TRIX Rules, Now What In 2016 For Stocks?

It was very appropiate for me to write the last post, as the TRIX showed once again its power and predicted we were going up short and medium term and that is exactly what happened. and on Oct. 8th., people were really scared. TRIX said: Go for it!

And the market went up with force!

The question is what happens now, almost three months later. Everyone is fairly negative, so I once again turn to the TRIX for wisdom and what I see is fairly positive.

In particular for the S&P 500.

First let’s look at the monthly TRIX for a number of charts. This is really, really long term. For example, the monthly TRIX (red line) for the S&P 500 seems to be turning up as shown in the next graph:

SP500Notice how few monthly signals there are. Two deep ones in 2002 and 2009 and a few clear intermediate ones in 2006, 2010 and 2011. The current one is not yet clear, but if you look at the weekly chart:

sp500wThe weekly TRIX also shows it is turning up, even if it has yet to turn. But if I look at the Daily TRIX:

sp500dThe daily TRIX is turning up, which will drive the weekly TRIX to turn around and so should the market.

Yes, this could all fail, there were two bounces in 2001-2003 that failed, but this is very rare, the higher (much higher) probability is that we will see a short, medium to long  term move up in the SP500, according to the TRIX. That is what the TRIX is telling us at a time of markets being negative, which is very good if you are contrarian.

Now, we all know that the market in the second half of 2014  was driven by the FAANG stocks, which I like to say is the FAANGM stocks since I include $MSFT in the group.So, let’s see what each of them is saying:

$FB Facebok

Monthly:

fbm$FB monthly has not had a very long run. It gave a sell signal in early 2014and a buy in May 2016. The uptrend seems to be intact. Thus, we have to check at the weekly chart to see what it is telling us right now:

fbwWell, as you can see the TRIX is down, has yet to turn, but anytime it has been down like today it has been an opportunity to buy. Thus, I expect from my experience for the TRIX to turn, the daily TRIX (not shown, does not show much, except that the graph shows compressing Bollinger bands.

Let’s look at $GOOG

Well, the monthly TRIX is very nice:

googmit gave a beautiful signal in mid-2015, which has been sustained up to now. The weekly chart is down:

googwBut that is good, if it were up, it would mean the monthly uptrend could be dead. But once the weekly turns, it will certainly continue to go up, just wait for it to turn up.

$AAPL on the other hand is not pretty:

aplmthe monthly chart is not pretty, it is actually ugly, no suggestion that it wants to turn, which contrasts with the market. And the weekly chart is not better:

aaplwThe other “A” in FAANGM, $AMZN is not clear in the monthly chart, it could be toppy:

amznmbut the weekly chart suggests more good times are coming as it has corrected down, but has yet to give a buy, but it looks close. Note in particular, how the scalloped shaped TRIX has guided so well in the jumps so far:

amznwIn contrast, $NFLX is not sending a clear signal on the monthly TRIX:

nflxmbut the TRIX seems to be drifting, very much like it did in 2013, when it was certainly not a sell signal. But let’s look at the weekly indicator:

nflxwwhich is also drifting and telling us very little. Wait for it…

And thus we come to $MSFT, one of the best monthly charts right now:

msftBut the weekly is showing a minor correction on its way to much higher prices ($65?)

Thus, $MSFT and the SPX are showing the best charts at this time. I think $AMZN; $GOOG; $NFLX and $FB, will turn up eventually, the question mark right now is $AAPL. But with the market showing such a strength pattern short and medium term (months) I would not bet against any of them.

As a bonus, one of the strongest patterns I see now is that of Warren Buffet’s outfit $BRK.B, whose monthly looks outstanding:

brk.bmNote how since 1998, $BRK.B a monthly Trix signal has worked well 5 out of five times in 200, 2003, 2005,2009, 2012 and 2014. The sixth time should also be a charm! Base on my experience, this is a powerful signal by the TRIX on this stock.

 

 

 

 

 

 

 

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