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major fed policy change
i am extremely bearish
the fed is slowly taking away QE
Shane S. (fed juice) now expects selling to year end and looking at the bradley model.
fed changes do not take place immmediately
the market often takes time to implement them
fed juice exploded up to jan 1 and has been slowly trickling down and the market
has been rising.
so wait for the rallies to die and short em.
so do not just blindly short wait for clear tops then short
shane did mention on larry p show he told clients to not be long PERIOD
Stock Market Commentary 07/21/23
By Lawrence G. McMillan
"Most major stock indices made new 2023 highs this past week ($RUT; IWM is still a little shy of that). Thus, the charts remain positive, and a "core" bullish position is warranted. There are several gaps on the $SPX chart, and a pullback to support at 4440 would fill all the recent ones. There is further support at 4385, and then major support at 4330 and 4200. A violation of the support at 4330 would be a very negative development and would require a change of our "core" position, but a pullback of that depth doesn't seem likely right now.
On the upside, the next resistance area is at 4650, the March 2022 highs, which occurred early in the 2022 bear market. Beyond that, the all-time highs at 4800 could be in play.
Equity-only put-call ratios are near the lows of their charts, so they are still on buy signals, albeit in very overbought territory. When they begin to rise, they will generate sell signals.
Market breadth has been generally strong, and the breadth oscillators are on buy signals and are also overbought. It would take at least two days of negative breadth to generate oscillator sell signals from their current levels.
$VIX is hovering in the 13-14 area. It is no longer falling as the stock market rises, because there is still a fear factor out there (which is causing some larger traders to buy $SPX puts, thus keeping $VIX from falling farther). As long as $VIX remains subdued, it is not a problem for the stock market. The trend of $VIX buy signal remains in place.
We continue to maintain a "core" bullish position. We are raising trailing stops where appropriate and are rolling calls up to higher strikes when they become deeply in-the-money. So far, there are no confirmed sell signals, but we will trade those around our "core" position when and if they occur."
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=1689964281400
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1689964281400
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1689964281400
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1689964281400
JLS
Pretzel does updates Monday, Wednesday and Friday. Once in a while he will post something off schedule. He doesn't post if a holiday falls on one of his scheduled days to post as well.
"....I made a mistake "betting on the bears" analytically, and I apologize for getting that wrong. Fortunately for bears..."
http://www.pretzelcharts.com/
"NYA finally broke its invalidation level, which at least helps clarify the chart picture a bit. That said, it does mean that I made a mistake "betting on the bears" analytically, and I apologize for getting that wrong. Fortunately for bears, at least, there haven't been any recent impulsive declines to cause a stir and signal tentative confirmation of the inflection. Long-time readers know I generally advise waiting for the first impulsive decline before acting strongly (which is why a few weeks ago (June 28), I only suggested a "small stab if one was bearishly inclined"), and "no system is 100% right, so let's try to limit the damage when wrong" is one reason it helps to be patient.
Having cleared its prior swing high, NYA's most straightforward option would be for the current rally to be a C/3 wave. There are still other options, but this is the most "straightforward." On the opposite end of the spectrum, the absolute least straightforward option would be for NYA to form a b-wave high and drop back toward the blue 2/B. Until we have signals for that (such as an impulsive decline), we'll just keep it in the back of our minds, though."
"SPX, likewise, is apparently in a 3/C wave rally."
"BKX is an interesting chart in this context: If it's correct that BKX formed a large impulsive decline off its 2022 high, then it's currently in a large second wave bounce -- which, although unlikely to end immediately, will eventually end and lead to another big wave down. This is very much worth keeping an eye on, as the rest of the market would inevitably be dragged down by a major disruption in the banking sector."
"From a fundamental standpoint, the simplification of the bull case is something like: "Due to the lessons learned during Covid and concerns about future supply chain disruptions, private industry is in the process of revitalizing the American manufacturing base, which will lead to an era of meaningful prosperity."
The simplification of the fundamental bear case is something along the lines of: "Yeah, but inflation often comes in waves (see the 1970s, when inflation rose, then dropped down to 'normal' for a few months before spiking even higher in the next round) and we've only finished the first wave. The Fed isn't out of the woods yet. Plus we still have the worldwide debt bubble to contend with, and the economy hasn't meaningfully contracted in order to burn off its prior significant excesses. We're still carrying too many zombies to start a new era of prosperity."
In the coming updates, we'll take a closer look at each of those arguments (plus some others). For now, we'll presume bulls have the ball in a C/3 wave either way. Trade safe."
Have any idea why ...
Pretzel Logic doesn't have an update?
"I was actually hoping NYA had broken above its key level, just so I could write about something new. But alas, not yet."
http://www.pretzelcharts.com/
"As I listen to the wind and rain of Tropical Storm Calvinist whipping around outside, I'm to the point with this market where I was actually hoping NYA had broken above its key level, just so I could write about something new. But alas, not yet."
"After roughly doubling the prices of everything over the past two years, June inflation suddenly came in at manageable levels, implying that the Fed's interest rate hikes have been successful. Hilarious that the politicians who did nothing but create massive inflation are now trying to take credit for the Fed's apparent win."
"BKX is unchanged:"
"And COMPQ has broken above its long-term trend line:"
"In conclusion, still waiting on NYA to make it official (or not)... and the power just flickered on and off, so I'll end it here. Trade safe."
Opposite George Week Is Underway!
JULY 18, 2023 AT 01:02 PM
"I always refer to monthly options expiration week as "Opposite George" week. It's a reference to the Seinfeld episode where George Costanza is, as always, down on his luck. Jerry and Elaine suggest that if everything he does in his life is wrong, then why not just do the opposite of every urge he has. That should then make his life so much better. George actually starts doing the opposite of his instincts and his life immediately turns. Anyhow, this same logic seems to apply to stock market performance heading into options expiration week. There's typically market maker incentive to send prices lower in certain areas of the market after a big advance, especially if these areas are heavily traded in options. Suddenly, stocks that have been rising have a lot of net in-the-money call premium (which market makers will be required to pay out) and can reverse as options expiration approaches. This weakness generally lasts into the week AFTER options-expiration Friday, but I'll save that discussion for another day."
Check out today's sector performance as of 11am ET:
http://d.stockcharts.com/img/articles/2023/07/18/d10ee7f9-de50-4542-984e-52cc7ec4fa6e.jpg
"I sorted it in SCTR order, highest SCTR score to lowest SCTR score. Notice today's morning weakness is mostly concentrated in top-performing sectors, while strength is focused on the recently-weaker sectors. I discuss and write about this often and it's associated with monthly options expiration. While we've seen a bit of a change in this rotation over the past couple hours, don't be surprised if you see a return to Opposite George week in full force very soon.
We see the max pain effect on our major indices as well. The QQQ and SPY have both been moving up nicely, but currently have net in-the-money call premium of $1.86 billion and $2.47 billion, respectively. That's a lot of money on the table for market makers. The point at which market makers would pay the LEAST amount of net option premium, which I refer to as max pain, would be at 355 and 427 for the QQQ and SPY, respectively, resulting in possible declines of 7.61% and 5.75%, respectively. I'm not saying we'll see that kind of drop, but it's definitely possible that we'll soon see a reversal and at least head in that direction. It's just one reason to be very careful the balance of this week into early next week.
Here's a chart of the S&P 500, but check out several periods around options expiration and the reversals:"
http://d.stockcharts.com/img/articles/2023/07/18/9080831f-5c65-4e30-b291-8b276d0b645b.jpg
"The black arrows mark short-term tops during options expiration week and then a week or so later. They also sometimes mark short-term bottoms during options expiration week and then a week or so later. The red 1's coincide with key market tops or bottoms during options expiration week, showing the 5-day rate of change (ROC). The 2's highlight that same 5-day ROC a week or so later. It's easy to see why I refer to options expiration week as "Opposite George" week.
If we keep moving higher, the odds of Opposite George week and a big reversal grow. Just keep this in mind.
Later today, at 5:30pm ET, I'll be hosting our monthly Max Pain webinar for July. It's a member-only event, but there are two ways to attend. First, you can start a 30-day trial to our full service at NO CHARGE by CLICKING HERE. Or, if you're only interested in our Max Pain service, we've made it truly affordable at just $27 per month. If you prefer this option, start your monthly service HERE. Either way, I hope to see you in a few hours!"
Happy trading!
Tom
Turn date tomorrow, earnings in full swing as banks start the ball rolling. Dollar, yields favorable to stocks. BUT things can come from left field so stay alert but don't expect fireworks just yet. The Judge for next supreme court will be Cannon as she announces delays delays delays forever! Trump promises to be a king next time around and has plans to do just that as the voter cheers him on.
if the political arena is so absurdly criminal with the public support why is it hard to believe a stock market can't rally from here to new highs? Imagine the next president is someone that is fully exposed for what he is and plans for our future. that exposure is so damning it is like electing a serial child molester and placing him in charge of Child Protective Services. Only in America, home of the corrupt, the petty, the evil relieving our personal hate by venting towards the most vulnerable and innocent.
if we today can accept TRUMP as the next president all faculties regarding common sense, accountability, decency, and moral obligations are gone. that means interpreting the health of the stock market comes into question.
INSANE TIMES! Embarrassing times.
OK Thanks Steve..I may not either...I have so much junk now...
Glen
Is this what you are looking for, Tom Bowley's Earnings Beat sign-up?
I didn't sign up myself but hopefully this works for you
Steve
https://www.earningsbeats.com/public/money-flows.cfm?ref=tp#;
RCKS...Can you give me that webb site he has market."Click here"..I need a live copy I guess to be able to sign up for his free letter..
Guru's just getting braver and braver with their targets now...How many times have we seen this movie...Thanks for the updates..
"...nothing much has changed since Friday:"
http://www.pretzelcharts.com/
"Just one chart today, since it's the only chart that seems to matter at the moment and nothing much has changed since Friday:"
"If NYA doesn't clear blue (C), then bears have the go-ahead -- if it does, then there's a straightforward near-term bull option (represented by red "bull: 3") or an annoying and near-term bullish but ultimately bearish option for some type of ending diagonal, which is pretty easy to visualize using the upward-sloping black line and the lowest upward-sloping blue line as rough boundaries.
In other news, fair warning that Tropical Storm Calvin and Hobbes is projected to slam directly into Hawaii on Wednesday, so on the off-chance things get hairy and/or the power and/or internet goes out, then there may not be an update on Wednesday. If things do get hairy, my emergency plan is to call the Fed and have them raise interest rates, then call the government and have them run up the highest non-Covid deficit they possibly can despite near-record-low unemployment. Both I and the market currently feel confident that this will solve everything. Trade safe."
Stay Ahead Of The Curve To Make More Money
JULY 16, 2023 AT 02:29 PM
http://stockcharts.com/articles/tradingplaces/2023/07/stay-ahead-of-the-curve-to-mak-675.html
"Everyone's a stock picker. And to be quite honest, everyone gets hot and everyone gets cold. Every trader has to find strategies that work for him/her and then hit the "rinse and repeat" button. Personally, I've found three keys that have helped me beat the major indices, particularly the S&P 500, over the years. They are:
Get the market direction right
Follow rotation and relative strength
Stick with leaders
That might seem like a lot, but it's really not.
Getting Market Direction Right
This one requires market experience, knowledge, and research, but there are several tried and true techniques to help us in this regard. (Hint: It's not watching CNBC and Jim Cramer.) I always talk about perspective, because WAY too many folks, both Wall Street professionals and retail traders, get so caught up in the NOW that they can't comprehend what's happening in the Big Picture. Start with the FACT that the stock market goes up a whole lot more than it goes down, so get all the perma-bear influencers out of your life. Seriously, they'll ruin your perspective. Surround yourself with realists, those who are primarily bullish, but remain objective when evaluating current technical, fundamental, and historical indications. You MUST understand the role that sentiment plays. When selling accelerates and pain grows, irrational selling and market behavior will ultimately mark critical bottoms. I have found sentiment to be my absolute best bottom indicator.
If you study history, you'll also understand that capturing the most bullish advances are the best opportunities for a financially-secure future. Once those rallies have ended, so too has the investment opportunity.
There are plenty of signals that the stock market provides us BEFORE or during major rallies. Sector rotation, positive divergences, and extreme bearish sentiment are perhaps the three most reliable, in my opinion, and I have my own strategies on how to use those. Recently, however, was the breakout in transportation stocks ($TRAN) and that signal is UNMISTAKEABLE. There is only one reason why transportation stocks go higher - economic conditions are strengthening and more goods will be delivered (or Wall Street is anticipating economic strengthening). Don't believe me, believe the charts. Here's what happens to the S&P 500 when transports break out to new highs or above periods of consolidation/selling:"
http://d.stockcharts.com/img/articles/2023/07/16/5a6f3b35-78c9-4176-96e4-f2d8a029bb8f.jpg
"Listen, there is NEVER a guarantee that the stock market will go higher. If you're looking for that, then stop investing in stocks. But do some research (or follow ours at EarningsBeats.com) and invest knowing that the odds are on your side. Many times, when I call market tops or market bottoms, I do so based on the shift in market risk vs. market reward. I don't guarantee my calls. I can't. But if you follow my work, then you know I'm convicted. I don't waffle. My signals are my signals and I follow them. I don't care what Jim Cramer says. I certainly don't care what all the market influencers (ooops, meant to say market analysts) are saying on CNBC. It's almost all a pile of garbage to consume our time so they can sell ads. And what occupies our mental space? Fear. If you don't believe we're all manipulated by the media, then we can't be friends. (just kidding)
Follow Rotation and Relative Strength
Let's look at the market top at the beginning of 2022:"
http://d.stockcharts.com/img/articles/2023/07/16/e729a8bc-619c-4379-b6a9-4287b8c92494.jpg
"I think the continuing weekly negative divergence was clear (pink lines). But the change in relative strength was eye-popping. There's no problem with a pullback in these relative ratios IF the market is also pulling back. Profit taking will show up that way. But when you see final highs accompanied with massive rotation into more defensive areas, you need to take that very seriously, which I did.
Now let's look at the exact same chart in mid-June 2022, when I called for a potential market bottom:"
http://d.stockcharts.com/img/articles/2023/07/16/4a0bbe5c-b6ad-487d-b945-dc868dd37224.jpg
"Price moved substantially lower from May 2022 to June 2022, but the pace of relative weakness began to slow, even turn higher in many growth ratios (IWF:IWD is the one I provided in this example, but there were others). I also wrote many times in mid-2022 about how manipulation was showing that Wall Street was accumulating heavily starting during the May 2022 to June 2022 period. Sentiment was beginning to "reset" as well. History now has proven me correct in calling for higher U.S. equity prices from that June 2022 low and making calls like that one is how you build wealth. But you have to be willing to "think differently" and not simply follow all the bearish talk on CNBC.
Stick with Leaders
When 2023 opened up with narrow leadership from the key, high-market-cap stocks on the NASDAQ 100, Wall Street eschewed that early surge. I love technical analysis and I believe it's AWESOME to help us trade during uptrends and downtrends. But I believe intermarket relationships, sentiment, and good ole perspective are much better in helping us locate market tops and market bottoms. Throughout much of the current bull market move, the naysayers have been everywhere, saying the stock market couldn't go higher, because of "this" or "that". I said "stay the course, we're going higher". To this day, I still will never understand why those who follow market-cap weighted indices grow bearish when the highest market-cap leaders outperform and send our indices higher. What if "breadth" had been great, but these mega-cap leaders were left behind? Would everyone have grown bullish? I doubt it. Personally, I believe that once the majority of folks develop a bearish mindset, NOTHING MATTERS. They're bearish no matter what the market is doing and what's leading. That's why at the beginning of 2022 I said that sentiment needed to "reset" and now I hope everyone can appreciate what's necessary to make that happen.
The truth is that at nearly every bottom, the leaders are bought first. Semiconductors ($DJUSSC) are historical leaders and NVIDIA Corp (NVDA) has to be considered one of the best stocks in this space. Check out NVDA's breakout in late 2022, followed by a quick retest, then an explosion higher:"
http://d.stockcharts.com/img/articles/2023/07/16/2bffd1e8-1eae-4b93-b610-a495fbd7844f.jpg
"Trading smarter and better and, ultimately, carving out a more secure financial future is about RESEARCH and EDUCATION. We are never satisfied at EarningsBeats.com. I feel like I need to learn something new about the stock market every day I wake up. We also have to deal with an evolving market. Economic changes, interest rate outlooks, profit projections, geopolitical concerns, management issues, political policies, and the like, all play a role in shaping and re-shaping our stock market landscape. We MUST change with it and be open-minded to the possibility that things will play out differently than the way we believe today. But just as important, we must always keep a healthy dose of perspective. While things do constantly change in the short- to intermediate-term, the Big Picture generally remains the same. It's a balancing act and it's up to us to get it right. No one cares more about your financial future than you. Always remember that.
In an effort to constantly engage with our EarningsBeats.com community, we pass along our experience, knowledge, and research via our 3x per week EB Digest newsletter. The subscription cost is ZERO and there's no credit card required. I'd like to provide you with a "Money Flows" e-book just for subscribing to our EB Digest. You won't believe the impact that money flows has on stock market performance. CLICK HERE and then hit the "Download" button. You'll be prompted to provide your name and email address. From there, we'll immediately send you this FREE Money Flows report and begin sending you our EB Digest every Monday, Wednesday, and Friday. You may unsubscribe at any time."
Happy trading!
Tom
Stock Market Commentary 07/14/23
By Lawrence G. McMillan
"The last five trading days have seen $SPX rally strongly, breaking out to new 2023 highs. This keeps the $SPX chart bullish and keeps us in our "core" bullish position. $SPX has now reached the first (minor) resistance area at 4510. Above here, the next significant resistance is at 4630, and then the all-time highs at 4800 would be within reach.
A brief pullback last week closed the gaps on the $SPX chart (although new ones have opened up with this week's rally). That left 4385 as a minor support level, with 4330 as a stronger one. Below there, the 4200 level which acted as resistance for much of 2023 before the early June breakout to the upside continues to be support. In my opinion, a pullback that extends below 4330 would be bearish, and would cause us to close our "core" bullish positions.
Equity-only put-call ratios continue to crawl lower, meaning that the buy signals are still in place. They are both at the lowest point in the last year, meaning that they are quite overbought. But call volume has been pretty heavy this week as $SPX has moved to new highs for the year. These will not generate sell signals until they roll over and begin to trend upward.
Breadth has been very strong in the last five trading days. So, the breadth oscillators once again have reversed direction and are now on buy signals, in overbought territory. With so many whipsaws from these oscillators, we are not using them for a trade at this time.
$VIX rallied briefly when the broad market sold off a week ago (but never went into "spiking" mode). In any case, there won't be a problem for stocks unless $VIX returns to "spiking" mode. Otherwise, the trend of $VIX buy signal remains in place.
In summary, we are maintaining a "core" bullish position. We are raising trailing stops and rolling calls up to higher strikes as they become deeply in-the-money. We will trade other confirmed signals around this "core" position."
http://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1689440041520;
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1689440041520;
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1689440041520;
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1689440041520;
I NEVER short anything.
Well ... depends on how you interpret that.
If I don't like the way the market is acting, or I have some totally unrelated things I have to do which will require most of my attention then I go from long-stock to all-cash. Been that way for over two weeks now -- maybe three.
So there you go, I'm not shorting squat -- and I am definitely not losing money (if you don't account for inflation).
I also do not like the current state of the Yield Curve. It is now highly inverted, and it is easy to interpret that as a signal of a lot of money flowing into high-return short-term bonds (or just into cash).
The guru I read is looking at 4540 Cash as the next target..He calls magnet...There are no indicators that look to be pointing to a down move yet..Thanks for the chart and info.
Pretzel is "....still waiting on NYA to either reverse or break out in order to clear the air."
http://www.pretzelcharts.com/
"The market continues to defy bears (and reality) and head higher. Bears haven't run out of real estate just yet, but NYA is getting close, and bears need to show up soon if they want to prevent a breakout:
"I haven't updated BKX in a few months, and this seems like a good time to do so:"
"The SPX "immediate" bear count will come under fire if NYA breaks out:"
"And the SPX bull count, which would also function as another version of the bear count (with both the bull and bear options being in agreement for a time; see annotation):"
"In conclusion, still waiting on NYA to either reverse or break out in order to clear the air. Trade safe."
Obstinate aren't we. The BEAR can't watch this unfold and the bull is scared it might not be real. Take what is given you. i stated last week this will be an all up week. Inflation data is coming down some more. Dollar is NOW favorable to stocks and yields are dropping. NOW lets add a pathetic earnings season expectations that has got to beat. The ONLY (2) things that can derail us is a surprise earnings or future projections in mass -or- external calamity worth trillions.
We have BROKEN OUT! Extended valuations and flat earnings this quarter will keep the naysayers in happy mode. I am adamant that such a tight labor market and recent escalation of strikes is reminiscent of the 70's when inflation lasted TOO LONG to ignore. I was thrown back by the weak response from the Chinese consumer. they are hording disposable money in the range of 1.7 TRILLION! But the Chinese government has no restraint in policy and quick turnaround. they are cutting and stimulating. it should result in a spike move BEFORE the end of this year. it will cause havoc on prices and world inflation.
I can NOW see how a final setup for a monumental crash can happen. It needs current feel good news dismissing anything that can derail it till it actually does get derailed. the long strong Bull run leafing into the Pandemic was a classic example. Nothing was going to spoil a one sided view.
My only concern is that this last stage isn't going to spike in a steep trajectory. the steady trend line, draw a line thru it, type of move will not set up for a big crash. We need a hyperbolic move from here lasting 2 months.
7/17 is a defined turn date but that can just mean a shallow retrace as opposed to anything more damaging. I personally see NOTHING this month that can derail a spike move higher. Maybe i am wrong? we shall see.. this bear is playing dead for now.
"...so it's about "do or die" time for the bears. Trade safe."
http://www.pretzelcharts.com/
"So far, nothing much seems to be going for bears, as every decline is bought like it's still 2020 and the market is expecting massive inflation from all the "stimulus." On Monday, I noted that there was not yet a confirmative impulsive decline, and the market never formed one (and apparently never will again lol).
NYA continues to edge toward its key zone:"
"COMPQ is still in "back-test" territory"
"And SPX is adding that "next wave up." Whether it will end there or if that will only end up being the midpoint on a larger bull(ish) wave remains to be seen:"
"In conclusion, still watching NYA as the most significant of the current hurdles, so it's about "do or die" time for the bears. Trade safe."
SWEET SPOT! This spectacular year is going to get even more so. Bears are clinging to the belief that without higher rates we drop hard? As long as China's consumer hordes their 1.7 Trillion dollar disposable money it is unlikely a self contained inflation pressure goes far. I was counting on CHINA to be the double whammy to spike inflation from here. They are cutting rates and trying to stimulate while we are hoping for a soft jobs market and soft landing.
I suspect China will restart their economic expansion but obviously now here yet. That means a sweet spot for US inflation and demand. Dollar, long term rates are breaking down. ONLY an external event of trillion dollar proportions will derail this July and August move.
Pump it UP! We also have preliminary pressure from strikes and demand for higher wages but that too takes time.
keep shorting
great way to lose money in a bull market
do not know anyone who trades solely on the inverted yield curve
put up a chart with a correlation to the market
Uh ...
the yield curve is part of what "a market" is saying.
Money comes in various forms (which one could refer to as markets).
Be careful which money market you are investing in, as there is no such thing as "the market".
For instance, money could be coming out of the stock market and maybe most of that is being put into a bond market. Then you have to decide which bond market.
listen to what the market is saying
Been waiting for our Inverted yield curve ...
to produce what it's famous for -- being a reputable forward indicator of a significant stock market decline. The current inverted yield curve is a whopper but nothing's happened ... yet.
The tone of the news I've been reading is changing: Just read, "Expectations are for earnings to decline for a third straight quarter. Consensus estimates project a decline of about 7% in earnings per share among S&P 500 companies compared to the same quarter last year, which would mark the steepest decline since 2020, per UBS."
no signs of real sellers
running in place is not weakness
its re accumulation
when this market tops after options
when they take it down it will very clear
this is the major problem just using complex EW and price
and 1 form of TA
Manipulation Around Earnings Season Is Insane!
JULY 09, 2023 AT 01:40 PM
"Every quarterly earnings season, we hear the same thing on CNBC and other media outlets. "Earnings are going to be rough this quarter." Blah, blah, blah. After decades of technical, fundamental, and historical research, I've concluded that the games on Wall Street are designed to thoroughly confuse the individual investor. And it's been my mission for the past several years as Chief Market Strategist at EarningsBeats.com to separate the truth from the rhetoric. The history of the stock market shows quite clearly that most public companies beat earnings expectations. Don't believe me? Well, here's a bit of research by Ed Yardeni of Yardeni Research, showing the percentage of earnings beats vs. earnings misses by quarter over the past 35ish years:"
http://d.stockcharts.com/img/articles/2023/07/09/ae3ee285-48f2-40ad-9e52-2a26708bd9fd.jpg
"Throughout the 21st century, the percentage of companies that have BEATEN consensus earnings estimates is greater than 80%. Greater than 80%!!! But, for some reason, we're always worried about earnings as we approach the start of earnings season. While Wall Street firms send their finest analysts (I call them "influencers") out into the world to spread all the bad earnings news we're about to hear, they're actually buying stocks hand over fist.
Consider how the S&P 500 has traded throughout each calendar quarter since 1950. I've broken down ANNUALIZED performance between the first half of each calendar quarter and the second half:"
Q1 (January 1-February 15): +12.49%
Q1 (February 16-March 31): +4.80%
Q2 (April 1-May 15): +13.25%
Q2 (May 16-June 30): +1.15%
Q3 (July 1-August 15): +10.02%
Q3 (August 16-September 30): -4.88%
Q4 (October 1-November 15): +16.24%
Q4 (November 16-December 31): +16.97%
I believe we can make a few observations after studying this performance data:
"While everyone is worrying about earnings during the first half of calendar quarters, the stock market's overwhelming tendency is to RISE.
After the strong earnings are realized, the stock market's tendency is to struggle.
Q4 doesn't matter. The stock market just goes up. The two BEST half-quarter performances are found in Q4.
Q3 is the worst calendar quarter of the year BY FAR. We're in Q3, so we should all lower our expectations.
Let me break down the S&P 500 annualized performance by first half of ALL calendar quarters vs. second half of ALL calendar quarters:
First half of calendar quarters: +13.00%
Second half of calendar quarters: +4.51%
The big Wall Street firms WANT us to worry about earnings and sell so they can line their pockets as prices rise. Then, just after we realize that earnings are solid and start buying, those big Wall Street firms are happily taking profits. Then rinse and repeat. There are so many instances of this. It's why we all need to be aware of history and to understand how we are manipulated regularly.
If you want to learn more about the ideosyncrasies of stock market timing, I invite you to join our rapidly-growing community of EarningsBeats Digest subscribers. Subscription is completely free and there is no credit card required. And when you sign up, I'll immediately ship you our e-book, "Money Flows" as a valuable BONUS! CLICK HERE to get your free subscription started and check out some mind-boggling stats!"
Happy trading!
Tom
Thanks RCKS...One guru I read is still bullish...looking at 4500 plus..
"I continue to favor the bears until proven otherwise...."
http://www.pretzelcharts.com/
Last update concluded:
"[A]s I've stated previously, unless and until NYA breaks out over its blue (C) high, I'm continuing to give bears the benefit of the doubt. While there are several near-term options, if NYA is to hold its key high, then there's just not a lot of room for bulls to run much higher. If I'm wrong, then I'm wrong, but right now, this makes more sense to me than the bull alternative.
On Friday, SPX initially rallied strongly, but it then reversed equally-strongly and gave back all its gains on the day. This is normally not a bullish development -- which, in essence, means there's no change from Friday's update. So, I've updated the charts with the latest price action, but as I've outlined several times recently, I continue to favor the bears until proven otherwise -- thus, unless and until the market "proves otherwise" (or, conversely, until such a time as there's a more confirmative reversal), there's still nothing new to say about the charts."
"NYA:
SPX near-term:
SPX intermediate term:
COMPQ very long term:
Trade safe."
BIAS always clouds common sense and logic. Market has only one worry today, INFLATION. The data will spell out the future path. Easy call. For now the Dollar and 10 year note and OIL is in a range bound move. I know with certainty we can never survive a 70's style run in rates. The street already announced their concern. the One trillion bad bet salivating over a sure thing that disinflation would win has been proven wrong. 18 months and transitory is still a one sided assumption and bet. BIAS, extreme bias. NO ONE sees a Fed Funds rate hitting 6%.
The street is begging for rates to stop rising and the FED to start lowering all this year. WHY? Simple. The One trillion Dollar bad bet is not a one off. Huge bets using 1 and 2 year notes all one sided, all assuming disinflation takes hold. Can't blame a 40 year trend to still be here, but it is NOT! All asset classes that went hyperbolic against historic norms rely on disinflation to pull it off.
Watch WAGES, JOBS, and PCE reports.
Likely we are about to LAUNCH into a very BULLISH run. You see almost all crashes are not from left field. Emotional attachment to a one sided assumption that goes bust suddenly does it. A Pandemic that no one believed would hit our soil or cause any economic disruption was the one sided assumption despite common sense telling you that was completely crazy.
Not a single analysts, economist or Fed official sees Inflation going north from here. they all assume it is stubbornly stuck at 3 to 4% or will DROP soon. ALL! That everyone thinks they can handle. Me, I see an 18 month situation by a tight employment force demanding higher wages. The SIGNS are already here.
JULY however should start the next phase of the BULL RUN. Will it end in August, September or October? dunno. Hope there is a "TELL" before we drop hard.
Stock Market Commentary 07/07/23
By Lawrence G. McMillan
"Stocks charged ahead to a new yearly high at the end of the second quarter, but have faltered a bit since then. A rather sharp pullback occurred yesterday, based on fears that the central banks around the world are not done raising interest rates. That's news? I guess it was to those who sold yesterday. In any case, that pullback closed a couple of upside gaps on the $SPX chart. However, it has left a potentially important island reversal on the $SPX chart now (circled area on the chart in Figure 1).
If $SPX rallies back and closes yesterday's gap, thus rendering the potential island reversal harmless, then upside targets would initially be 4510 followed by 4630.
There is still support at 4330 the recent lows and there should also be strong support at 4200, which was the area that was holding the market back for so long earlier this year. As long as $SPX is above 4330, the chart is unequivocally bullish; a failure at that level, though, might lead to problems.
The equity-only put-call ratios (Figures 2 and 3) are slowing their rate of descent. However, they are not yet on sell signals. That would only occur if they began to rise and trend higher.
Market breadth continues its sort of "all-or-nothing" approach. Either it's very positive or it's very negative, very little in-between. This action has produced yet another sell signal from both breadth oscillators.
$VIX has been contained in the 13 to 15 range for nearly a month, but with yesterday's selling, it jumped up to 17 intraday, before falling back. If $VIX returns to "spiking" mode, that would be a negative occurrence, for the stock market can fall rapidly while $VIX is in "spiking" mode.
In summary, we are maintaining a "core" bullish position as long as $SPX remains above 4330. We will, however, trade other confirmed signals around that "core" position.
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=1688765123662
http://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1688765123662
http://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1688765123662
http://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1688765123662
Yes Finally he states: "Finally, I'd be remiss if I didn't disclose that SPX does have multiple near-term options here, even for the broader bear case:"
http://www.pretzelcharts.com/
"SPX and NYA have both been preliminarily rejected from the lower edges of their respective inflection zones. As of yet, we do not have an impulse down to confirm anything, but it certainly looks possible that one will develop.
Although it's a hard market to say this in: I continue to lean toward the bears until proven otherwise. The question at the micro level is whether they're ready to show up again immediately. As noted above, it's entirely possible they do, especially given that COMPQ has hit an ancient resistance line:"
NYA:
SPX big picture:
"Finally, I'd be remiss if I didn't disclose that SPX does have multiple near-term options here, even for the broader bear case:"
"In conclusion, the market is playing for keeps around these levels, and as I've stated previously, unless and until NYA breaks out over its blue (C) high, I'm continuing to give bears the benefit of the doubt. While there are several near-term options, if NYA is to hold its key high, then there's just not a lot of room for bulls to run much higher. If I'm wrong, then I'm wrong, but right now, this makes more sense to me than the bull alternative. Trade safe."
Jobs report was a dud, a tame 200K. Wages however starting to creep back up. Enough good news to keep the partying going. The data from June is showing accelerated rebound as people are back spending on travel, entertainment, and big ticket items. Fed Funds has NO CHOICE but to continue the drive up. But hey everyone is still convinced it would never reach 6%. I love the uniformity of assessment like a Pandemic not causing any problems here.
pullback is not the top in
gold and the dollar should have zoomed for confirmation.
the spy gap volume (tim ord) was 100 million vs 80 million
so the gap filled and then headed up
this is just another fakeout
new high will be start of the july to october weak seasonality
https://schrts.co/mwfQhaRY
HOT HOT HOT. The weather is scorching this earth. The economy has just shown signs of real economic expansion. i mean forget about any concerns by the consumer about the cost of things. That's why SERVICES are jumping ever higher from an already hot position. That's why all data points are HOT HOT HOT! 8:30 tomorrow we see if the HOT OFF THE PRESSES news at 8:30 AM has any affect. ADP can be wildly off. Me, i look at ONLY ONE THING that tells me if Inflation is getting out of control this early. WAGES! Jobs is already expected to be very strong.
If YOU want to know if the Fed Rate Hikes is crushing the economy ask YOURSELF what plans you have. Trips anyone? Entertainment? YOU already KNOW the answer to my question Mr. and Mrs. Public.
I pounded home ad nauseum INFLATION is NOT transitory and will catch hold like a bad cold once WAGES kick in. Watch for it!
But like a PNADEMIC we pretend not to know the future outcome. We pretend that the FED has this under control and we would never see 6% Fed Funds eve again. If YOU want to know why that number is so important i can spell it out for ya in a trillion dollar answer. The street knows with certainty that 6% is the ceiling they can't hit. As long as the street believes or pretends ignorance that 6% will not happen we are just fine! LISTEN for any articles or analysts discussion of hitting or going over 6%.
ONCE the street gets a whiff of the possibility that FED FUNDS can hit 6% the market will react and not kindly.
How Bad Could This Selling Get?
JULY 06, 2023 AT 10:44 AM
http://stockcharts.com/articles/tradingplaces/2023/07/how-bad-could-this-selling-get-735.html
"The first thing I always look at are the technical conditions. For me, that's a very simple analysis of price/volume. Here's what that looks like right now on the S&P 500 and NASDAQ 100:"
S&P 500 ($SPX):
http://d.stockcharts.com/img/articles/2023/07/06/edd36be1-1cf5-4316-972f-0a9e5ae90dfa.jpg
"During any uptrend, I look to the 20-day EMA as my initial key short-term support. I typically view the odds of a successful test as quite strong - unless there's a negative divergence. In this case, there is one. So we need to consider that the odds have shifted a bit more toward a 50-day SMA test (pink arrow)."
NASDAQ 100 ($NDX):
http://d.stockcharts.com/img/articles/2023/07/06/3322d55d-89ba-4542-8209-35f10ba04559.jpg
"We've been spoiled on the long side with a mostly straight-up advance. The short-term selling could be problematic, because we haven't see an extended slide for awhile and there's a catalyst that could push stock prices lower near-term. Higher treasury yields have resulted in a falling market over the past year and a half. While I believe the stock market has handled rising yields very well in 2023, it's certainly not immune to a period of selling.
There are signals that tell me this pullback will be temporary. The primary signal is that we've not seen any significant rotation to defensive sectors. Since topping on the S&P 500 on June 15th at 4425, we've seen slightly higher prices before the selling the past couple days. If you recall, at the end of 2021, the final ultimate high was accompanied by heavy rotation into defensive sectors. Over the past three weeks, here's the performance of all 11 sectors:"
http://d.stockcharts.com/img/articles/2023/07/06/cc1f917e-56cb-4f81-b984-f86721515aa5.jpg
"Does this look like a mass exodus out of aggressive sectors? I don't think so, considering that four of the top six sectors since June 15th are aggressive sectors. And most of the selling in technology (XLK) has been via gaps. Check out the candles the past few days on the XLK:"
http://d.stockcharts.com/img/articles/2023/07/06/8f4a4014-695b-4dcd-b1f9-a5b635c32c48.jpg
"We're seeing technology down for the third consecutive session, but do you see intraday selling? There's not one red-filled candle of any significance this week as the XLK drifts lower. It's all gap downs again. We saw this through the first 5 months of 2022 when retail traders were swindled by Wall Street. There were months of gap downs and early morning selling, followed by significant accumulation. This week has been nothing more than a mini-version of the manipulation we saw repeatedly last year.
I'll be spending a lot of time this evening providing our "Bulls-Eye Forecast: Mid-Year Update", highlighting areas of strength and weakness during the first half of 2023 and what we should expect in the second half. It's a FREE event, open to the public, so I hope you'll join me. When you register, and as further incentive to join me, I'll provide you a "Money Flows" pdf, which highlights much of the manipulation that's taken place on Wall Street since 1950. I believe every investor/trader should be aware of this manipulation, which is why I'm including it for FREE. Please register NOW as this must-attend event is today at 7:00pm ET. To register, CLICK HERE. Upon registration, we'll immediately send you this FREE "Money Flows" pdf, which will significantly impact your approach to investing/trading!"
Happy trading!
Tom
No harm, no foul!
TRUMP posted an address where he thought Obama was staying in DC and a MAN with multiple guns stalked and cased out that area. I guess TRUMP will have to try harder next time. maybe when he becomes president he can have his own governmental detail kill him.
But hey, this is just a coincidence trump wanted people to thank him for his service.
And THIS IS THE NEXT PRESIDENT. I can't wait to see what happens. Gunna be fun.
"The market barely moved during Monday's short session, so I'm not going to strain myself trying to think of something new and exciting to say, since there's literally nothing to add to Monday's update."
http://www.pretzelcharts.com/
"The market barely moved during Monday's short session, so I'm not going to strain myself trying to think of something new and exciting to say, since there's literally nothing to add to Monday's update. I have updated the charts with the latest price action, but there's nothing else to do beyond that.
In italics is the same text from Monday's update:
SPX cleared its most recent high on Friday, as did NYA, putting NYA closer to its significant level (blue (C))."
"SPX may have cut its last fourth wave a bit short -- though could still form an expanded flat to create a larger fourth wave:"
"And last but not least, COMPQ is finally back testing the very long-term trend line we've been watching for a year or so:"
"In conclusion, not much to add to the past few updates. We're still watching 16223 in NYA closely. I look forward to the day when the market allows me to stop repeating myself,
I look forward to the day when the market allows me to stop repeating myself.
Trade safe."
have a wonderful time
working on sleep apnea surgery
it will take months
but be worth it
Jerry
Thanks for updates
We are on a little vacation in San Diego spending time with our 7 month old grandson and I'm paying very little attention to the market this week.
I did do well on Friday as the market was determined to close higher as the End of Quarter markup took place.
Interesting today the market didn't react much to the Fed Minutes but maybe its the lack of traders this being a holiday week for many I imagine
Hope you are doing well and congrats on dropping a bunch of weight I saw. Also a belated Happy Fourth to you.
dalton this week 7-2
normal for market to sell early in the week, historically weak time of year
ES 4500 should be resistance
November 6th 2024 starts the doomsday clock for stock market, our Republic, and world economies not to mention Billions of lives.
Not sure if all three are thriving by that date but sure as hell will be destroyed soon after. I know this better than "seeing" a crash AFTER a Pandemic was discovered. Do the MATH!
1- Trump will WIN election.
2 - GOP, Supreme Court will support all dictatorial control by Trump.
3 - Trump will pardon himself and all involved in his schemes.
4 - State trials can't be destroyed only delayed.
5 - Trump will NEVER give up his power knowing he spends the rest of his days in jail.
6 - Second coup is a given. Declare National Emergency starting a super power war.
I dare anyone to mock me and my analysis. Doesn't take a genius to figure our the likely path. I give the full scenario discussed better than a 50/50 chance of occurring. I give a crash of unprecedented proportions in the stock market greater than 50%. Will all occur together? if so it is AFTER November 6th 2024. And no later than November 5th 2027.
A convicted rapist bragging about it with 2 impeachments and 4 indictments including Sedition, Extortion and Treason has made him the NUMBER ONE CANDIDATE for next president! if that ALONE doesn't wake you up to the possibility of such a dire future NOTHING WILL!
INSANE WORLD WE LIVE IN!
One quick point on the end game. I believe as long as INFLATION stays muted we can stretch this sucker longer. Fed Funds "MUST" stay under 6%. The anecdotal signs of the repeat of early 70's are here. The length of heightened prices have crept in JOB WAGE DEMAND TODAY! Once that takes hold it becomes Impossible to stop inflation below 6% Fed Funds. Don't know which will cause the crash, rates so high causing massive stagflation or external BETS like the trillion dollar bank mistake. We are adducted to disinflation and everything thrived because of it. Take that away and you take away the heroin from the addict. Expect massive withdrawal symptoms.
For now July should be a good month. Even a flat quarterly report due by end of July and early Augusts will be ignored. As long as future projections keep rising. Now we need a double digit gain in 6 months to justify todays prices.
BIAS is built into everything and understanding that helps fight that urge to lean one way. the reason why so many see a crash is simple, we are in uncharted territory. if a Pandemic can be totally ignored till an actual death on our soil and a trillion dollar run on banks not even cause a ripple in the days move you should understand extreme complacency is here. earnings? What earnings? The P of the E ratio is moving all right. The 18 plus months of TRANSITORY inflation is seen because to see anything else would cause a huge readjustment of future earnings.
The roaring 20's had many early proclamations of doom. It was based on foresight. people that understood the bubble we were in. if you want a better reason look no father than the dead of night placement of GOP Supreme Court judges, their lies under oath that they would NOT touch precedence like Roe. ALL the REPUUK judges with a political agenda have cozied up to mega money in an illegal outlawed way and flaunt it today. they attack the premise that they should be held to any standard. They are held to none and can rule of whether Trump is a KING while his spouse attempted to overthrow the government. Millions of dollars of gifts and job positions netting millions because of the Supreme Court appointment. Hiding the facts. On and on and at the exact same time pass ruling from a fake case already known to be fake yet ruled anyway to pass an agenda of ideology not constitutional law. As for the GOP presidential candidate that also is so outrageous so extreme that not a single person would have thought this even possible 10 years ago. A two time impeached, 4 indictment, defamation case lost on belief he gropes woman and boasts about it. His presidency was riff with graft and corruption. his incompetence in those 4 years was massive. His sedition, treason, extortion charges are already sealed with true impossible to refute TRUTHS! YET he is likely to be the next president.
So if you ask why (some) people see all these aspects of life out of whack i must ask how is it that all don't. The facts can't be disputed yet they are. the path we are on is obvious yet no one sees it. We are OBVIOUSLY in a multi-generational BUBBLE of epic proportions. 40 years of disinflation allowed for ALL asset classes to expand beyond anything we have ever seen before. Just look at an historic chart of stocks and excuse the hyperbolic moves as a new era in economic model, new innovations, FED magic bullet. Use any excuse you want the charts speak for themselves. The greatest invention since the wheel is crypto. It was allowed to become an entity in USA with no rules, no regulations, no oversight. One man controlled BILLIONS on a personal home computer. Had no track of millions, used it illegally and when the government stepped in they said they have NO IDEA what was pilfered or where it went.
We "see" what we want and excuse the rest. My above F-A-C-T-S are so unbelievable you would think we were a fledgling Banana Republic where greed and corruption was the only game in town. Yet we debate the US Stock Market might just be in one hell of an historic bubble? Nah, instead we are unanimously giddy over the future prospects. the new Paradigm argument? I wonder why all economists saw such a bright future right before the collapse? Tis a puzzlement.
"We're still watching 16223 in NYA closely"
http://www.pretzelcharts.com/
"SPX cleared its most recent high on Friday, as did NYA, putting NYA closer to its significant level (blue (C))."
"SPX may have cut its last fourth wave a bit short -- though could still form an expanded flat to create a larger fourth wave:"
"And last but not least, COMPQ is finally back testing the very long-term trend line we've been watching for a year or so:"
"In conclusion, not much to add to the past few updates. We're still watching 16223 in NYA closely. Don't forget today is a short session, and have a safe and enjoyable Fourth of July. Trade safe."
death of the QT bear
Bear markets do not last long and have a cause and a cure
World banks started QT to kill inflation and this caused the Bear market
Now that QE has been back since the bank of england crisis creating the new bull
There should be confirmation of this in market charts and activity
First bear market rallies are violent and short lived then give it all back.
Bull markets trickle up and last a long time
Anytime a rally lasts longer then fib .50 top to bottom and trickles up
and pullbacks are weak that is a bull market.
BT would say that aint no kind of bear i ever seen,
the week ahead
did not realize after triple witching
buyers are tired and market often sells
dalton- next week should be weak
inventory is probably too long
dalton is the creator of market profile
jim dalton
unlearning and conflicting information
people can not handle confliction information since it causes anxiety
people want to think fast and have 1 non conflicting trading idea.
but things change so drastically
each market is unique and follows new rules
Follow the FED JUICE (fed qe or qt) runs the show.
there are charts showing qt and the path up and down big time
As Shane S says the fed qt caused the bear so the same
QE can fix it.
The FED even conquered covid bear with qe. The recent bank crisis was real bad yet
fixed literally overnight. The FED has some tools other fed funds rate. They can print billions
out of thin air.
I study at least 8 hours a week.
EW puts in fear on the charts and traders. It always looks for the extreme lows to not be in
and tested.
I listen to TFNN shows and learn every day. learning the chapman wave.
The old way s are hard to give up. Now days people are more attached to tribalism or theories emotionally. They quickly go with the latest theory that makes them feel good. They do not allow
time and conflicting ideas to come to a normal decision
The fed will go back to qt and the market will sell. Not this year.
Hi Jerry
I would never argue that Pretzel gets it right all the time or that EW is never wrong. EW works on probabilities and the practitioners bias often gets in the way. Pretzel for fundamental reasons believes this has to come all crashing down and for that reason he is missing this Bull Market.
Pokersam has the same problem, he also believes that we are in a wave 2 up and when it completes we will start a massive wave 3 down. Currently we have retraced .727 of wave 1 down which puts into question that this a wave 2 correction up. The .782 fib still lies ahead at 4529 spx, which may be there last hope of this being a wave 2 correction.
I haven't been in there camp for a good while, so don't misinterpret my views.
I started posting Tom Bowley and Lawrence McMillian here to give bullish views of the current market.
You could argue that Tom has been the most right even though he called the bottom at this time last year and acknowledged that as the October low occurred that was wrong but he has been full bore ahead in his bullish views ever since.
1326.03 964.13
Pretzel :
(1) Pretzel presents both a Bull and Bear case.
(2) Pretzel gives both Triggers and Targets
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