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Why are we bearish?
The real reason why stock prices are dropping is not due to the coronavirus. It's because the Fed is taking away the easy money. The Fed recently reduced its total holding of repo contracts by $14.3 billion. In the repo market, that's a big enough number for participants to start feeling the effects of liquidity drying up. And the Fed has plans to steadily reduce its holdings even more. Lack of liquidity is the number one reason why market sells off. And easy money is the number one reason why market takes off. So when the Fed takes away the easy money, the good times are essentially over. Sooner or later, the bullish rise will pause. And given that $SPX $NDX have surged so high in the last 4 months, the drop will be rather painful. So while you may find setups to successfully trade long positions based on $SPX $NDX right now, we caution you from deploying large chunks of your assets into the market at this time. Hoping that $SPX $NDX will surge to more and more all-time highs may bring you a lot of stress. The full article covers: Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections
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Our trading system based on market internal indicators issued a bearish signal calling for a short-term top on Jan 22. Our readers had 2 days of warning before market took a serious dive.
Our trading system also identified in advance the bounce that started on Jan 28. We urged traders to exit long positions based on $SPX $NDX in preparation for Major Pullback4. Today market internals gave us another important message. The full article covers: Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections
Subscribe to read the full article. Market internals issued their fully bearish signal on Jan 22. Our readers had 2 days of warning, then came the sell-off that started on Jan 24.
FOMC announcement is tomorrow Wed Jan 29 at 2 PM EST. Stock market will likely go into a wait-and-see mode prior to announcement, but post announcement we are likely to see the resolution of the current drop. Will the Fed announcement finish the current medium dip and enable Surge10 to resume, or will it trigger a bigger sell-off that turns the medium dip into Major Pullback4? There is a fairly reliable way to determine this. The full article covers: Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections
Subscribe to read the full article. This article covers:
Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections
Subscribe to read the full article. The Lunar New Year is starting off with a sharp drop in the market. There are certainly lots of potential catalysts for the sell-off on Fri Jan 24, including the coronavirus outbreak. But this medium dip has been in the making for a while as you know, and it is due to something else entirely.
It’s the Fed who’s spoiling the party! The Fed giveth and the Fed taketh. The short story is that the Fed is winding down their cash injection into financial system. The original timeline was for the Fed to stop their repo operation by the end of January. But it is not entirely clear that they are going to accomplish this goal within January. This Reuters article explains the issues facing the Fed and the repo exit more clearly. But regardless of the exact exit date, the Fed is taking away the easy money, and in the process draining liquidity from all markets. It is Fed-injected liquidity, the sloshing of easy money, that has been driving the stock market to a new high. There is a high probability that Surge10 will end, and Major Pullback4 will arrive, when sufficient liquidity is drained from the system. There is also a high probability that Major Pullback4 will turn out to be the start of a new Down Trend in stocks. So, is Friday’s drop the start of Major Pullback4? If not, when can we expect it? Read on. The full article covers: Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections and Planning Your Trades
Subscribe to read the full article. The full article discusses exactly how to determine when the current sell-off will end. This article covers:
Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections and Planning Your Trades
Subscribe to read the full article. $SPX $NDX $RUT are gapping down this morning as $VIX $VXN gap up. The question is how serious is this rise in volatility. Is this a buy-the-dip opportunity or take-the-money-and-run signal?
We discuss the specific indicators to look for that answers these questions in today's trading plan. The full article discusses exactly how to determine when a short-term top is in for a medium dip, and what the end of Surge10 will look like. This article covers: Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections and Planning Your Trades
Subscribe to read the full article. Does anyone need a trading plan in this market?
It would seem that you can just buy buy buy and it will go up up up. Indiscriminately. It feels a lot like January 2018. All good times. All up. And then came February 5 2018. So how are we going to figure out when this party will end? Read on. The full article discusses exactly how to determine when a short-term top is in for a medium dip, and what the end of Surge10 will look like. This article covers: Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections and Planning Your Trades
To read the full article, register your email here. You will get immediate full access to all our nightly analysis and trading plans. No credit card necessary. Trial membership is FREE for one month. Here are testimonials from our readers. In the last 3 days, we have observed a pattern of morning buys and afternoon sells. Does this mean the bullish sentiment is waning?
The full article discusses exactly how to determine when a short-term top is in for a medium dip, and what the end of Surge10 will look like. This article covers: Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections and Planning Your Trades
To read the full article, register your email here. You will get immediate full access to all our nightly analysis and trading plans. No credit card necessary. Trial membership is FREE for one month. Here are testimonials from our readers. So what do we make of today's drop? We discuss this and more in the full article which covers:
Market Internal Indicators
Short-term Support & Resistance Levels
Market Projections and Planning Your Trades
To read the full article, register your email here. You will get immediate full access to all our nightly analysis and trading plans. No credit card necessary. Trial membership is FREE for one month. Here are testimonials from our readers. |
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