As the market moves to new highs breadth from the Twitter and StockTwits streams continues to paint a negative divergence. It is a sign that the momentum stocks of last year still aren’t back in favor.
Our Twitter Sentiment Indicator for the S&P 500 Index (SPX) is once again suggesting that more chop is in the near term future. Last week the daily indicator fell with the market, but had mostly positive readings. This indicates that market participants aren’t too concerned about the current weakness. Friday brought about more concern with a reading of -15 as traders tweeted about the situation in Iraq, oil prices, and extremely high bullish sentiment from various sources (AAII and CNN’s Fear & Greed Index). Smoothed sentiment continues to decline as the excitement resulting from a break above the 1900 level on SPX has started to fade. It continues to paint a negative divergence with price which suggests there may be more weakness ahead. The weakness should be contained if the indicator stays above zero and its confirming uptrend line. Support and resistance levels generated from the Twitter stream continue to paint the same pattern from the first of the year where traders are reluctant to target higher prices. It has
Over the past week or core health indicators stalled. With the exception of perceptions of risk they are all compressing right against the zero line. Our measures of the economy fell slightly. Our measures of quality, trend, and strength rose slightly and are now as close to going positive as possible without breaking zero. As a result, we have to wait another week before changing any portfolio allocations. Unless the market falls sharply next week I suspect some of our indicators will turn positive and result in removing some hedges and adding exposure. Our hedged portfolio is currently 70% long and 30% short. The long / cash portfolios are both 40% long and 60% cash. Below is a chart with the current reading for each category.
The Twitter Top 10 portfolio is falling with the market this week. There are no real drags on the portfolio but most of the stocks are weak. The one stand out is Micron (MU) which is up nearly 6%. Below is a performance chart and details of the current holdings. Start Date Symbol Shares Start Price Start Total End Price End Total % Gain / Loss 6/6/2014 $AAPL 120 92.22 11066.40 91.73 11007.60 -0.53% $GOOG 20 556.33 11126.60 549.80 10996.00 -1.17% $CSCO 446 24.83 11074.18 24.74 11034.04 -0.36% $GMCR 90 122.07 10986.30 119.83 10784.70 -1.84% $GOGO 600 18.48 11088.00 18.04 10824.00 -2.38% $KORS 117 94.33 11036.61 94.07 11006.19 -0.28% $AGN 64 165.06 10563.84 162.95 10428.80 -1.28% $F 650 17.08 11102.00 16.59 10783.50 -2.87% $MU 415 29.54 12259.10 31.28 12981.20 5.89% $DIS 131 84.61 11083.91 82.83 10850.73 -2.10% Cash 95.69 95.69 Totals 111482.63 110792.45 -0.62%
Micron (MU) and Advanced Micro Devices (AMD) are lifting the StockTwits Top 10 portfolio this month. Both stocks are up about 6% while the other stocks in the portfolio have small gains or losses. Below is a performance chart and details of the current holdings. Start Date Symbol Shares Start Price Start Total End Price End Total % Gain / Loss 6/6/2014 $GOOG 19 556.33 10570.27 548.5 10421.50 -1.41% $AMD 2586 4.06 10499.16 4.33 11197.38 6.65% $KORS 111 94.33 10470.63 94 10434.00 -0.35% $MSFT 253 41.48 10494.44 41.19 10421.07 -0.70% $MU 355 29.54 10486.70 31.28 11104.40 5.89% $NOK 1332 7.88 10496.16 8.025 10689.30 1.84% $DIS 124 84.61 10491.64 82.65 10248.60 -2.32% $SPWR 296 33.78 9998.88 34.64 10253.44 2.55% $PFE 329 29.42 9679.18 29.46 9692.34 0.14% $NKE 137 76.23 10443.51 74.09 10150.33 -2.81% Cash 48.99 48.99 Totals 103679.56 104661.35 0.95%
Below is a list of stocks that have had consistent support from the StockTwits community over the past three months. It’s a great list for trend followers who like to buy dips.
The strongest stocks on Twitter (have the most support from people tweeting) over the past two weeks are mostly technology and consumer stocks.
Below is a list of the strongest stocks on StockTwits over the past two weeks. Notice the number of Tech stocks.
The sell signal issued for Gold (GLD) on 3/19/14 from quantified StockTwits messages has ended. The downtrend line in quantified messages has finally be broken to the upside. Unfortunately for gold bulls it didn’t happen after a strong positive divergence with price. As a result, the sell signal is merely closed rather than flipping to a buy signal. For aggressive traders who believe in GLD there are other factors that might warrant a tightly controlled long trade. Notice that GLD had a strong volume washout in June of 2013. Then a double bottom in December 2013 on lower volume near the 114 level. That was followed by a very strong rally up to the descending trend line that has been in place since the peak in late 2012. It is logical for the ETF to be turned back at that trend line again, but since the double bottom has held for nearly six months the odds are increased that any retest of the 114 area will hold. So a long