Having traded through the 2007 - 2009 stock market meltdown, I remember what an impact "flapping gums" had on short term market gyrations.  For every apocalyptic Jim Cramer "They're Nuts" type rant uttered back then, there was sure to follow an opposite but never-quite-equal agenda driven sound byte from institutional money managers ("this is a buying opportunity") or government officials ("the economy thriving"-GW Bush August 8, 2007) who would huff and puff the markets with price-propping reassurance.  

Month in and month out, financial Media Talking Heads delivered lip-smackingly tradable dead-cat bounces, giving smart money the "wink wink--nod nod" signal to enter short positions and then take profits at precisely timed intervals.  A symphonic cascading downward spiral that eviscerated jobs, 401ks and the savings millions who were left out of the loop became the easy pray for those of us who knew where to hunt and when to pull the trigger.

Despite the unfolding stock market panic around us today, I have no idea if we find ourselves in a stock market zombie apocalypse, nor would I dare inflict an ill-informed flesh eating expert opinion about market direction on you.  With Chaikin Analytics, you are inoculated against the incredible amount of portfolio-shrinking verbal bullshit that I guarantee will feed upon the innocent in Business Media this week. 

You have as good, if not better, data than the predatory zombie pros around you.  And the data is speaking loudly. 

Buying opportunity?   You are sure to hear it that this week.  But is it really?

• The Power Gauge of individual components of the S&P 500 currently results in a rating ratio of 27 Bullish/Very Bullish Stocks to 148 Bearish/Very Bearish stocks.  That's the worst ratio we've seen since we started tracking it in the past 3 years. 
  
• Cyclical sectors such as Energy, Industrials and Basic Materials are all ranked even worse than the overall large cap index, with defensive Utilities poised for the best market performance.  That's a very defensive sign.
• Remember the Power Gauge is not heavily technical in nature.   It's driven more by key fundamentals such as company free cash flow, price to sales and book ratios, earnings report cards and analyst estimates.  Price action ultimately reflects these measures.  And overwhelming, the fundamentals are soft
• The consumer drives more than 70% of the US economy, yet look at the broken intermediate trend on the corresponding ETF, XLY.

The Buy Buy Buy pundits need sucker money to Fade, Face Fade...

I know I've sounded like a broken record over the past few months about price performance catching up to fundamentals,.  And while it appears that's what's going on now, we are responsible managers of our our own long stock positions and have stubbornly stuck to our rules in our Chaikin Power User Portfolio

• Friday's bloodbath caused  stop losses to be be hit on several positions.  
• We got hammered to the tune of a 15% loss on Flexsteel Industries in the opening gap-down, but that was the exception rather than the rule. 
• Our discipline of raising stoplesses to 2x the Average True Range below the long term Chaikin trend has resulted in mostly profit taking and some solid double digit returns.
• We don't hide anything, nor do we ever claim that Chaikin Analytics is a perfect system.  There's no such thing.  We're outperforming the market on the long side in this, a very tough year.  
• And remember, our long-only portfolio is hedged by short call option spreads which are designed to profit from market pullbacks or any emerging bearish trend.  Here's our performance. The sideways to downward overall 2015 market performance has made our bearish bets incredibly profitable with as stunning win-loss ratio  as you can see. 
• All long and short positions are entered and managed based on the data and trading signals from Chaikin Analytics.

Man, there is so much to talk about when we market conditions like the ones we're experiencing today emerge.  Just follow the data, you can out-shout any CNBC pundit.  

Never Fear the Talking Head again!

Later this week.  When the Talking Head urges you to "get your shopping list ready" because "it's a stock picker's market," you can use Chaikin Analytics to cherry pick the very best of the best- poised for incredible bounce back price appreciation.   You'll already know how to find them.  So let's compare notes before Friday.  Good luck.

-- Mike and AA

Paying attention to the Power Gauge sector trends in our Market Analysis section of the site?  Look at the move Utilities has made in the past couple of weeks.

With so few sectors showing bullish/very bullish underlying stock strength to begin with, we're really surprised that the S&P has managed to even hang in its sideways trend.  The fact that defensive playbook staple, Utilities, have powered to the top of the Power Bar differentials strengthens the case for the month's long sideways market consolidation finally resolving to the downside. For our long-only Chaikin Power User portfolio, strong consideration will be given to entering Pacific Gas & Electric Corporation this week.  Despite being overbought in the short term, PGE's Very Bullish Power Gauge rating and Relative Strength reading are in agreement, with strong Money Flow and a price pop above the long term Chaikin trend all having occurred in the space of just a few trading days.  Despite a recent run-up, the dividend remains healthily above 3.3%.

For demonstration purposes, we'll acquire the stock on any price weakness as our Trade of the Week.  But the December, $50 put is selling for $1.00, and that's the more likely real world play we'd make for acquiring the stock prior to the ex dividend date.

Yesterday, C group flashed an Oversold Buy Signal, and today, a more powerful long term Relative Strength Buy signal.  Recently, the stock pulled back despite strong money flow.  With the Power Gauge agreeing with the market in the form of Relative Strength, and the OB/OS Oscillator oversold, this is a picture perfect chart from a Chaikin Analytics standpoint. Financials as a group show strong technical and Power Gauge readings.  C is already in our Chaikin Power User portfolio.

Watch the trade of the week video to see why we're continuing to  scale into our  Citigroup position. 
Check our entire portfolio performance then grab a no-risk trial and start trading yourself using Chaikin Analytics.