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You mean like Witch hunt? Dictator trump and his GOP Politburo? No, I'll keep fighting that as i have fought irrational market behavior. the long ago trillion dollar bet that went bad placed a condition on future bad bets. The street DEMANDED rate cuts this year! Why? because without it we get many more bad bets. This is like a Pandemic that was known and excused for being just a mild inconvenience. The street already decided wasn't going to cause a problem. There is NO WAY the FEDS reduce rates anytime soon. the odds favor more rate hikes just based on an historic tight labor market. A 40 year Pavlovian condition on disinflation against a 2 year spike in inflation?
Mark this down! Many EXTERNAL implosions will result for such a high short term bond yields. Greed never goes out of style. Everyone TODAY is convinced we saw the peak in inflation and it has only one way to go. It will be the biggest mistake of the century. This as everyone is convinced the FED is lying about futur rate hikes and not on pausing for now. They see what they want and disregard the rest. Watch WAGES carefully next time. Unions, though a much smaller component than the 80's is demanding and getting matched wage increases. Social Security has to match that rise also.
I warned 2 years ago that disinflation is cyclical and the 40 years is over. No one believes disinflation is not permanent due to the new Paradigm of our economy. Like the 1920's I guess. I laughed at the coined term "transitory". EARNINGS! Better spike up and soon or the assumed P/E gest a multiple not seen in a very long time. We have now gone thru a trillion dollar run on banks in ONE DAY! It was here and gone in the daily news like a street accident. No ramifications, no biggie! the FED takes care of all accidents. Not a blip in the stock market reaction. You can call that NORMAL, i call it extreme exuberance and complacency. All things are handled and instantly fixed.
We will be going thru a 2 to 3 decade economy much worse than the 70's. Laws of gravity have not yet been negated. But like all things it seems to never get here. When it does we will see it move in slow motion never getting out of it.
Everything in nature is cyclical ... du.
All anything can do is to accept it.
All anything that is intelligent can do is to nudge it.
DOW to test a double top at 34450 area. Should know if this is a real pattern or it breaks right thru. Street for now ignoring the implications of NO RATE CUT this year. There are many best in many sectors of the economy that need desperately rates to be lowered. They all rely on disinflation. External shocks should start before year is out. I expect on multiple fronts. But first we only have a measly 100 or so points to prove there is no double top in DOW.
No matter where we are in cycle this is stretched way too much. Bitcoin breaking down. Expect SPX to follow with a decent drop here. Maybe 150 - 200 points?
Inflation must be transitory or else this market would FREAK OUT!
Street accepted the FED pause, but think they are scaring the street with fake announcements of more rate hikes possible this year. Interesting the street hears what it wants and reinterprets what it doesn't. The FED (KNOWS) something since not a single member dissented on their call for NO RATE CUTS IN 2023. Why are they also calling for TWO MORE rate HIKES this year as possible?
Same OLD! Street not believing the FED. Just talking down the stock market froth it seems? yup that's what they think. Watch the data real carefully. market should hold up till a month of cumulated data piles up showing inflation coming back. if that doesn't happen the only event that will reverse this Bull is an external debacle.
Market put on notice today. Another 4 week should be enough time to determine if inflation is still persistent or not. In that time who knows if the street will make the most positive assumptions on inflation and pull the stocks with it. I do know the FED wouldn't be warning just to stop the market from going up. They are using past experiences and a tight labor market never produced low inflation.
Interesting that the 13th once again was a big turn for the DOW. is it a one day affair?
TWO MORE RATE HIKES EXPECTED???????
Not a single analyst saw that coming. not a ONE! they MUST know something most have forgotten. YUP, a super tight labor market with 10 million want ads is not conducive to rate cuts and not nearly enough to stop INFLATION! Unanimous decision also? WOW! A shocker!
WAGES should be heading a lot higher soon and with it persistent INFLATION! this as the street was desperate to have Fed cut. If you ask me this is a BIG divergence, biggest in a very log time. I believe we might have seen our top. Watch the dat prove them right.
The THRILL of Victory and the AGONY of Defeat! DOW dropping HARD as the 13th has been the Turn Date. Will the street shrug this off too? Will find out by 4PM!!!!!
BUY THE DIPS! OUCH! Like i stated, NO RATE CUTS for all of 2023! Big response, big initial drop!
So many bulls. I believe we are experiencing the death throws and it usually involves more drops and rebounds before it decides to tank.
The street is DESPERATE for RATE CUTS! If you didn't know it then you should now.
thats
what richard wyckoff said
do not figure out why its going up or down
go with it till it changes
still in wyckoff markup phase
fed keeps pouring in money
do not fight the fed i guess
Exactly. don't fight the price and volume. price and volume in a chart shows so much and there is nothing to predict just follow it.
The chart pattern on the DOW is spooky! DOUBLE TOP can be fulfilled within 2 weeks. 34450 is the target. if we break right thru than the pattern is destroyed and a Bull Market is likely from here. If we get a strong reaction at that level and fall hard from there we could be witnessing the big drop ahead. DOW is the easily defined chart symmetry. Bitcoin has been running in sync with other stock market indices. Till recently. It is at a precarious point and could fall over into a crash or hold and rebound strongly. ONLY 2 options.
I don't know the what or why such a drop will occur. i do know Inflation is far from dead and our 40 year addiction to disinflation will cause more trillion dollar debacles if we don't stay in a disinflation environment. had UNION participation been strong like in the 80's wages would already be much higher causing a vicious cycle. As it is there is still enough government workers that can cause the rest of economy to catch up to their wage hikes. WAGES! Watch that one data point carefully.
i do not use
i said i liked his chart
how many complex wavers said october was the bear market end
complex Elliot wave
it has more holes then swiss cheese
jxyz, If you're going to criticize e wavers missing your pattern, you need to recognize their rules properly. E wave doesn't recognize a (1) 5 wave as complete as well as waves 2 and 4 overlapped. Also, doesn't a corrective need to be a 3 wave pattern? Keep in mind I'm not saying either is correct or not as I have my own wave pattern that is all 3 wave patterns.
terrific chart
fed day next day almost always opposite
first move after news is opposite direction then true direction
them move the other way
however it often takes a few days to see what the market thinks
the october weekly five down count in october was missed by all most all the elliot wavers
if it counts as 5 its a 5
Jerry he has a red 3 label with a /C
I believe he sees us in a wave 3 now and I try not to look to far out anymore.
I can be too bearish but this whole leg up I've stayed bullish in my thinking and my little bets have largely worked.
here is the channel I'm watching on the daily SPX chart
http://stockcharts.com/c-sc/sc?s=%24SPX&p=D&yr=1&mn=0&dy=0&i=p27207063826&a=222820108&r=1686754696482
Disinflation is CYCLICAL! I know all economists now claim it is the new norm but I don't buy into that. In the 30's we also had a new norm till we didn't. In the 80's we had a huge spike in Inflation and ever since has been coming down.
I called the banking debacle 2 weeks before we saw it. I ONLY based it on a 40 year trend that placed all bets on the assumption rates would come down. We are addicted to that since it allows for all asset classes to rise in value as inflation falls and costs fall. Our whole economy now is built ion this foundation. If i was wrong how did we have a trillion dollar run on banks? Why is Wall Street obsessed with LOWERING RATES!
The FED will NOT announce plans to lower rates and will only commit to a skip this month. I expect Wall Street to NOT BE HAPPY with that. I also believe WAGES will catch up and seal our fate on Inflation being cyclical.
The giddy stage is here. This right after a trillion dollar loss? Does that sound NORMAL to you? Bitcoin has been running in sync with rest of market. it is NOW nearing a critical point of big rebound or crash. The new pet rock is AI.
like the pretzel chart
it should be labeled we are in 3
but top of the channel should be the long term target
shane s rally till early or mid july
SPX is close to the 4400-4440 target set on 6/5/23
http://www.pretzelcharts.com/
"Last Friday, I wrote that SPX appeared to be on track to break resistance, which it has since done. It's now closing in on its next upside target zone:"
"NYA is now right up against resistance -- if it sustains a breakout there, then the next probable resistance zone is represented by the blue line:"
"Finally, for the past few months, I've gone back and forth on whether to publish the potential longer term bullish count, but have been restraining myself. I'm very close to publishing it now (eighty percent of the time, "finally" publishing a bull count is the best way to create a bear move, so we'll see if the threat of publication is enough to cause the market to reverse, or if I actually need to publish the bull count to really force the market's hand), but have decided to hold off just a little longer. Trade safe."
Disinflation is:
on average, in a healthy economy, a temporary slowing of the pace of price inflation.
In other words, there is on average always going to be inflation in a healthy economy. Why is that the case? Because people feel better about themselves every time they get a raise. That's positive feedback. People will work harder and stay at their jobs longer when they get positive feedback. That positive feedback comes most often from an increase in salary. But that increase in spending means nothing on average because sellers will respond by raising prices. This process is basically a circle jerk.
A healthy economy is a teeter-totter economy in terms of prices versus income. If anyone wants a better lifestyle, the easiest way to do that is to increase their value. The way to do that is through more or better education, preferably obtaining additional skills that are in higher demand. That additional education will cost them something but if they chose the right path, they will get more out than they put in.
Not in a BULL MARKET? Perhaps not. In a spike hyperbolic move and only question is how high and how long. Extreme greed, analysist are falling over themselves patting themselves on the back. This on the day we indicted a president for federal crimes. Pet Rock, Bitcoin out of favor and might actually crash from here. AI is the new pet rock.
Imagine wall street not a few months ago begged the FED to LOWER RATES and for good reason. World bets on disinflation and so far they lost trillions. FED has to LOWER RATES in 2023 or another bigger external debacle will occur. The CPI news was in the right direction. Now they are hoping for a faster drop and 99% think it is a done deal. Me, I have never seen a spike inflation with extremely tight labor suddenly drop hard and stay fully employed. heck there is a first for everything. I expect surprise numbers contradicting the assumed disinflation path. Watch wage component spike up. that spells doom for any hope of disinflation to kick back in.
The white flag has flown. Rick Ackerman, the king of perma-bears now sees another 470 SPX points higher. Talk about crazy! Like trump indictments it gets more favorability rates each time. Reality is what YOU make of it. Unanimous argument and near fact is that disinflation is a permanent trend and we are about to witness this as a fact. Tight labor market, 10 million want ads no longer has a factor in wages and inflation. Like TRUMP we believe what we need to believe. Inflation is dead and rates will soon come down. the opposite is unthinkable. The 40 year trend in disinflation is no longer cyclical but permanent.
We are about to find out soon enough if inflation is dying a slow death. The productivity the last 2 quarters were negative because of it. The trillion dollar mistake and best are over. This is like declaring TRUMP an easy victory because of the indictments. But we do and the masses accept it. We live in the Bizzarro world.
Who is on first..
RCKS...Thanks..One guy I read this weekend says we are not in a new bull market...We need to surpass the 4800 high for a new bull..Sure seem like a bull market to me..
"This is the last potential hurrah for Blue 2:"
http://www.pretzelcharts.com/
"Since last update, SPX rallied up to a near-perfect test of the aforementioned horizontal resistance zone (4326) and stalled for the rest of Friday's session. This is the last potential hurrah for Blue 2:"
"The next chart expresses my overall thoughts:"
"Finally, a reminder of the red trend line beneath the market:"
"In conclusion, SPX has tagged horizontal resistance, which is where Blue 2 lives or dies. The second chart expresses my overall thoughts in more detail. Essentially, while I'm open to either outcome here, as I said last update, at this point, Red 2 would be more common to see as a resolution, given what came before. Trade safe."
richard wyckoff keep it simple
if a market is rising do not try to understand it or fight it
go with it till the trend changes
The market rallies forms a base to rally from then rallies again
The amount of market analysts that continue to fight the market is amazing
Especially elliot wave analysts
After the end of the QE. Shane Smoleny said the the market surprises will now be white swans.
So many used old sayings and old analysis which no longer work well at all
Sell in may and go away was completely wrong
We are in a bull market. Accept that and trade accordingly
wyckoff quote of day
“Reading all the financial news and evaluating it will avail you nothing. The market may rise on bad news and go down on good news. Then where are you?”
What Could Go Wrong This Week? Ummmm, A Lot!
Tom Bowley | June 11, 2023 at 11:50 AM
"I remain steadfastly bullish, but I do recognize reasons to be short-term cautious when I see them. I suppose the first question is, "what does it mean to be cautious." Well, I can only tell you what it means to me. While I still believe it makes sense to be long to some degree, I would not be a fan of being in leveraged ETFs on the long side. It has nothing to do with whether we go higher or lower next week. Instead, it has everything to do with managing risk. Folks, we're really overbought AND we just failed at key price resistance on the S&P 500. Check this out:"
http://d.stockcharts.com/img/articles/2023/06/11/3c0425a4-efad-4c3f-82d6-44625726c2f8.jpg
"Not every top sees stochastic at 80-90 and RSI at 70, but you can see from the above chart that when the stochastic reaches at least 80, you should at least be thinking that a possible short-term top is at hand. The RSI 70 level is always one to keep an eye on. We're not there yet, but RSI 65 is a high level compared to what we've mostly experienced over the past year. We're overbought to some degree without a doubt. The bigger issue, however, is that 4305.20 was the key closing price resistance and 4325.28 was the intraday high - both occurring on August 16, 2022. I don't like failed breakout attempts in any market.
Options Expiration Week
Listen, there's a reason why the S&P 500 has struggled in the middle to latter parts of calendar months since 1950. In my opinion, it's all about monthly options expiration. This Friday, June 16th, monthly June options will expire. I call this week and the few days following options expiration "Opposite George" week, a Seinfeld analogy. During that episode, George Costanza, whose always pessimistic and down on his luck, is encouraged by Jerry and Elaine to start doing the opposite of every instinct he has. Not too surprisingly, George's life and fortunes turn for the better. My experience is that the stock market pulls off a similar "Opposite George" type of week as monthly options expire. When the stock market is trending higher into monthly options expiration week, we tend to see strong sectors, industry groups, and individual stocks lag, while weak counterparts tend to suddenly reverse and push higher. I've seen a number of very obvious reversals, including one that occurred after the S&P 500 was incredibly weak during the 2022 cyclical bear market:"
http://d.stockcharts.com/img/articles/2023/06/11/a4ff13ac-accc-451c-b2b5-f50f0661065c.jpg
"Clearly, this was an extreme case. The net in-the-money put premium on the SPY and QQQ was over $5 billion - on just two ETFs! So you can imagine how much money was on the line for market makers across all index and stock options that week. It was NOT a guarantee of higher prices. Rather, we use this option expiry information as a directional clue.
We have a dedicated "Max Pain" event for our EarningsBeats.com members every single month, because we feel it's THAT important. Our next one will be held this Tuesday, just after the stock market closes. If you'd like to be a part of it and you're not already an EarningsBeats.com member, please take advantage of our 30-day free trial and join us! It will help you to improve your trading success and to better manage your risk during this unique period during the month.
As I look ahead to options expiration this Friday, there's plenty to worry about. Let me give you just one example. I love Advanced Micro Devices (AMD) and believe it's going much, much higher in time. But it has big-time issues this week. Before I show you some key options information, look at the negative divergence that AMD will face IF it can manage to test overhead price resistance:"
http://d.stockcharts.com/img/articles/2023/06/11/93917ea8-771e-440b-b7ae-40ec367bbd8c.jpg
"AMD is a leading stock in one of the hottest industry groups - semiconductors ($DJUSSC). So it's very easy for me to love this stock. HOWEVER, I cannot ignore the short-term risk of owning it. Please keep in mind that high risk of owning does not mean AMD is guaranteed to drop. But to buy AMD at this level, knowing that it's quite overbought and that there is a TON of net in-the-money call premium, carries very significant risk. As a trader, one of my goals is to manage and limit my risk. Buying AMD here goes counter to that.
Now let me show you a little bit about AMD's June options profile. From cboe.com, here is public information that you should be aware of, with respect to AMD:"
http://d.stockcharts.com/img/articles/2023/06/11/091c573e-ce5f-48ad-b6a2-023966a31695.jpg
"The far left column is the number of call option contracts that remain open at every strike price shown. The far right column is the number of PUT option contracts that remain open at every strike price shown. There is not a single strike price above 125.00 (ie, in-the-money puts) that has more than 1000 open put contracts. Meanwhile, check out all the open call contracts that are in the money.
12000 at 60.00 (not shown above)
10000 at 75.00 (not shown above)
29000 at 80.00 (not shown above)
23000 at 90.00 (not shown above)
38,000 at 100.00 (not shown above)
25000 at 105.00
42000 at 110.00
33000 at 115.00
17000 at 120.00
46000 at 125.00
I haven't calculated the net in-the-money call premium, but it's clearly going to be in the hundreds of millions of dollars. When market makers have sold these calls, it's quite likely that they bought the underlying stock (covered call strategy), so they are NOT at risk to lose money if AMD keeps moving higher. However, if demand wanes and market makers sell their long positions and move to short positions, we could see a significant drop in AMD this week, which would lead to a windfall of profits for market makers. That's where the risk of being long comes into play. And it's not just AMD. There are plenty of NASDAQ stocks, in particular, with the same options issue as AMD. That's also why it's quite possible that our major indices struggle in the week ahead."
"I use max pain as simply one indicator, no more impactful than a negative divergence or an overbought condition. But everyone should be aware that there's an absolute TON of net in-the-money call premium across many areas of the market and selling could kick in over the next week to 10 days, especially if the S&P 500 cannot negotiate 4305 price resistance."
Happy trading!
Tom
Easy decision on a hidden markets path. Next week answers all questions. We are due for a reenergized spike in inflation again based on past experiences. This assumes disinflation for the last 40 years is completely dead going forward. The street repeatedly sees a job market falling back down despite every single indicator to the contrary. Wages are BELOW inflation targets and I expect they will exceed inflation targets going forward. JOLT proved just how tight the labor market is with over 10 million jobs begging to be had. The one week rise in unemployment was an anomaly yet convinces the street we are slowing down and so is inflation. At best we should experience Stagflation which is the worse scenario for profits. Momentum indicator suggests the next target on ESM23 (SP mini) is 4331.50 only a few points below that today. CPI/PPI had better be tame or we might have witnessed a multi-decade top.
Just as trumps favorability rating from the GOP is 77% it defies logic and common sense. Both the market and political arena is at an emotional disconnect to reality.
"...bulls still need to claim horizontal resistance (4326), but so far, anyway, SPX appears to be on track to do that."
http://www.pretzelcharts.com/
"Yesterday, SPX back-tested its breakout over the red trend line that I mentioned last month:"
"That red trend line has shown itself to be near-term support so far. Next overhead resistance is still 4326. And while one can never comfortably assume that resistance will fail (or that support will hold), if SPX is to reach the common C=A outcome, then it would still need higher prices. Thus the near-term outlook is unchanged. "
"In conclusion, bulls still need to claim horizontal resistance (4326), but so far, anyway, SPX appears to be on track to do that. Of course, if bears were to whipsaw the recent breakout with authority, then they would gain more near-term hopes. Trade safe."
I agree with Pretzel's Logic. The year long waiting for Godot move is unprecedented. I have followed the markets for many decades and can't recall anything like it.
Last year must have destroyed all short term bets. BUT such a lack of a move suggests an unprecedented next phase. It might even be a huge bull rally. Point is it should be BIG! Either way. Coinciding with Hang him High Pence finally attacking his president over breaking the constitution. Gutless GOP member to the core. Every last one of them. The Emperor with no cloths was being PRAISED for his choice of fashion till this very moment.
I stated a long time ago such a rare event, one hundred year (or even a three hundred year) super cycle event will coincide with the insanity and imbalance in all aspects of life. Political front we see some of the candidates for president testing the waters by attacking trump. We see a conclusion to the Trump era crimes as prosecution is near. We see realization that this economy is very fragile and any more rate hikes could crash it.
Funny that we are at a moral crossroads and financial crossroads at the exact same time. Actually i have always expected this to happen.
June 12th might just be the start of a giant reversal. An historic moment where the malaise of the last 12 months gets washed away in a tsunami moment. OR we start the final phase of the hyperbolic rocket up?
Trump was supposed to be hung for treason but instead cheered as a hero for the common man. this as Mark Meadows who knows absolutely everything about TRUMP will spill his guts on the PLANNED PLOT to overthrow this government. he has all the ties to all politicians that helped build that plot. he has the wife of a Supreme Court Judge planning the plot to overthrow, he has the facts on the secret documents trump stole, he knows the documents he burned with Scott Perry. he knows EVERYTHING! The fall guy. I guess he realized some time in prison is better than being locked up for life. I suspect a dozen current and former congressman will be INDICTED along side TRUMP on the January 6th plot.
So while die hard BULLS think this is a breakout as the massive one sided wisdom is that deflation will save us any inflation spike will not only KILL this bull run dead it will cause an avalanche of defaults and crashes. ALL IN 2023! But like the good cheer for TRUMP it's all a matter of perspective. Imagine having Mark give in detail corroborating testimony to every corrupt seditious treasonous deed of Trump in full display for the world to see and hear. We already know for a FACT that Mark and Trump expected the riots and even foretold this would happen telling others it will get BAD, real BAD on January 6th. I can't wait for the congressmen to be charged. On THAT DAY I WILL CHEER!
So a Bull market with a trillion dollar simple mistake in market strategy by banks is no biggie. Begging and pleading with the FED to stop raising and start lowering isn't some sort of wish list but real hard knowledge that this economy will TANK soon if they don't lower. "I" anticipated the one trillion mistake not 2 weeks before it happened. It is NOT the last or even the biggest debacle to come. MARK THIS ONE DOWN!
Time is running short on the bettors side going forward. the more stretched this beast becomes the easier it falls fast and deep. Love a condensed market timeline. betting becomes that much more profitable knowing time is running out!
But hey, I warned on the Pandemic, the "transitory" inflation, on a world gone insane praising a man that would have killed his own VP with his bare hands and lead a rampage to kill anyone that got in his way of a coup. Like rewarding Hitler after he lost the war and murdered millions. We have outdone even the Germens in our disgusting immoral diseased mind.
So if I LAUGH at the huge losses by all here don't take it personal. If the markets crumble and I become a happy person thinking some justice does get balanced don't blame me. If we all fall on hard times i will rejoice knowing at least the devil has won and we can start rebuilding our lives in a humble manner. For God Knows we need to be taken down before we can get up again.
It ALL should happen THIS YEAR! Don't believe me? I don't care! BUT like the Pandemic and transitory inflation I was ADAMANT about the folly we fall into and i am JUST AS ADAMANT NOW!
elliot wave troubles
EW is just not working well in this type of market. EW wavers just do not use other forms
of TA to confirm their counts.
Again TIm Ord, Shane Smoleny, Stan Harley all see the same thing
a bull market.
here is tim ord video today
as tim says no need to fight this rally. Old school thinking is just not working well
I will never forget prechter saying 2008 bounce was phony bounce and we would go much LOWER
NOPE
Well we were supposed to be in a recession now but it ended up being a Bull Market. Go figure. Thanks for the info..
"I started trading in the 1990s, and I've seen bull moves, bear moves, and sideways grinds -- but during that time, I can't recall a market that spent a full year going nowhere, as this one has."
http://www.pretzelcharts.com/
"You know you're dealing with an exciting market when the most recent annotation you wrote on a specific chart was 11 months ago -- but that annotation remains relevant almost a year later."
"No real change since Monday's update. A reminder that Blue 2 would be off the table north of 4326 -- and that the horizontal zone around 4326 is potential resistance."
"In conclusion, this market is rather unique, at least to most people who are trading today. We certainly haven't seen anything like this in decades. I started trading in the 1990s, and I've seen bull moves, bear moves, and sideways grinds -- but during that time, I can't recall a market that spent a full year going nowhere, as this one has. Hopefully, it will also be the last market we see like this for the next 25-30 years. Trade safe."
its a lot more complicated than that
shane goes thru each fed transaction and produces a fed juice chart.
its a new world but follow the FED still does apply
I believe the Treasury was conteracting the QT from the Fed, there was some FED QT going on, but the Treasury was using its general fund to buy the sold fed stuff.
absolutely
its amazing how the past does not repeat.
That said different forms of TA must confirm and they do
The FED really did not do the QT they said would do.
If they had we would be past the lows.
Shane Smoleny studies all daily the fed activity.
The banking crisis and Brit pension fund fall should have tanked the market big time
it did not as the fed came in and injected money all over the place.
Inflation is real bad yet the market holds up.
Been studying Shane for months. The fed has so many tools to do what ever they want.
Fed can create tools out of thin air and they do
Now if the fed goes back to QT or a catastrophe event happens the fed is limited
in their ability to fix it
snoot
You are speaking of Tom Bowley I believe and I'm sure he is aware that 20% has failures.
He is more Bullish here than I am. I post his stuff because it balances in some manner, Pretzel's Bearishness.
From my end I can see both sides which is what makes a market.
I do think we may surprise to the upside whether its a path like you suggest or something different
If IWM holds this breakout we may go a good deal higher in the near term
http://d.stockcharts.com/img/articles/2023/06/04/5e1a6ccd-77c3-44af-9789-0a97e6525002.jpg
JXYZ, So if I understand you, you're saying it's different this time?
when
shane s., tim ord and stan harley all say the bear market ended on the Brits QT ending
and then the charts confirmed. not gonna doubt those guys
every old schol guy (living in the past) wants to make it complex
its 1970, inverted yield curve. ETC
if you noticed every time the bears catch a bid for a day or 2
the fed comes in and the market explodes. This is the FED injecting QE
do not fight the fed especially when they are doing QE
Hi RCKS,
Last August that "A 20% advance represents a new bull market." went around and even AJ got suckered into it. I'm wondering if you followed Tom's commentary last August or if he didn't see the 20% gain of the August high and this is all new to Tom? In any case it didn't work last August and expecting the same results over again has some people wondering if Tom realizes the 20% rule has failures?
"Friday's move has finally put bears into a "do or die" with blue 2, given the proximity to 4326."
http://www.pretzelcharts.com/
"After a big day on Friday, we finally have a market move worth discussing. Let's start with NYA before SPX:"
"Next, let me reprint something from a couple weeks ago, because it remains relevant:
This lag suggests two diametrically opposed possibilities: Either SPX only has a little more upside, and the rest of the market will drag it back down -- or SPX is headed toward at least Red 2 and that will drag the rest of the market up. NYA may become particularly germane here -- IF it can break above the red c/3 high, as it would then need to go on to form 5 waves from the 15055 low. Right now, because of the divergences across markets, it's a bit early to determine how significant SPX's breakout may or may not be, so how these markets collectively behave during the upcoming sessions will be important toward drawing firmer conclusions one way or the other about the larger time frames."
"Finally, the big picture chart again, to put it all into perspective: Above 4326 and Blue 2 would finally be off the table, leaving Red 2 as the main bear option:"
"In conclusion, Friday's move has finally put bears into a "do or die" with blue 2, given the proximity to 4326. The second chart already hints at Red 2 as a distinct possibility, but let's see if bears have anything up their sleeves at horizontal resistance. Trade safe"
Recent Manipulation in Small Caps Led To Friday's Big Breakout
Tom Bowley | June 04, 2023 at 12:48 PM
"I wasn't expecting a huge 4% move in small caps on Friday, but I was looking for this group to start flexing its muscles. I've been telling our EarningsBeats.com members that small caps were poised for a big move to the upside. We've seen the kind of "value to growth" rotation in small caps that we saw during last summer's massive large cap rotation from value to growth. I discussed in length how the big Wall Street firms were manipulating retail traders. While the overwhelming major of folks expected the cyclical bear market to continue, the story the charts were telling was much, much different. We saw the result. From the ultimate 2022 bear market low on each index, here are how our key indices have performed since that time:
Dow Jones: +17.80%
S&P 500: +22.65%
NASDAQ: +31.24%
NASDAQ 100: +39.33%
S&P 400 Mid Cap: +14.62%
S&P 600 Small Cap: +11.70%
A 20% advance represents a new bull market. The NASDAQ 100, NASDAQ, and S&P 500 have now exceeded that threshold. Fortunately, we at EarningsBeats.com didn't need to see the advance to turn bullish. We saw it coming and it's just gotten started. But shhhhhh, please don't tell the bears. Skepticism is what drives bull markets, so let's keep it our little secret.
Perspective is Critical
It simply amazes me how many analysts will talk about the narrow leadership found in the mega cap leaders in technology and communication services in 2023, but fail to mention how much many of these stocks suffered during the 2022 cyclical bear market. Let's take NVIDIA Corp (NVDA) as an example. NVDA was 346 in November 2021, when tech stocks began rolling over. It didn't manage to find a bottom until October 2022, when it reached 108!!!! That's a loss of 69% in just under a year. Shouldn't that be given some consideration, when we discuss its massive 2023 advance? Once all the inflation hype deflated, a mass move back towards the big growth names was inevitable. We said it was coming and that it would be explosive. Why? Because that's what historical perspective tells us.
The NASDAQ 100 fell 38% during the 11-month cyclical bear market. The S&P 500 lost just 27%. The S&P 600 (Small Caps) lost 28%. I expected the NASDAQ 100 to outperform when the cyclical bear market ended. If you recall Q4 performance, then you remember that the S&P 500 CRUSHED the NASDAQ 100 from the October low through the end of the year. The rotation to more aggressive areas was not only overdue in 2023, but it should have been expected. But when it happens, the permabears find yet another reason to ignore the 2023 rally - breadth.
Listen, I'm totally fine recognizing that breadth was weak. But it's a secondary indicator, like everything else other than price/volume, which is my ONLY primary indicator. Primary indicators MUST confirm secondary indicators. It's that simple. Bear markets brainwash us though. Retail traders, based on the equity only put call ratio ($CPCE), didn't truly turn bearish until May 2022 - just before a major low printed in June, the very next month. Big picture sentiment doesn't change overnight. It takes a lot of days of CNBC for all the bad news and awful market action to begin to sink in. When it finally sinks in, though, you can't get it out of your head to objectively assess the stock market. Wall Street firms were buying growth stocks HAND OVER FIST in 2022, just as everyone was turning excessively bearish. That enabled those pesky market manipulators (oops, meant to say market makers) to buy growth stocks incredibly cheap (example: NVDA) for themselves, their firms, and their wealthy clients.
We've Been Hoodwinked!
It's very clear to me that all the rotation into aggressive large cap areas in 2022 preceded the HUGE 2023 move in key sectors like technology (XLK), which has now gained 34% year-to-date. The big Wall Street firms got it right, as usual, and this chart helps to illustrate intraday QQQ manipulation that I began discussing a year ago:"
http://d.stockcharts.com/img/articles/2023/06/04/59f5c031-0c72-4428-9d5f-f96c01a797ed.jpg
"If you want to know more about what these different color-coded periods represent, please refer to a previous article of mine, "Wall Street's Hunger Games Are Now Complete". But essentially, I refer to the intraday manipulation that took place during these various periods. It's worth the read, if you didn't read that article.
Some have said that one of my favorite intermarket relationships, consumer discretionary (XLY) vs. consumer staples (XLP), was bearish and showing no signs of life. After doing further research, ignoring the manipulative gaps, and studying intraday rotation, I completely disagree. Money has been rotating into discretionary vs. staples all year, but it's been masked by the opening downside gaps in the XLY. If we strip out gaps and only consider intraday rotation in the XLY:XLP ratio, we see a MUCH different picture. Check this out:"
http://d.stockcharts.com/img/articles/2023/06/04/ae4b293f-fdcc-4671-a252-dec871b347d2.jpg
"The top of this QQQ:SPY chart ignores gaps and has been rising since last year's May bottom. But if we allow the market makers to cloud the picture and include gaps (bottom panel), then we see a different picture. The top panel is provided only because we do independent research and use the User-Defined Index (UDI) feature at StockCharts.com to provide the ACTUAL rotation taking place. Our EB.com members KNOW what's truly been happening and were prepared for the bullish action that we're seeing in 2023.
Now It's Time for Small Caps To Surge
I've been highlighting the extreme rotation from value to growth among both mid caps and small caps the past couple months, just as I discussed the rotation to growth of large caps a year ago. There's only reason why money rotates to aggressive stocks under the surface of the S&P 500 action. Because future economic activity favors these stocks. So look at all the breadth indictors you'd like. Discuss the lack of participation until the cows come home. The fact of the matter is that the big Wall Street firms have been pouring into small cap growth vs. value and mid cap growth vs. value since March. I believe this accumulation is going to lead to a breakout and significant advance in the small cap world and IWM is the small cap ETF that tracks the Russell 2000. While I've been favoring investment in the IWM recently, I've been building a sizable position in the leveraged ETF - TNA - that tracks the IWM at a 3 to 1 clip. So returns (and possible losses) are tripled. First, I want you to see the visual rotation from value to growth:"
Small Caps:
http://d.stockcharts.com/img/articles/2023/06/04/5e1a6ccd-77c3-44af-9789-0a97e6525002.jpg
Mid Caps:
http://d.stockcharts.com/img/articles/2023/06/04/b02d1362-0a68-46a4-a4ac-c61f71f610b6.jpg
"It's really difficult for me to be bearish when I see this type of bullish rotation, topped off with major breakouts like the one on Friday regarding small caps.
Tomorrow morning, I'll be featuring another must-know story about this small cap breakout in our FREE EarningsBeats.com newsletter, the EB Digest. If you're not already a subscriber, it's simple. CLICK HERE to enter your name and email address. It's free, no credit card required, and you may unsubscribe at any time!"
Happy trading!
Tom
Stock Market Commentary 06/02/23
By Lawrence G. McMillan
"The market finally looks like it is breaking out on the upside. After numerous failed attempts to exceed and hold above 4200, $SPX seems to be on the way to doing just that. If it closes above 4210 today (June 2nd), that will be confirmation of an upside breakout.
The next target and resistance is the 4300 level the highs of last August. If that can be overcome, then the picture is quite bullish, with only 4650 (the highs of March 2022) and 4800 (the all- time highs) as obvious resistance areas.
Both equity-only put-call ratio charts are on buy signals. The standard ratio (Figure 2) rolled over first, and since its buy signal is coming from a relatively high level on its chart, it is normally a strong one. The weighted ratio (Figure 3) is less bullish. It sort of belatedly rolled over to a buy signal.
In any case, as long as these ratios are declining, they remain on buy signals.
Breadth has been swinging back and forth in rapid fashion, and in general it has been weaker than the broad market indices (which have been propelled by the AI and tech stocks, while many other stocks have languished). Having said THAT, both breadth oscillators are on buy signals now. So, if the upside breakout is confirmed by $SPX, it will be important to see breadth confirming that breakout as well.
The most bullish indicator all along has been $VIX and its various related indicators. That continues to be the case. Both $VIX-based buy signals are still in place.
In summary, we are going to take a "core" long position if the upside breakout is confirmed today by $SPX. In addition, we will trade other confirmed indicator signals as they occur."
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=1685732804096
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1685732804096
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1685732804096
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1685732804096
"NYA is still severely lagging SPX"
http://www.pretzelcharts.com/
"If you've ever read the "financial" media (or really, any media), you know that one of their tricks to keep us interested is to use hyperbole a LOT. So you see a lot of headlines that either scream that it's the end of the world or that the market is going to the moon. What you don't see are a lot of pieces like the pieces I've been writing for the past couple months, which boil down to "nothing to see yet." So I apologize if these have been boring, but I prefer what I view as the "boring truth" to an exciting lie.
Nothing has changed from the past few updates, NYA is still severely lagging SPX (if need be, reread the past few updates to see what that means):"
"So, still nothing to add, unfortunately. Other than, of course, the news that JEROME POWELL EXPLODES!!! Which probably didn't happen. (Though, to be fair, I haven't seen any reports denying this, either.)
When something does happen, which it eventually will (I think), then we'll finally have something to talk about again.
Trade safe."
Today we are breaking out of range to the next level. SPX around 4370. This as labor market continues to build on new jobs and 10 million want ads. The short term bond yields continue to spike ever higher and the FED has promised to pause next meeting. What a setup for the close out of summer.
Been wrong on MAGA ability to train wreck the debt so maybe such a long tight labor market is not going to cause inflation to rise? CPI report should give us a good clue soon.
welcome to sub wave 3
market had to get everyone bearish
then inject fed juice big time
price is used to get you to do the wrong thing at the wrong time
market profile 101- markets often have to flush before they can rally
so the 2 day liquidation break did its job
it took out sellers and strengthened the market
we had a hard wave 2 at the open. (meaning the market could not break the lows)
so fib 1.61 was very likely
or abcd
pick your poison
algos came in at va low
just like they are suppo
until we lose the spy 9 14 ma
and they become resistance the up trend is still on.
both the es and nq are around the open
https://schrts.co/QagBTEBA
"...NYA continues to want to try to pull SPX down."
http://www.pretzelcharts.com/
" Let's start off with a look at NYA, which continues to lag severely:"
"Next, a reminder of my current near-term view, which is unchanged since last week:
This lag suggests two diametrically opposed possibilities: Either SPX only has a little more upside, and the rest of the market will drag it back down -- or SPX is headed toward at least Red 2 and that will drag the rest of the market up. NYA may become particularly germane here -- IF it can break above the red c/3 high, as it would then need to go on to form 5 waves from the 15055 low. Right now, because of the divergences across markets, it's a bit early to determine how significant SPX's breakout may or may not be, so how these markets collectively behave during the upcoming sessions will be important toward drawing firmer conclusions one way or the other about the larger time frames.
Next up, there is potential intermediate resistance overhead in SPX on two different scales, the first of which is shown below:"
"Long-term resistance shows on the next chart as well -- which also happens to be a crazy projection chart I drew more than a year ago. I haven't moved anything on this chart since then:"
"In conclusion, NYA continues to want to try to pull SPX down. SPX is also facing overhead resistance, which just happens to line up with a chart I drew before the bear market was even being called a "bear market" by the masses. So, it will be interesting to see if we're getting into the ballpark of a turn, or not. Trade safe."
If true the timing of such reversal is useless. Does it signal a major reversal is coming? Maybe.
How did it do with such external events like a Pandemic? I cringe at the ability of investors to rely on signals instead of common sense.
Where are we today? Inflation is NOT going away and in fact shows signs it is about to move higher still. Economics 101, the basic framework of all analysis is the labor market. Tight with no signs of weakening. Wage pressure ALWAYS results. Spending at times of change. Well we have stronger than expected consumer spending still even as big ticket items are being ignored. The bond market is telling us inflation is NOT reversing towards the past 40 years of disinflation. In fact they keep rising once again despite the so called debt ceiling deal.
External events like a pandemic was a no-brainer for me but obviously not the market. it took them 5 weeks and an actual death on US soil for it to reverse big time. So FORGET about signs, technical readings, and other built in mechanisms. Inflation is stubborn and persistent, and an implosive GOP can easily plunge this market immediately down 30 percent.
Main focus today: Easy, debt ceiling agreement. I highly doubt it would pass from the Republican side. Their secretive last minute deal was proof of their concerns. We only have a few days this week to fond out if it does get passed. No deal means an immediate PLUNGE!
An easy no-brainer call! A default will plunge this economy and market into chaos. With a deal we extend the bullish move till INFLATION will prove to be similar to the early 80's. A One trillion dollar gamble by banks is jus the start of the problem. The Street is desperate for a rate CUT in 2023. The number of institutions across a large asset class will default on their obligations betting deflation is back.
Like a Pandemic and Debt Crisis all external events come upon us like a hidden Tiger. We have 2 immediate problems lurking. One the Debt ceiling and we will know before the end of this week. the other is INFLATION and the data starting by end of this week will verify these concerns.
BOTH of these events are at a point where either one can trigger a crash scenario since it seems to be ignored with current assumptions and prices.
Back n TNA at open
Fight This Bullish Development At Your Own Risk
Tom Bowley | May 28, 2023 at 12:11 PM
http://stockcharts.com/articles/tradingplaces/2023/05/fight-this-bullish-development-409.html
"Sentiment was a HUGE problem for the bulls to start 2022 and now it's become a similarly big issue for the bears now. If you haven't noticed, most bulls don't begin to turn bearish until after all or most of the selling is complete. After we've endured a nasty bear market, either secular or cyclical, most bears can't see that a bottom has formed until after a major advance has already occurred. Media brainwashing is a real thing and Wall Street firms use this to their advantage to exit before retail traders and then buy back in just as retail traders acknowledge all the market weakness and bad news.
One signal to help call market tops and bottoms is by following the long-term moving average of the equity-only put-call ratio ($CPCE). I use the 253-day moving average (253 trading days = 1 year) and refer to it as my "freight-liner" sentiment signal, because it takes a long time to change the 1-year direction of the put call ratio. But the signals produced by it cannot be ignored. Here's the chart:"
http://d.stockcharts.com/img/articles/2023/05/28/e52b2120-6d78-4fdb-8b9d-3cc713fcad6d.jpg
"This simply makes good common sense to me. When traders turn overly bearish and believe the market MUST go lower, do you think they're invested on the long side? Probably not. They've already sold. After a long period of market weakness and a substantial increase in bearish sentiment, the market is sold out. There's little downside, because those wanting to sell have already done so. Therefore, when this "freight-liner" indicator begins to roll over, there's lots of cash on the sidelines to continue to propel the market higher and higher.
At first glance, the top right now looks a little bit suspect, right? After all, it's just barely turning down from the top and one argument is that this is a blip and the continuing market weakness will result in another push higher in this CPCE chart. But you have to understand a couple things. There were several readings of the daily CPCE in November and December that were artificially high. It was reported that big funds had taken sizable put positions in the largest market cap companies like AAPL, MSFT, TSLA, NVDA, GOOGL, etc. I saw those HUGE levels of put options in the CBOE half-hour readings that I follow, so it was fairly easy to pull those professional put buys out of the CPCE in order to reflect what retail traders are doing. After all, when I gauge sentiment, I want to know what the retail trading community is doing.
As a result of the above, I started a User-Defined Index at StockCharts.com. I used the daily CPCE readings on StockCharts, but I adjusted those daily readings that clearly needed adjusting. First, let me show you the readings that improperly impacted the daily readings:"
http://d.stockcharts.com/img/articles/2023/05/28/2ef7a4cd-b715-4890-a068-1a7bec73abd0.jpg
"The CPCE rises when retail traders panic. That's the historical norm and it makes sense. The highest reading of 1.35 came in 2008 during the financial crisis. ANY daily reading above 1.0 will coincide with stock market selling. But those November and December readings hit a high of 2.40 during a period when the stock market was rising! In my UDI, I adjusted the daily CPCE readings by removing these huge increases in equity puts that occurred in the middle of trading days. There were approximately 10 days that I adjusted. My UDI began in 2021, because I wanted to see how the 253-day moving average was truly reacting in Q4 2022. Here is my UDI chart on the CPCE and how it's trending now:"
http://d.stockcharts.com/img/articles/2023/05/28/5b682aff-679d-436b-ae48-1af4dd5ae7e1.jpg
"The rolling over of the 253-day CPCE is much more obvious after adjusting the ridiculous and overstated readings from November and December. History tells us that this is a MAJOR BUY signal. And it's not like I'm just pulling this up now to support my bullish stance. I also provided this to our MarketVision 2022 crowd in January 2022. It was just turning up at that time and I indicated that the stock market's biggest problem heading into 2022 was the 253-day moving average of the CPCE just starting to turn higher. It proved to be an excellent bearish call.
I remain adamant that you want to be long. I've had many bullish signals emerge over the past year, but this is a very important one that is adding more bullish fuel to the fire."
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Happy trading!
Tom
Pretzel :
(1) Pretzel presents both a Bull and Bear case.
(2) Pretzel gives both Triggers and Targets
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