Joe Friday Says…Bull market progress could depend on this stock



When it comes to stocks that have been hit hard of late, Valeant Pharma (VRX), sure comes to mind. VRX is declined over 70% since July.

The decline has caused momentum to reach levels not seen since the 2009 lows at (1).

Volume has skyrocketed at (2). Potential that panic selling has taken place?

VRX after the huge decline, finds itself testing a cluster of support at (3).

Joe Friday just the facts...VRX is part of the 4-year white hot Bio-tech sector. What VRX does at (3) above, will have a big impact on the leading Bio-tech sector, which should also have an impact on the broad markets!

Buffett should be concerned about Berkshire and UNP here!



Is Berkshire Hathaway (BRK-A) and Union Pacific (UNP) a good proxy for the broad markets and economy? If you happen to believe they are, what happens to both of them from here, should be very important!

BRK and UNP both hit highs before the broad market did, earlier this year. Did they lead the market lower? Time will tell. Of late while the S&P 500 has rallied back near all-time highs, neither of these stocks has been able to match the broad markets upward strength.

The decline in BRK took it below its 4-year rising channel and the decline in UNP put it back inside of its 30-year rising channel.

Now BRK is kissing the underside of the 4-year rising channel as resistance for the first time ever at (1), which now could become a very important underside kiss.

UNP is now back inside of its 30-year rising channel and is kissing the underside of this long-term channel for the first time since the early 1990’s.

Are these two stocks/companies leading indicators of things to come? Whether they are leading indicators, is not what is important to the Power of the Pattern at this time. What is important is this…both are testing the underside of multi-year resistance lines at this time.

What they do at these resistance lines, should be very important for where these companies are 6-months from now!

Interest rates about to blast higher from here?


We’ve been hearing over and over for months if not years, that the Fed was going to “push rates higher.”

Do billions of free thinking people have anything to do with where rates go from here? We think so!

Below looks at the yield on the 30-year bond over the past decade.



Long-term yields when looking at them from 30,000 foot view, remain in a down trend (red channel). Yields now are near mid-level of this long-term channel.

The yield rally over the past few weeks has caused it to face falling resistance line (1), which looks to the part of a pennant pattern. At this time resistance remains resistance.

Yields find themselves at (2) today, which is at the top of the pennant pattern and at the 50% retracement level, based upon the yield high in 2014 and the low in Jan of this year.

What yields do at (2) should tell us a good deal about what billions of free thinking people are feeling.

If yields would breakout, would that be good for stocks? If yields hold at resistance, would that mean stocks are due a pause?

In my humble opinion, what rates do at (2), should have a good deal to say about where yields and stocks will be 5 to 6 months from now.

This is not your typical interest rate test of resistance!!!

Thank You Vets!!!