2018 Week 3

Week 2 Results: 8-6, Overall: 17-11 (60.7%)

Outside of financial markets, we’re also sports fans here at Bespoke.  With new legal sports betting avenues now available across the US, we figured we’d have some fun and pick each NFL game versus the spread this season (as of Saturday evening).  Let’s see how we do…on to Week 3.

After going 9-5 versus the spread in Week 1, we were 8-6 in Week 2 with one push.  This brings our overall record through 2 weeks to 17-11 (60.7%).

2018 NFL Week 3 Bespoke Picks:

New Orleans at Atlanta (-1.5): New Orleans +1.5

San Francisco at Kansas City (-6.5): Kansas City -6.5

Oakland at Miami (-3): Miami -3

Buffalo at Minnesota (-16.5): Minnesota -16.5

Indianapolis at Philadelphia (-7): Indianapolis +7

Green Bay (-2.5) at Washington: Green Bay -2.5

Cincinnati at Carolina (-3): Cincinnati +3

Tennessee at Jacksonville (-9.5): Tennessee +9.5

Denver at Baltimore (-5.5): Denver +5.5

NY Giants at Houston (-6): NY Giants +6

LA Chargers at LA Rams (-7): LA Rams -7

Chicago (-4.5) at Arizona: Chicago -4.5

Dallas at Seattle (-1.5): Seattle -1.5

New England (-7) at Detroit: New England -7

Pittsburgh (-1) at Tampa Bay: Pittsburgh -1

Week 3 Picks: 9 Favorites, 6 Dogs; 5 Home, 10 Away

2018 NFL Week 2 Bespoke Results:

Carolina at Atlanta (-6): Carolina +6 (Loss)

LA Chargers (-7.5) at Buffalo: LA Chargers -7.5 (Win)

Minnesota at Green Bay (Even): Minnesota Even (Push)

Houston (-3) at TennesseeTennessee +3 (Win)

Cleveland at New Orleans (-9.5): New Orleans -9.5 (Loss)

Miami at NY Jets (-2.5): NY Jets -2.5 (Loss)

Kansas City at Pittsburgh (-5): Kansas City +5 (Win)

Philadelphia (-3) at Tampa Bay: Philadelphia -3 (Loss)

Indianapolis at Washington (-6): Indianapolis +6 (Win)

Arizona at LA Rams (-13.5): LA Rams -13.5 (Win)

Detroit at San Francisco (-6): San Francisco -6 (Loss)

Oakland at Denver (-6.5): Oakland +6.5 (Win)

New England (-1.5) at JacksonvilleJacksonville +1.5 (Win)

NY Giants at Dallas (-3): NY Giants +3 (Loss)

Seattle at Chicago (-3): Chicago -3 (Win)

The Bespoke Report — Passing With Flying Colors

School has been back in session for less than a month now, but the S&P 500 already had its first test of the semester and came out passing with flying colors. After breaking out to new highs at the end of August, the S&P 500 pulled back in early September and found support right at its prior highs from January. After holding that level, the S&P 500 has now traded higher on eight of the last ten trading days, rallying to higher highs. It doesn’t get much more textbook than that!

Heading into the week,the DJIA was the only major US index that had yet to take out its January high, but that changed this week as the index closed out the week with four straight days of gains. While most other indices ran into resistance on their first attempts to take out their highs from January, the DJIA just buzzed right through it.

We’ve just published our latest weekly Bespoke Report newsletter, which is available to subscribers across all three of our membership levels.  Sign up here to read the report.

To get up to speed on our thoughts regarding the market’s direction going forward, choose any membership option and access this week’s full Bespoke Report newsletter after signing up!  You won’t be disappointed. Some of the topics discussed in this week’s report include:

  • Index and sector breadth checkup
  • US economy update
  • What major indicators say about the odds of a recession
  • How recent earnings report stack up
  • An ‘Industrious’ rally
  • Commodities and the Materials sector
  • Mutual fund and ETF flows
  • High yield spreads
  • Rotational forces
  • Model Growth Portfolio update

The Closer: End of Week Charts — 9/21/18

Looking for deeper insight on global markets and economics?  In tonight’s Closer sent to Bespoke clients, we recap weekly price action in major asset classes, update economic surprise index data for major economies, chart the weekly Commitment of Traders report from the CFTC, and provide our normal nightly update on ETF performance, volume and price movers, and the Bespoke Market Timing Model.  We also take a look at the trend in various developed market FX markets.

Below is a snapshot from today’s Closer highlighting the current positioning of speculators in US interest rate markets.  If you’d like to see more, start a free trial below.

Sample

The Closer is one of our most popular reports, and you can sign up for a free trial below to see it!

See tonight’s Closer by starting a two-week free trial to Bespoke Institutional now!

Trend Analyzer — 9/21/18

Coming off of the Dow and S&P 500 both hitting all-time highs during yesterday’s session, our Trend Analyzer is showing a sea of green.  Yesterday we highlighted several of these ETFs as being down versus a week ago.  Today, every one of the fourteen major US Index ETFs are higher than they were heading into last Friday.  Additionally, eleven are currently overbought, three are neutral, and none are oversold.

This week, there has been a recurring theme in our Trend Analyzer that while most ETFs have been overbought, it was not by much. This is no longer the case today. Many of the ETFs are considerably more overbought than before with some nearing extreme overbought levels. Two that have neutral readings—Core S&P Small-Cap (IJR) and the Russell 2000 (IWM)—are on the cusp of moving into overbought territory.  Meanwhile, the Micro-Cap ETF (IWC) has traded below its 50-DMA all week but has finally moved above.  The Dow (DIA) is flexing its muscles from yesterday’s gains with a gain of 2.01% on the week (double the next highest) and is the most overbought ETF up 4.15% from its 50-DMA.


Finally, as we discussed yesterday in our Bespoke Sector Snapshot, the Financials and Materials sectors have recently lagged, but that hasn’t been the case this week. Both Materials (XLB) and Financials (XLF) have experienced the largest gains of the sector ETFs over the past week moving well into overbought territory.

Bespoke Morning Lineup – Pre-Market News and Analysis

After a test of support levels in early September, the S&P 500’s rally this week has confirmed the breakout from late August, as the market now sits in previously uncharted territory.  Perhaps the most impressive part of this week’s rally is the fact that the magnitude of it seemed to catch so many people off guard.

With yesterday’s move, the S&P 500 closed more than two standard deviations above its 50-DMA for the first time since late July.  As shown in the chart below that is updated each day on page two of our Morning Lineup, while prior periods since May where the S&P 500 reached similarly overbought levels didn’t lead to big declines, the market typically didn’t stay this overbought for long, indicating that a modest pullback or at least some sideways trading here shouldn’t be a surprise.

Start a two-week free trial to Bespoke Premium to see today’s full Morning Lineup report. You’ll receive it in your inbox each morning an hour before the open to get your trading day started.

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The Closer — Insurers Buck The Season, Valuation, Flow of Funds — 9/20/18

Log-in here if you’re a member with access to the Closer.

Looking for deeper insight on markets?  In tonight’s Closer sent to Bespoke Institutional clients, we take a look at the performance of property & casualty insurers relative to the S&P 500 with surprising results for the period around hurricane season. We also take a look at S&P 500 (ex Financials) valuation and debt, before a detailed analysis of today’s Flow of Funds report from the Federal Reserve. That report includes debt and income levels for various macroeconomic sectors, with myriad interesting analyses possible.

See today’s post-market Closer and everything else Bespoke publishes by starting a 14-day free trial to Bespoke Institutional today!

Bespoke’s Sector Snapshot — 9/20/18

We’ve just released our weekly Sector Snapshot report (see a sample here) for Bespoke Premium and Bespoke Institutional members.  Please log-in here to view the report if you’re already a member.  If you’re not yet a subscriber and would like to see the report, please start a two-week free trial to Bespoke Premium now.

Below is one of the many charts included in this week’s Sector Snapshot, which simply shows the year-to-date performance of the S&P 500 and its eleven sectors.  After a rally to new all-time highs today, nine of eleven sectors are in the green for the year, with just Telecom and Consumer Staples in the red.  Health Care, Technology, and Consumer Discretionary are the three top performing sectors with double-digit percentage gains so far in 2018.

To find out what this means and to see our full Sector Snapshot with additional commentary plus six pages of charts that include analysis of valuations, breadth, technicals, and relative strength, start a two-week free trial to our Bespoke Premium package now.  Here’s a breakdown of the products you’ll receive.

Eurozone Consumer Confidence Disappoints Again

The preliminary reading of the European Commission’s Eurozone consumer confidence for September fell for the fourth month in a row to -2.9 from -2.0 in August.  Although not as big a miss as August’s report, this was the second weaker than expected report in a row. The last time consumer confidence was this low was in May of 2017.

Consumer confidence further confirms the undertows of worsening European economic activity; echoing the weaker Eurozone retail sales and industrial production report from earlier this month. If this release is any indication, no one should hold high expectations for next month’s retail sales. While the level of the confidence index is still very strong relative to recent history, and therefore is no reason to panic about the end of the Eurozone’s economic expansion, the direction it’s moving definitely represents slowing consumer spending prospects.

the Bespoke 50 — 9/20/18

Every Thursday, Bespoke publishes its “Bespoke 50” list of top growth stocks in the Russell 3,000.  Our “Bespoke 50” portfolio is made up of the 50 stocks that fit a proprietary growth screen that we created a number of years ago.  Since inception in early 2012, the “Bespoke 50” has beaten the S&P 500 by 102.9 percentage points.  Through today, the “Bespoke 50” is up 215.9% since inception versus the S&P 500’s gain of 113.0%.  Always remember, though, that past performance is no guarantee of future returns.

To view our “Bespoke 50” list of top growth stocks, click the button below and start a trial to either Bespoke Premium or Bespoke Institutional.

Individual Investors Still Not Feeling It

The stock market is back at record highs, but don’t tell that to individual investors.  In the latest survey of individual investor sentiment from AAII, bullish sentiment declined (ever so slightly) for the third straight week, dropping from 32.09% down to 32.04%.

Interestingly enough, bearish sentiment came in at the exact same level as bullish sentiment this week, dropping from 32.84% down to 32.04%. The last time both gauges of sentiment were at the exact same level was in June 2016.

With both bearish and bullish sentiment at the same levels and neutral sentiment right around a third as well, can individual investors be any more indecisive?  We do have to say that the last three days of gains for the US equity market have caught a lot of people off guard.

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