Market Volatility | Mike Follett | 9-10-19

hello there and welcome everybody class
this is Mike Follette speaking you have found your way to market volatility
it’s a webcast we do every Tuesday glad you could join me today and today is September 10th isn’t it where does the
time go here we are almost into the winter time
in fact apparently it’s snowing in the mountains out here which drives me crazy
however Michael Keely Mike turvy they are happy as clams but I think I’m gonna
move to Florida anyhow welcome to the session today it’s
good to have you aboard my name is Mike Follette you can reach me at M Follet
underscore TDA on twitter if you’re interested also a great way to follow
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screen when you’re looking at your YouTube video there but a let’s get
started with some disclosures and so we’ll hit those right now I carefully
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those are measurements they measure how an options price might change with
changes in price time and implied volatility okay so let’s let’s get
started with the class and there’s a number of things that I wanted to cover
today and that’s his futures agenda I shouldn’t say that this is the
volatility agenda what I want to talk about today are some of the unique
occurrences that are happening in the markets today at least just to get
started that’s what I want to talk about and I did send out a tweet kind of about
this last night I don’t know if you get a chance to see that tweet or not but
one of the things I definitely wanted to hit today is what’s going on with the
Russell 2000 and so we’ll just call it small caps in
general small caps and we’re talking about small caps if you haven’t noticed
they have really caught some fire over the last couple of days and some
investors might just say they’re playing catch-up but I did want to get involved
or I wanted to take a closer look at small caps and what’s happening there
and something is also interesting that’s happening it’s actually the second day
in a row that this has occurred not only in small caps but just in broad markets
in general we’ve got the vol indices that are actually higher at least they
were before I started the class today so want to take a look at some of these vol
indices and talk about how sometimes that can be a possible divergence where
what you see in terms of market price action I’d quite possibly if volatility
is going up and that creates a divergence quite possibly that could be
a signal that big option traders institutional investors might might
still be hedging or maybe not as confident in the move higher now it
doesn’t necessarily mean that the market has to drop but it’s one of those things
where it’s it’s a fairly rare occurrence when you see volatility indices going
higher as well as prices going higher in the underlying index so we’ll talk about
that and what possibly some of those signals mean also I want to talk for
just a second about brexit I mean brexit is kind of like a moving target over
there but certainly I wanted to talk about you know kind of some of the
latest that’s going on in brexit because you know what’s happening there could
definitely have a trickle-down effect or a trickle effect across global markets
and in addition to that we’ll take a look at some stocks and if you take a
look at individual stocks it’s interesting because there is quite a
sort of a shift that’s going on what was strong now has turned out to be kind of
weak and what was weak has actually started to catch fire and has become
strong so there’s a little bit of road patien maybe you’ve seen other coaches
talk about that but I wanted to get into some of the specific companies being
involved in the rotation and kind of drill down and take a look at any news
that might be driving some of those price events as well with some
individual stocks now I will make mention of this you do not see it on the
screen but there is a particular technical indicator I wanted to use as
we’re going through our discussion today and that’s going to be the Bollinger
Band bol Li and GE are bands and the reason I wanted to talk about Bollinger
Bands today is is it’s just kind of a useful tool especially if you’re trying
to concentrate on two things volatility of an underlying index or stock and
direction possible changes in direction and possible changes in volatility and
we’ll use the Bollinger Bands and learn a little bit about that today and so as
we’re going through this we have a bunch of different topics on our agenda but if
there’s one key learning point maybe to take out of this class it’s to
understand how to use the Bollinger Bands when you’re looking at whatever
stock or index is on your screen and now we’ll start by taking a look at the
broad indexes and I want to bring the Bollinger Bands onto the screen now as
we’re taking a look at some of these broad indexes and talk about what
Bollinger Bands are used for and then we’ll talk about the transition that’s
kind of happened there into small caps recently and so if you wanted to bring
Bollinger Bands onto your screen so you can kind of follow along do the same
things I’m doing here do that at home here’s how you bring on the Bollinger
Bands what you’re gonna want to do is bring up a new study on your charts and
just as a reminder in order to create a new study what you’ll do is click on
this beaker icon right here or you could go to the beaker with the studies word
right there as well but one of those two icons and I’m just going to click the
beaker for now and if you do not have the Bollinger Bands on the screen what
you need to do is select that from the available studies on the left and drag
it over to the studies on the right or the available studies that will be on
your screen on the right and you can these are all alphabetized so you can go
right down to the bees or you can type Bollinger if you’d rather and that’ll
help you get there quicker but just grab that and bring it over to the right-hand
side of the page and then we’ll hit apply and okay but I’ve already gotten
those on my screen and by the way if you were ever in a position where you’re
thinking you know I like to look at the Bollinger Bands but not all the time
maybe you’d like to look at moving averages or something else and not have
to go rebuild those indicators every time I know that can be kind of a drag
when you’re going to rebuilding your entire chart screen every time you want
to take a look at kind of a different train of thought what you can do is if
you’ve created for example a fairly simple chart like this with Bollinger
Bands on there you can save this as a style and so thinkorswim is pretty
helpful this way all you need to do to save a style is just right click on your
chart background after you’ve set this up with the indicators that you want and
then in the menu that appears at the bottom of the page go down to style and
what you’re looking for is save style then you can go ahead and click that
give this a name and I’ll tell you what we’ll just call this Bollinger or B Oh
LLL just call it ball and then we’ll go ahead and include patterns and study set
go ahead and hit save and if for one reason or another you wind up with a
different set of indicators on your screen and you just wanted to get back
to this right with just the Bollinger Bands on there all you need to do at
that point is just right click on the chart and then go ahead and hit style
again and this time load style ok so just find the style that you created
there Bo ll click on that and that’ll load your Bollinger Bands or whatever
indicator you wanted to have on your screen now with the Bollinger Bands let
me explain to you what these are this is an indicator it’s really really it
serves two purposes this indicator the first one is to get a sense for how
volatile the underlying is currently behaving now relative to bass
over the last 20 days okay how volatility is it now compared to the
recent price action or the recent volatility that has been occurring
because this Bollinger Band is programmed where it’s got these two
bands and this is the Bollinger Bands one above and one below price these are
two standard deviations and these standard deviations are sourced from a
moving average and by the way the moving averages are going to be that center
line on your screen right now that’s going to be the green one and and the
default is actually a 20-period moving average so basically what this does is
it just puts two standard deviations one above one below the 20-day moving
average so what you can get a sense for is you know well number one which
direction are these lines going I mean you do have a 20-day average that’s the
one in the middle so it becomes sort of like a trend indicator but also these
Bollinger Bands they will move in the direct in directions as well sometimes
the bands themselves are moving wider and sometimes they’re moving narrower
sometimes they’re just moving at the same rate and in the same direction okay
what these bands are there to do is to help kind of confirm the direction
that’s going on and what’s happening with volatility those two things and if
you notice right we’ve got Chipotle here notice what we saw basically within the
last week or so and I’ll highlight this just so you can see this a little bit
better and then we’ll switch over and we’ll take a look at those indices but
notice how these bands themselves they had gotten kind of a little bit more
narrow relative to one another they started to squeeze in and that’s not the
only time you’ll see them squeeze in right but you’ll see these Bollinger
Bands sometimes get closer together and other times they’ll be farther apart now
just so you know the band width is a representation of how volatile the stock
has been lately and if you have those bands close together that’s telling the
investor that things are not very volatile right now
now oftentimes with the mean reverting nature of volatility when things aren’t
very volatile currently they’ll have a tendency to start becoming more volatile
okay and so when they’re when the banns are close together some traders might
expect that to be a consolidation in the stock a quiet period but then when this
when the banns start to widen that’s representing that volatility is starting
to pick up again now sometimes the stock will be sideways trending with those
bands widening and narrowing and sometimes the stock will be either up or
down trending so the the amount of volatility that’s currently being
experienced in priced is represented by the width of the band and the current
trend of the underlying is really expressed by where the bands are
currently going and where that moving average that 20-day average in the
middle is going in CMG’s kind of an interesting example here by the way
because all the bands and the moving average were going higher but then they
the band’s narrowed so we had an uptrend and volatility was contracting today we
had a very big move in terms of volatility I’m gonna zoom in on that
just a little bit we had a big move in terms of volatility and then the band
started to widen then if you notice with the widening the bottom band is going
lower and the moving average is starting to go lower as well now some traders who
use these Bollinger Bands might say this if the bands are widening volatility is
expanding so they might expect a period of more active price movement right
that’s number one but if the bands and the average itself are starting to go
down they’re starting to drop and you can see the moving average is starting
to drop and the yellow the lower band it’s not yellow it’s purple it’s
starting to drop that could be a signal of a new change in trend and some
traders if you’re talking about systems that could be built based on these
Bollinger Bands like this and I’m gonna zoom in on that just a little
a bit more seeing siedel just a little bit better at least in my mind it allows
you to see it just a little bit better but some traders will actually trade in
the direction of that breakout right so if the stock is you know we’ve seen a
consolidation or a contraction of those bands if price expands and touches
either the upper or the lower band and those those bands start to move lower
some traders will take that as a break out and trade in the direction of that
breakout especially if we’ve gone through a period of quiet volatility
right so another way to think of that is that some traders will actually use
price patterns when things start to squeeze in on a price pattern right say
sending triangle descending triangle just two symmetrical triangle things
like this oftentimes you’ll see the band squeeze when that’s happening volatility
in terms of price is narrowing and then the direction of the breakout that
occurs some traders will trade in that direction the Bollinger Bands are just
another way to kind of indicate what direction that might be but anyhow what
we’ve got here in CMG is after a quiet period it looks like we’re expecting an
expansion of volatility and with the lower band going down and the moving
average starting to go down that could be a fairly significant signal of
weakness right tell us something we didn’t know because the stock actually
went down 6% today but the best kind of confirmation according to John Bollinger
of the direction of the underlying is going to be when all of the bands right
the upper and the lower band and the moving average are going down and when
that occurs sometimes you’ll actually see price ride that lower band or if all
those things are going up sometimes you’ll see that price ride that upper
band and some traders will just stay with that underlying as long as the
price kind of rides one of the bands in one direction or the other but it’s a
pretty useful tool for somebody who’s factoring in volatility you know even
some option traders might use this as a way to determine what type of option
strategy to choose right if it’s option trader we’re looking at a period of very
low volatility that been happening and I’m talking about
your viewing that based on narrow bands right when those bands start to widen
out and there’s some sort of a trend signal there some option traders might
choose a directional option strategy in the direction of the break out if that
makes any sense in the world and then on the other hand if the bands get very
wide some option traders might expect that that volatility will contract and
so they might choose a neutral or a contrary maybe a contrarian type of
strategy when the bands are very very wide okay
now let’s apply some of this to those broad indices because I mentioned I
wanted to take a look at these indexes and drill into small caps and also VIX
or volatility indices at some point first we’ll start with the SPX
okay now here on the SPX let’s apply the Bollinger Bands after a period where
we’ve seen some flat market action and the bands actually and this is kind of
going in just to the first part there of September the bands had actually kind of
narrowed right narrowed bands volatility contracting there in terms of price
volatility and then a few days ago boom we had an explosion to the upside and if
you notice the bands are starting to widen again and we have touched that
upper band now what we’ve got here is the moving average going up so that’s
positive for trend direction the fact that we touched that upper band is
positive for uptrend direction and maybe a last bit of confirmation for the
direction of that trend could be if that bottom band starts going higher as well
okay but what we’re seeing here on the SPX is is basically indications of an
uptrend taking hold here right and an uptrend that’s got possibly a volatility
emphasis behind it now one thing to factor in with these bands as well some
traders will use these as like an overbought and potentially an oversold
indicator some traders might feel like hey if we’ve gone all the way
outside of the upper band there and especially if these bands are still kind
of widening going away from each other some treaters might anticipate maybe
there’s a chance we have some sort of a pullback a little bit but in terms of
how much pullback traders might look for on the level of support and that could
be quite possibly right in here somewhere
or some traders will actually look for a pullback maybe closer to the moving
average in the center of the band there and you can see that so for example we
had sort of a same similar type of move that went on in June not identical but
you’ll get the idea here where we had kind of constricting bands here in the
first part of June and then boom we blast it off and we touch the upper band
on those Bollinger Bands and the band started to widen out again and price
actually went a little bit sideways but notice these moving average these moving
averages and the upper band the blower band hadn’t started going up yet but it
sort of indicated a new kind of uptrend forming there doesn’t mean it was always
going higher right when we touch the upper band those are the times when we
had a tendency to come back down a little bit but generally price action
still worked its way higher so hopefully that is making some sense and then at
some point all of the bands were effectively going higher and that was a
pretty strong signal of an uptrending market which would have taken place let
me see if I can highlight the area when all the band’s talking about the moving
average both the upper and the lower bands kind of all going up at the same
time that’s sort of your best uptrend signal right there and that took place
back here kind of at the end of January ok but anyhow these Bollinger Bands kind
of kind of cool when you’re trying to figure out market volatility and market
direction and what we’ve got right now is quite possibly in the SPX a market
that is starting a new sort of uptrend or a new cycle of strength
and a bit of a volatility expansion based on recent price action but one
thing that is sort of interesting on this SPX
is that well actually today we did close in the green we must had a pretty good
rally there toward the end of the day so quite possibly found a little bit of
support rallying up by the end of the day there but the SPX for a big chunk of
the day was actually a negative territory so that was kind of a late day
rally take a look at the Nasdaq here in order to look at the Nasdaq here’s when
I look at I’ll put a look at the nd X that’s going to be the Nasdaq 100 is
what that is so sort of like the cash index but only
for the Nasdaq they’re very similar type of price action there for the Nasdaq and
quite frankly that price action is bullish based on an expansion of
volatility price volatility potentially and also up upward moving direction in
fact if we look at that Nasdaq kind of closely we have all the bands currently
going higher so the upper the lower band is going higher and that middle band is
going higher so those are all kind of three positive signals or bullish
signals for the Nasdaq and we’ve had a bit of a pullback off that upper band
already and quite possibly the Nasdaq’s getting toward a level of support so
anyhow based on these bands right period of consolidated market activity and now
the band’s suggesting maybe some expanded ball and the direction being
higher we’ll have to see you know these can fake you out there’s no perfect
signal however it’s kind of interesting to see that take place now one thing
about this Nasdaq though even though we did get some strength toward the end of
the day the Nasdaq was actually negative so the Nasdaq down and remember Nasdaq
is like technology-based companies bigger tech companies but nevertheless
technologies the S&P 500 fairly broad mix right of large cap companies in
general and here’s another index that really is ultimately the one on one
to take a look at a little bit closer today but is this Russell 2000 and the
Russell has actually as the as the other markets had already received a majority
of their strength and had already kind of broken through some resistance and
had touched the upper band and the band started to widen believe it or not that
didn’t really happen until today on the Russell 2000 but over the last few days
the Russell has been quite strong compared to the other markets when the
other markets have been more or less sideways to down after their breakout so
here’s my point is that this Russell has been lagging but it kind of looks like
it’s starting to play catch-up the other stuff that’s been leadership more than
momentum in the big caps and in Nasdaq companies they started to lag while the
S&P 500 or shimmy while the Russell 2000 has gathered some strength here but
what’s interesting is now it’s almost like we’re getting all three of those
indexes on the same page Russell still relatively speaking lagging those other
two indices but that’s fairly in anything can happen right doesn’t mean
the market has to continue to go higher from here in fact some traders might
look at where that Russell is relative to that Bollinger Band and say you know
what it’s probably due for maybe a little bit of a consolidation a little
bit of a pullback here but it’s like we’ve got all three indices now that
have touched their upper band and at least the upper in the middle band are
both going higher and volatility is expanding suggested that quite possibly
we could see some bigger moves to the upside right and again this could all
fail but these are sort of the things that the Bollinger Bands are kind of
indicating but there is one thing that’s been sort of a fly in the ointment and
we’ll take a look to see how things wound up with this today but this are V
X this Russell 2000 volatility index this has not wanted to drop even though
the Russell has gained some strength although and this has happened really in
the last half of the day as I was setting up for this
so really my some of my thesis and some of my interesting points so to speak
that I was going to make today or actually the markets changed a little
bit but volatility did actually drop today and some traders might be looking
again at this you know these price levels and quite possibly what the
Bollinger Bands are saying on the Russell 2000 volatility index as a
possible confirmation of what they’re seeing on the run the rut talking about
the cash index but what’s been interesting is the the volatility right
remember volatility is a reflection of option prices when option prices are
going up implied volatilities going up now why would implied volatility or why
would option prices go up right and take that rvx higher well generally it’s
because of put buying right when people have greater demand to buy options and
oftentimes that’s puts there’s usually more puts traded than there are calls
we’re talking about these broad indices but put buying right so why would people
buy puts well because they aren’t very sure or they’re not as convinced that
the markets are out of the woods but also this has a reflection of just
generally speaking how volatile the markets are right I mean there’s a
component that really is tied into just how volatile the underlying index is but
notice here volatility is still holding fairly firm even though we ultimately
did wind up with a down day right but it’s still holding firm at least it’s
holding some of these support levels right at around 19 maybe a little bit
better confirmation of bullishness would be if the VIX could break down below 19
and then quite possibly traders might expect volatility to drop closer to the
15 handle there so something to watch quite possibly this week which could be
a better confirmation of what’s happening with markets is maybe some of
these lows here on the rvx to see if those hold or not but take a look at
those Bollinger Bands I mean all three of the Bands right the the upper
standard the lower standard deviation and the
average themselves they’re all going lower which would indicate down this
however price action wise it looks like around nineteen we’ve got some kind of
support in there okay so anyhow markets believe it or not and they were more
bifurcated earlier in the day it looks like by the end of the day kind of all
three of them are starting to get into sync with each other there’s not as much
bifurcation there but it will say this you know kind of moving here into some
stocks that are moving primarily still the biggest movers today were kind of
found in those small micro-cap and Mid Cap index indices and a lot of those
stocks were really cooking today just some examples of some stocks that were
moving quite heavily kind of found in the Russell 2000 NKT are this is a
pharmaceutical company so it’s it’s kind of a smaller cat biotechnology type
space notice how this stock has been very
volatile in the past it started to really go sideways and those bands
closed or have gotten really really close to one another but just today boom
we got a close outside of that upper band and it looks like quite possibly
there’s some strength coming into you know nectar nectar
I guess it’s nectar therapeutics I mean think I said nectar pharmaceuticals
there but I believe it’s nectar therapeutics but this is a $19 stock
speaking of things that tend to be byproducts of volatile moves this has a
pretty gnarly gap on it a gap that took it down to and this was on their
earnings announcement took it down to about $20 a share from not quite all the
way to 30 but in the high 20s and you know sometimes those gaps will act like
levels of resistance so quite possibly we might see this go higher and then
have to see what happens it is as it approaches this gap but you know some
technicians I think that if the stock is able to
kind of get back inside of that Gap area it may actually make a move all the way
back up and close that gap right that’s still quite a ways away from where we
are right now but you know keep your eye on those gaps because when you’re below
them or above them they can act like levels of support or resistance but when
you start to get it back inside those gaps oftentimes they get filled okay
we’re not inside the gap not yet but some traders might be watching to see
what happens from here and if we get back inside that gap you know some
traders might expect that stock to actually close it and that would be a
pretty big move going up but one of the reasons I wanted to mention this company
is because this is fairly representative of the types of companies that are in
small caps that really caught a bid today a lot of the pharmaceutical
biotechnology companies here’s another example of one Idra
this is just a baby right it’s just a tiny stock and right now in fact it’s
only trading for three dollars and 31 cents and this has already had a pretty
big move but again this is just an example of a small cap company this
might even be more in the micro cap space but starting to really move higher
here and if you were looking you know I’m just showing you a couple of stocks
as it exists as examples but if you wanted to see more stocks on your own
time that might serve as examples that are in the Russell 2000 or in some of
these small cap indexes you can actually view those by going over to the market
watch page and under the market watch page if you just hit the quotes sub tab
here so it’s almost like you’re bringing up a watchlist is what it is but then
you can choose where to select your watchlist stocks right you can actually
direct this to an a primary index and if we drop down here to public and look
under the ARS our through W stands for Russell you
could actually just go into Russell mm or Russell micro-cap stocks right from
here and start taking a look at names yourself right now this is the micro
caps and there are a lot of them and these are all very you know low well not
all but most of them are very low priced type of stocks but we’ll just bring
those up onto your screen here you can see is says we start sorting these I’ll
just sort these by their net change here come on and there were just you know
scrolling down this list there were just a significant portion I mean probably
hundreds of stocks there were up over one to two percent just today so quite a
few strengths and you can go through as well and actually see what sector these
are in if you edit sector onto your screen and just as a reminder you can
edit the sector so that you can see that by just right-clicking on the top of
these columns although for some reason my buttons aren’t working very well I
don’t know why but you should be able to right click if the right click is not
working try left clicking on this gear up here and then you can access a spot
where you can customize and edit you know these different columns that you
might want to see just to give you additional information but any of them
maybe check that out maybe as a homework assignment I mean if
you’re interested I go over to the Russell micro-cap edit in the sector and
start taking a look at some of the top performing sectors today and you’re
gonna see actually a lot out of the healthcare and you might actually see
some energy in there they quite possibly you’re not see I used to see in either
but that’s a good way to just find out you know how a bunch of different stocks
might be performing on a relative basis out of an index but now some other types
of companies that were moving up by the way this Idra you know some traders
rather than just looking at the strong price action they might look for some
sort of news to support you know maybe the strength
that is there you know we talked last week about analyst upgrades and how
analyst upgrades can definitely provide fuel for a company also mergers and
acquisitions we’ve talked about that before in this class but one of the
reasons I wanted to bring this one up it’s not a recommendation but just for
this particular class is because just in the last couple of days it has gotten
involved with a business deal with Abbvie and also JP Morgan initiated you know initiated a target on these guys at
about seven dollars a share with an output rating that’s the term I’m
looking for with an outperform rating on these guys and so when you can get you
know a few things behind it not just sympathy from the group not just
sympathy from you know the index but if there’s also some significant news that
can definitely help drive prices higher but anyhow that was sort of an
interesting one that came across the list today also some of the banks here’s
one that came across and this is going to be more small cap related but State
Street there we go State Street Corporation they had a big
move today and they had some good news certainly news can help and you can see
those bands right there they’re actually starting to widen out but State Street
actually they were very optimistic about some of their margin rates because you
know they’ve guided lower saying that the interest rate environment wasn’t
good for their business but actually they took some of those comments back
and were a little bit more positive about the interest rate environment and
their in that impact on their business and so the stock was taken higher quite
significantly today okay some other things that are really getting volatile
in this volatility sort of the upside or sort of to the upside really in you know
a bit of a transition happening here what was out of favor some of these
pharmaceuticals biotech companies small caps
they’ve really kind of played catch-up here as of late of course we’ll have to
see if they continue to do well who knows we we won’t know for sure until
you know some time has gone by but other areas of the market that have been
weaker are starting to get stronger than just some examples of this are for
example caterpillar you know heavy machinery companies and this has been a
stock that’s just been really pushed to the side in a lot of cases because of
their exposure to you know the the tariff situation and the trade war and
concerns about how that’s going to affect demand in China anyhow it looks
like this this stock though has really caught a bid and a nice move higher and
if we’re talking about you know that where the stock has been just in the
last week or two they were down in about 113 now they’re all the way up to about
130 and you know caterpillar does have some characteristics that might indicate
what some you know investors are looking for its stock that has now started to
become weak one thing that you’ll notice with this company is and I’m just going
to jump over to the trade screen for a second on the trade screen this is a
stock that’s got a relatively low p/e right the p/e ratio on this is 12 and it
also has of course it’s not as strong as it was but it does have a dividend yield
as well but the yield is about 3% and the p/e ratio is 12 so that could be in
one of the characteristics that quite possibly investors are starting to steer
toward in terms of what was week becoming strong because a lot of these
machinery and also some of these oil and energy related companies are starting to
see some strengths for example SLB now slumbers today they had a little bit of
weakness maybe maybe some traders might call that a shooting star type of
pattern but it was a weak stock starting to get
some strength and one thing you’ll notice here is that there you dividend
yield is over 5% and they’ve got a p/e ratio of 24 so it makes you wonder if
quite possibly we haven’t reached a point in the market where investors are
looking for stocks with better yields and maybe lower p/e ratios that’s sort
of a theme of some of these industrial companies machinery type of companies
oil sector related companies starting to get some strength here’s another example
this is Cummins right they build engines you know heavy diesel engines primarily
of course they do other things as well but you know the stock has made a very
large move as you can see volatility is expanding pretty big move higher there
and if we take a look at over on the trade screen they have a yield of over
3% and a p/e ratio of 10 right so very you know relatively speaking low p/e and
still providing a pretty significant yield because the price the stock has
been down you know for the last for the last little while but now it’s getting a
lot of strength a couple of more examples Dear John Deere they are
starting to catch a bid some some strong some strength out of them and if you
take a look at that the yield isn’t quite as high but a fairly low p/e ratio
there in John Deere on the other side of things where there’s not a lot of
strength right now is in payment processors you know MasterCard which has
been one of the most masterful stocks of the entire year well it’s actually
broken down and potentially it’s starting to break some significant
levels of support maybe some old old resistance if some investors were
expecting that to become support that was broken but you know it’s all it’s
down so far now that some investors might expect it is getting close to
possibly another level of support anyway but MasterCard not doing well
a lot of the technology types of names you know have been weaker and you can
actually see some of that weakness in the Nasdaq but Apple quite possibly some
comments out of Apple today with their technology show that they’re doing they
mentioned they’ve got a new phone and a new you know i watch or whatever you
call it coming out and they actually found some strength today so quite
possibly they’re providing a little bit of leadership for the Nasdaq even though
technology in general has not performed quite as well but in Apple looks like
investors kind of liked some of their new products and some of their positive
comments that they had to say about you know about the Apple TV ok but I am
running out of time just some things maybe for you to do you know maybe take
a look at because Apple did gain some strength especially late in the day
maybe take the time to go through and read some of the reports if you haven’t
done so yet but read some of the news reports that are coming out of that
technology show and see what your opinion is on how these products look
right because Apple certainly what that stock does can provide leadership for
general markets another thing by the way with kind of generally transition in
leadership in the markets right now maybe took a look at Brent Moore’s class
he does a class on Wednesday where Wednesday evening where it’s at 7:00
Eastern Time as when it is but where he talks about sector rotation in a little
bit more of a succinct way looking at broad sectors and industry groups in the
overall transition of money so that could be a very useful class for you if
you’re looking for things to do going forward after you leave this class
alright so some final thoughts on brexit brexit is not a closed deal by any
stretch of the imagination and the latest is that Parliament is there
actually on a hiatus until October 17th it is but Parliament drafted up some
legislation that would require an egg’s or an extension to the brexit or an
extension to the brexit I should say and the European Union has
said they’re on board with that but Boris Johnson said you know what I’m not
going to go for an extension and so that’s the big point of conflict right
now in the brexit situation is Boris Johnson basically is he is he breaking
the law so to speak but one thing that we’ve talked about before in this class
the forward slash 6b this is the currency that currency is actually
strength in the strengthened here in the British Pound and with that
strengthening that actually has been a sign of certainty coming into the
currency itself it’s quite possibly traders are becoming more comfortable
with quite possibly a brexit actually happening in October but we’ll actually
see I have to see what happens still there’s a lot to be figured out
you know what I just realized I am out of time so I’ve got to wrap up this
session here but I’ll tell you what I appreciate your attendance today and
above all else hopefully that gives you a better idea of how to use those
Bollinger Bands hopefully this gives you a sense of how these markets seem to be
changing and in particular small caps they seem to be catching up but we do
see strength in markets so keep your eye on it all right thanks everybody for
your time I got to go everybody remember these
final disclosures and and I hope you trade well maybe use some of these take
techniques that we talked about today by the way you know in your analysis over
the next couple of days you might find it quite useful for you okay thanks
everybody and we’ll talk to you later have a great day and

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