Sunday, May 15, 2022

ETF composition – Invesco DBA

Invesco DB Agriculture Fund (DBA) : The fund is composed of futures contracts on some of the most liquid and widely traded agricultural commodities.
  • Source
  • Avg. Volume 3,673,278  (5/13/22)
  • Expense Ratio (net) 0.85%
(5/13/22)
NAMECONTRACT EXPIRY DATE% OF NET ASSETS
CornCBOT Corn Future09/14/202215.00
SoybeansCBOT Soybean Future11/14/202213.49
SugarNYBOT CSC Number 11 World Sugar Future09/30/202210.94
Live CattleCME Live Cattle Future08/31/202210.19
CoffeeNYBOT CSC C Coffee Future07/19/202210.13
CocoaNYBOT CSC Cocoa Future07/14/20229.18
WheatKCBT Hard Red Winter Wheat Future07/14/20228.94
WheatCBOT Wheat Future07/14/20228.20
Lean HogsCME Lean Hogs Future07/15/20227.50
Feeder CattleCME Feeder Cattle Future08/25/20223.23
CottonNYBOT CTN Number 2 Cotton Future07/07/20223.22
100.02

  
daily, weekly, monthly charts

Wednesday, May 4, 2022

Market update: Federal Reserve hikes short-term rates by 0.50% (4 May 2022)

The Federal Reserve increased short-term interest rates on Wednesday, as expected, raising the fed funds target range by 50 basis points to 0.75-1.00%the biggest increase in 22 years.  The stock market surged and Treasury yields fell as Fed chief Jerome Powell signaled supersize rate hikes are off the table in June and July.



Fed chief Powell says it's crucial that inflation is brought down quickly. But Powell said he sees rate hikes of "50 basis points" on the table for the next couple of Fed meetings. He added that policymakers aren't actively considering 75 basis points. Markets had priced in a good chance of three-quarters of a point hikes at the June and July Fed meetings.

Fed chief Powell's less-hawkish-than-feared rate-hike forecast sent stocks sharply higher and Treasury yields lower.

Dow Jones Industrial Average -6.3% YTD
S&P 500 -9.8% YTD
Russell 2000 -13.2% YTD
Nasdaq Composite -17.1% YTD

 
 All 11 S&P 500 sectors closed higher with gains ranging from 1.1% (real estate) to 4.1% (energy). Ten sectors advanced more than 2.0%.
 

Tuesday, May 3, 2022

Candlesticks: Hammer

One of the most visually compelling candlestick patterns is the hammer signal. This signal is easily recognized by the lower shadow also known as the tail that protrudes to the downside after an extended downtrend.


The hammer signal is comprised of one candle and it is easily identified by the presence of a small body with a shadow at least two times greater than the body. It is found at the bottom of a downtrend and this shows evidence that the bulls started to step in. The color of the small body is not important but a white or green candle has slightly more bullish implications than a black or red body. A positive day is then required the following day to confirm this signal.

Criteria for the hammer signal

  • The lower shadow should be at least two times the length of the body.
  • The real body is at the upper end of the trading range. The color of the body is not important although a white or green body should have slightly more bullish implications.
  • There should be no upper shadow or a very small upper shadow.
  • The following day needs to confirm the hammer signal with a strong bullish day.

Signal Enhancements
  • The longer the lower shadow the higher the potential of a reversal occurring.
  • A gap down from the previous day’s close sets up for a stronger reversal move as long as the day after the Hammer signal opens higher.
  • Large volume on the Hammer day increases the chances that a blow-off day has occurred.
Pattern Psychology
After a downtrend has been in effect the atmosphere is very bearish. The price opens and starts to trade lower. The bears are still in control but the bulls then step in and they start to bring the price back up towards the top of the trading range. This creates a small body with a large lower shadow and represents that the bears could not maintain control. The long lower shadow now has the bears questioning whether the decline is still intact and a higher open the next day would confirm that the bulls had in fact taken control.

Monday, May 2, 2022

Nasdaq 100 valuations return to pre-pandemic levels

The P/E ratio of the Nasdaq 100 has returned to pre-pandemic levels. In theory, that would indicate all the steam has been let out. But think back to the conversations investors were having in late 2019 and early 2020. It bore a resemblance to the same issues being talked about now: extreme valuations, a slow down in growth, a tight labor market and a prolonged rally thanks to Fed support.


If those concerns were surfacing at pre-pandemic valuations, then returning to those levels doesn't necessarily bolster the bull case as is the instinct to do. (Especially with the same issues.) Instead, it signals there may be more selling as markets recalibrate.

Wednesday, April 6, 2022

Home building stocks are falling

Prior to the 2008 recession, home building stocks took the nose dive first, in 2005 & 2006.
Then they fell off cliffs in 2007 & 2008.

Now home building stocks are falling, all below the 200d ma, stage 4.

This isn't 2008 but something to watch.
 

Tuesday, April 5, 2022

Dow Transports drops 10% in five trading sessions

The Dow Jones Transportation Average has dropped nearly 10% in the last five trading sessions including today. Historically, this index is watched as a harbinger of what's to come in the broader stock market, so when investors see a move like this, many interpret it as a signal of a broader sell off to come. But there's two sides of this argument.


Starting with the bear case, Bloomberg Macro Strategist Cameron Crise crunched the numbers in his column today, comparing the relative performance of the S&P 500 and the Transports Index. Last week's decline was its 7th-worst day against the broader market since 1928, according to Crise. When looking at other occurrences, he noticed this kind of move is only seen after some of the most traumatic episodes in U.S. market and economic history

But there's another side to this. One of Bloomberg TV's markets producers Dan Curtis examined a different set of data. Since 2010, the index has fallen 5% or more in a week 124 times. 85 of those times, the S&P 500 was higher a month later. In other words, about 2 out of 3 times, the S&P 500 rallied one month after a significant drop in the Transports Index. That debunks the Dow Theory. 

Given the Dow Transports mostly hold railroads, airlines and shipping companies, it serves as a proxy for economic activity in the United States.

Sunday, April 3, 2022

Chinese stocks

China is the world's most-populous nation and the second-largest economy, with a booming urban middle class and amazing entrepreneurial activity. 
Hundreds of Chinese companies are listed on U.S. markets.  Chinese stocks are often among the top performers at any given time, across an array of sectors.


Internet stocks (e-commerce, messaging, mobile gaming):
  • Alibaba (BABA)
  • JD.com (JD)
  • Pinduoduo (PDD)
  • Tencent (TCEHY)
  • Vipshop (VIPS)
  • Baidu (BIDU)
  • Tencent Music Entertainment (TME)
  • NetEase (NTES)
  • Trip.com (TCOM)
  • Dada Nexus (DADA)
  • Bilibili (BILI)
  • Joy (YY)
  • KE Holdings (BEKE)
Electric vehicles
  • Nio (NIO)
  • Xpeng Motors (XPEV)
  • Li Auto (LI)
  • BYD Co. (BYDDF)
Financial firms and brokerages
  • Futu Holdings (FUTU)
  • Up Fintech Holding (TIGR)
  • 360 DigiTech (QFIN)
  • Noah Holdings (NOAH)
Solar power
  • Daqo New Energy (DQ)
  • JinkoSolar (JKS)
For-profit education
  • New Oriental Education (EDU)
  • TAL Education (TAL)
  • 17 Education & Technology Group (YQ)
  • Gaotu Techedu (GOTU), formerly known as GSX Techedu.
Others
  • riding-hailing outfit Didi Global (DIDI), beauty products maker Yatsen (YSG) or data-center operator GDS Holdings (GDS)

China Stock Investing Via ETFs
KraneShares CSI China Internet ETF (KWEB) tracks major Chinese internet companies. Many Chinese stock holdings in the KWEB ETF are U.S. listed or traded, such as Alibaba stock, JD.com, Tencent, Pinduoduo and Bilibili, but KWEB also holds companies listed on Chinese markets. Direxion Daily FTSE China Bull (YINN) is a three-times-leveraged ETF of the 50 largest companies listed in Hong Kong, including Alibaba, JD.com and Tencent stock, but its biggest weights are in financials. (The Direxion Daily FTSE China Bear (YANN) is a three-times-leveraged ETF shorting Hong Kong's biggest companies.)