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That 4840 is the SPX Cash.. He has 4880 for Futs.
CyclesFan Update
CycleFan is suggesting a target area for SPX of 4917 to 5100............
$SPX - The daily cycle low on January 5 was almost confirmed today when it hit 4791, just 2 points from the December high. A breakout to a new all time high should lead SPX to somewhere between the 1.618 extension to the 2.0 extension of the July-October decline at 4917-5110. pic.twitter.com/0pQobQ9aD5
— CyclesFan (@CyclesFan) January 10, 2024
"Not much to add........"
http://www.pretzelcharts.com/
"At this point, there isn't a lot to say in follow up to Monday's update, but I did include a chart discussion regarding the near-term:"
"Not much to add beyond that, for now. Trade safe."
CyclesFan Update:
SPX
Friday was a Cycle Low
$SPX - Potentially made a daily cycle low last Friday on day 47 of the daily cycle. I was expecting lower lows this week which still possible if it turns down tomorrow. A breakout above 4793 would confirm the low is in and lead to at least 4950 by late January. pic.twitter.com/rwlQSMdy7N
— CyclesFan (@CyclesFan) January 9, 2024
".....It's too early to say if these reactions will be short-lived or will turn into a full-on resumption of the bear market, but that possibility is at least on the table (and fun to consider, since I suspect it would catch almost everyone by surprise)......"
http://www.pretzelcharts.com/
"Since capturing its June "bull count" target, SPX has remained in a near-term downtrend. Let's look at a few charts."
"This jives with the very long term trend line that we've been watching since July:"
"COMPQ has also stalled at its inflection zone:"
"As has NYA:"
"For bears, the one monkey in the works is probably INDU:"
"In conclusion, multiple markets have reached and reacted to their inflection zones, so score one for inflection zones, if nothing else. It's too early to say if these reactions will be short-lived or will turn into a full-on resumption of the bear market, but that possibility is at least on the table (and fun to consider, since I suspect it would catch almost everyone by surprise). Even the more bullish case could see a meaningful correction develop, though there are no concrete targets for such a move yet. Trade safe."
CyclesFan updates SPX and NDX
$SPX - Monday has been the most bullish day of the week in 2023. If it doesn't change in 2024 we're going to have an up day on Monday. Then we roll over and head lower to test the July high around 4600 on January 11/12. Reminder: The August and October lows occurred on Friday. pic.twitter.com/33QWoDDv2v
— CyclesFan (@CyclesFan) January 5, 2024
$NDX - Ended a 5 day down streak but not the correction. I expect an up day on Monday, then another leg down to test the July high at 15930. The low is likely to occur on January 11/12, the next 26/27 day cycle low. pic.twitter.com/nvYbyiK9O4
— CyclesFan (@CyclesFan) January 5, 2024
Stock Market Commentary 01/05/24
By Lawrence G. McMillan
"Heavy selling hit the market this week. Part of that was due to the fact that traders didn't want to sell in 2023, because of the taxes that would be owed. So, they sold in 2024, deferring the tax bill for a year. But there is more to the story than that, as overbought conditions had built up to the point where sell signals are now appearing in numerous places although not in the implied volatility ($VIX) complex.
There is now resistance just below 4800 (the December highs). Of course, this is very near to the all-time highs set in January 2022.
There is support on the $SPX chart at 4600 (horizontal red line on the chart in Figure 1). A pullback to there, while not necessarily pleasant, would still keep the chart bullish overall. However, a decline below 4600 and especially a decline below the December lows at 4550 would be a game-changer as to the trend of the $SPX chart. As it is, the chart is still bullish as long as support holds at 4600, and a "core" bullish position can be maintained.
That's the positive news. There is a lot of negative news surrounding the internals of the market.
Equity-only put-call ratios have curled upward, and these are now on confirmed sell signals, according to the computer programs that we use to analyze these charts. These sell signals are coming from the low levels on their charts (i.e., from overbought conditions).
Market breadth had been tremendously strong at the end of 2024, but now it has turned heavily negative. As a result, both breadth oscillators rolled over to sell signals on January 3rd.
The implied volatility complex is much more bullish on the market than just about everything else. Recall that we have often pointed out the fact that a low $VIX is not a sell signal in and of itself; $VIX only generates sell signals for stocks if it starts to rise sharply. That has not happened (yet). $VIX has yawned at the selling that took place this week. It barely rose above 14.
Overall, we are still carrying a "core" bullish position, and we are adding new confirmed sell signals around that. In addition, some of the previous bullish signals have expired or are being stopped out."
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1704562981397
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1704562981397
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1704562981397
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1704562981397
"....the market has moved surprisingly little in absolute terms since last update..."
http://www.pretzelcharts.com/
"I said I'd "likely return on the 3rd," so here I am -- though I still have relatives in town for a few more days and have weird "drive us to the airport" hours to contend with on Friday/Saturday, so the next update after this will be on Monday.
Despite my holiday break, the market has moved surprisingly little in absolute terms since last update, so we're just going to look at one chart today, because it's probably the most relevant chart going right now:"
"In conclusion, SPX has captured its old June "bull count" target, which does open up options from here. It's a bit early to say whether bears will actually capitalize on those options yet or not, but at least they finally have some again.
I wish everyone a safe and prosperous New Year. Trade safe."
CyclesFan Update:
SPX
$SPX closed below the 10 day MA which may or may not be bearish. The last time it did that on December 6 it wasn't. A daily cycle high will be confirmed only if it closes below the 20 day MA. If it closes below the 20 DMA later this week we'll likely have a 2 week pullback. pic.twitter.com/UfuLPyF5Rw
— CyclesFan (@CyclesFan) January 2, 2024
Oops, I Did It Again!
DECEMBER 31, 2023 AT 11:51 AM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
https://stockcharts.com/articles/tradingplaces/2023/12/oops-i-did-it-again-606.html
"I'm sure most of you, by now, know that I'm a student of history. 2023 played out beautifully and mostly according to its historical road map. Here are a couple things in 2023, with respect to the S&P 500, that could have been predicted simply by being aware of historical norms.
Q4 Strength in Industrials and Financials
Industrials (XLI) and financials (XLF) LOVE the fourth quarter. I've pointed it out on many occasions. During this secular bull market advance since 2013, financials haven't outperformed the overall market. Rather, the sector has been roughly equal to the benchmark S&P 500. But the September through December period is when the XLF has shown nice relative strength:"
http://d.stockcharts.com/img/articles/2023/12/31/5d8e3881-ec3b-4bef-a910-0b71600f03c6.jpg
"Here's how the XLF has performed relative to the S&P 500 since 2013:
January through August: -3.1%
September through December: +4.3%
Now check out the XLF:$SPX relative chart:"
http://d.stockcharts.com/img/articles/2023/12/31/9576e0e8-3f4e-4fc6-b11f-f7fa30af371b.jpg
"It was like clock work.
Industrials (XLI) aren't much different, though their strength is clearly found in November. Here's that same 11-year relative seasonality chart since 2013, but this time featuring the XLI:"
http://d.stockcharts.com/img/articles/2023/12/31/da57ae13-2ecf-4dab-bdb9-35fc4e41dad5.jpg
"Let's break this one down by the same two periods of the year:
January through August: -1.4%
September through December: +2.6%
And here's the chart:"
http://d.stockcharts.com/img/articles/2023/12/31/85ee68e5-84fe-4726-b8d1-75348deddd08.jpg
"It took a little while to get started, but that November/December explosion occurred perfectly into industrials' seasonality sweet spot.
October 28th Through January 18th Most Bullish Period of Year
I don't know if you were watching, but the correction bottom printed on October 27th. As soon as the market opened on October 28th, the S&P 500 exploded higher and it hasn't looked back. Check out this chart:"
http://d.stockcharts.com/img/articles/2023/12/31/ccb8fdfe-1e18-4595-a6a3-4215c0a5c5d1.jpg
"What changed on October 27th to the 28th? Seriously, did anything change other than the flip of one day on the calendar? I've said in the past that late-October bearishness to November bullishness is like flipping a switch or simply turning the cold water to hot. History nailed it - AGAIN.
The strongest October 28th through January 18th period EVER on the S&P 500 (well, since 1950) was in 1962-1963, when the S&P 500 gained 19.51%. The second best since 1950 was in 1998-1999, when the S&P 500 gained 16.70% during this bullish period. The third best? Well, right now it's 2023-2024. The S&P 500 is currently higher by 15.85% since the close on October 27th. If the S&P 500 closes above 4921 on January 18th, it will set a record for the largest gain from October 28th through January 18th - since 1950.
Now you're probably thinking that these strong October through January periods would likely lead to a lot of selling after these periods end, right? I mean, my goodness, we'd have to be incredibly overbought, just like we are now, right? Well, you might want to sit down, if you're not already sitting.
Check this out.
Of the TOP 20 BEST October 28th through January 18th periods since 1950, 19 of 20 ended the subsequent calendar year higher. 13 of those 20 years produced double digit gains! And of 26 October 28th through January 18th bullish periods that gained 8% or more, only ONE subsequent year fell by double digits. It was year 2000 as the S&P 500 fell 10.14%. So I ask, where does the risk lie now? With those sitting out, waiting for a pull back or, worse yet, a bear market? Or is it with those that buy at current stretched prices?
If you're thinking this bullishness can't last or it makes no sense to chase this rally, well, history suggests otherwise. Ultimately, however, the call is yours.
Since I discussed the most bullish historical period of the year, I should mention that the weakest period is from the July 17th close through the September 26th close. Look up at that S&P 500 and check out the 2023 correction. When did it occur? Yep, it started in mid- to late-July and ran through September, even into October.
History nailed 2023 in so many respects.
S&P 500 2023 Performance
Let's take a trip down memory lane, shall we? Here's where the S&P 500 stood one year ago today, on December 31, 2022:"
http://d.stockcharts.com/img/articles/2023/12/31/bdff8e1e-dc5d-4829-99fe-58c3b0f2d9c8.jpg
"Remember? It was ugly. Do you remember how many analysts were saying we were heading lower? How many at that time were bullish? Can you reach five fingers on one hand? I can't. I felt like I was on a bullish island, all by myself. I don't really care, though. I don't need others to agree with me. I'm not trying to follow the crowd. Instead, I completely ignore the crowd and follow my charts and my signals. And I KEEP PERSPECTIVE at all times. It allows me to take a step back and make an unbiased call, based on the facts and RISKS at hand - not based on the opinions of every media "expert", most of whom do little research to back up their calls. Do you remember what everyone was saying? Here's a partial list...
Don't Fight The Fed
Now Rate Cuts Are Coming (contradiction is ok on Wall Street, apparently we shouldn't invest when the Fed raises or cuts rates)
Go Away in May
Breadth is Too Narrow
Now Breadth is Too Extreme (again, contradiction central - lagging breadth and extreme breadth are both bearish)
It's Only the Magnificent 7
Runaway Inflation
Politics
Government Debt
Consumer Debt
Negative Divergences
Trendline Breaks
Bullish Sentiment (I also love this one, because sentiment remained incredibly bearish in 2023 until November, in my view)
and blah, blah, blah
Where did I stand? Well, I put my reputation on the line at the beginning of every year, making a convicted prediction for the the S&P 500. On Saturday, January 7th, 2023, at MarketVision 2023, I argued my case for the S&P 500 to rise to 4700 during 2023, potentially testing all-time highs on the S&P 500 near 4800 and ending with a 23% gain. Many laughed and thought I was crazy. The S&P 500 actually gained 24%, and I was off by 1%. My bad. Now here we are, one year later, and the S&P 500 just closed out the year at 4769 and tested 4800 all-time high resistance last week. Call me crazy, I don't care.
I'm ready for an encore.
But first, do me a favor. Actually, two favors."
#1 - Ignore all the usual perma-bear and perma-bull biases and follow me at EarningsBeats.com. I'll give it to you straight, based on the signals I see and risks inherent in the market - bearish or bullish. The best way to become acclimated with my style is to sign up for our FREE EB Digest newsletter. It's a 3x per week newsletter that's very simple to read. It's 2 paragraphs and a chart, 3x per week. And did I mention it's absolutely FREE? CLICK HERE to register with your name and email address. You may unsubscribe at any time.
#2 - Join me this Saturday, January 6th, for "MarketVision 2024: Beyond The Fed". It's a live virtual conference that all begins at 9:30am ET and runs roughly 5 hours. Grayson Roze, Director of Operations here at StockCharts.com will be joining me. You can learn more about this event and register HERE. It will be recorded, so you can listen to the event LIVE or via the recording at your leisure. If you want to fully understand how to follow the signals and ignore CNBC, then MarketVision 2024 is where you want to be.
Get your resolutions for 2024 in order now and kick it off with EarningsBeats.com. You won't regret it.
I've provided unparalleled market guidance and S&P 500 forecasts for the past 4 years and they've been eerily accurate. I'm ready to put my reputation on the line once again this Saturday. I hope you will join me!
I'm wishing all of you health, happiness, and financial prosperity!
Happy New Year and happy trading!
Tom
Stock Market Commentary 12/29/23
By Lawrence G. McMillan
"Stocks continue to plow higher, with most major indices making new highs for 2023 just as the year is coming to an end. Furthermore, $SPX is just a short distance from its all-time highs, set in January 2022, so new all-time highs seem certain to be attained early in 2024.
The market is overbought by many measures, but confirmed sell signals are not to be had -- at least, not among our indicators. The advance has been swift, so that the nearest support area is just below 4600, where there was some backing and filling in late November and early December. A pullback to there would still be within the confines of a bullish $SPX chart. However, if the December lows at 4550 are broken, then that would have severe bearish implications.
Equity-only put-call ratios are both making new relative lows. That means they are both still bullish for the stock market. The weighted ratio had "wiggled" higher last week, but any potential sell signal has been quashed by the ratio now moving lower. These ratios will turn bearish for the stock market when they roll over and begin to trend higher.
Breadth has been exceedingly strong. The "stocks only" breadth oscillator made a new all-time high on December 26th, when it reached +1192. That is the most overbought reading in history. The NYSE breadth oscillator is nowhere near that high, but it is also quite overbought. Both breadth oscillators remain on buy signals. It is going to take at least two, and probably three, days of negative breadth in order to generate sell signals.
$VIX had a small "blip" upwards a week ago, when $SPX sold off 70 points in a couple of hours. But $VIX is once again near its lows, so it is in a bullish mode for stocks. The mere fact that $VIX is near its 3-year lows is not a sell signal. $VIX can remain at these low levels for long periods of time, and stocks can continue to advance while that is the case. Trouble for stocks only begins when $VIX begins to rise sharply.
So, there is a lot going on. We continue to maintain our "core" bullish position for now, since the $SPX chart is bullish. We will trade other confirmed signals around that "core" position, and so far those have all been buy signals. But sell signals will certainly be coming, and we will trade those as well."
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1703889714741
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1703889714741
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1703889714741
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1703889714741
CyclesFan update
SPX
$SPX - I thought we'd have a small down week, but it looks like we're getting a 9th up week in a row. RSI(14) has a negative divergence like it had in late July, but due to the bullish seasonality it's likely to top only next week. The next resistance is the all time high at 4819 pic.twitter.com/09HVxtDINt
— CyclesFan (@CyclesFan) December 26, 2023
$NDX - On track for a 9th up week in a row. The target for the next short term high is the 1.618 extension of the July-October correction at 17090 but it will probably hit it only next week, not this week. pic.twitter.com/85vBgS84V6
— CyclesFan (@CyclesFan) December 27, 2023
Stock Market Commentary 12/22/23
By Lawrence G. McMillan
"There was finally a correction of sorts this week, as some late afternoon selling on December 20th ballooned into a 70-point decline in a matter of less than two hours. Considering that the market had been more or less straight up for days even weeks and it was thus quite overbought, it was not a total surprise to see something of that nature.
$SPX remains in a solid uptrend, and its chart is still bullish. There is still a target of the 2022 highs at 4800 (the all-time highs). A move above that level seems to be almost inevitable at this point.
The decline extended to about 4700, so that is a short-term support area. Below that, support is much lower because the speed of the rally didn't leave much time for backing and filling. The next support area is in the 4540-4570 area, where $SPX traded in late November and early December.
The weighted equity-only put-call ratio (Figure 3) has edged higher, and this is enough for the computer analysis programs to call this a sell signal. Thus, it is marked with a green "S" on the chart. If the weighted ratio drops to a new relative low, that would cancel out the sell signal. The standard ratio (Figure 2), however, just made another new relative low, so it remains on a buy signal at this time.
Breadth has been all over the place. But both breadth oscillators remain on buy signals. The one big down day this week, even though it was a 90% down day, was not enough to throw the oscillators over to sell signals. At this point, it's still going to take at least a couple of days of negative breadth in order to generate sell signals from our breadth oscillators.
$VIX had a very muted reaction to the sharp stock market decline on December 20th. So, the trend of $VIX buy signal remains in place. Overall, $VIX is currently still in the bullish camp in its outlook for stocks.
Also, we are now entering the third of the three bullish seasonal periods that follow Thanksgiving. This is the Santa Claus Rally, and it encompasses the last five trading days of one year and the first two trading days of the next year. Typically, the market rallies a little more than 1% over that time frame. However, if the market should instead decline over that period, it would be a negative sign for stocks in the new year. That time period began with the close of trading on Thursday, December 21st, and is in effect right now.
In summary, we are maintaining a "core" bullish position, in line with the bullishness of the $SPX chart. We are rolling calls up as they become deeply in-the-money, or taking partial profits. We will continue to trade new signals around this "core" position."
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1703279052264
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1703279052264
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1703279052264
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1703279052264
CyclesFan may have a top finally
$SPX - It's the 3rd bearish daily candle during this uptrend and the one with the biggest range(80 pts). The previous 2 were only one day wonders. If there's bearish follow through tomorrow and it closes below the 10 day MA, it will mean we're declining into a daily cycle low. pic.twitter.com/GA8xpUSKBE
— CyclesFan (@CyclesFan) December 20, 2023
"Don't count your chickens before the cows come home to roost."
http://www.pretzelcharts.com/
"SPX is flirting with the all-time high and its first "bull count" target from June:"
"Bulls (and bears) have seemingly all decided that a new all-time high is a given, and maybe it is, but as the old expression goes: "Don't count your chickens before the cows come home to roost."
SPX is again facing the same resistance zone that knocked it down the last time bulls were expecting a new all-time high (bears have forgotten that many bulls lost a bunch of money buying too early during the last decline and getting stopped out, before buying again and getting stopped out again (when that rally turned out to only be the 4th wave of C) -- before finally being rewarded by being too scared to pull the trigger at the actual bottom and therefore missing most of the big rally, before closing their longs way too early and missing the rest of the rally since then. That's the thing: The grass isn't greener, it's just that everything always seems so darn easy until you have actual money on the line and your emotions are fully invested.)"
"COMPQ is also now into the general ZONE (it's a zone, not an exact level) of the old "or (2)" bear inflection:"
"NYA suggests there may still be a bit more upside, but I do have to note (and did, on the chart) that the first inflection zone for the C wave has been reached. (You know, just in case those chickens don't hatch.)"
"So, we'll see how it goes here. Maybe bulls will blow right through these resistance/inflection zones as well. Maybe there's just so much liquidity floating around (from where God only knows) that the market simply can't go down. But I'm just sayin', those chickens haven't actually hatched yet, so let's see if the cows come home to roost, because a penny saved is worth two in the bush.
***
And with that, as per usual, I bid my adieu for the year. I have relatives on-island until (I think, keep meaning to double-check) January 5, so I'm going to try to make the most of my time with family this year, because, for one thing, we're running out of Christmases where we have any kids at all at home. Our oldest already flew the coop, and our next oldest is getting close. We really only have one kid left who's still a "kid" (technically he's a teenager, but this is probably the last year where he's still more childlike than not).
You know, when I had my first, I remember SO MANY older couples saying, "Treasure it, they grow up so fast!" And -- especially when it's your first and the kid is still an infant and keeping you up all night and just generally demanding every bit of your free time and energy to the point that you're convinced the whole experience must be some kind of punishment -- you think, "Yeah, right, they grow up fast. Man, I HOPE so." Because you're still in the mindset you were in when you were childless, and this new gig seems like nothing but sacrifice. Which it is. (Eventually you realize it's one of the most rewarding sacrifices you can make in this life, but you don't realize that two weeks in. Or at least, I didn't.)
And then you blink, and they're off to college.
And you can't believe how much time has passed and how quickly it did. And you find yourself nostalgic and a bit wistful for so many things that you feel like you didn't savor enough when they were happening.
You other parents know what I mean.
Anyway, I'll likely return with the updates on January 3, unless there's still nothing interesting to say about this market, in which case I may just enjoy another few days of family time. But probably on January 3.
As is tradition for the final update before Christmas, here's the link to a non-market-related piece I penned almost exactly a decade ago (Can't believe it was a decade ago already. "They grow up so fast!"), titled:
A Christmas Story - Reflections on What Matters
Merry Christmas to all my readers -- or Happy Holidays, if that's your thing instead. Trade -- and be -- safe this holiday. I wish you all the best for the New Year."
So let me guess. you LOST money during the PANDEMIC! Thought the news was already out there. DUH!
Nonesense you say? Did you even bother to see the speech from TRUMP. Right out of the HITLER speeches. i mean no ambiguity there. But hey like a Pandemic we see what we want. I am amazed that people can be exposed to the moron with orange flames spewing out of his ass and declare he is justified. he is our savior. The antichrist is here and you idiots can;t recognize him even today? Maazing. no woder it took FIVE WEEKS of a known Pandemic to crash.
We realy are a species hell bent on destroying ourselves. nonesense? I guess another extermination program is in order? Yup thats the way of it. we as a nation are beyond embarrasing. the really stupid part is hitlers words actually resonate here, the MELTING POT OF THE WORLD! I guess we can PRETEND that was never the case as irish killed Italians who killed hispoanics who killed blacks. the Jew was never welcoe to this day.
We are living in historic times and you call it nonesense? Don;t forget to vote!
Nice chart and nonsensical market comments GDL
Senate Republicans recoil at Trump ‘poisoning the blood of our country’ remarks. Hitler playbook. Funny thing about that. Germany was a closed society then. We here all come from immigrants yet the morons voting and investing see what they want. Seems the majority of Americans are greedy, racists, bigots, and love to blame the weakest among us for their petty failures in life.
Yup just pretend YOU have no idea why you are voting for TRUMP. pretend YOU didn;t know who is is. Pretending is so so so easy. That goe also for the stock market. Everything is trending stocks way. Wait till the FED starts lowering rates. You will see an explosive market move. BUT alas I give that scenario a small number. You see INFLATION has just started. GDP of 5% after the big spike move in prices? And you really see rates cut?
We are a stupid self destructive species. proves this every day. As for this rally it didn;t take a genius to figure this out. Even Bitcoin is surging still. Weeeeeeeee.
Market movement: ONLY thing that could detrail this glorious rally is a bad PCE report early Friday. It would reverse the gains on disinflastion in every single sector. But hey they FED surely knows what to expect. The street also knows. Done deal.
Easy call so far. Saw this coming a mile away! SP500 now at 26. median is around 16 - 18. I expect a possible high of 30 before the whole thing collapses.
Looks like a classic end of year exposive move. Set up for the frst of many surprise drops in January. Everything working in favor of the BULL. Dollar, Yields, Oil,
inflation expectations. I mean it is goldilocks time. just right!
Holiday cheer and a New Year hangover. January will see a dramatic short lived drop. ONLY when INFLATION expectations are reversed will the street be concerned. But most if not all see inflation as TRANSITORY given the recent slew of data points showing just how tame it is. me i am pragmaic and use history as a guide. the fact that the street was wrong on a faltering consumer during the spike months tells me the stage is set for the 70's style spike inflation cycle. GDP of 4% at a time when inflation was spiking makes no sense if you still believe the Goldilocks scenario of tame to deteriorating inflation.
But hey the future isn;t written on a piece of paper yet. I am just using Common Sense and past cycles. Inflation cycle is a long one, 40 years. IF we are in one we will crash well before we reach double digitis again. Debt is way too fragile and exposue to extended credit way over the limit.
January is a shoe in for a surprise fast drop BUT it should last only a few days and greed will take over from there.
Thanks RCKS..It sure looks like we are right under it maybe even to or over that RED line already. Bull markets are so hard to believe..They just go and go and go.
"......there's just not a lot to say about a trending market, except that it's still trending."
http://www.pretzelcharts.com/
"So I looked through my chartbook, but there's just not a lot to say about a trending market, except that it's still trending. As the old saying goes, "The trend is your friend -- 'til the end when it bends." Accordingly, there's not much to add to recent updates, except to note that SPX is getting close to the zone of the old red trend line:"
"I also wanted to share an interesting thought (not a prediction, just a random speculation) regarding the housing market. As we all know, just as I predicted back in April 2022, the housing market hasn't fallen, despite rising interest rates. My speculation at the time was that rising rates would cause people to cling to their 3% mortgages, so while demand would fall from rising rates, supply would also fall, which would tend to counteract falling demand. That's exactly what happened... then I had another thought a few months ago that went something like this:
When rates finally do start to fall, people who have felt "trapped" in their mortgages may finally rush their homes to market.
This will, of course, increase inventory.
Depending on how much pent-up supply lies in the wings, there's a chance that falling rates could again trigger the inverse of what everyone is expecting: Instead of rising prices, it's not outside the realm of possibility that lower rates could lead to a supply glut, as "trapped" would-be sellers finally see a way out -- which would then trigger falling prices.
Again, that's not a prediction, because there's no reliable way to measure how many people will list their homes in a falling rate environment -- so I don't have enough data to make that prediction. But I think it's at least a possibility that the housing market once again does the exact opposite of what "everyone" is expecting. If it were to play out this way, I still wouldn't expect a housing "crash," but a significant rise in supply brought on by lower rates could at least turn this into a buyer's market. Again, not a prediction, just a random thought.
Not much to add beyond that. Trade safe."
"BKX and NYA: Lessons from the Trenches"
http://www.pretzelcharts.com/
"Since last update, Powell came out and signaled that the Fed is not only ready to back away from ongoing rate hikes, but that there could be three rate cuts in 2024. The market loved hearing this, of course, and rallied on the continued assumption that inflation is literally the only problem that was ever, or will ever be, on the horizon.
But to me, that's not the most interesting thing that happened. The most interesting thing is the resolution of an extremely complex chart pattern. I'll admit, while I saw the potential for a version of this in advance, I didn't foresee this version of it.
The pattern in question is shown on the NYA chart below:"
"This pattern hit me right in an Achilles heel, because I simply assumed in advance that if it was going to play out as a flat, then it would be an expanded flat (meaning it would head below the blue A wave before any big rally) and not the running flat that it was. Running flats stall without breaking the prior A wave low, and because they're quite rare, it's generally silly to "assume" running flat. So when NYA formed an impulse down that failed to break the A-wave low, I subconsciously wrote off the expanded flat option I'd been watching, entirely skipped the running flat option, and instead assumed the heavy-odds-on-favorite: That it was wave 1 down.
I didn't really think about this -- when you hear hoofbeats, you think horses and not zebras. "Zebras!" probably doesn't even enter your mind.
But this time, it was indeed zebras.
Which is part of why this type of pattern is extremely difficult to navigate in real time, and the market got one over on me here. Even after more than two decades, there are always more lessons from the market.
Anyway, lesson learned; I won't make that same mistake again.
BKX is interesting as well, inasmuch as it appears to be forming a classic "double-retrace" of the prior extended fifth wave."
"On the BKX chart above, do note that the blue horizontal has been on that chart for over a year for a reason, and has at least the potential to be a resistance zone, near-term or otherwise.
Not much to add beyond that. Trade safe."
Stock Market Commentary 12/15/23
By Lawrence G. McMillan
"The stock market has blasted off. The most recent catalyst was some dovish commentary after the end of the FOMC meeting this past Wednesday. $SPX is trading at new highs for 2023. Moreover, it has broken out over 4640, which was the high of March 2022 and was a minor resistance area. Now the all-time highs just above 4800 (from January 2022) are the next target. Momentum is strong and seasonality is positive, but this market is getting very overbought. So far, though, we don't have any confirmed sell signals. Overbought does not mean "sell."
As for support, there should be some in the 4550-4660 area, where $SPX traded in early December. A drop below there would likely cause a more severe correction.
Equity-only put-call ratios have continued to plunge, confirming the strength of the stock market. These ratios will remain bullish for stocks until they roll over and begin to rise.
Breadth has expanded considerably. December 13th was a "90% day" in terms of "stocks only" data (but not NYSE). Small caps are doing much better than large caps right now (the "January effect" -- which has been taking place in December for a number of years), and that piece of data shows it. Both breadth oscillators are on buy signals and are in overbought territory. It would take at least two days of negative breadth to even think about generating a sell signal.
$VIX continues to trade at very low levels. This keeps the trend of $VIX buy signal in place A low $VIX is not a problem for the market. The problem comes when $VIX begins to rise. So, while the media is excited about a low $VIX and thinks it is "predicting" a market downturn, that is not the case. A rising $VIX would be predicting trouble, but not a low $VIX.
We continue to hold a "core" bullish position and will trade other confirmed signals around that. With the strength of the market this week, bullish spreads and outright long calls in both SPY and IWM were rolled up. That is a recommended strategy for everyone. because it brings in a credit, reduces downside risk, but keeps upside profit potential in place."
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1702670724996
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1702670724996
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1702670724996
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1702670724996
CyclesFan
$SPX - RSI(14) closed at 78, its highest level in 2023, just in time for the next 30-33 day cycle high. It's likely to open higher tomorrow and get to at least 4718, like it did on June 16 before the reversal. The pullback is likely to be similar to June too, about 120 points. pic.twitter.com/IQHfFT3lfW
— CyclesFan (@CyclesFan) December 13, 2023
$SPX - We're approaching the next 30-33 day cycle turn which is likely to occur tomorrow, on FOMC day, but may occur as late as Thursday. After the breakout above 4637, the next resistance level is 4718. Once it tops, there's likely to be a pullback similar to the one in June. pic.twitter.com/Xdmpzw3zqI
— CyclesFan (@CyclesFan) December 12, 2023
$DJI - The first major index to make a new all time high. It's also the most overbought index with the RSI closing at 84. The 30-33 day cycle has had the greatest impact on the Dow, as every previous high has been a multi week high, unlike for NDX and SPX in some cases. pic.twitter.com/qkhv1ltFUE
— CyclesFan (@CyclesFan) December 13, 2023
"........SPX has managed to rally above horizontal resistance at the prior 4607 high, so we'll see if bulls can hold that."
http://www.pretzelcharts.com/
"Back in June, I published the following bull count, which was roundly ignored, so I figure now's as good a time as any to check in on it and update it:"
"Let's also not forget that SPX still has this long-term overhead trend line to contend with:"
"Finally, TLT has continued bouncing after hitting the noted support zone:"
"Not much else to add. SPX has managed to rally above horizontal resistance at the prior 4607 high, so we'll see if bulls can hold that. Trade safe."
Thanks RCKS...Guess the gut always gets into the decision making on almost everything. Hard to trade a mechanical system because we want to put our "feeling" in there too.. Started off today down but could reverse a couple times before it's time for counting...
"..........my lean was that we'd go on to form five down. That lean was based largely on the seemingly-awful fundamentals that the market faces, but that lean turned out to be in error."
http://www.pretzelcharts.com/
"There are two major aspects to what I present through these updates:
One aspect is the technical side of things, typically in the form of Elliott Wave counts, which are based on a combination of concrete patterns and gut instinct, in which I (almost) always present both sides of the trade. The other aspect is something readers always seem to want (often even when I haven't offered it), which amounts to "okay, but which way are you leaning?" That aspect is typically based on a combination of technicals, fundamentals, and, of course, gut instinct.
None of it is foolproof, but let's examine a recent case in point, because it illustrates the conundrum well. For months leading into the recent swing low, my charts pointed to that price zone, often with the label "3/C" (or "C/3," same thing). That was my technical (mixed with some gut instinct) read on where we were headed for the immediate future. In Elliott Wave, a C-wave always represents three down (or up), which is always an inflection zone -- though in this instance, I further mentioned that my lean was that we'd go on to form five down. That lean was based largely on the seemingly-awful fundamentals that the market faces, but that lean turned out to be in error.
What was not in error was the location of the inflection zone (SPX 4090-4115; in fact, the market nailed it dead-center). It's just that many of us (including me) thought that wasn't going to be the end of it. As I wrote on October 26 (in an update appropriately titled: Now Entering "Bounce or Break" Territory):
Yesterday, SPX came within 7 points of its preferred target zone, which also puts it into the C-wave inflection zone (not that I'm expecting this to be a C-wave, but I'm not always right, so I never ignore things that run counter to my biases):
That was followed by this chart: "
"So on the one hand, the technical aspect worked flawlessly in this case -- but my lean that we'd go on to form an impulse did not. It's important to understand the difference between those two things -- my lean is always an xx% vs. xx% proposition; it is NEVER, EVER 100% vs 0%. Never. Usually pretty far from it, as it's usually 5x% vs. 4x% (i.e.- 53% to 47% or similar).
Even the technical aspect isn't 100%. (Nothing I believe about anything is 100%, for that matter, at least as far as I'm concerned.) I feel like I've made that pretty clear over the years, but in case I haven't, there it is again.
In this instance, I probably needed to focus more on the warnings and caveats for bears. I covered them a few times, but probably didn't highlight them enough.
Below, I intentionally left the labels on this chart as they were -- next update I'll delete the 1/2/3, since we know now that it was the A/B/C portion of those labels."
"Anyway, I'll try to caveat more in the future. Usually I'm pretty good about that, but I don't think I did it enough at this last inflection.
Beyond that, I really don't have a lot to add here about the current market -- I'm still awaiting an impulsive turn, as I have since I wrote about that publicly on November 8 (we had one quick little false alarm since then, but after it shook out, it was back to waiting). Until then, there's not much for bears to sink their teeth into, and the market could run higher in the meantime. As mentioned last update, BKX (and many other markets) has/have reached resistance, but that doesn't mean the market won't break through it:"
Trade safe.
Slew of data points that need to be tame for this rally to once again take off. All have to do with Inflation. Tuesday on. The street is still caling for a drop in FED FUNDS in 2024. They actualy need it soon and by mid-year if there is no cut we should be already in a revamp of inlfation.
I actually expect some inflation news to hit this week. Can;t see GDP at 4% for half a year with jobs and unemployment at such levels without higher costs and prices. The mantra, like the roraing 20's was a permanent new economic environment cheered with a unanimous understnding that prices will keep going up for decades to come. We have that today. No one, i mean NO ONE is expecting inflation to be a problem let along start spiking again.
me i see the same scenario as a Pandemic disregarding science and natural progession of a virus. No one can connect the dots. heated economy means demand for wages goes up. Imagine a 4% GDP with a huge increase in employment and squeezing the unemployment to near new lows WITHOUT INFLATION?
Call me naive, an armchair economist but for me the simple facts speak volumes on where we are headed.
the more dramatic the miss on this coming weeks CPI, PPI, Retail Sales, etc... the more damage the market will inflict. I suspect the Decmebr affect will keep it from having a majore trend reversal.
NOW if we actually continue to get tame numbers on inflation the rally should cause a big move before 2024.
Next year expect Bannon. Milller and all the sleazy corrupt individuals on board with the total destruction of our constitution to go alogna nd encourage TRUMP from day one of his new term. He will stop all funding against Putin. Go after NY for dissolving his empire. Pardon everyone involved to help him win and even pardon himself. Declare himself king and dare anyone to challenge him. Crazy talk right. Even the fanatic loyalists see this happening. Like fiddling watching Rome burn.
But that for another time.
This Combination Makes Trading Next Week VERY Dicey
DECEMBER 08, 2023 AT 07:01 PM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
http://stockcharts.com/articles/tradingplaces/2023/12/this-combination-makes-trading-978.html
"I think just about everyone is on "4600 watch" on the S&P 500 and I can't blame them. It's a big level. That was our high in July and now the subsequent recovery has returned the S&P 500 to the most critical price resistance of 2023:"
http://d.stockcharts.com/img/articles/2023/12/08/e01e0bc2-cbdc-42c7-b43c-6ce113715783.jpg
"At the time of this writing, the S&P 500 is a dozen points away from this key level, with an earlier high above 4600. A false breakout on the close today, accompanied by that daily PPO rolling over isn't a great look and combination, knowing how important this breakout would. But even a breakout doesn't exactly suggest it's an all-clear-ahead signal. That PPO is suggesting momentum is seriously slowing right now. If we do see a breakout, then be on the lookout for a reversing candle at some point next week. That very well could precede a bout of selling, perhaps as much as 3-5%.
In addition to a few technical reasons to be cautious, next week isn't a great one for the S&P 500 historically either. Should we struggle the next 1-2 weeks, there is a silver lining. The December 22 through December 31 period is extremely bullish as you can see from the daily annualized returns on the S&P 500 (since 1950) below:
December 21: +71.54%
December 22: +31.82%
December 23: +16.67%
December 24: +27.39%
December 25: Market Closed - Christmas holiday
December 26: +126.94%
December 27: +40.72%
December 28: -10.07%
December 29: +45.11%
December 30: +29.78%
December 31: +38.5%
For the entire Dec 21-31 period, the annualized return of +40.21% is more than 4x the average S&P 500 return of roughly 9% since 1950. S&P 500 prices rarely see a cumulative loss during these final 11 days of the year."
"I believe it's critical to fully understand the key historical trends on the S&P 500. At EarningsBeats.com, we continue to offer a FREE 7-page PDF report on critical S&P 500 historical trends that every investor/trader should be aware of. To download your FREE copy, CLICK HERE!"
Happy trading!
Tom
Stock Market Commentary 12/08/23
By Lawrence G. McMillan
"The broad market is not giving up on the monster rally that occurred in November. While there has been resistance at the 2023 highs, there has not been much of a pullback from there. That is the 4600 level roughly, and if it is decisively broken through on the upside, the next target will be the all-time highs at 4800.
Meanwhile, if that resistance does hold and a more meaningful pullback occurs, it is not necessarily a bad thing. Filling the gap down to 4420 on the $SPX chart would be "healthy," as long as support holds at 4400 (which was the major breakout level that launched this latest phase of the $SPX rally). A close below 4400, however, would be a bearish game-changer.
Equity-only put-call ratios continue to fall, and thus they remain on buy signals for the broad stock market. These buy signals will persist until the ratios bottom out and begin to trend higher.
Breadth has managed to hold together well enough so that the breadth oscillators remain on buy signals. They are in modestly overbought territory, as are many other indicators, but "overbought does not mean sell." So, the breadth oscillators remain in the bullish camp.
$VIX has been languishing at low levels near 13 for a couple of weeks now. This can be considered another overbought indicator, but it is not a problem until $VIX begins to rise. In fact, the trend of $VIX buy signal remains in place. That buy signal was generated in mid-November (the circle on the chart in Figure 4), when the 20-day Moving Average of $VIX crossed below the 200-day MA.
In summary, we continue to maintain a "core" bullish position in line with the positive nature of the $SPX chart. We will trade other confirmed signals around that core position. Ordinarily one might have suspected that any new confirmed signals would be sell signals, but those have not yet materialized while in fact a new buy signal appeared ("New Highs vs. New Lows"). This is why we have system rules and don't make guesses about what we think might happen."
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1702059487652
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1702059487652
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1702059487652
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1702059487652
I find it almost comical to describe the mood on Wall Street. The die-hard long term Bear has finally conceded just when the economy is showing a major storm dead ahead. If anyone wonders why there is an obsession with inflation and the need to call it transitory you are about to find out the real reason. Wages are picking up as expected. JOLTS is finally droping hard as perks and wages pick up. Job market is actuially approaching the post WWII unemployent low.
The good news on a soft landing is really very bad news for our future. Red hot GDP for 2 quarters and a flat earnings picture? The disinflation hope is still strong.
The other fantasy story is that the FED will LOWER RATES in 2024. if you want to know how stong a case they have look at the dollar and 10 year note yield. So far they agree with assesment. I believe strongly we are about to reverse back up and quickly. Once the street realized the best scenario to hope for is no more rate hikes they will cave in.
Everythig, all profts and margins require disinflation to kick in here. the forward projections for earnings is very high. this alone will be the reason for a crash or rolling crashes. Will we stay tame on inflation till end of 2024? possible.
The market HATES today's report and you will soon be scrathing your head not understanding why great economic news is causing problems. The 40 year inflation cycle has already started and ONLY when the economy and market get repeated head pounding news will we start the really big reversal.
Watch the Dollar and 10 year Note Yields to determine if we already started the heated spike move back up.
".........we'll see if resistance resists or not, but most major markets seem to have reached it together."
http://www.pretzelcharts.com/
"The market continues its sideways grind, so not much to add overall, but I do want to note that BKX, too, has now reached resistance, just overhead:"
"So it joins NYA, which hit resistance a little earlier (as mentioned previously):"
And COMPQ:
"And, of course, INDU (also noted previously) and SPX (no new chart needed), which is in the resistance zone of the prior high (also noted previously). So, we'll see if resistance resists or not, but most major markets seem to have reached it together. Trade safe."
CyclesFan's posts have become a fun tool for me to look at and follow
$SPX - There's still no confirmation that it made a daily cycle high on Friday since it's still above the 10 DMA. As each day passes, the odds of filling the gap at 4421 become lower and lower, since it's possible that this decline may end as only a pullback to the 20 day MA. pic.twitter.com/SGODZkR3V1
— CyclesFan (@CyclesFan) December 5, 2023
$NDX - Unlike the Dow and S&P 500 it has already pulled back to the 20 day MA on Monday. Today it bounced but it didn't make a new high like AAPL did, so I still think it's likely to move lower and fill the gap at 15524 before bottoming. pic.twitter.com/dQZ3kA4Ma6
— CyclesFan (@CyclesFan) December 5, 2023
$DJI - The index with the most consistent cycle: a 30-33 day cycle that goes back to the March low, but has pinpointed mostly highs until the inversion at the October 27 low. Logic says(and seasonality) that the next time this cycle is due(December 11-14) should be a low. pic.twitter.com/76UNhpPGbj
— CyclesFan (@CyclesFan) December 6, 2023
$WTI - RSI(14) is in the 30-31 range(vertical lines) which means that another short term low is imminent. It's the 3rd successive low in this range in the last month, so this time this low should be good for a multi week bounce into the end of the year. pic.twitter.com/ZXXMnXq2lZ
— CyclesFan (@CyclesFan) December 6, 2023
"I think if that bull count does show up and give us a new ATH, it probably doesn't get too much further than that.........."
http://www.pretzelcharts.com/
"The market has traded sideways for a week, so there's not a lot to add to recent updates. I realize that it's fashionable to be bullish now, so I've drawn up a bull chart for sake of reference."
"Again, as I've discussed previously, I think if that bull count does show up and give us a new ATH, it probably doesn't get too much further than that, because the option of this rally to be the first subdivision of a new massive bull wave just seems silly to me. But hey, maybe I'm wrong. Here's the chart I published on Dec 1, discussing this:"
"Of course, everyone seems to be presuming that a new ATH is just a given in SPX, and while I agree it's possible, I don't think it's automatic. In the event it doesn't materialize for bulls, here's an interesting chart to watch for as long as it's relevant (it could always become irrelevant by the end of today's session -- or not):"
"In conclusion, I continue to maintain that in the big picture, while it's entirely possible I was a wave early, I don't see many positive developments coming down the pike (to the contrary, pending Treasury supply alone is going to suck a ton of liquidity out of the market), which is probably what I'd need to see to convince me I was way off. I'm open to change if the playing field changes materially -- but so far, it hasn't. Trade safe."
RCKS...JUst too much for me to keep up with.So many systems and indicators. Could drive you crazy...I'm half way there now..
RCKS, Thanks for the Charts and info...If I were to depend on the yield curve for any down it would never happen..
"......maybe there were just too many shorts for bears to get traction. Maybe those needed to be cleared out. Maybe even more clearing out is necessary."
http://www.pretzelcharts.com/
"Remember when (28 minutes ago) everyone was talking about the yield curve inversion? I'm sure you do, but just in case you're new to the markets: An inverted yield curve has accurately foreshadowed all 10 recessions since 1955, per the Federal Reserve Bank of San Francisco, with only one false positive in the mid-1960s."
"So, is "this time" really different? Will this be the first outlier in ~60 years, proving all those who heeded history wrong?
Or is the market/economy (yes, I very much realize those are two separate entities, despite the slash mark, and have written about that extensively) just biding its time?
INDU is approaching an interesting very-long-term trend line:"
"Here it is zoomed in:"
"And here's an even closer look, along with a trend line that's only months-old (in blue) instead of decades-old:"
"I suppose if we get into a bigger bull move, then it's entirely possible we're experiencing a "bull market in short covering." Since most everyone who hasn't been hiding under a rock during the past year and a half knew about the yield curve inversion (along with many of the other fundamental challenges facing the market), maybe there were just too many shorts for bears to get traction. Maybe those needed to be cleared out. Maybe even more clearing out is necessary.
We'll see if the market responds to this resistance, or if it blows through it. Trade safe."
Two more Tweets from CyclesFan on the SPX longer term
For a better visual of what I'm talking about here are the 2 cyclical bull markets in the 1970s that were comprised of 3 waves. The B wave bottomed at the 20 month MA in both cases. pic.twitter.com/f7s0pHqOjS
— CyclesFan (@CyclesFan) December 2, 2023
Bullish Rotation Fully Supports Further Gains Ahead
DECEMBER 03, 2023 AT 03:58 PM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
http://stockcharts.com/articles/tradingplaces/2023/12/bullish-rotation-fully-support-913.html
"Well, we're into the final month of 2023. Are we having fun yet? I'd argue that the bulls are having a blast, with many stocks surging year-to-date. I love all the attention that the "Magnificent 7" are attracting. Stock market skeptics are ALWAYS looking for the next big thing to take the stock market to its knees, yet rarely do any of them work. But now the buzz words are "Magnificent 7". Stocks can't go higher, because the overall market strength is too narrow. Whatever. What do we want to see - the largest, most influential and innovative companies in the world, that employee MILLIONS of people worldwide, to perform poorly? Would that make everyone feel better?
Bull markets are led by leaders and money pouring into aggressive sectors on a relative basis is BULLISH. I absolutely want the Magnificent 7 to lead. These stocks are all in the most aggressive areas of the market. When they're being bought and are outperforming the rest of the market, it's a "risk on" market environment, which is the engine of a secular bull market advance.
When stocks are moving lower, the overwhelming majority of market participants are afraid to buy, thinking prices have to fall further. When stocks are moving higher, the overwhelming majority of market participants say "Don't Chase!" All of my "beneath the surface signals" suggest this rally has legs and is quite sustainable. Would it be better to enter at lower prices on a market pullback? Sure, who doesn't want to buy cheaper. But I'd also argue that secular bull market advances wait for NO ONE. You're either on the train or you're not. At EarningsBeats.com, we've been on the train since June 2022. Until you learn to ignore the naysayers, many of whom never go away, you'll find investing to be extremely frustrating and you'll be set up for failure.
Instead of trying to call a top at every possible chance, why not evaluate the strength of the advance?
Over the past 5 weeks, we've seen a massive advance that's completely recovered all the losses during the recent 3-month market correction from July through October. Rapid, heart-thumping gains are a hallmark of secular bull market advances, by the way. Leaders during such advances can tell us a lot. So what's been leading? Let's start with sectors. Since the October bottom, here is the performance order of all 11 sectors:
Real estate (XLRE): +17.50%
Technology (XLK): +15.18%
Financials (XLF): +15.01%
Consumer discretionary (XLY): +14.37%
Industrials (XLI): +12.75%
S&P 500 ($SPX): +11.59%
Materials (XLB): +11.21%
Communication services (XLC): +10.81%
Utilities (XLU): 8.17%
Health care (XLV): +7.06%
Consumer staples (XLP): 6.56%
Energy (XLE): +0.46%
Look at that rotation! Does it appear that the big Wall Street firms are ditching the aggressive sectors and turning more defensive? Honestly, the exact OPPOSITE happened. Most defensive sectors are found at the bottom, that's where the relative selling has taken place. Of the 5 sectors that beat the benchmark, rotation benefited 4 of our 5 aggressive sectors. Sorry, that's not likely taking place just before another big leg down. It makes no common sense.
Here's an RRG chart to show this rotation more visually:"
http://d.stockcharts.com/img/articles/2023/12/03/1f2b2c8f-19d6-4bc3-86be-8052280ec05c.jpg
"If you're concerned about the XLK moving into the "Weakening" quadrant, understand that leading sectors many times move into the weakening quadrant, before returning to the leading quadrant. Here's the same RRG, but this time with the tail length at the maximum 30 days (coincides with the recent surge from the October low), so that you can see how the XLK has traveled:"
http://d.stockcharts.com/img/articles/2023/12/03/c194fdd5-5ad0-4fa4-a84c-ee9516eb0162.jpg
"A month ago, the XLK also moved from leading to weakening quadrants and then it returned to leading, stronger than ever. Staying on the right side of this chart tells us that the XLK has remained a relative strength leader throughout. Technology isn't typically a great performer during December, so I suspect we might even see further weakness, perhaps touching into the lagging quadrant before moving straight back to leading in January, when the seasonal forecast turns much brighter.
Speaking of seasonality, you can still get your FREE copy of my S&P 500 seasonal PDF by CLICKING HERE and signing up with your name and email address. It's 7 pages, highlighting the most critical seasonal patterns that every trader/investor should be aware of on our benchmark index. If you aren't learning, you're losing ground to every other trader who is. The 2nd PDF in this 2-part series is 70 (!!!) pages long and provides more seasonal details of the S&P 500, along with historical tendencies of 16 key individual stocks, including the Magnificent 7, and several others. I used Part 2 information to execute one of my best trades of the year - on NVDA based on its bullish November seasonal pattern. Check out NVDA's run in November:"
http://d.stockcharts.com/img/articles/2023/12/03/b3964cde-c145-47b5-a3be-c1a82cf606ab.jpg
"The reversing candle at price support set this trade up technically, but it was the knowledge of NVDA's seasonal pre-earnings run that gave me the confidence to make my largest investment of 2023. It paid off handsomely thanks to the Bowley Trend 2-part PDF series corroborating the technical outlook."
Here's a bonus for signing up for this 2-part series. The 2nd part comes with a nominal fee of $27, but will include an event on Monday, December 4th at 4:30pm ET to provide further details and clarity. I'll discuss in detail the best timing for trades for each of the 16 individual stocks. Let's nail several more NVDA-type trades! This event will be open to all EB members, including those who purchase the Bowley Trend series, part 2. Hope to see you there!
Happy trading!
Tom
Fan boy - Only when they confirm your own assumptions. reinforcing play. How has these so called gurus done during the down times? Lets get this straight. In a mega long term super cycle bull run. Those that kept plugging the wave up will always seem to know what the heck they are doing.
All you have to do is use an obvious tragic external event and see if they ackowledged reality or ignored it. Pandemic 101. While i stomped my feet and had a hissy fit over the event and market dismissal of it I knew with certainty reality will bite them in the ass. Calling a bull run during ythe super cycle once in a lifetime event makes you a genius. Exposes your fabnaticism when a death plague from 100 years ago comes along and they still IGNORE IT!
I deal in Logic! I have always dealt in logic. my livlihood depended on it. ANYONE that couldn't recognize what a Pandemic meant to the stock market and salivate over the once in a loifetime opportunity to position for a steep fall isn;t worth crap.
We needed economists to declare a New Paradigm at the peak of the last great debacle. The death of this market is likely a slight miscalculation that inflation is transitory once again. EVERYONE, i mean everyone believes it.
I am calling for a HUGE run in Decmebr and ONLY one of perhaps 2 decent drops and recovery early 2024. This blowoff will not give up so easily. But all we have to do is look at inflation data and watch the excuses why it isn't behaving just yet. Even BITCOIN is surging with no sign of topping.
We have entered the last stage of this generational play. Trump winning election with a resume that hasn't begun to realize his full potential. He has announced his wrath on day one and will charge ahead. In a span of months he will deband the constitution DOJ and judicial review. ike a Pandemic that keeps getting ignored till there is death and destruction on our soil.
We are illogical creatures pretending there is logic to it. We are petty weak immoral at the core. Repuks call trump the Orage Jesus. i called his the Anti-Christ years ago. Which endearing name will stick.
If the market down;t break out soon we might get the first decent drop of two but my guess it not till January at the earliest.
I've become a Big Fan of CyclesFan and his work on the Index's, I found him on Skinowski's thread CFZ E-Wiggle Workspace a few months back and I think his work can keep one on the right track to some degree
$SPX - The bearish seasonality for the 1st TD of December didn't work out. SPX hit 4600 and we are now 32 days from the October high. Still, given the negative divergence on RSI(5) a daily cycle high is imminent. Also, NDX didn't make a higher high, so it's diverging from SPX. pic.twitter.com/IKj2katr1G
— CyclesFan (@CyclesFan) December 1, 2023
What A Week! This Small Cap Party Might Just Be Getting Started
DECEMBER 01, 2023 AT 06:34 PM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
http://stockcharts.com/articles/tradingplaces/2023/12/what-a-week-this-small-cap-par-878.html
"Last week, in my Weekly Market Report to EarningsBeats.com members, I pointed out the upcoming bullish history of the small cap Russell 2000 Index (IWM tracks this index). Most probably have no clue why small caps outperformed by such a wide margin this week. But history saw it coming all along. Here are the daily annualized returns on the Russell 2000 since 1987:
November 23: +63.10%
November 24: +255.15%
November 25: +78.57%
November 26: +22.50%
November 27: +28.95%
November 28: +72.16%
November 29: +38.77%
November 30: +44.22%
December 1: -39.02%
December 2: +121.88%
December 3: -26.06%
December 4: +22.88%
December 5: +157.14%
December 6: +52.01%
December 7: -34.93%
December 8: +90.60%
There's a lot of historical tailwinds at our back right now. It's a clear seasonal indication that the IWM LOVES this time of year. Historically, the IWM's best two calendar months are December and November, which have produced annualized returns of 25.08% and 17.46%, respectively, since 1987. Only three other months are even in double digits: April (+15.25%), May (+13.10%), and February (+12.89%).
So should we be shocked to see the following IWM chart:"
http://d.stockcharts.com/img/articles/2023/12/01/eb3a3b25-f628-45ec-b1b7-156230bf7282.jpg
"It's easy to see what's happened thus far in November/December. And just think, December is typically stronger than November and it's just getting started.
Looking at the IWM another way, this time from a technical perspective, also yields a very bullish December outcome:"
http://d.stockcharts.com/img/articles/2023/12/01/da31fb38-9521-4f35-a931-5757872678fb.jpg
"I see a beautiful reverse head & shoulders bottoming pattern that executed today. Volume soared to accompany the price breakout above the neckline. Listen, none of this is surprising to me. I've been telling members since June 2022 that the longs were in a much better position than the shorts. It was time to STOP shorting in June 2022. The S&P 500 is now up 1000 points off the ultimate October 2022 low. The NASDAQ 100 has risen nearly 50% from the June 2022 bottom.
And you know what? We're going higher. A lot higher."
To improve your own trading success, answer these two questions honestly:
(1) Do you know there's a 12-consecutive day period of EVERY calendar month that has produced more than 80% of the S&P 500's gains since 1950? In other words, a little more than 33% of all trading days have accounted for more than 80% of the market's gains. Do you WANT to know what that period is? I would certainly hope so!
(2) Do you know the trading behavior of each calendar quarter? That knowledge recently led me to very profitable trades on both NVIDIA Corp (NVDA) and Tesla, Inc. (TSLA), 2 of 16 key stocks that I've done extensive historical trading analyses for. Want to improve your trading success with simple seasonal data? Why wouldn't you?
I want to introduce you to "Bowley Trend: Long-Term Trends Since 1950". It's a 7-page PDF that I want you to immediately download and keep as yours. Consider it a "Thank You!" for following my work over the years. Learn the secrets that few traders know. Take one minute, CLICK THIS LINK, and download my FREE PDF that will change the way you look at the stock market forever!
Happy trading!
Tom
Stock Market Commentary 12/01/23
By Lawrence G. McMillan
"The massive rally of November has slowed a bit, but $SPX continues to move higher. The Index is now approaching the 2023 highs near 4600, which may offer some resistance. If that is overcome, then sights will be set on the all-time highs at 4800 (from early 2022). If there is a pullback, it is likely to come sooner rather than later, since there is bullish year-end seasonality (although there is a general positive influence for most of December in any case). Any pullback will likely be minor perhaps closing the gap down to 4420 on the $SPX but not much more. It would be a game-changer, though, if $SPX were to fall below 4400.
As we walk through the various indicators, one will see that many are overbought. But remember that "overbought does not mean sell." Sell signals always require necessary confirmation, but especially before venturing in against this strong market trend.
Equity-only put-call ratios are plunging now, as call buying has increased. The weighted ratio is already reaching the lower regions of its chart, meaning that it is in overbought territory. These won't give sell signals until they roll over and begin to rise.
Market breadth has improved, but is still not stellar. In any case, the breadth oscillators are on buy signals and are in modestly overbought territory. It would only take one or two days of negative breadth to generate sell signals from these oscillators, but they have been subject to whipsaws recently, so we are relying more on other indicators at this time.
$VIX is quite subdued and traded at a new 2023 low this week. In fact, that was the lowest level since January 2020 only slightly prior to the pandemic "crash." Fear-mongers are already citing that fact, but the real thing one needs to pay attention to with $VIX is its trend. Currently the trend of $VIX is downward, and that is a bullish signal for stocks.
Overall, we are maintaining a "core" bullish position, based on the strong $SPX chart. We will trade other confirmed signals around that "core.""
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1701457414336
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1701457414336
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1701457414336
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1701457414336
CyclesFan continues to look for a high as the Market continues higher........ I believe it has a date with 4607 minimally and likely at least somewhat higher then that to eliminate any counts that would remain alive due to a double top at 4607
$SPX - Probably made a daily cycle high yesterday when it topped at 4588. In order to confirm the top it has to close below the 10 DMA. The bullish seasonality this week proved itself since today is the highest close of the week, but the 1st TD of December is seasonally bearish. pic.twitter.com/Hzshk5vkl4
— CyclesFan (@CyclesFan) November 30, 2023
BEARS have been very wrong on 2023. from crash setup to a huge move? Don;t dispair since bubbles, like the political arena, has been expanding bubbles on bubbles. TODAY it is official, "Transitory" is back baby! The Inflation message. like the early 70's is the same, inflation is D-e-a-d! Seems 2 impeachments. 2 rape caeses against trump, 91 charges, 4 indictments, the pussy magnet is leading by a wide margin to be the first dictator in our short history. This story against a backdrop that huge GDP quarters back to back, Jolts stuck at 10 million, jobs surging yers over year at a record pace means inflation is dead? What????
December should surge and the higher the more likely January has the first of many casualties. 500 to even 1000 point move in next 30 days? IF we stall in decemebr the froth is not here yet. Bitcoin is certainly telling us a spike move is coming.
HUGE amount of free cash floating around and NOT committed. If it does commit most will flow into equities. How long will the party last? Thats depends on Inflation Data and the market. Like a Pandemic the market ignored it for 5 long weeks! Astonishing!
So INFLATION data is the ONLY thing you need to look at from here on out since earnings expctations is still so low a snail can win this race.
Economics 101 used to state that a GDP for 2 quarters above 4 percent after the big spike in prices and jobs refusing to give up the torrid pace means INFLATION pressures, if the laws of economics prevail, should catch up and soon. But for now, relax and enjoy the holidays.
"I have never seen bears so demoralized and discouraged as they are right now."
http://www.pretzelcharts.com/
"In all my years trading, I have never seen bears so demoralized and discouraged as they are right now. NEVER. As most experienced traders know, usually bulls are most demoralized near major bottoms, and bears are most demoralized near major tops. In both cases, sometimes there's a final "washout" wave that crushes the last of the strong hands (bull or bear). Make of that what you will.
Let's step back and take a serious look at the count bulls are banking on. I mean, let's really try to envision this... and afterwards, we'll project what sort of things might need to happen at the fundamental level for this to work:"
"For the above count to work fundamentally, here are some things that probably need to happen:
Inflation needs to stop, obviously.
Rates need to come back down to somewhere near the lowest levels in history [which is where they were during the prior bull market], in order to again fuel some degree of debt expansion.
Commercial real estate needs to come back from the edge, and rates coming down would only be part of that equation: People also need to return to working in an office and quit this remote stuff. People also need to stop shopping online so that brick and mortal stores can make a significant comeback.
Treasury buyers must be found, in order to fund the rapidly-growing national debt and to help bring Treasury rates down, because it's hard to bring rates down when there are barely enough buyers to absorb supply.
China needs to find a way out of its pending demographic crisis, in order to keep buying Treasuries and in order to keep manufacturing cheap Widgets for us. And also to prevent their highly speculative real estate market (which already features numerous literal "ghost cities") from melting down and causing any degree of global contagion.
American consumers need to get out of debt and start spending and taking on new debt again. The problem with a lot of this stuff is "it only works once." You can't max out your credit cards AGAIN until you pay them off.
GDP needs to increase substantially and in a real manner, since all recent "rises" in GDP have been fueled solely by the government borrowing and spending (see: Treasury oversupply, etc.). Again, seems hard to do when everyone else is already tapped out, but no matter, it needs to happen to fuel that bull market.
Banks need to strengthen their balance sheets. Of course, if commercial real estate recovers somehow and Treasuries come down substantially and mortgage rates come back down (so that banks aren't stuck holding all those 3% mortgages, which are a liability in the current environment), then banks will probably be just fine. The problem is: How do we get those other three things to happen?
This isn't even an exhaustive list of the fundamental challenges bulls are facing.
So, for sake of argument, let's assume bulls can manage to make a new all-time high in SPX in the coming months (and that outcome is not a given -- in fact, it's not even a given that SPX will break the July highs). But in that event, given what we know about the fundamental environment, this is what would look more reasonable to me:"
"In conclusion, is it possible I was "a wave early" in my long-term count? Absolutely, it's an easy error to make and most of us do it at the micro level fairly regularly. Is it likely I was WAY off and the black mega-bull count will show up? You be the judge.
Near-term, keep in mind that SPX is still sitting at/below resistance, via the July highs. Trade safe."
"Worth mentioning that we are closing in on the July high in SPX, and prior highs can sometimes offer resistance."
http://www.pretzelcharts.com/
"Not a lot to add to the past several updates, but I have some interesting charts today nonetheless. Let's start with INDU's very-long-term chart:"
"Next, a bit of a different perspective on SPX:"
"NYA highlights this even further:"
"Finally, oil has remained stalled at its inflection point for a few weeks now, and presents some interesting options from here:"
"Worth mentioning that we are closing in on the July high in SPX, and prior highs can sometimes offer resistance. Btw, the "grass is always greener on the other side" because our very presence on the grass changes both its environment and ours, so unless we take proper care to nurture and sustain it, trapsing about casually ultimately kills it. Not much else for now. Trade safe."
CyclesFan SPX post today
$SPX - Today's intraday high was 4568.14. Last Wednesday's high was 4568.43, so Wednesday's high remains a potential daily cycle high. The 10 DMA is already close to the current price so it either breaks out tomorrow and heads to 4600 or closes below the 10 DMA and confirms a top pic.twitter.com/oUsSMKPtkH
— CyclesFan (@CyclesFan) November 28, 2023
Pretzel :
(1) Pretzel presents both a Bull and Bear case.
(2) Pretzel gives both Triggers and Targets
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