See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 4:55 PM EST - Sunday 6/28/20 We would like to welcome all new subscribers. Please read our FAQ for more explanations on terms, labels and abbreviations that we use. Long-term portfolio and medium term trades Our latest analysis of market conditions reveals a lot of bearish signals. This does not bode well for long-term equity portfolio, or medium-term long positions. However, Dive2 is not necessarily taking off this coming week, or even in July. Instead the transition to Dive2 may be a choppy market that frustrates both bulls and bears. We project that Dive2 will arrive in a big way after the next FOMC announcement on 7/29. August is the worst month for the Dow and S&P since 1987, according to the Stock Trader’s Almanac. Let's examine the signals in more detail. Signals from the Fed The Fed has been sending out some big messages, yet retail investors and financial headlines so far have not zeroed in on these messages. Here they are:
Signals from market internals Volatility: See further below for expanded discussion. Market breadth: NYSE and Nasdaq A/D charts are all bearish currently. However, the most concerning chart is Nasdaq A/D cumulative chart ($NAAD on Stockcharts.com). It shows the same bearish divergence observed between Jan and Feb 2020, and between Aug and Oct 2018. The divergence is this. There were less net advancing Nasdaq stocks in Feb 2020 compared to Jan, even though $NDX rose to a new high between Jan and Feb. There are now even less net advancing Nasdaq stocks than back in Jan, even though $NDX rose to a new all-time high last week. At some point soon, prices will wake up to this bearish divergence and start to head down as well. Equity put/call ratio: This daily chart for this ratio (PCCE on TradingView.com) shows a W bottoming pattern, indicating it is likely to rise up substantially. When this ratio rises, it is bearish for stocks. Percentage of bullish stocks: Again we are observing the same bearish divergence here. $NDX has been forming higher highs since 6/10 while this index ($BPNDX on Stockcharts.com) has been forming lower highs. Signals from bond market TLT chart shows long term bonds are coiling to rise. Meanwhile junk bond ETFs (JNK HYG) have trending down since the start of Jun, despite buying from the Fed. Junk bonds tend to behave more like stocks because they tend to rise in risk-on environment. The message here is that big money is moving more into risk-off defensive mode, and poised to move out of equity. This could be due to mid-year portfolio rebalancing by pension and hedge funds. But it could also be due to big money sensing the arrival of Dive2. Subscribe to read the rest of this post which covers: Signals from monthly charts Signals from $VIX Short-term trade setups Our members base their trading plans on our nightly analysis and projections, along with timely intraday calls. Some have been collecting 10% to 15% profits per week, or sometimes as much per day. SUBSCRIBE now to get our signals in advance of your trading day. Get live trade updates and take advantage of our introductory low rate of just $39/month. You can cancel at any time.
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See FAQ for more explanations on terms, labels and abbreviations that we use. Below is a time-delayed excerpt from our live updates for members. Updates 10:23 AM EST - Friday 6/26/20 We warned earlier today that Bounce8 is in trouble if:
We also warned do not enter short just yet. This statement is still true. We will post more analysis shortly about where $VIX $VXN are heading, and when you can begin shorting. The boss indicators $VIX $VXN are definitely in charge of the market today. Updates 9:29 AM EST - Friday 6/26/20 Here are the updated conditions that we are tracking, and updated entry/exit rules for today. Bullish: Bounce8 is intact if:
Bearish: Bounce8 is in trouble if:
When these bearish combinations are seen, it's a signal to exit long $RUT IWM. However do not enter short just yet. While this is a very choppy market, it is not yet ready to drop big. Furthermore, we need better setup for short entries. Recommended position management techniques in choppy markets:
Our members base their trading plans on our nightly analysis and projections, along with timely intraday calls. Some have been collecting 10% to 15% profits per week, or sometimes as much per day. SUBSCRIBE now to get our signals in advance of your trading day. Get live trade updates and take advantage of our introductory low rate of just $39/month. You can cancel at any time. See FAQ for more explanations on terms, labels and abbreviations that we use. Below is an excerpt from this weekend full analysis, posted Sunday 6/21/20. In last weekend analysis, we wrote that $SPX $NDX IWM were likely to find support in the green support zone on Monday 6/15, and they would rise up and get stuck in the orange resistance zone. This is pretty much what happened on 6/15 and 6/16. On Thursday 6/18, we wrote: There is now a better chance that $SPX $NDX IWM will be able to rise towards the top of their orange resistance zones. Keep in mind that this thrust is Thrust4 of Bounce7 for $NDX. Bounce7 is still on schedule to end after Thrust4. Indeed on Friday 6/19, $SPX $NDX IWM gapped up into their orange resistance zone as we anticipated. Then at 10:27 AM we wrote: Here are the conditions we are monitoring for to indicate Bounce7 is still intact.
Soon after, $SPX $NDX IWM dropped below the morning low, and $VIX rose up above 31.5. This combination told us that Bounce7 has ended. And as projected, $SPX $NDX IWM ended up with a bearish engulfing candle day. So now what? Bounce7 has ended. Are $SPX $NDX IWM starting the highly bearish Dive2, or are they just going to snap back to support at the bottom of the channel again? To answer that we turn to market internals. Our members base their trading plans on our nightly analysis and projections, along with timely intraday calls. Some have been collecting 5% to 7% profits per week, or sometimes as much per day. SUBSCRIBE now to get our signals in advance of your trading day. Get live trade updates and take advantage of our introductory low rate of just $39/month. You can cancel at any time. Below is an excerpt from our latest updates posted at 1:15 AM EST Thursday 6/11/20. Our members had lots of warnings since 6/9 about the impending end of Bounce6. At 1:15 AM Wednesday 6/10, we wrote: These indicators are telling us that Bounce6 is likely to end. For short-term positions that have been riding Bounce6 up, the prudent move is to consider locking in profits.... The most likely move after Bounce6 ends is for $SPX $NDX IWM to snap back to strong support zones near the bottoms of their respective channels. This is pretty much what happened Wednesday 6/10. Bounce6 ended for $NDX. Bounce6 already ended for $SPX IWM on 6/8. $SPX IWM started heading down early Wednesday. Now future prices are marching down sharply. Here are the current messages from market internals. ... SUBSCRIBE now to get our signals in advance of your trading day. Get live trade updates and take advantage of our introductory low rate of just $39/month. You can cancel at any time. Our observations and comments on Stocktwits don’t always reflect our short-term trading calls, published in the members section daily. So we thought we would share with you our calls since 6/1. 6/1: "still a moderate net advancing day….setup not "ripe" enough yet for entering short." 6/2: "IWM and RTY show an upward coiling pattern. This supports the general rise in price for $SPX $NDX IWM." 6/3: "Overall, market internals and price actions still favor the bulls on Wednesday." 6/4: "Minor Dip scenario… going from Support1/2 back up to Resistance1/2." 6/5: "The buying momentum is quite strong….Note that we do not think prices will revisit the support zone today." As one of our members pointed out, an entry into IWM on 6/2 per our call would result in over 8.5% gain by today. An entry into TNA would result in almost 27% gain. SUBSCRIBE now to get our signals in advance of your trading day. Get live trade updates and take advantage of our introductory low rate of just $39/month. You can cancel at any time. |
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