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Strategies & Market Trends : John Pitera's Market Laboratory
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To: The Ox who wrote (18769)2/24/2017 11:21:17 AM
From: John Pitera1 Recommendation

Recommended By
Hawkmoon

   of 33421
 
Thanks OX, The semi's have really outperformed on a 5 year basis. You can see on this chart that the SPX is up 72% in the last 5 years, the SPX tech sector has been up 86% and the semi's have been up 132%... they have been the leading edge or Zeitgeist of the market in a sense.



Since Dec the Semis performance relative to the SPX technology index has begun to stall and has been underperforming.



The Semis performance to the SPX --- the Semi's have checked back to the uptrend line on at least 5 occasions since the later part of 2015. Yesterday was the 1st day that the Semi's broke down through the uptrend line in regards to their relative performance to the SPX technology index.



Over the past 5 years the Semi's have periodically checked back to their 150 dma and in the case where they went below it they then went up and bounce off of the 150 dma. Right now it's been over 8 months since they have checked back to their 150 dma which is about as long in time as they can go without having a mean reversion check back to the 150 day trend.



and thus the Semiconductor Index should be in for an 8 to 10% correction back to the 150 DMA. As they have been a leading edge of the bull market, it increases the likelihood that the Overall market is preparing to have either a sideways corrections.... or a reversion to the mean corrective adjustment.

The Banks and Financials have also stopped outperforming on a relative basis and peaked in outperformance on Dec 8th 2016.



#Breeeze was kind enough to PM me a chart of the DJIA monthly going back to 1980. The DJIA monthly line chart further above the Keltner band than at any time since 1980.... so we have been experiencing exponential price action.... while getting massively above the upper keltner channel.

What is remarkable about this chart is that the sustained momentum that we experienced from 1996 to early 2000 gave us much more powerful momentum readings on the 14 period RSI and yet we stayed largely within the Keltner channel.... on this most recent surge above the Keltner we have done so with the monthly RSI mometum at a relatively modest 75.22 level, less than the highs in the RSI momentum in the 1996 -2000 super bull market as well as the super bull market years of mid 1984 thru 1985 and the powerful year that preceeded the August 27th top in 1987.



Here is Carter's presentation from last evenings fast money show.

video.cnbc.com

He's all most always insightful.

The March VIX index has already zoomed up to 14.10 this morning at a couple of short term 3 minute intervals during the 9 AM to 10 AM hour and pulled back swiftly to 13.50 by 11:22 am. If enough fear and hedging is generated in rapid order ..... the less of a check back we see.... (this last paragraph is micro short term stuff)



JP
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