Weekly Thoughts

Week of November 7, 2016

by John Person

Index Weekly Pivot Support Weekly Pivot Resistance Quarterly Pivot Support Quarterly Pivot Resistance

$SPY 205 211.70 208 226

$QQQ 110.80 116.35 110 127

$IWM 112.65 118 115 134

$DIA 176.62 180.70 177 191

11-7-2016 Thought of the Week: “As the reaper of his own harvest, man learns both by suffering and bliss.” – James Allen

Market Thoughts & Observations: Last week, all the major indices posted further losses; marking a nine day losing streak in the S&P 500, a milestone not seen since 1980. Here’s where we stand year to date.

S&P 500 +3.88%, Dow Jones +2.66%, Nasdaq 100 +2.42%, NYSE + 1.44%, Russell 2000 +3.93%.

The table below shows the Persons Pivot WEEKLY and quarterly support and resistance levels.

Last week, we identified numerous amounts of bearish technical points of interest and we did see a price decline. This is what I called and was expecting …the “delayed reactionary” correction. Now let’s look at what the stock indexes condition looks like for next week based on the…

Technical Points of Interest:

l $SPY, $DIA, $IWM the $QQQ’s & NYSE are in Weekly PPS Sell mode, but at/ near Q. Support.

l $SPY, $QQQ’s, $NYSE, $DIA & $IWM in PPS Daily sell mode.

l WEEKLY Persons Pivots are in bearish mode for $DIA, $SPY, $IWM, $QQQ & $NYSE.

l S&P 500 has 42 stocks near 52 week highs versus 178 on 8-12-16 and 71 last week.

l S&P 500 has 37 stocks near 52 week lows versus 2 on 8-12-16 and 25 last week.

l S&P 500 now has 368 stocks below their respective 50 day Moving average vs. 333 last week.

l 5 sectors are now negative on a YTD basis: $IBB, $ITB, $XRT, $XLY & $XLV.

l Weekly McClellan Osc. Level at -132 versus -149 last week.

l Daily McClellan Osc. is now at -183 versus -135 last Friday.

l COT DATA in S&P 500 shows Large Speculators & small speculators have a net LONG position but small specs INCREASED their LONG positions, Commercials added to their short hedges.

The Weekly Persons Pivot indicator suggests continued bearish conditions The chart below shows the Advance Decline continued to see follow through weakness, as did the OBV volume. Volume preceded prices and we did see more downside. This is noteworthy as the OBV did give us an earlier warning of the impending correction before the Advance Decline analysis.

Despite the increasing bearish technical condition I still believe we will see a year-end rally. The question is from what support level? I see in the SPY a very strong support near 204-205. But before I start waving the checkered flag the correction is over. We need to see confirmation from: A. Sector leadership; B. PPS buy signals; and C. Volume pattern confirming the price action.

None of which we have at the moment.

-168

226.09

213.84

208.55

204.86

I mention above there is strong support near the 205 – 204 level in the $SPY. The chart below shows there is a confluence of Persons Pivot levels. Notice the gold line is at 204.86 and weekly support is at 205. (Last quarters Pivot was at 205.40.)

The McClellan Osc. is turning higher in the weekly time frame, which may develop into a bullish conver-gence pattern in the next couple of weeks. My take is we are closer to a bottom now as we traded near my price targets in the $SPY ($208). With the COT data suggesting small specs added to longs, I sense we may have a bit more downside first.

November Seasonal Trends: (*denotes mid-month) Strong: $XCI, $GDX, $TLT, $FXE*, $XRT*, XLY*, $XLI*, $XLV*, $XLP*, $XLB*, $IBB*,$KIE*, $XLU*, $IYR*, $IYT*, $IYZ* Weak: $XLE, $XOP, $OIH, $KRE, DX*, $GLD*, $XLF*

Weekly Bearish LCD’s: Symbol Entry Stop 1st Target Holding DateBest Buy ($BBY) $38.58 $40.28 $36.83 12-16Microsoft ($MSFT) $59.38 $61.46 $56.79 12-09Alphabet Inc. ($GOOGL) $798 $825 $739 12/16

*** The sector is bearish but stock looks strong longer term

Weekly Bullish HCD’s: Symbol Entry Stop 1st Target Holding DateNoble Energy*** $NBL $34.95 $33.01 $40.11 12/31 Sanofi Aventis ($SNY) $38.49 $37.22 $40.39 12/32

Next Week: With so many people trying to prognos-ticate what’s going to happen if one party wins ver-sus another (like I said last week) , “I predict and am hopeful no matter what the results are that the market will begin “operating” again”. What I meant is the mar-kets may go back to trading with less emotional pent up fear and trade with the back to basic function. I be-lieve this will happen after the elections. Once people realize we are not in a recession and interest rates are still near zero, we will still have a strong chance for a year-end rally. But as I stated earlier, from what levels and which sectors will lead us higher? We are getting a bit oversold especially in the Biotech & Drug stock sector. We have one low risk trade in that sector for next week on a pullback, Sanofi Aventis ($SNY). We also have a potential breakout trade happening in Noble Energy ($NBL) which we covered in the trading room last week; which is why it made the list for this week. I am on the look out to see names populate buy triggers in the consumer discretionary sector. By the way, we have a slew of earnings from department stores like Macy’s, Nordstrom’s, J.C. Penny’s & Kohls at the end of the week.

We have numerous sectors (see below) that turn up after the middle of the month. However, we have almost every single sector in weekly PPS sell mode and now we have a fresh new weekly LCD triggered in regional banks ($KRE). We will need to see some kind of bottoming action before putting cash in on these sectors. The only bright spot is the Transportation sector ($IYT) has been in a week-ly PPS buy mode, as is Gold and the Gold Miners. Currently we have on a longer term options strate-gy in the Gold Miners (GDX), it’s worth noting there were numerous weekly PPS buy signals and one new HCD in that sector ($ABX). Also, both Gold ETF ($GLD) and ($GDX) are in a weekly PPS buy mode.

Last week we took a small profit in Disney ($DIS) thanks to the timely email alert. As for new trades here’s what I see….

l Watch Delphi Automotive ($DLPH) a daily close above 72.10 could trigger a breakout back to test the highs of 90.00.

Seasonal Commodity Spreads: Buy Mar Bonds / Sell 10 Year Notes on 11/07 liqui-date before 12/27*** Buy June Hogs/ Sell Feb Hogs on 11-7 liquidate before 1/10 Buy Mar B. Pound/ Sell Mar Japanese Yen on 11/10 liquidate before 1/3 Buy July Wheat / sell Mar Wheat on 11/17 liquidate before 2/1 *** Tuesday’s election may have a dramatic influence in the NOB spread.

REPORTS & EVENTS: ELECTIONS ON TUES-DAY Monday: Labor Conditions 10:00 AM, TD’s IMX 12:30 PM, Fed Speaks 2:45 PM Election Tuesday: Redbook 8:55 AM, JOLTS 10:00 AM, Fed Speaks 12:20 PM, China PPI & CPI 8:30 PM Wednesday: Wholesale Trade 10:00 AM, EIA Oil Report 10:30 AM, 10 yr. Note Auction 1:00 PM, Fed Speaks 1:30 PM Thursday: Weekly Jobs 8:30 AM, Nat Gas report 10:30 AM, 30 Yr. Bond Auction 1:00 PM Friday: Veteran’s Day - US Bank Holiday: China Retail Sales 12:30 AM

EARNINGS: Double check release times! Monday: ACAD, AMC, CZR, DF, FTD, HHC, IFF, MAR, MGM, MGP, MCHP, PCLN, RAX, RRR, RBCN, SNI, SYY, TMH Tuesday: ASH, CNK, COKE, CPA, CXI, CVG, DOOR, DHI, EXPD, HL, GLPI, JAZZ, JCI, IPAR, SATS, TRIP, VRX Wednesday: DISH, EGRX, KITE, MYL, PRI, RPD, SHAK, SLW, SCTY, TASR, VIAB, WEN, Thursday: BUFF, DIS, JNP, KSS, M, KORS, JWN, PRTY, PRGO, RL, Friday: ATW, JCP,

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personsplanet.comJohn Person President of John Person Inc dba PersonsPlanet.com worldwide known for his unique use of Pivot points and candlestick charting, also known as Person Pivots or PPS on TD Ameritrade / Tos platform, John provides online trading education for a begin-er or advance traders with his University Pro-gram and daily trading room, John Person offers research for ac-tive stock and options traders with newslet-ters, trading software, trading seminars, forex trading systems, trad-ing course, books us-ing advanced technical analysis on candlestick, pivot points, fibonacci and indicators.