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Here we periodically publish a chart and a brief excerpt from one of our 8 research reports for the purpose of familiarizing potential subscribers/clients to our investment research, and to stay on the radar screen of those who have already expressed an interest in us.

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Professional investors can request a free trial of our premium research by clicking here and typing TRIAL REQUEST in the “how can we help you?” box.

If interested in an immediate subscription please email sales@asburyresearch.com or call 1-888-960-0005


John Kosar’s July 10th Interview On Financial Sense

Click the link below to listen to John’s Kosar’s Thursday July 10th interview with James Puplava of the popular Financial Sense website, where John and Jim discuss the direction of the US stock market, US market sectors, US interest rates, and gold prices during the 3rd Quarter.

Click Here To Listen To The Interview

 


Asbury Research Trend Model:
US Stock Market Q2 2014 Update

The Performance page of our website lists Asbury Research’s market calls for various areas of the US financial landscape — including our trend model for the US stock market.

Our trend model was designed to be a simple and objective tool that quantitatively determines when the near term (monthly) trend is positive or bullish, and when it is not.

Investors evaluate models by performance.  Here is ours, beginning in 2007 and through Q2 2014, versus the S&P 500.

0702-4This information is provided for information purposes only. Past performance or back-tested results may not necessarily indicate future results. The results indicated from back-testing or historical track record may not be typical of future performance. No inferences may be made and no guarantees of profitability are being stated by Asbury Research LLC. The risk of loss trading in stocks, futures, commodities and Forex can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

Our trend model is not intended to be a stand-alone, one size fits all trading system, but rather just one of many different metrics that we employ to produce a comprehensive market analysis, one that we believe is collectively more insightful and forward-looking than any of its individual components.

Our model doesn’t use short positions, or leveraged longs, or futures or options strategies — just a very simple and binary “in or out” mechanism using the bellwether S&P 500 as a proxy.

Our model argues against the buy and hold “strategy”, and the assertions by its proponents that “you can’t time the market” and “you can’t beat the market”.

Although buy and hold advocates can correctly point out that the S&P 500 is up 6.1% for the 1st Half of 2014 compared to just 2.9% for our trend model, we would counter by saying that attempting to get out of the way of an emerging market decline comes with the inherent risk of potentially missing out on some performance — especially within a Fed stimulus-fueled environment that has been a big part of atypically pushing the S&P 500 higher for the past 6 quarters without a meaningful correction.   Poor hedge fund returns since 2013 are a testament to this.

However, if you look back over a bigger span of time, our model’s performance since 2007 is a testament to intelligent quantitative risk management as it has more than doubled the S&P 500′s performance in index points during that period.  We view this as evidence that, over time, and during a period that includes all market environments including bullish, bearish, and neutral price trends, a conservative and repeatable quantitative approach trumps passive buy and hold.

Interested investors can contact us by phone at 1-888-960-0005, or via email at sales@asburyresearch.com, to request sample reports and further information about services and pricing.

Asbury Research subscribers can login to our Research Center to see our most recent updates on our outlook for the US stock market, US market sectors, US interest rates, and economically influential commodity prices like gold, crude oil, and copper.


3 Reasons For 1 More Leg Higher In US Stocks

Asbury Alerts are one of 8 different reports that we produce for subscribers at various intervals throughout the month.  Their purpose is to provide tactical and actionable investment ideas that pertain to the more strategic investment themes that appear in our Commentaries and other more intermediate term oriented reports.

The following is our May 23rd Asbury Alert, entitled 3 Reasons For 1 More Leg Higher In US Stocks, in it’s entirety to show you a good example of our approach to investing, and how it it helps our clientele of professional investors manage risk and improve performance.

Report: Asbury Alert
Title: 3 Reasons For 1 More Leg Higher In US Stocks
Date: Friday May 23rd, 9:10 am ET

 

In Monday’s (May 19th) Keys To This Week, we said:

The key takeaway for this week is this: if there is going to be another leg higher within the 2013 advance, it needs to begin from right here between now and month end.

More recently, in our May 20th report entitled Correction Now, Or Another Leg Higher? 2 Key Indexes To Watch., we said:

“…the US stock market is trading at a critical near term decision point from which it is likely to either: 1) begin one more minor leg higher before potentially beginning a corrective decline in the 3rd Quarter, or 2) begin that correction nowA sustained rise above NDX 3617 and/or SOX 583 would suggest the former, that the US stock market is beginning another near term leg higher before a potential corrective decline emerges in the 3rd Quarter.”

The following 3 charts collectively suggest that another near term leg higher is beginning now.

The highlighted area in Chart 1 below shows that the PHLX Semiconductor (SOX) Index broke out higher yesterday from almost 2 months of sideways congestion.  This breakout indicates that the SOX’s larger February advance is resuming and targets an additional 6% rise to 620 that will remain valid as long as the upper boundary of the pattern near 580 now loosely contains the index on the downside as underlying support.

<Editor’s Note: The SOX met our 620 initial on June 9th, to capture a 6% advance in a little over 2 weeks.>

Chart 1

Chart 1

Semiconductors typically lead Technology, and Technology typically leads the US broad market, so as long as this pattern remains intact it will also be seen as being indirectly near term bullish for the S&P 500.

Yesterday’s bullish breakout in the SOX is especially compelling because it occurred on significantly expanding investor assets in the PowerShares QQQ Trust ETF, which the highlighted area in the lower panel of Chart 2 below shows have now moved back above their 21-day (1-month) moving average for the first time since March 13th.

Chart 2

Chart 2

As long as these assets continue to expand/remain above their moving average, we will view it as an indirect indication that there is enough near term bullish conviction by investors for the SOX to meet its 620 target.

The highlighted area in the lower panel of Chart 3 below shows that, as the SOX is breaking out higher from 2 months of sideways congestion on expanding investor assets in the QQQs, the S&P 500‘s 1-month rate-of-change (ROC, the percentage change between the most recent price and the price 21 day ago) has been positive (bullish) since April 22nd and is now testing its zero line from above.

Chart 3

Chart 3

This means that SPX must begin to rise from right here in order to keep near term market momentum positive (bullish) as it did on October 8th and December 18th 2013, and most recently on April 11th (green vertical highlights between both panels).  A negative shift in the ROC would indicate that a pullback/correction is beginning in the US broad market index, as recently occurred between January 23rd and February 20th (red highlights).

Conclusion, Investment Implications, Strategy

The near term inflection/decision point for the US stock market that we have identified and have been discussing for the past several weeks appears to be resolving itself to the upside this week, which targets an additional 6% rise in the market leading PHLX Semiconductor (SOX) Index before a US broad market pullback/correction potentially emerges during the 3rd Quarter.

As long as the SOX remains above 580 on expanding investor assets in the PowerShares QQQ Trust ETF and a positive 1-month rate of change in the S&P 500, our currently positive near term bias for the US stock market will remain intact.


Since that report, the S&P 500 rose by 76 points or 4% into the 1,968 June 24th highs in exactly one month, and those highs were tested again today.

Interested investors can contact us at 1-888-960-0005 or sales@asburyresearch.com to request further information about services and pricing.

Asbury Research subscribers can login to our Research Center to see our most recent updates on our outlook for the US stock market, US market sectors, US interest rates, and economically influential commodity prices like gold, crude oil, and copper.


XOI Meets Our 1700 Upside Target

The chart below shows that the AMEX Oil Index, which is now known as the ARCA Oil & Gas Index (NYSE: XOI), met our 1700 initial upside target this morning, first mentioned in our January 25th 2013 report entitled A Strengthening Energy Sector Is Positive For US Stocksto capture a 370 point, 28% advance in just about 17 months.

XOI Weekly Since 2009

XOI Weekly Since 2009

From that report:

Quarterly momentum metrics and our own sector-related asset flow data concur that the current June 2012 trend of relative outperformance by the Energy Sector is uncompleted. This directional bias is corroborated by recent bullish breakouts from almost 2 years of sideways congestion in the AMEX Oil Index (XOI) and the Energy Sector SPDR ETF (XLE), which target an upcoming 28%-30% rise in these assets amid what appears to be an emerging, corroborating advance in positively-correlated crude oil prices.

Chart 7 plots XOI alongside the S&P 500 since 2000, and points out that these two series have maintained and stable and significant positive correlation to one another for the past 20 years.  Per the correlation, upcoming intermediate to long term strength by XOI suggests a similar upcoming advance by the US broad market.

Economically, this implies an upcoming increase in economic demand which would indirectly support our overall positive bias for the US stock market in 2013.

A Strengthening Energy Sector Is Positive For US Stocks
Asbury Research Commentary, January 25th 2013
(access requires subscription)

 

During the same 17 month period the Energy Sector SPDR ETF (XLE) has risen by 20.11 points or 26% to meet our 97.00 upside target on June 9th, while the positively correlated S&P 500 has coincidentally risen by 457 points or 30%, both as forecast in our January 2013 report.

 


TLT Meets Our 115.20 Upside Target

The chart below shows that the iShares 20+ Year Treasury Bond ETF (TLT) essentially met our 115.20 initial upside target, first mentioned in our March 26th report entitled 5 Reasons For A Q2 Decline In US Interest Rates (access requires subscription), on May 29th to capture a 5.20 point, 5% advance in almost exactly 2 months.

TLT Daily Since February 2014

TLT Daily Since February 2014

During the same period, the yield of the US 10-Year Treasury Note declined by 26 bps to 2.45%.

From our March 26th report: 

The most compelling data that we see right now, across our macro coverage of the US financial landscape, suggest an emerging move toward declining long term US interest rates and rising long dated US Treasury prices that could potentially dominate much of the 2nd Quarter.

What makes our analysis so compelling, aside from the fact that it is counter to most everything that you hear and read in the financial media, is that it showing up in a lot of different places including: 1) current positioning by the smart money in the futures market, 2) the relationship between US and European government bond prices, 3) the yield curve, 4) investor sentiment, and 5) the Japanese stock market.

We would view a sustained rise above 108.73 in the iShares 20+ Year Treasury Bond ETF (TLT), a sustained decline below 2.70% in the yield of the US 10-Year Note, and/or a rise above 102.72 in the iShares 7-10 Year Treasury Bond ETF (IEF) as confirmation that the move we are expecting is underway.”

Asbury Research subscribers can view the entire report by visiting our Research Center.

Interested investors can contact us at 1-888-960-0005 or sales@asburyresearch.com to request further information about services and pricing.


Video Replay & Accompanying PDF of
John Kosar’s June 11th Webcast

John Kosar, Asbury’s Director of Research, presented a webcast for the Market Technicians Association (MTA) on Wednesday June 11, 2014 at 12:00 pm ET entitled “US Financial Update for June 2014″

If you missed it, you can view the video replay and
download the accompanying PDF by
Clicking Here
and using the case-sensitive
promotion code : asbury6

 


SOX Index Meets Our 620 Upside Target

The chart below shows that the PHLX Semiconductor Index met our 620 initial upside target this morning, first mentioned in our May 23rd report entitled 3 Reasons For 1 More Leg Higher In US Stocks (access requires subscription), to capture a 6% advance in a little over  2 weeks.

SOX Index Meets Our 620 Target

SOX Index Meets Our 620 Target

From that report:

“The near term inflection/decision point for the US stock market that we have identified and have been discussing for the past several weeks appears to be resolving itself to the upside this week, which targets an additional 6% rise in the market leading PHLX Semiconductor (SOX) Index before a US broad market pullback/correction potentially emerges during the 3rd Quarter.”

 

 


Investor Sentiment & Q3 US Stock Market Direction

The graphic below includes 2 of 39 charts that comprise our US Financial Market Chart Book for June 2014 (access requires subscription), which was distributed to Asbury Research subscribers earlier today.

“Chart Book” is a collection of key charts and data that convey our best investment ideas over the next 1-3  months for the US stock market, market sectors, and US interest rates.  It includes an accompanying video in which John Kosar, Director of Research, discusses each chart’s implications for upcoming US financial market direction.

June US Financial Market Chart Book: Slide 13 of 20

June US Financial Market Chart Book: Slide 13 of 20

continued>>>


Asbury Research subscribers can view the entire report, which includes newly-updated price targets for key US and European stock indexes, and our intermediate term outlook for US interest rates, by visiting our Research Center.

Interested investors can contact us at 1-888-960-0005 or sales@asburyresearch.com to request further information about services and pricing.


Oil Prices: Smart Money Skeptical At $103 Per Barrel

One of several investor asset-flow based investor sentiment metrics that we track is the weekly Commitments of Traders (CoT) data. 

The CoT data, compiled and published by the Commodity Futures Trading Commission (CFTC), breaks down futures open interest to determine and disclose how several different types of investor are positioned in the marketplace.

One COT data series that has caught our attention recently is the current positioning of the Commercial Hedger and Large Speculator categories in crude oil futures.

First, a little background information.  Commercial hedgers are large traders who also deal in the commodity on a cash basis, which in this case would include oil producers. These entities typically accumulate a net position against the trend, to hedge their physical interest in the commodity.  Think of them as value barometers.  More specifically, this group indicates, via their positioning in the futures market, when the smart money thinks (and, more importantly, is betting) that an asset is either over- or under valued.

Large Speculators are non-commercial large traders who have no dealings in the underlying commodity.  They are typically commodity funds who accumulate a net position with the trend.

The chart below shows that Commercial Hedgers are currently hovering near a record net short (bearish) extreme of 445,492 crude oil contracts (red line, upper panel) while the trend following Large Speculators are coincidentally holding a near record net long (bullish) position of 423,136 contracts (blue line, middle panel).

Crude Oil Futures Since 2006 & COT Data

Crude Oil Futures Since 2006 & COT Data

This indicates that the smart money, who is in the oil business, is aggressively betting that crude oil is currently over-priced at $103 per barrel.  If they are correct, and they almost always are, this means that any decline that pushes oil back below $100 per barrel will probably send these very aggressively net long commodity funds heading for the exits, and that forced selling could fuel the decline that the smart money is betting on.

The pink highlights between all 3 panels show that the previous two similar net positioning extremes by the Commercials and Large Speculators, back in April 2011 and again in February 2012, immediately preceded two 30% declines in oil prices as in each instance they dove back below $100 per barrel.

Crude oil prices have historically been an economic barometer that can indirectly indicate, and sometimes lead, upcoming direction in other financial asset prices.  This can be seen in the periodic positive correlation between oil prices and the S&P 500 during the past decade.

Asbury Research subscribers can view our latest macro overview of the US financial landscape, including US stocks and sectors (we have been overweight the Energy Sector since March 3rd), US interest rates, the US Dollar. and economically influential commodity prices like crude oil, copper and gold, by logging into our Research Sector

Interested investors can request information about Asbury Research, including services and pricing, by emailing sales@asburyresearch.com or calling 1-888-960-0005.

 


Gold: Bad Investment Or Great Buying Opportunity?

Following a huge $207 per ounce, 17% rise in gold prices to almost $1400 per ounce between December and March, gold prices have since given back more than two thirds of those gains and are currently trading at their lowest level in almost 4 months.

Is it time to stay far away from gold as an investment, or is this a great buying opportunity?

History suggests that it may be the latter.

The following is an excerpt from our June 2013 Global Seasonal Analysis report


Gold Seasonal Pattern Since 1977

The green bar on the chart at lower left on the previous page identifies June as the 10th seasonally strongest or 3rd weakest month of the year for gold prices (London PM fixing) since 1977. It represents a modest one-month seasonal decline from May, the 8th strongest month, but leads into a gradually-increasing period of seasonal strength that culminates in September, the strongest month of the year for the price of the yellow metal during this 37-year period.

Chart 20 of 24

Chart 20 of 24

The depth of the teal bar on the chart indicates that, on average since 1977, gold prices have declined by 0.18% in June. The red line shows that gold prices loosely adhered to their 36-year annual seasonal pattern during 2013 by bottoming in June, rebounding into August, and then declining in October.

continued>>


Global Seasonal Analysis, one of 8 different reports that we produce for subscribers at various intervals throughout the month,  displays and analyzes annual, quarterly and monthly seasonal trends for 17 global asset prices including equities, benchmark interest rates, foreign exchange, and key commodity prices based on historical data going back to the 1950s.

Asbury Research subscribers can view the entire report by logging into our Research Center.

Interested investors can request information about Asbury Research, including services and pricing, by emailing sales@asburyresearch.com or calling 1-888-960-0005.

 


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