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Jim Van Meerten
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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs and Seeking Alpha. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and... More
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  • Caution - But No Need To Panic

    The signs say we are near the top of the Market. No one, especially myself, can tell you the date or the price at the top but a little common sense can tell you if the top has been reached and which side of the wave we are on.

    The Conference Board says the Leading and Coincident Economic indicators are still on the rise:

    Their Press Release:

    The Conference Board Leading Economic Index® (NYSEMKT:LEI) for the U.S. Increased Again
    NEW YORK, June 18, 2015…The Conference Board Leading Economic Index® for the U.S. increased 0.7 percent in May to 123.1 (2010 = 100), following a 0.7 percent increase in April, and a 0.4 percent increase in March.

    "The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half," said Ataman Ozyildirim, Director, Business Cycles and Growth Research, at The Conference Board. "While residential construction and consumer expectations support the more positive outlook, industrial production and new orders in manufacturing are painting a somewhat more mixed picture."

    The Conference Board Coincident Economic Index® (CEI) for the U.S. increased 0.1 percent in May to 112.1 (2010 = 100), following a 0.2 percent increase in April, and no change in March.
    The Conference Board Lagging Economic Index® (NYSEARCA:LAG) for the U.S. increased 0.2 percent in May to 117.0 (2010 = 100), following a 0.2 percent increase in April, and a 0.5 percent increase in March.

    The Value Line Arithmetic Index has been on a tear for the last 5 years as is shown on this weekly chart:

    But a closer look at this daily chart over the last year appears to indicate its running out of steam:

    Value Line each week gives a scorecard on 3 great Market indicators:

    The Markets Price Earnings ratio:

     

    • 18.9 Presently
    • 19.3 Market peak 5/21
    • 19.0 26 weeks ago


    The Markets Dividend Yield:

     

    • 2.1 Presently
    • 2.0 Market Peak 5/21
    • 2.0 26 weeks ago


    Market Appreciation Potential:

     

    • 40% Presently
    • 35% Market Peak 5/21
    • 30% 26 weeks ago


    The Market has clearly run out of steam and hasn't made any significant progress over the last 6 months. The Value Line Index is only 3.70% off its previous high.

    My Conclusion: No need to sell out in PANIC but at the same time you need to evaluate each of your holdings and decide at what price will you sell. Don't wait - be proactive and rational not reactive and emotional.

    Jul 06 9:14 AM | Link | Comment!
  • Barchart Morning Call 7/6

    BARCHART MORNING CALL

    Monday, July 6th, 2015

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    OVERNIGHT MARKETS AND NEWS

    September E-mini S&Ps (ESU15 -0.63%) are down -0.62% at a 3-month low and European stocks are down -1.73% at a 4-3/4 month low after Greek voters voted 'No' to austerity measures. The ECB will meet today to discuss its next move and German Chancellor Merkel will meet with French President Hollande today before Eurozone leaders meet on Tuesday. Stocks recovered from their worst levels after Greek Finance Minister Vaoufakis resigned, which boosted speculation a last-minute deal with Greece's creditors was possible. Another positive for European stocks was the upward revision to the Eurozone Jun Markit composite PMI which was revised higher to its best level since the data series began in 2012. Asian stocks closed mostly lower: Japan -2.08%, Hong Kong -3.18%, China +2.41%, Taiwan -1.09%, Australia -1.14%, Singapore -0.29%, South Korea -2.50%, India +0.41%. China's Shanghai Composite closed higher after the government over the weekend suspended initial public offerings and the PBOC said it would provide liquidity for margin trading.

    Commodity prices are mostly lower. Aug crude oil (CLQ15 -2.32%) is down -4.67% at a 2-1/2 month low, Aug gasoline (RBQ15 -1.57%) is down -3.31%. Metals prices are mixed. Aug gold (GCQ15 -0.30%) is up +0.07%. Sep copper (HGU15 -3.04%) is down -3.93% at a 5-month low. Agricultural prices are weaker as a stronger dollar and drier weather pressured grain prices.

    The dollar index (DXY00 +0.38%) is up +0.35% at a 1-month high. EUR/USD (^EURUSD) is down -0.71% at a 1-week low. USD/JPY (^USDJPY) is up +0.09%.

    Sep T-note prices (ZNU15 +0.26%) are up ticks at a 5-week high as global government bonds rally after the Sunday's Greek 'No' vote to austerity increases the chances that Greece will be forced to exit the Eurozone.

    In an attempt to stop the recent plunge in Chinese stocks, China's State Council suspended initial public offerings and the China Securities Regulatory Commission (CSRC) said 21 brokerages pledged not to reduce any proprietary investments in the equity market as long as the Shanghai Composite Index stays below 4,500. The PBOC also said it will offer China Securities Finance Corp., which manages China's short selling and margin trading, liquidity support, according to a statement on the CSRC website on Sunday.

    U.S. STOCK PREVIEW

    Key U.S. news today includes: (1) final-Jun Markit U.S. services PMI (expected +0.1 to 54.9 after prelim-Jun -1.4 to 54.8), (2) Jun ISM non-manufacturing index (expected +0.7 to 56.4 after May's -2.1 to 55.7), and (3) Jun Labor Market Conditions Index (expected 2.0 vs May's 1.3).

    None of the Russell 1000 companies report earnings today.

    U.S. IPO's scheduled to price today include: NephroGenex (NASDAQ:NRX).

    Equity conferences this week: none.

    OVERNIGHT U.S. STOCK MOVERS

    Celanese (CE +2.39%) was downgraded to 'Neutral' from 'Buy' at UBS.

    Intuitive Surgical (ISRG +0.09%) was downgraded to 'Underweight' from 'Equal Weight' at Morgan Stanley.

    Guess (GES -0.88%) was upgraded to 'Neutral' from 'Underweight' at Piper Jaffray.

    Aegerion (AEGR -1.27%) was downgraded to 'Sell' from 'Neutral' at Guggenheim.

    VMware (VMW +0.40%) was downgraded to 'Market Perform' from 'Outperform' at FBR Capital.

    Bank of America (BAC -1.10%) and Citigroup (C -0.56%) both fell over 1% in pre-market trading as financial stocks fell across the globe following the results of the Greek referendum.

    Humana (HUM -2.92%) jumped over 8% in pre-market trading after Aetna agreed to buy the health insurer for about $35 billion,

    The Financial Times reported that Royal Bank of Scotland (RBS +0.89%) could potentially face a judgment of nearly $13 billion in a case related to the subprime mortgage crisis.

    Pershing Square reported a 13.2% stake in Howard Hughes (HHC -0.81%) .

    Man Group reported a 5.31% stake in Perfect World (PWRD -0.25%) .

    Point72 Asset Management reported a 5.1% passive stake in SPX Corp. (SPW -0.65%) .

    Frigate Ventures reported a 6.8% passive stake in Novogen (NVGN unch) .

    MARKET COMMENTS

    September E-mini S&Ps (ESU15 -0.63%) this morning are down -12.75 points (-0.62%0 at a 3-month low. Thursday's closes: S&P 500 -0.03%, Dow Jones -0.16%, Nasdaq +0.09%. The S&P 500 on Thursday settled slightly lower on (1) the slightly weaker-than-expected +223,000 increase in U.S. Jun payrolls and the downward revision in May payrolls to +254,000 from +280,000, and (2) the -1.0% drop in U.S. May factory orders, weaker than expectations of -0.5%. On the supportive side for stocks, the U.S. Jun unemployment rate fell -0.2 to a 7-year low of 5.3%, a bigger decline than expectations of -0.1 to 5.4%.

    Sep 10-year T-notes (ZNU15 +0.26%) this morning are up +24.5 ticks at a 5-week high. Thursday's closes: TYU5 +13.00, FVU5 +10.00. Sep T-notes on Thursday closed higher on the weaker-than-expected +223,000 increase in U.S. Jun payrolls and Jun average hourly earnings, which may push back the timing of a Fed interest rate increase.

    The dollar index (DXY00 +0.38%) this morning is up +0.341 (+0.35%) at a 1-month high. EUR/USD (^EURUSD) is down -0.0079 (-0.71%) at a 1-week low. USD/JPY (^USDJPY) is up +0.11 (+0.09%). Thursday's closes: Dollar Index -0.197 (-0.20%), EUR/USD +0.00312 (+0.28%), USD/JPY -0.116 (-0.09%). The dollar index on Thursday settled lower on (1) the weaker-than-expected U.S. Jun payroll and average hourly earnings reports, which may push back a Fed interest rate increase, and (2) strength in EUR/USD on short covering ahead of the July 5 Greek referendum.

    Aug WTI crude oil (CLQ15 -2.32%) this morning is down sharply by -$2.66 (-4.67%) at a 2-1/2 month low. Aug gasoline (RBQ15 -1.57%) is down -0.0673 (-3.31%). Thursday's closes: CLQ5 -0.03 (-0.05%), RBQ5 +0.0275 (+1.37%). Aug crude oil and gasoline on Thursday settled mixed. Crude oil received support from a weaker dollar and the close-to-expected increase in U.S. Jun payroll report, which signals moderate economic growth that is beneficial for energy demand. Crude oil prices were undercut by the afternoon report from Baker Hughes that U.S. active oil rigs rose by +12 rigs to 640 rigs, the first increase in nearly 7 months.

    GLOBAL EVENT CALENDAR07/06/2015

    US0945 ETFinal-Jun Markit U.S. services PMI expected +0.1 to 54.9, prelim-Jun -1.4 to 54.8. Final-Jun Markit U.S. Composite PMI, prelim-Jun -1.4 to 54.6.
     1000 ETJun ISM non-manufacturing index expected +0.7 to 56.4, May -2.1 to 55.7.
     1000 ETJun Labor Market Conditions Index expected 2.0, May 1.3.
     1100 ETUSDA weekly grain export inspections.
     1600 ETUSDA weekly crop progress.
    JPN0100 ETJapan May leading index CI expected -0.1 to 106.3, Apr 106.4. May coincident index expected -1.7 to 109.3, Apr 111.0.
    GER0200 ETGerman May factory orders expected unch m/m and +4.4% y/y, Apr +1.4% m/m and +0.4% y/y.
     0330 ETGerman Jun Markit construction PMI, May 50.8.
    UK0400 ETUK Jun new car registrations, May +2.4% y/y.
    EUR0430 ETEurozone Jul Sentix investor confidence expected -1.6 to 15.5, Jun 17.1.

    U.S. STOCK CALENDAR07/06/2015

    CompanyTickerTimeEvent DescriptionPeriodEstimate
    AetnaAET US8:30Acquisition of Humana Inc by Aetna Inc Call  
    HumanaHUM US8:30Acquisition of Humana Inc by Aetna Inc Call  
    A Schulman IncSHLM USAft-mktQ3 2015 Earnings ReleaseQ3 20150.77

    Tags: CE, ISRG, GES, AEGR, VMW, BAC, HUM, RBS, HHC, PWRD, SPW, NVGN, AET, SHLM
    Jul 06 8:39 AM | Link | Comment!
  • Primo Water - Sell Signals

    Today I deleted Primo Water (NASDAQ:PRMW) from the Barchart Van Meerten Speculative portfolio for negative price momentum:

    Barchart technical indicators:

     

    • 32% Barchart technical sell signals
    • Trend Spotter sell signal
    • Below its 20 and 50 day moving averages
    • 13.82% off its recent high
    • Relative Strength Index 32.69%
    • Recently traded at 5.55 which is below its 50 day moving average of 5.93
    Tags: PRMW
    Jul 03 11:42 AM | Link | Comment!
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