to jumpstart downside/bearish sentiment and momentum, a sort of psychological head fake.

Buy the way, we have four F_E_D speakers over the next 3-days....

See you in a few hours...