. 14 November 2012
My last post stressed the weakness of Canadian banks and suggested that Canada (and Europe) was going to join the American selling party. Today, I 'm suggesting Australian banks are vulnerable here -- and I'm also suggesting (just suggesting) that the housing bubbles in both countries are going to pop. Both country's have historical Debt Bubbles generated by low interest rates (too low for too long) and by housing bubbles.
I don't intend this blog to be about the Canadian/Australian housing bubbles -- and the effects on banks in a declining economy. But both countries have historic housing bubbles, both much more overbought and excessive than the US housing bubble. I will visit this issue some other time.
Today I want to show a relatively new indicator I am using to screen stocks -- its my CGTS Differential Weekly Moving indicator; and this indicator gave us this screen today. We look at the top and the bottom 25 using this screen. And what we see is that the top 25 have an amazing similarity: they are almost all inverse ETFs, that profit when stocks fall.
We have charts of some of the top 25; and we have charts of the bottom 25, emphasizing our theme for the night: Australian banks seem to be topping; and US housing stock are starting to break apart, one by one.
We see gold stocks valiantly trying to resists selling; US TBonds are hot again; the US Dollar is gaining strength by the day -- all signs that the selling in the markets is getting stronger.
|TOP 25||CGTS Diff WEEK|
|2||TZA||5||Direxion Daily Small Cap Bear|
|3||TSU||5||TIM Part (Tele Cellular)|
|4||PSQ||5||Short QQQ Index ETF|
|5||TWM||5||Short Russell 2000 Index ETF Daily|
|6||SBB||5||Short Small Cap 600 S&P ETF Daily|
|7||QID||5||Short NASDAQ Index ETF|
|8||RWM||5||Short Russell 200 Index ETF Daily|
|9||EWV||5||Short MSCI Japan ETF Daily|
|10||EPV||5||Short MSCI Europe ETF|
|11||REW||5||Short Technology ETW Daily|
|12||BZQ||5||Short Brazil Shares ETF|
|13||IEF||5||7-10 Year TBond Fund|
|14||TIP||5||Barclay's TIPS Bond|
|15||SMN||4||Short Basic Materials|
|16||MUB||4||I-Shares Muni Bond Index|
|17||SDP||4||Short utilities ETF Daily|
|18||EFZ||4||Short MSCI EAPE Index ETF Daily|
|22||UUP||3||US DOLLAR INDEX BULLISH ETF|
|24||SDD||3||Short Small Cap Index ETF Daily|
|25||SIJ||3||Short Industrials ETF Daily|
|21||TYO||-5||Short 10-Year TBond ETF|
|19||ANZ.AX||-5||Australia/New Zealand Banking|
|18||BZF||-5||Brazilian Real long currency|
|16||NAB.AX||-5||National Bank of Australia|
|15||EUFN||-5||Euorpean Financial Index|
|14||BBD||-5||Banco Brandesco SA|
|13||HPQ||-5||Hewlett Packard Daily|
|12||EWM||-5||Malaysia Index ETF|
|11||SFL||-5||Ship Finance Intl.|
|9||CSCO||-5||Cisco Systems Daily|
|8||MAKO||-5||Mako Surgical Corp|
|6||EWJ||-5||Japan Index ETF|
|4||BBVA||-5||Banco Bilbao Argent SA|
|1||^TNX||-5||10-Year CBOE Interest Rate|
Let me reiterate: the indicator in use for tonight's report is the very light yellow indicator appearing in the pane second from the top. Usually, when it spikes up, it indicates a buying opportunity.
IMMR, Immersion Robotics, looks very strong at the moment. But remember, the direction of the markets is DOWN; so any counter-movement stock needs to be watched carefully.
TSU is giving a buy signal through the CGTS 5-Day Differential -- but it has not really moved much yet. Everything seems in place for a good move up.
QID, the inverse Nasdaq ETF, is the strongest of the three issues here overall. The picture of QID should be enough to encourage bulls who are holding on that this is no ordinary selling in the making.
Here come the Aussie banks and one US housing stock that we really feel are all three ready for new short positions.
NAB, National Australian Bank: Short.
ANZ, Australia/NewZealand Bank: Short.
BZH, Beazer Homes: Short.
All three issues are showing accelerated selling and all are breaking down through support and trend levels. A careful examination of all three panes will show our technical logic for assuming these issues are breaking down.
Need to run. Best of luck with trading.
Michael J. Clark
CGTS, Hanoi, Vietnam