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"So it's all tricky territory lately, and don't let any temptation toward complacency (in either direction) convince you otherwise."
http://www.pretzelcharts.com/
"Last update discussed that SPX and NYA had both reached support, and both markets proceeded to form sizeable bounces from that support. I want to say that puts us in trickier territory, but the reality is, this market has been stuck in a trading range for a year. So it's all tricky territory lately, and don't let any temptation toward complacency (in either direction) convince you otherwise.
Year-long trading ranges are the type of thing that could give Freddy Kruger himself nightmares.
There's no change to either NYA or SPX at the intermediate level."
"Near-term, I outlined a bear case (the bull case is obvious and was already discussed last update):"
"In conclusion, so far, the market has bounced twice at major support. As noted several times previously, bears still need to break that to get anything going. On the flip side, bulls have yet to claim the next key resistance levels, so they can't claim victory yet, either. And on another note, if you've survived this year-long trading range without blowing up your account entirely, pat yourself on the back. When the market treads water, often the best we can hope for is to do the same. Trade safe."
Just checked futures again.
Now the futures are all red but not by much.
Conclusion: Don't check futures too early.
Question:
How early is too early?
At the time of this post ...
futures for Monday open are very green:
Dow mini: +543
S&P mini: +74.5
I usually don't check these things this early, so I'll check it again late tonight (when I normally check it).
Stock Market Commentary 05/05/23
By Lawrence G. McMillan
"Stocks are still stuck in a trading range. The wider range has its lows in the 3760-3850 area (the lows of both December and March). The narrower, more recent range has its lows in the 4050-4070 area. That was just touched yesterday, but appears to be holding at this time. On the upside, resistance at 4200 is strong and has a lid on this market for now. Above there, the highs of last August at 4300 make for further resistance.
Bulls are seeing the positive force of big tech earnings, and bears are concerned with inflation and interest rates. The two factions have created this trading range that we are in.
Equity-only put-call ratios continue to remain on sell signals. That is, they are continuing to rise. As long as that is the case, these sell signals will remain in place. The weighted signal (Figure 3) is coming from the lower (i.e., overbought) section of its chart, while the standard signal (Figure 2) is not. This has been the case for a while now, but these signals have been effective.
Breadth has mostly been negative, with the exception of two very strong days on April 27th and 28th. The net result of this action has been that the breadth oscillators have whipsawed once again, but at the current time they are in oversold territory. The market is rallying today (May 5th) so buy signals may be forthcoming early next week.
One set of indicators is in its own world: indicators related to $VIX and its derivatives. $VIX edged higher this week (finally) and just barely reached "spiking mode," as of the close on May 4th. The stock market can fall sharply while $VIX is in "spiking" mode, but eventually a $VIX "spike peak" buy signal will occur. It appears that such a buy signal has a strong chance of confirming, perhaps as soon as today. Meanwhile, the trend of $VIX buy signal remains in place, since $VIX would have to close above its declining 200-day Moving Average (currently just below 23) in order to stop that out.
We are not maintaining a "core" position as long as $SPX continues to trade in this trading range. We are trading individual indicator signals as they occur."
S&P 500 (SPX), CBOE Market Volatility Index (VIX), 21-Day Equity Only Put Call Ratio (PC21), and Weighted 21-Day Equity Only Put Call Ratio (PC21 w) charts updated each Friday.
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1683310545537
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1683310545537
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1683310545537
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1683310545537
4122 has slowed them down, good call
Just can't stop "them" Bulls...
"....last update thought the pattern begged more downside and that happened -- now the market has reached support, so bears need to keep pushing and break that support. If they can't, then Red 2 (second chart) will stay on the table."
http://www.pretzelcharts.com/
"In the prior update, I wrote:
NYA is interesting, because, unlike SPX, it did not make a new high, instead making a slightly lower low. This suggests that these markets need at least a little more downside
That read came through, and the markets delivered more downside -- in fact, both SPX and NYA declined right to their downside inflection zones (even though anyone not well-versed in Elliott Wave probably thought my placement of the red horizontal line seemed arbitrary!):"
"SPX also tested/is testing its important trend line:"
"These are important tests, and bears need to come through, since we can see on the near-term SPX chart that the decline has taken the form of three waves so far:"
"In conclusion, last update thought the pattern begged more downside and that happened -- now the market has reached support, so bears need to keep pushing and break that support. If they can't, then Red 2 (second chart) will stay on the table. Trade safe."
"NYA is interesting, because, unlike SPX, it did not make a new high, instead making a slightly lower low. This suggests that these markets need at least a little more downside......."
http://www.pretzelcharts.com/
"Since last update, SPX effectively retested its prior swing high and was strongly rejected. This is the moment of truth for blue 2:"
"NYA is interesting, because, unlike SPX, it did not make a new high, instead making a slightly lower low. This suggests that these markets need at least a little more downside, as NYA's current decline would be expected to at least reach parity with its prior little leg down (from 15710 to 15201), which would mean it (most likely, these are never 100%) needs to make its way down to 15110-20 at the minimum. Note the red horizontal is now potentially a key overlap:"
"Today is, of course, a Fed day, which means Powell needs to decide whether to let inflation run amok or whether to continue trying to convince the market that it's being stupid and that (to quote a Fed interoffice memorandum) The Fed is Really Serious About Taming Inflation This Time, We Mean It (for Realz Y'all!) So Bulls Should Quit Acting Like Everything is Going Back to "Normal" Tomorrow Because It's Not.
Either way, things could get interesting soon. Trade safe."
"....bears still need to whipsaw the intermediate red line to be in better shape, while bulls still need to sustain a breakout over 4195 to help their cause."
http://www.pretzelcharts.com/
"On Friday, SPX's 4169 high was broken, showing that it was a b-wave high:"
"NYA has not yet broken its corresponding high:"
"And no change to the big picture yet:"
"Thus, still no change to the zones we've been watching. As noted on Friday:
bears still need to whipsaw the intermediate red line to be in better shape, while bulls still need to sustain a breakout over 4195 to help their cause.
Trade safe. "
Using technical analysis during the Pandemic got "Bullish and Balanced". The street already knows what to expect and discounted it according to YOU! So please EW is as good or as Bad as human interpretation makes it.
I HAVE PROOF of your extreme BIAS using YOUR technical method.
How do people listen to others that failed to observe the obvious. A Pandemic that was known from charts 100 years ago, known from science that showed it was deadly and known it was spreading FAST. Me, I was ridiculed by YOU during that time until the drop started. made fun of Common Sense and Intuitive analysis.
As for your BULLISH call here we did go from a low ball negative 5% earnings to a whopping negative 2% so far. We did grwo the SP500 P/E from last quarter of 19 to 22. We all agree that the FED has to stop raising rates after the 25 basis point move and actually start LOWERING it all this year in order for Wall Street to make money. This is a FACT! I can prove it. Every article and analysis states unequivocally they expect disinflation to be back. Like an addict demanding their fix. Way overdue and about to go into withdrawal pains.
YOU call for a BULLISH powerful move from right here! Got it! Just ignore INFLATION and the recent data? But hey, you said the same thing in the first 5 weeks of a Pandemic.
BTW remember my rant on Pandemic, rant on Transitory and NOW rant on Inflation China and Debt Ceiling. The latter is about to bite us hard. A sure way to see a crash. Like a Pandemic. the GOP will never ever ever agree to increasing the debt limit till after a crash.
Place your bets. i choose Common Sense and a little easy analysis. here goes: Trump will be the nominee regardless of his troubles and indictments. Guaranteed! he will LOSE to anyone if the market isn't in deep trouble. if Ted Cruz, the orchestrator of overthrowing an election and boasting about it was seen hiding in a closet during the Jan 6th tea party you can be damn sure they will do ANYTHING to win, even default and cause a crash. A NO BRAINER!
this market analysis
was just as bad as it gets
again using just ew, and price which equals = emotional trading
is so miss leading
sorry for the rant
but i hate to see others lose money
violent rally has just begun
everything is in sync for this
using just EW and price is like using a 1990's computer
Stock Market Commentary 04/28/23
By Lawrence G. McMillan
"Stocks had been drifting in a tightening range, causing realized volatility to shrink, and boring the heck out of traders -- even though intraday swings were still present. Then with some earnings announcements this week, $SPX first dropped 65 points one day and then rose 80 two days later.
This hasn't had much effect on the $SPX chart, though, as resistance at 4200 is still a major factor. One could say that $SPX is in a broad trading range between 3760 and 4200 and has been since last October or November. Within that range, there have been some trading swings, of course. In the near term, there is still support in the 4050-4070 area.
A new negative development is that the equity-only put-call ratios have rolled over to sell signals. From Figures 2 and 3, one can see that they have curled upward over the past week or so. But this sell signal is not just an observation by one's naked eye; it is also confirmed by the computer programs that we use to analyze these charts.
Breadth had gotten very negative, even though $SPX was trading more or less sideways. Breadth was negative for seven days in a row . That caused the breadth oscillators -- which had been on sell signals since April 10th -- to descend into oversold territory. Then the big positive day on April 27th pulled them back up to potential buy signals.
Despite the negativity of some of the signals discussed above, the signals surround $VIX and volatility remain generally bullish for stocks. $VIX rose modestly when $SPX turned down in the early part of this week -- but not by enough to cause any "problems."
With $VIX remaining subdued, the trend of $VIX buy signal remains intact. It is an intermediate-term buy signal which occurred in the circle on the chart in Figure 4, back in March. This buy signal would be stopped out if $VIX were to rise above its 200-day Moving Average, which is at 23 and declining.
Overall, we are not taking a "core" position because $SPX remains in a trading range. However, we will take positions in line with individual indicator's signals."
Weekly Charts
S&P 500 (SPX), CBOE Market Volatility Index (VIX), 21-Day Equity Only Put Call Ratio (PC21), and Weighted 21-Day Equity Only Put Call Ratio (PC21 w) charts updated each Friday.
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1682698142287
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1682698142287
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1682698142287
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1682698142287
"....bears still need to whipsaw the intermediate red line to be in better shape, while bulls still need to sustain a breakout over 4195 to help their cause..."
http://www.pretzelcharts.com/
"Last update's near-term wave count proved correct, as SPX followed the iii and iv labels quite well, but the 4120-25 "big question mark" v proved to be a bit overambitious (hence the big question mark) and, while SPX did form a fifth wave down, it found support at the red trend line we've been watching forever:"
"Near-term, if the bounce is corrective to the decline from 4169, then it will need to hit some resistance soon -- but as noted back on the April 19, it's quite possible that the 4169 high was a b-wave, and if that's case, SPX will probably exceed it. So we're in unclear territory at the moment."
"Not much to add regarding NYA:"
"In conclusion, bears still need to whipsaw the intermediate red line to be in better shape, while bulls still need to sustain a breakout over 4195 to help their cause. Between those two zones is a lot of noise. Trade safe."
"... that was a very significant inflection with the potential for things to get very bearish from here:"
http://www.pretzelcharts.com/
"For the past few weeks, the market has been stuck "on the bearish side of an inflection zone" (as described in the last update). Yesterday, SPX and NYA both made their first significant breaks lower in weeks. This confirms the inflection zone, no matter what else happens from here, but as long as bears hold those recent highs, then they're in good shape."
"Continue to keep in mind that, as noted many times, that was a very significant inflection with the potential for things to get very bearish from here:"
"Near-term, SPX finally appears to have an impulsive turn at micro degree:"
"In conclusion, bears still need to whipsaw the red intermediate trend line, but if they can sustain a whipsaw there, they will be in very good shape. Trade safe."
The problem with VIX.
It's a measure of very short-term historical (and current) volatility of the market which is always higher during a sell-off. It knows nothing about the future but it can (and does) affect the future as traders react to it, especially if they try to trade VIX.
Given that traders will react to it (and do that during its early and late stages), it will obviously affect both the current and future market prices, and that will reflect back and affect VIX itself.
Therefore, it's a market cannibal with very high volatility. Be very careful trying to trade VIX itself as that will take money away from the rest of the market and that will result in a lower VIX as it's gotten fatter (more calm) after traders leave the market.
RCKS...Thanks..I understand they have a "new" vix now ..Symbol VIX1D. I guess the option traders have now changed their way of trading them..Like a lot of 1 day options..So maybe the old VIX is out of business..I do not know..I do not trade options so I maybe should not even comment about the new symbol as I do not know how it works.
Are We In A Recession Yet?
One common definition of recession — two consecutive quarters of negative gross domestic product (GDP) — happened in the first half of 2022. Yet the organization that defines U.S. business cycles, the National Bureau of Economic Research (NBER), takes a different view.
According to the NBER’s definition of recession — a significant decline in economic activity that is spread across the economy and that lasts more than a few months — we were not in a recession in 2022 and we still aren’t now.
Until recently, the Federal Reserve was determined to raise interest rates until inflation got much, much lower. The cooling economy plus the implosion of Silicon Valley Bank — the second-largest bank failure in U.S. history — has inspired the Fed to starting talking about a pause in rate hikes.
To keep tabs on whether an official economic contraction is imminent, we’ve devised the following recession tracker, which monitors 15 important economic indicators. Once most of the signs point downward, a recession may very well be nigh.
https://www.forbes.com/advisor/investing/are-we-in-a-recession/
My interpretation: talk is cheap but it can cause a whole lot of whoop-ass ... or pleasure if following your guess became true.
Question is: are you investing or are you gambling?
My way: buy the stock - - - sell its weekly Calls.
If assigned: wash, rinse, repeat. It's a way of making money while standing guard
Is The Bear Market Over? Watch The VIX
Tom Bowley | April 23, 2023 at 11:13 AM
http://stockcharts.com/articles/tradingplaces/2023/04/is-the-bear-market-over-watch-245.html
"The normal relationship between the Volatility Index ($VIX) and the S&P 500 is an inverse one. The easiest way to illustrate this is to pull up a chart showing both and their correlation coefficient:"
http://stockcharts.com/img/articles/2023/04/23/d0d1787b-c0ce-4d8c-abe1-20ee118c3fab.jpg
"The red arrows mark bottoms in the S&P 500 and they generally coincide almost perfectly with tops in the Volatility Index. In the bottom panel, the correlation coefficient tells us whether the SPX and VIX are moving in the same direction (positive correlation) or in the opposite direction (inverse or negative correlation). The latter is highlighted by the blue-shaded area. It should be fairly obvious that the VIX and SPX almost always move in opposite directions.
To fully understand the VIX, you need to have a basic understanding of stock options and how they work and are priced. Options are contracts that give option buyers the right to buy or sell a stock at a predetermined price (strike price) on or before a specified day (expiration day). The pricing of options is dependent on a number of factors, but two of the most important are the volatility of the individual stock and the time remaining on the contract.
The value of the VIX is based on the "expected volatility" of the S&P 500 over the next month. As I pointed out in the chart above, the VIX typically goes up when the S&P 500 goes down (inverse correlation, remember the blue-shaded area). That tells us that expected volatility will be higher during market downtrends. And, because the VIX is based upon expected volatility over the next month, the lower the VIX goes, the more bullish the signal for the S&P 500. The biggest moves higher in the S&P 500 have historically occurred when the VIX is dropping and extended bull markets are associated with historically-low VIX readings.
When I look at sentiment, I only like two signals. One is the VIX, because it looks at how market makers are pricing S&P options, which provides us a clue as to what market makers are expecting over the next month. The second is the equity-only put-call ratio ($CPCE), because it provides us a feel for the psyche of the retail trader. The latter is the best contrarian indicator in the stock market, in my opinion. Its predictive abilities are astounding. But let's stick with the VIX here for this article.
Bear markets require a number of things, but one significant need is fear. The more fear we have, the more volatile the stock market is, and the higher the VIX. That's how it works. That's why we see VIX readings in the 30s, 40s, and 50s at or near the bottom of bear markets. In 2008, during the height of the financial crisis, the VIX spiked to 90! At the other end of the spectrum, however, are bull markets that see the VIX tumble all the way back to single digits.
So where are we now? Well, here's what history tells us. When the VIX drops below 16-17, we are OUT of the current bear market and we should expect higher prices. The bottom's already been made and the falling VIX confirms the worst is behind us. Let's look at charts to see what I mean:"
2020 Pandemic
http://stockcharts.com/img/articles/2023/04/23/27ce6411-27c5-40d2-95fe-79d23fa82d4a.jpg
"Bear market ended in March 2020. VIX later reached below 16-17 level in June 2021. Confirmation."
2018 Trade War
http://stockcharts.com/img/articles/2023/04/23/10aa835c-5cbe-4d63-999d-a0ce2feccee0.jpg
"Do you see the rallies in November and December 2019? Note that they occurred after the VIX bottomed in the 16s. The February 2019 drop in the VIX below 16 confirmed a bottom was in."
2007-2009 Financial Crisis
http://stockcharts.com/img/articles/2023/04/23/627cb2fe-7fe8-4537-a3e7-41296d98b833.jpg
"This was not your normal bear market. First, it was the deepest bear market in nearly 8 decades, with the S&P 500 falling nearly 60%. There were "echoes" of fear for quite some time as the VIX remained elevated above 16 for an extended period. But once the VIX fell below 16, the depths of the bear market had already been reached."
2000-2002 Dot Com Bubble
http://stockcharts.com/img/articles/2023/04/23/6b9154ef-c12e-4651-a8c2-d19320f871a4.jpg
1998 Global Financial Crisis
http://stockcharts.com/img/articles/2023/04/23/f81aadd1-3ad2-4cb5-b2e8-1e92ddcff211.jpg
"The late-1990s was one of the craziest market runs in stock market history. It's also the only secular bull market period characterized by VIX readings consistently above 16. The best secular bull market in history (1980s-1990s) saw "irrational exuberance" at the end that led to the start of the 2000-2012 secular bear market."
1990 Persian Gulf War
http://stockcharts.com/img/articles/2023/04/23/f9878aa5-59dc-4aa0-a8db-24d9e3a0abbf.jpg
"This was a short-lived cyclical bear market that ended almost as quickly as it began.
So where are we now? What should we expect moving forward?"
2022 Return of Inflation
http://stockcharts.com/img/articles/2023/04/23/7697fe36-f6c3-4bbf-ae4c-92f6785b0f22.jpg
"Are we at the start of the secular bull market resumption - the one that began in 2013? Or has this rally set us up for more selling and a lower bottom ahead in a secular bear market?
Two great questions where most market participants have been firmly planted on one side or the other. Personally, I was looking for a cyclical bear market when 2022 began. I looked for a 2022 bottom and then an ensuing rally to all-time highs. So far, so good. Nothing has changed my view. Money has rotated feverishly in 2023 to "risk on" areas of the stock market:"
http://stockcharts.com/img/articles/2023/04/23/1ff252fc-c2b1-4da0-931f-80d9b1fe7cec.jpg
"The stock market is rising and being led by aggressive sectors. This is truly a sign of sustainability, in my view, and based on my many years of research.
Oh, and I'd LOVE to argue valuation right now with anyone. In fact, my EB Digest article tomorrow morning will reveal why I believe current market valuations are WAAAAY low and we're poised for a massive rally over the next decade. If you'd like to read this article and are not already an EB Digest subscriber, CLICK HERE to enter your name and email address. It's completely free and you may unsubscribe at any time."
Happy trading!
Tom
Weekly Stock Market Commentary 4/21/2023
By Lawrence G. McMillan
http://www.optionstrategist.com/blog/2023/04/weekly-stock-market-commentary-4212023
"Stocks are definitely having trouble with overhead resistance near 4200. This has been a resistance area since last August (it was a failed attempt to close the gap on the island reversal, noted by the circle on the chart in Figure 1). Then it halted the rally in February, and now it has seemingly halted the current rally. Thus, the $SPX chart is not bullish, in that there is not only the resistance at 4200, but resistance at 4300 as well.
As for support, there should be some in the 4050-4070 area, with further support below that in the 3970 area. A move below 3950, though, would be negative and should bring in heavier selling.
We are seeing overbought conditions in some of our indicators, but so far there have not been confirmed sell signals. For example, the equity-only put-call ratios are still on buy signals, but the weighted ratio is very near the bottom of its chart. That would place it in overbought territory.
Breadth has deteriorated (five of the last seven days have seen negative breadth), and so a sell signal is potentially setting up. Both breadth oscillators have generated sell signals, but we require further confirmation in the form of a second consecutive day (today). $VIX continues to decline. A big part of that, of course, is the deterioration in realized volatility.
The continuing decline in $VIX means that the trend of $VIX buy signal remains intact. It last went into effect inside the circle on the chart in Figure 4, when $VIX fell back below its 200-day Moving Average. This buy signal will remain in effect until $VIX rises back above its 200-day Moving Average, which is currently just above 23 and declining.
In summary, we are not carrying a "core" position, but we are trading positions in line with confirmed signals from our indicators."
S&P 500 (SPX), CBOE Market Volatility Index (VIX), 21-Day Equity Only Put Call Ratio (PC21), and Weighted 21-Day Equity Only Put Call Ratio (PC21 w) charts updated each Friday.
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1682438515756
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1682438515756
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1682438515756
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1682438515756
At what point does reality set in? First Republic made a profit this quarter on losses of ONE HUNDRED BILLION! Yup you heard right. The banks handed over 30 billion BUT they can withdraw that within FOUR MONTHS! Not a single mention of all the creditors and if they will be BAILED OUT!
Keep em comin. This is like telling you a new virus in China has appeared and it looks like a Pandemic is going to hit everyone. That was met with WHO CARES! The TRILLION DOLLAR and counting banking disaster where not a single person or institution will be penalized just had a brief statement about their great customer commitment. NO ONE I mean NOT THE FED or Government is saying what will happen to creditors money. POW! We do know that the 30 Billion from the big banks will withdraw their money in the 4 month deadline.
if "I" was a creditor at First Republic I would be watching the Christmas Movie "It's a wonderful life" again. The run on banks with no savings and loan that gest to keep the creditors money trusting they will get it back. oh look, I see a run right now.................
"So, all-in-all, still nothing to add. The market remains on the downward side of a pretty significant inflection zone, so if it continues to turn here, that could be significantly bearish -- but it may be awaiting the Fed before getting serious...."
http://www.pretzelcharts.com/
"On Friday, SPX dropped back into its target zone again, and again bounced:"
"This leaves everything in basically the same place it was on Friday for the near-term, and in basically the same place it's been for a while on the intermediate term:"
"There's been nothing to update about the NYA chart since April 3:"
"So, all-in-all, still nothing to add. The market remains on the downward side of a pretty significant inflection zone, so if it continues to turn here, that could be significantly bearish -- but it may be awaiting the Fed before getting serious one way or the other. Trade safe".
ONLY that the longer it is stuck in this tight range the more likely a violent decision will be made. How many more weeks can the structure be undecided. I would argue we never went out of the October bear cycle. I stated 2 weeks ago there would be NO WAY the market can rally on earnings, fear of fed, and most importantly fear the FED will not lower rates this year. How critical is it for the FED to lower rates this year? As critical as the Pandemic in China staying in China. The affect will be the same once realization occurs.
I promised myself to stay away during the roll over event. The recent INFLATIONARY data on manufacturing and service means the FED does NOT see a recession and therefore will NOT stop the hikes. Lets see if confirming data points over next 2 weeks make it a fait accompli.
The pressure on this market IMO is huge. I can't see any ability to mount a rally.
Nothing New to Add
http://www.pretzelcharts.com/
"Last update provided some near-term targets for SPX, which were both subsequently captured, with Target 2 then providing support:"
"Big picture, there's no change and there's just nothing new to say about these big picture charts yet:"
SPX:
"In conclusion, the market has (so far) reversed from its upside inflection, but now we're watching to see how that develops to determine whether it helps add confidence to blue 2/3 or not. Trade safe."
market is just balancing
balancing is waiting for info
day 4 of balancing
until we break above the balance area high or below balance area low
we chop and pin as many options as possible
i would not be surprised to see this range continue
the selling volume today was lowest in weeks
here is balance area rectangle
"....SPX managed to make an ever-so-slight new high for this move and then closed up a whopping 4 points (well, almost), continuing its trend of not trending."
http://www.pretzelcharts.com/
"Since last update, SPX managed to make an ever-so-slight new high for this move and then closed up a whopping 4 points (well, almost), continuing its trend of not trending.
So, still not a ton to add here, though I did create a near-term chart, since I could. "
"Blue 3 remains on the table, by a hair:"
"And NYA stalled again at the upper edge of its inflection zone:"
"Not much else to say about this market, but at least we have some near-term targets to watch. Trade safe."
ROLLING OVER! As sure as i was about TRANSITORY being a pathetic joke and the Pandemic not causing any market harm.
I NO LONGER see an extension to JULY for a crash but the start of a deep drop should happen on the second week of MAY.
In fact I will bet that the highs on all indices are in or within a fraction of a percent. I also see an immediate drop right HERE! No not a large one but one where there is no longer any traction for upside momentum. Earnings, economic data and INFLATION data will soon wake up the living dead.
VIX at extremes, projections for next two quarters are coming down, not up and is already a pathetic bet at a P/E of 19. CHINA as expected has surprised on the upside. The market takes this as a positive. it is a HUGE negative with Inflation. At best we see Stagflation here.
I actually have a pattern that if continues will place the DOW at the next low on 5/12. When preposterous reactions to a dire situation occurs that is the biggest warning flag you will ever get to trade off of. The known Pandemic with known infections and deaths and a 100 year old chart repeat gets ignored completely for 5 weeks with not a single major article or brokerage house sounding the alarm tells you we can mask and twist any situation to please our bias. ONE TRILLION swept under the rug with no consequences? In fact the street has concluded it HELPED their cause by tightening bank lending and concluding it will stop inflation.
I shouted, swore, begged people to follow my logic on the Pandemic but was told the TECHNICAL proved I was wrong. I am shouting today. There is a possibility that my MAY crash doesn't occur but it only guarantees a JULY one.
I have 4155 marked as resistance ...
also 4300.
I think it is important to keep track of these things but I don't know how much significance to give to them because I only trade stocks and every trade is a Buy-Write: buy the stock and sell its ATM or Overhead weekly Calls. At least that way I always have income, but the downside is that I sometimes miss a good portion of a lengthy trade higher.
most of the bank stuff
is already priced in, they got those numbers long before retail traders see em
the bears have had 2 days to sell and have accomplished 0
this is a C wave down and C waves run out of sellers
then boom boom up
never short the BIG H
https://schrts.co/fZwsjRHT
I see items like this and
I just imagine someone standing in an empty barren field,
facing the horizon and yelling -
with a bewildered, misguided passion.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171704895
Bought puts earlier -
I have a feeling we're ready to break downward -
Does anyone have blind faith in non-bank earnings here ??
Intraday downward channel here developing - or trying to...
https://stockcharts.com/public/1684859
Home ›S&P 500 ›Weekly Stock Market Commentary 4/14/2023
Weekly Stock Market Commentary 4/14/2023
Posted on April 14, 2023 - 12:06pm
By Lawrence G. McMillan
The rally that began in mid-March is persisting. Market internals remain positive, and that is finally having enough of an effect on $SPX (and the market psyche) to push prices higher in a relatively slow manner. Even so, there is formidable overhead resistance at 4200 and 4300, so the $SPX chart will not be outright bullish until those levels are exceeded (in my opinion).
Below current levels, there is support at 4050 and then 3970 below that. However, if $SPX should fall below the mid-March lows of 3950, that would be a larger negative development that would probably once again call for a retest of the December low area of 3760 to 3850.
Equity-only put-call ratios continue to decline and thus they remain a bullish indicator for stocks. They won't turn bearish until they roll over and begin to rise. The Total put-call ratio is also declining, although that buy signal has a target of a 100-point rise in $SPX, and that target has been fulfilled with $SPX trading above 4150.
Breadth has not been as consistently bullish as the put-call ratios, but after some flirtations with sell signals, breadth has expanded again. Currently, then, both breadth oscillators are back on buy signals and are in overbought territory.
$VIX has continued to decline and is below 18 once again. The trend of $VIX buy signals remains in place. However, the "spike peak" buy signal has "expired."
We are not carrying a "core" position at this time, but have traded several positions in line with the internal indicators. We will continue to proceed in that manner until $SPX breaks out strongly.
Weekly Charts
S&P 500 (SPX), CBOE Market Volatility Index (VIX), 21-Day Equity Only Put Call Ratio (PC21), and Weighted 21-Day Equity Only Put Call Ratio (PC21 w) charts updated each Friday.
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1681755720455
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1681755720455
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1681755720455
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1681755720455
Lot of Bulls out this weekend..Predicting higher prices and a new bull market..
"...everything in pretty much the same place it was."
http://www.pretzelcharts.com/
SPX closed Friday's session down 8 points, leaving everything in pretty much the same place it was.
NYA was rejected from the 15,700ish zone on Friday's attempt, so we'll see if that's permanent or temporary:
"BKX has formed three waves up from its recent low (could still be in progress). The bigger question here is whether the entire decline marked a complete 5 down, or if we're in the midst of a nested third wave. Both options are longer-term bearish, but the first option could be near-term bullish."
"Finally, SPX has so far remained below the meaningful level (4196), so blue 2 is still hanging on as an option:"
"In conclusion, blue 3 is running out of real estate, but still on the table, so if it's going to show up, then it needs to start soon. The decline off Friday's high may have been impulsive, and so far, there's only three waves back up off Friday's low -- so this is something to watch early in the week. Trade safe."
Will This Massive Reverse Head & Shoulders Bottom Execute?
Tom Bowley | April 16, 2023 at 12:55 PM
http://stockcharts.com/articles/tradingplaces/2023/04/will-this-massive-reverse-head-623.html
"There are plenty of reversing patterns in technical analysis, but my personal favorite is the combination of a weekly positive divergence and a bottoming head & shoulders pattern. The positive divergence captures the slowing downside momentum and the head & shoulders provides confirmation that prices are indeed turning up. Keep in mind that a downtrend is nothing more than a series of lower highs and lower lows. When a potential neckline forms in a bottoming head & shoulders, it suggests that a prior "lower high" is being tested. The executed breakout then confirms that a new uptrend is underway.
During 2022, the worst-performing sector was communication services (XLC), the home of internet stocks ($DJUSNS), among others. Higher interest rates reduced the value of future earnings and earnings growth, but we're now seeing interest rates come down. As a result, the XLC is on the verge of a beautiful reversing pattern and potential breakout. Check this out:"
http://d.stockcharts.com/img/articles/2023/04/16/567082e5-5143-44bd-b49d-7242cff7f63d.jpg
"The bottom panel shows the XLC leading the stock market higher in 2023. I expect this to continue and the above breakout would certainly add to that likelihood.
I'm following one communication services stock, in particular, that could explode higher if I'm correct about the XLC gaining ground throughout 2023. I'll be writing about it in our free EB Digest newsletter on Monday morning. If you're not already subscribed, simply CLICK HERE to provide your name and email address and we'll get you set up and send along this stock. There is no credit card information required and you may unsubscribe at any time."
Happy trading!
Tom
Thanks RCKS...The H&S pattern on the Daily SPX chart says if it plays out the target is 4239...But I have never had one work for me..
"...still not much to add to the recent updates."
http://www.pretzelcharts.com/
"The market has continued to lurch around for the past week, making little progress, but not giving up its gains yet either:"
"NYA tagged the red horizontal. As noted previously, the current inflection zone stretches up to roughly 15,700:"
"In conclusion, still not much to add to the recent updates. Trade safe."
Bullish and balanced for the 5 thousand times. In fact guess what it is today tomorrow or in 10 years. Pandemic trillion dollar bank run inflation dismal quarterly earnings. All Great.
Me I call 4150 as the likely top and we rollover this month.
You just set a record ..:
5,000th post on this board.
Very interesting (for a non-trader posting on a stock trading board) as this board is supposed to be all about trading the SnP 500.
Please use your own effort or ignore it I know in these times spoon feeding is required but I am not open for service. Unreal. Btw the market today indicates we have seen the top and April will roll over into a dramatic May drop. If you can’t just look at both charts than perhaps the Pandemic also didn’t have a chart to use at the time did that take 5 weeks for someone to show you?
spx to bit coin
he does not know how to post it
he does not trade
https://schrts.co/NCCxwCHJ
Well then,
Please post two one-year charts with one pasted above the other.
One chart must be $SPX. The other one must be Bitcoin.
Use 1-day intervals. Then explain the correlation.
"After revisiting Friday's low, the market immediately began rallying, which continued until late in the session yesterday. Which means SPX is back to roughly the same price it was on Friday. Which means there's not a lot new to say yet."
http://www.pretzelcharts.com/
"In Monday's update (which was published Sunday night), I wrote:
I'm inclined to lean toward Friday's low being a b-wave, so suspect that low will be revisited/broken early this week.
I feel I need to mention that at the time I published that, futures were still trading in the ballpark of Friday's high. After I published, futures headed sharply lower -- then, by the cash open, the market gapped down and revisited Friday's low. So that was a hit and (when I actually made and published the call) was harder than it looked -- it just didn't end up being of much practical use for cash traders, unfortunately.
After revisiting Friday's low, the market immediately began rallying, which continued until late in the session yesterday. Which means SPX is back to roughly the same price it was on Friday. Which means there's not a lot new to say yet."
"Unlike SPX, NYA did manage to break a bit past its blue target. It remains within the current inflection zone until roughly 15,700+/-."
"Oil has continued rallying since last month's update:"
"In related news, the Fed's balance sheet spiked by about $400 billion from March 8 to March 22:"
"A little of that spike did roll off since March 22, but we'll all be waiting with bated breath to find out whether we're still "fighting inflation" -- or have decided to go back to fueling it. Interesting that they spent a year gradually and painstakingly rolling off the balance sheet, only to add half of it back in only two weeks.
I'm reminded of something I wrote in July of 2021:
The Federal Reserve has at last painted itself into its final corner -- or, to use another, perhaps more apt, metaphor: The Fed has placed itself on a treadmill from which there is no escape. There appears to be nothing it can do from here (other than a very modest taper) that won't immediately tank the markets. Even talk of such things spooks investors, which is why Powell has been so dovish of late. The Fed must keep rates low. It must continue QE (in one form or another) and continue buying Treasuries and Mortgage-Backed-Securities. The Fed cannot do anything but keep running at or near its current pace in perpetuity.
The Fed's new reality is like a treadmill-based parody of the movie Speed: If the Fed slows down too much, the market will implode, killing innocent economies in the process.
We just got a taste of exactly that with the SVB (et al) collapse. The Fed had to Speed up again, or risk more serious issues in the banking sector snowballing into a juggernaut. And that "catastrophe averted" was after the aforementioned modest taper.
And then that reminded me of something else from the same piece:
The Fed likes to talk about its "tools," but all its tools are currently running at full capacity just to keep the market from collapsing under its own weight. There are no more tools to call upon.
All it will take is a catalyst.
Later, people will blame the catalyst as if it were the "cause" (you and I know they will do this because they do it every time) -- but we'll know it was not the cause. Our short-sighted choices were the cause. Our inability to recognize, appreciate, and properly manage our good-fortune was the cause.
In short, we ourselves were the cause. We have met the enemy, and he is us. The catalyst will only be the trigger that forces the reckoning.
Last month, the market was all ready to begin collapsing under its own weight, but then the Fed ramped its "tools" right back up to "full capacity" and saved the day.
And all this made me again wonder about the second portion of the outlined equation, and to wonder if that's what the market is waiting on: A catalyst. China invades Taiwan, Russia uses nukes, commercial real estate collapses, that sort of thing. In other words, something that exposes just how weak and unprepared we really are right now.
Just food for thought. We'll see what the market does to close out the week. Trade safe."
bitcoin and spx
gdl of course had the top in early in this fed week
do not fight the fed
do not correlate very well a chart shows that
but if bitcoin sells hard it does creates selling
bitcoin does correlate better with gold
shane s.- fed juice guy
If you have followed BOTH they ruin in sync. I have a target for a momentum top on Bitcoin. I can assume they BOTH should STILL run in sync.
That's what on earth i am talking about. If Bitcoin can break above the target it seems LOGICAL to assume SP500 will also break above the 4158 recent highs. The most speculative stock out there is alive and healthy despite the internal destruction it has already received. IF speculation is alive the likelihood for SP500 to drop is low.
Lets see if both 4158 on SPX and 30,872 on Bitcoin gest taken out today!
Just curious ...
but what on Earth does BITCOIN have to do with $SPX which is what this message board is supposed to be all about? My thinking is that any discussion of BITCOIN is off-topic on this message board and should be deleted.
Taking a small step further, I'm a little more than perplexed why our country allows anything like BITCOIN to be used for any financial transactions in our country as it would be easy to use BITCOIN to obfuscate illegal activities (whether those activities happen outside or within our government).
The canary in coal mine BITCOIN. I have a target of 30,872 to be final top. NOW at 30,200. BIG JUMP over night and today.
A break above and it negates the dramatic drop scenario. If it gets close to target without going over it should indicate spent momentum.
Thanks RCK S..Looks like they are selling tech today...Just keep the rotation going.
"I'm inclined to lean toward Friday's low being a b-wave, so suspect that low will be revisited/broken early this week. If that's correct, it would keep the most bearish options on the table:"
http://www.pretzelcharts.com/
"Since last update, the market has continued its near-term churning within its even larger "lost year" of churning. I'm inclined to lean toward Friday's low being a b-wave, so suspect that low will be revisited/broken early this week. If that's correct, it would keep the most bearish options on the table:"
"Of course, after a ~year in a trading range, it gets hard to imagine the market doing anything other than running sideways for another 600 years, but that's how they getcha!
NYA does have a potentially-complete c (or 3) rally on the board:"
"In conclusion, everyone has had about enough of this endless grind, so we'll see if the market is ready to start doing something finally. It's at least worth mentioning that in the most bearish world, this setup would be exceedingly bearish; we'll see if the market negates this setup or not. Until then, there's just not much else to add. Trade safe."
Why Try To Call Tops And Bottoms? It's Easy!
Tom Bowley | April 09, 2023 at 12:49 PM
http://stockcharts.com/articles/tradingplaces/2023/04/why-try-to-call-tops-and-botto-694.html
"Okay, first when I say "it's easy", I'm not saying it's easy to call tops and bottoms. Instead, I'm say that answering that rhetorical question is easy. If you can call a top, you can exit equities with your capital completely intact. And if you can also time a bottom, you can reinvest at a much lower level. Isn't that a pretty easy and logical reason to seek out market tops and bottoms?
I recall all the negative YouTube reactions in early 2022 when I said the S&P 500 had topped and could drop 20-25% (actually dropped 28%). Many believed the stock market was their personal ATM machine as sentiment turned as bullish as I've ever seen it. Opponents said "you can't call a bear market if we haven't dropped 20%!" I found that response ludicrous. Are we seriously supposed to watch our investments drop 20% and then get out? The majority of cyclical bear market downside is over by the time they're down 20%.
Successful investing in stocks requires a heavy dose of perspective. Stock market history truly does repeat itself over and over. I'll never understand why so many people approach the stock market with so much negativity. It provides the absolute best avenue to grow your money over time. Take one look at this 75-year chart and explain why we should maintain a negative market bias:"
http://d.stockcharts.com/img/articles/2023/04/08/3d8ba4ea-88ee-45fc-9906-d23495ae6c60.jpg
"The bottom panel is quite interesting. It's the 24-month rate of change (ROC). Keep in mind that the S&P 500 has averaged gaining just over 9% per year since 1950. So the "normal" 2-year ROC would be roughly 18-19%. The 5 points that I've identified on the chart above highlight the 5 times when this 2-year ROC has hit 75%, which is quite simply unsustainable. There's a reason that we average going higher by 9% or so. Gross domestic product (GDP) plus inflation plus innovation is what produces those 9% gains over time. Moving higher by 75% over 2 years literally suggests to me, "reversion to the mean."
1950s
This was the first example (since 1950) of what happens when you make an unsustainable move to the upside. In this case, the next two years were a total wash - the S&P 500 went nowhere and included a cyclical bear market as prices dropped more than 20%:"
http://d.stockcharts.com/img/articles/2023/04/09/63fa49c5-aa0b-42cd-9de2-203f83e1b009.jpg
"Note that once the S&P 500 fell back to test its 50-month SMA, the cyclical bear market was over and the secular bull market of the 1950s/1960s resumed.
1987 Crash
It was more than three decades later before the S&P 500 again saw the type of upside move that begged for a significant correction. That occurred in September/October 1987 as the unsustainable advance of the prior 2 years was simply too much:"
http://d.stockcharts.com/img/articles/2023/04/09/78e9c606-3f8d-459c-8a64-6394bab44441.jpg
"The 1987 cyclical bear market turned out to be one of the fastest 36% drops in history, but it was, in part, foreshadowed by that unsustainable move higher from 1985-1987. Notice that the drop found support at its 50-month SMA, similar to the 1956-1957 decline.
The Late-1990s
There's a reason why it's referred to as the "dot com" era. The gains were as inflated as any time in history, except perhaps the euphoria just before the 1929 market crash and The Great Depression that followed. After the S&P 500 turned in its 75%+ gain over a 2-year period that ended in 1998, we saw a quick cyclical bear market, and then it ran another 55% higher over the NEXT 2 years. It took a secular bear market that included 2 of the worst individual bear markets (2000-2002 and 2007-2009) in history to iron out all the problems that the late-1990s advance created:"
http://d.stockcharts.com/img/articles/2023/04/09/f91b3473-37f7-4904-a1e6-64532fe2c24f.jpg
"The 1998 cyclical bear market turned out to be a small taste of what investors would be facing in 2000, after the huge advance in 1999, and it never breached the 50-month SMA. It wasn't just a short-term advance that investors had to pay for. It was the end of a two-decade secular bull market, which resulted in an extended period of financial pain, ushering in the next secular bear market.
2011 Rebound
After the depths of the financial crisis were found in 2009, Wall Street rebounded in a big way, generating yet another 75%+ move over the next 2 years:"
http://d.stockcharts.com/img/articles/2023/04/09/0a1b61b6-5a69-4c69-bc8c-654bef428dd0.jpg
"While the new bull market had not yet gotten started - that occurred in 2013 when we finally cleared the tops set back in 2000 and 2007 - the initial rebound was very, very swift, so another short-term drop of 20%+ was warranted and felt. In my view, this did not qualify as a bear market as it never began from an all-time high, but the consequence was the same. Note that the decline did move below the 50-month SMA, but never broke below the 2010 low.
2020 Post-Pandemic Advance
Many were caught completely off-guard by not only the 2020 stock market recovery, but more so by the magnitude of it. The 22-month advance from the March 2020 low through the January 2022 high was only topped by the euphoric 1920s - and there was going to be a price to pay. As I discussed at our MarketVision 2022 event, there were plenty of other warning signs, but the sheer magnitude of this advance suggested that caution be advised in anticipation of a potential cyclical bear market:"
http://d.stockcharts.com/img/articles/2023/04/09/f22572c4-92ca-4982-84b1-6116a10424f7.jpg
"Once again, we've seen the 50-month SMA provide excellent support and confirm - at least for now - that the 2022 bear market was, in fact, cyclical in nature. Should we see the S&P 500 move below the October 2022 low, then a re-evaluation would be in order.
Final Thoughts
Secular bull markets have historically lasted two decades, while secular bear markets typically unfold over a dozen or so years. So I thought it would be interesting to review a long-term chart of the S&P 500 with a 20-year ROC and a 12-year ROC beneath the price chart. Here it is:"
http://d.stockcharts.com/img/articles/2023/04/09/3b6b26b8-e7df-4abc-85a0-60a7def39fbb.jpg
"The green arrows in the 12-year ROC panel at the bottom show that the cumulative 12-year return is at roughly zero when new secular bull markets emerge. Meanwhile, those red directional lines highlight that secular bull markets end after a lengthy period of above-average market returns. Right now, our 20-year ROC is at 347%. That's an average annual return of 7.78%, compounded over 20 years. The AVERAGE S&P 500 return has been over 9% since 1950. Therefore, it's difficult for me to buy into the argument that the secular bull market has run its course. I believe we have much further to go. The 20-year ROC reached 750% in 1962 and was at 625% in 1969, when the 20-year secular bull market ended. The 1950s and 1960s had a compounded annual average return of 10.5%. The 1980s and 1990s had a compounded annual average return of 14.5%.
And I'm supposed to believe that this secular bull market has topped out at 7.78%? I don't think so."
Now is the time to STOP listening to media outlets like CNBC. They offer little substance and value. Instead, turn your attention to EarningsBeats.com. We kept our members out of harm's way throughout the cyclical bear market of 2022 and we said it was time to get back in the S&P 500 when it was 13% lower. Our next MAJOR event is this Saturday, April 15th at 10:00am ET. It's our "Bulls-Eye Forecast" event, where I'll provide you my latest expert opinion as to what you should expect over the balance of 2023 and into 2024. Best of all, it's a 100% FREE event. Registration is required and you may do so by CLICKING HERE.
I look forward to seeing you on Saturday!
Happy trading,
Tom
Pretzel :
(1) Pretzel presents both a Bull and Bear case.
(2) Pretzel gives both Triggers and Targets
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