We are witnessing an incredible melt up in stocks – all time highs in the DOW, S&P 500, Transports, Russell 2000, etc….
At the same time – Bonds are getting crushed:
- Business Insider – Bond markets everywhere are getting destroyed
Both moves suggest Inflation is just around the corner.
If stocks keep going up, I will need to sell more of my equity holdings – the air is getting thin up at these highs – never hurts to take some profits. Here are the numbers:
The following table is based on the Z Option Market Analysis Tool – which determines if a market is trending by assigning a trending score from -3 to +3. This helps us keep our trading with the trend.
| Symbol | Description | Short Term Trend | Medium Term Trend |
| $DJI | Dow Jones Industrial Average | 3 | 3 |
| SPX | S&P 500 INDEX | 3 | 3 |
| RUT | RUSSELL 2000 INDEX | 3 | 3 |
| NDX | NASDAQ-100 INDEX INDEX | 2 | 3 |
| VIX | CBOE MARKET VOLATILITY INDEX | -3 | -3 |
| /ZB[H7] | 30-Year U.S. Treasury Bond Futures,ETH | -3 | -3 |
| /ZN[H7] | 10-Year U.S. Treasury Note Futures,ETH | -3 | -3 |
| /GC[G7] | Gold Futures, ETH | -3 | -3 |
| /CL[F7] | Light Sweet Crude Oil Futures,ETH | 3 | 3 |
| /DX[Z6] | US Dollar Index Futures | 3 | 3 |
| $DJT | Dow Jones Transportation Average | 3 | 3 |
| XLK | SELECT SECTOR SPDR TRUST TECHNOLOGY SELECT INDEX | 3 | 3 |
| XLI | SELECT SECTOR SPDR TRUST INDUSTRIAL SELECT INDEX | 3 | 3 |
| XLY | SELECT SECTOR SPDR TRUST CONSUMER DIS SELECT INDEX | 3 | 3 |
| XLB | SELECT SECTOR SPDR TRUST MATERIALS SELECT SEC INDEX | 3 | 3 |
| XLE | SELECT SECTOR SPDR TRUST ENERGY SELECT INDEX | 3 | 3 |
| XLP | SELECT SECTOR SPDR TRUST CONSUMER STAPLES INDEX | 2 | -1 |
| XLV | SELECT SECTOR SPDR TRUST HEALTH CARE SELECT INDEX | -3 | -3 |
| XLU | SELECT SECTOR SPDR TRUST UTILITIES SELECT INDEX | 2 | -1 |
| XLF | SELECT SECTOR SPDR TRUST FINANCIAL SELECT SECTOR FUND | 3 | 3 |
Any market showing a 3 or a -3 is trending strongly – and should be factored into any options strategy you are contemplating.
Bonds and Gold continue their down move along with Healthcare stocks – Bond replacement equities are flat – everything else is rallying to the moon. Trump must be a genius!
Extra – Recommend you keep an eye on valuations during this rally – Shiller PE Ratio:
- Current Shiller PE Ratio: 27.74
- Mean: 16.71
- Median: 16.05
Speaking of Robert Shiller – he was on CNBC today:
Leave a Reply