What Do Oprah and The Bank of Japan Both Do That Can Make You $?

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Last Friday the stock and bond markets rocked higher on a surprise announcement from the Bank of Japan that it was cutting its benchmark interest rate to below zero.

I have to admit I didn’t anticipate this move either, but perhaps we could have seen it coming with a little more attention to the charts.

Consider the chart on the chart of the DXJ below. This ETF tracks the Japanese stock market and hedges against currency fluctuations.

Notice the points labeled #1 - #3 all fall at roughly the same price level.

At the point label #1 the BOJ announced a surprise easing in the form of a massive increase in asset purchases.

Point #2 wasn’t a “surprise”. This took a little digging. According to BOJ financial statements filed in July, they intended asset purchases of 350 billion Yen for the month of September. However, after August’s decline in the market, their August financial statements announced intentions of 500 billion Yen for September (an extra 40%!).

Apparently they thought that would be enough because the expected to return to “only” 350 billion Yen level for October.

I didn’t figure out if they stuck to their intentions, but I think we can see in the charts that they probably could have returned to 350 billion as the market rallied in October.

Finally, you know number #3. Friday’s “surprise” move to negative rates!

I have to commend the BOJ for being quite good at buying against support all three times.

In keeping with the theme of timely trading, it seems Oprah has taken a page out of Carl Icon’s playbook on “timely stock price enhancement tactics”. In case you are not aware, Mr. Icon has a reputation for being very good at timing his tweets about AAPL with key chart points!

In October, Oprah announce she had a 10% stake in the heavily shorted and extremely depressed stock, Weight Watchers (WTW). As a result the stock promptly jumped 100%.

Even more deadly for the shorts than just being an owner, Oprah also to become the new spokesperson.
Considering her average purchase price of $6.79, it was a pretty nice way to make $20 per share on 6.4 million shares over the following 30 days. That’s $128 million, but who’s counting.

I like Oprah. I think she’s really out to help people. And her buying into WTW certainly helped a lot of shareholders! Even some big ones (more on that later).

So I’d like the following analysis to be read as pointing out that I’m quite impressed with her chart reading skills, because...

As far as I’m concerned $128 million is Trump change for a billionaire like her (no political implications intended). That said, I’m sure she’ll give it her all to make WTW succeed.

If you look at the chart below of Weight Watchers (WTW), you’ll see labels #1 - #4.

#1 Is the jump caused by Oprah’s news of owning and partnering with the company.

#2 I’ll explain later.

#3 Is a 30% rally from right under the 50-day moving average, and the price point that filled the gap from

#2. This a great technical point to look for support. But the 30% rally was a result of a tweet by Oprah announcing a new commercial for WTW!

I couldn’t find any news to attribute to the subsequent break down under the “Oprah tweet” low, but despite Oprah’s involvement, not everyone believes the stock is worth so much.

#4 You’ve probably guessed it. The market’s sitting at that October breakout low and the 200-day moving average.

What a great place to enhance the support with another Oprah tweet about a new commercial! This time the rally was only 20%. I hope, for her sake, this is not a trend.

Finally there is #2…

Having discovered Oprah’s ability to read charts, I thought for sure I’d find that she tweeted against the first pull back to the 10-day moving average, but that’s not the case.

Instead, #2 made me smile in disgust.

I readily admit that I could be making an unfair judgement here, but I’m sure I won’t be the only one.

#2 is a 30% jump in the stock, but it’s not that move that made me mad. It’s the October gap, because the #2 gap is a result of a 13-D Filing disclosing that Point72 Asset Management holds a 6% stake in WTW.

I didn’t recognize Point72 so I had to find out who could have been so lucky, or smart, as to own so much of such a beaten down stock!

Much to my amusement, I discovered that Point72 Asset Management describes itself as the “family office managing the assets of its founder, Steven A Cohen, and eligible employees.”

Smart? Extremely.
Lucky? I doubt it.

If you don’t know the name, Steven A Cohen, google “Steven A Cohen SEC”.

So the moral of this week’s Market Outlook should be clear…

If the BOJ and Oprah are reading and “painting” the big picture charts, you should be reading them!

Unless of course, you’ve got a Rolodex and investment style of the same caliber of the billionaire hedge fund manager Steven A Cohen!

Here’s how to anticipate the market’s next move using the charts...

This week’s Market Outlook video will walk you through the 4 markets and 6 indicators you should absolutely be reading to stay on top of the market right now!