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Last time, I said the the Bears were up against "Free Money Monday" and the first of the month. Both were/are very Bullish as was the sharp drop at NAAIM. We got a rally and we got some more overnight. Today has an upward bias too, but there are a lot of Bulls and I suspect that most of the buying is done. We're on another FL/FS 2X Sell as well as a standard Sell and the ISEE ST Sell is still in force, but now we have a (lower quality) ST Buy. I strongly suspect we are in for some serious chop. I'm pretty sure we get an "a-b-c" correction and that we're on the "b" rally with "c" down ahead. The tricky part will be the transition. Bigger picture, the liquidity situation demands that we go long at support if we do pull back much.
Last week, I said the market was looking so tired and that there were signs of a thinning market and that I was very much on the lookout for a surprise decline. We got it. I was thinking that initially the market would try to rally and then fail, but it just fell apart. We did get our rally, per the "Best Fade" Buy late in the week. Now the Bears are up against "Free Money Monday" and Tuesday is the first of the month. Both are very Bullish. Also, NAAIM fell pretty hard, to just shy of a ST Buy. On the other hand, we're on a FL/FS and an ISEE ST Sell. My read here is that they try to take it down on Monday, but then bring it back. Tuesday should be higher. Wednesday should probably start strong but then pullback Thursday and into Friday, then we'll rally again. We have an unconfirmed IT Sell, but breadth is nowhere near to confirming.
Last time, I said that the market was looking so very tired and that Friday's action felt "hokied-up". I said that I was "very much on the lookout for a surprise decline" and I was wary of the FL/FS 2X Sell. I was a bit too respectful of the up trend, thinking that we'd not hold weakness, but we did. Of course, I advised that if we were to trade down and take out some support levels without rallying first, we might have something more exiting for the Bears to hold onto. We did and they did. So now what? We've been here before only to see the market rally. I'm confident that they will try to do so again. I'm not so confident that they will succeed this time before we get a more decent correction. Here's the deal: The sentiment still isn't showing much Bearishness. There are few if any natural buyers into this weakness. Sure, we'll bounce, but not like we would ordinarily. This market is very overdone, too. I'm of the opinion that it is manipulated, and if I'm right, even the manipulators need to reload. This foreign news-related decline is perfect. It provides political cover for a correction without implying any new weakness in our economy. Now, Bear in mind, we aren't looking for a ton. There's just room to fall. We've not yet broken the 21-day moving average and we may not. I'm thinking we trade down, then pop up. I think we have more weakness thereafter.
Last week, I said that the FL/FS Sell and the $-weighted OEX Sell would ordinarily be good for a sell off, but thanks to "free money Monday" and the upward bias, we were likely to rally on Monday. The VIX was so low, however, that it made sense to use to look for at least a day of selling if only to let the options guys jockey for position. That was about right and in fact we pretty well nailed the weekly call. This market is looking so tired. Friday's action felt hokied-up. The Dow had all the strength while the Naz and Rut lagged--and that's a sign of a thinning market. Now, the trend says that it's easy to look for higher prices, of course, but I'm very much on the lookout for a surprise decline. We're on a FL/FS 2X Sell and the options are somewhat supportive of a sell off. My read here is that they try to take it down on Tuesday, but fail. Wednesday should probably start strong but then pullback into Thursday and then we'll rally again. Now, if we trade down and take out some support levels without rallying first, we may have something more exciting for the Bears to hold onto.
Last time, I said that despite a pretty reliable set of sells I knew that there would be a tradable bounce from every decent support level there was. So, despite another FL/FS 2X Sell and lots of partially long Bulls and despite a huge jump at ISEE (a ST Sell) I was going to look for at least one and probably two decent rally attempts. We got them. They came close to giving us a good long entry, but not quite good enough. Today is options expiration. I can see some selling today, too, but I see no reason to change our view of the market. Support will be bought. We should buy it. Chances are, the market will remain in a fairly narrow range.
Yesterday the Seven Sentinels issued a confirmed buy signal. I've been expecting it for at least 2 weeks and have been mostly long during that time.
Last time, I said that we were getting some wonky readings from the options but that ISEE was probably the most reliable and it was ST Bullish. We saw no weakness and rallied, again. The sentiment trumped the momentum. That's par for the course in this market. Today, we've got a pretty reliable set of sells and we're off a bit. I'm ok with looking for lower prices too, but I know this market and the odds say that there's a tradable bounce from every decent support level there is. So, despite another FL/FS 2X Sell and lots of partially long Bulls and despite a huge jump at ISEE (a ST Sell) I'm going to look for at least one and probably two decent rally attempts today. If they give us a good entry, we'll be OK with shorting, but the easiest trades are likely to still be long.
Last time, I said that the market would probably trade down Tuesday and maybe part of Wednesday. We got Tuesday right. You can see that we've got the key to the lock with regard to buyers showing up at every support, too. They don't require much of that, either, to buy. The sentiment today is still supportive of some selling, but now we're getting some wonky readings from the options. ISEE is probably the most reliable and that's ST Bullish. The OEX nominal is bullish too, but the $-weighted is Bearish. This is probably just options related. We have a FL/FS 2X Sell and a repeat in force. Maybe we'll get a sell off of some magnitude for the options boys, but I have to think that they'll buy again as soon as volatility spikes and we get near support. I'm looking to get long on any meaningful pullback. Remember, sentiment is just a measure of ready liquidity. Right now, we know there is ample ready liquidity.
Last time, I said that despite a sell from ISEE, a sell from the FL/FS, and a Sell from the $-weighted OEX, Monday was "free money Monday" and given the good upward bias I was looking higher. I figured that the market would grind out another rally on Monday, but then trade down Tuesday and maybe part of Wednesday. So far, I'm still looking that way. The sentiment today is still supportive of some selling. TickerSense has lots of Bulls and so does the FL/FS poll. ISEE is still on the Sell and that's bound to have an effect today or tomorrow at the latest. Bear in mind, every support will be bought all along the way. All we are expecting is some pre-expiration jockeying.
Last week, I said that it was clear that the market had a higher bias and that support will be bought no matter what. That said, the OEX and the $-weighted options suggested lower prices and the WSS pollees suggest a turn down, if only for a quick correction. We got the pullback and as predicted, support was bought. This week, we have an interesting set up. First of all, for the short-term, ISEE is flashing a Sell and that's normally good for some selling. Further, we have a FL/FS Sell and the $-weighted OEX is on a Sell too. All of that would ordinarily be good for a sell off. It still may be, but tomorrow is "free money Monday" and there's a pretty good upward bias. The things is, the VIX never really spiked much last week and that means that the options guys are likely to take the market down one day or maybe two in order to either write some premium OR to simply buy premium and make the Delta. So, my thinking is that the market grinds out another rally on Monday, but Tuesday and part of Wednesday are down, then we'll rally back for options expiration. Bigger picture, NAAIM shows no shorting again and we have a great sentiment set up for an intermediate-term correction. The problem is, liquidity trumps sentiment and that means that it's just going to be hard to get a big decline going. Small declines are likely, but barring very bad news indeed, the market should hold together until the economy heats up and the FED sops up the liquidity again.
It's not a prediction, only something to watch for. I attended the World Moneyshow here in Orlando, Fl, and that was a theme I heard from a couple of the speakers. Of course everyone "adjusts" their outlook as water passes under the bridge. ;o)
I think it's practically a given at this point. But watch out when the time comes for QE3.
Last time, I said that there was hardly any fear anywhere, nor was the VIX up much so I had to think that they would whip this market around quite a bit before they turn it back up. So far, that's a pretty accurate call. Today we have a Sell from ISEE and there are a lot of Bulls in the polls. NAAIM also has no shorting going on, again. That crew usually has at least one or two advisors picking a top, but not this time. That might be tempting enough for the powers that be to pull the market back just a bit. Maybe. Big picture, I don't see much downside for now. Very near term, I'd really like to see the VIX needs to spike, and if it does, it's a buy. I'm thinking early today is a short on strength, but late in the day, barring disaster, any support is a Buy. Don't forget Free Money Monday. If we don't see any premium expansion, then we'll need to be alert for another decline next week some time as they'll just buy the puts rather than sell them, and then take it down for a day. Again, I'm going to look for bounces at every support, even as I'm OK with shorting resistance. Volume tools seem to be working well here.
Last time, I said that I thought that we'd see some selling for "Weird Wolly Wednesday" and we did, thanks to the big jump at ISEE into Sell territory. I was also confident that we'd bounce at support and by golly we did. Today, ISEE is down hard, triggering a Buy and a ST Buy. Alas, it's not that easy as the $-weighteds are all Bulled up, implying some more selling. There's really no fear anywhere, nor is the VIX up much. I have to think that they whip this market around quite a bit before they turn it back up. The VIX needs to spike, I think, so that "the Boyz" can sell some premium for expiration next week. If not, then we'll need to be alert for another decline as they'll just buy the puts rather than sell them, and then take it down for a day. Be that as it may, I'm going to look for bounces at every support, even as I'm OK with shorting resistance. Volume tools seem to be working well here.
Last time, I said that thanks to the ISEE Buy and a ST Buy, I thought that we could rally fairly easily, and we did. I also thought and think that we'll see some selling for "Weird Wolly Wednesday" even as I'm still confident that every decent support is going to be bought. Today, we've got some great support for a pullback. ISEE took a big jump into Sell territory and the $-weighteds are all Bulled up too. I'm going to look for at least a couple bounces today. We'll likely pullback from a resistance point and trade down too. I expect volatility, if only to keep traders guessing and to allow "the Boyz" to position for options expiration next week.
Last time, I said that our best trend indicator was still negative, despite the fact that it was clear that the market had a higher bias and that support would be bought no matter what. Well, the trend turned back up, unsurprisingly. Today, the OEX and the $-weighted options suggest lower prices, as does the VIX, but ISEE is flashing a Buy and a ST Buy. I think we can rally fairly easily today, and while I also think we'll see some selling for "Weird Wolly Wednesday", I'm still confident that every decent support is going to be bought.
Last week, I said that due to the weakness, our trend indicator went negative, as did the weekly MACD. I was disturbed that I didn't see more pessimism or fear, but despite that, I figured that the powers that be would martial the forces and bounce the market. They did indeed marshal the forces and drove the market up dramatically, reversing our sell. Surprisingly, while the Weekly is positive and breadth is too, our best trend indicator went back negative and remains that way today. Very curious. It is clear that the market has a higher bias and that support will be bought no matter what. The OEX and the $-weighted options suggest lower prices and the WSS pollees suggest a turn down, if only for a quick correction. The rest of the sentiment is generally in agreement. My thinking is that thanks to the FL/FS Buy Friday that we'll rally a bit on Monday and Tuesday and then trade down hard on Wednesday into Thursday only to rally.
Last time, I said that I was looking for some lower prices if only because of the $-weighted OEX and the big Bullish shift at AAII, but I was pretty confident of a bounce at support. We got both weakness and a bounce. Our best trend indicator remains negative but unconfirmed. We have a ST Sell on the heels of a ST Buy from ISEE. We've also got a FL/FS Buy on the heels of a Sell. We want to be very flexible here. The message board crew is uncanny about getting positioned correctly at turns. I can't see a big decline coming, but we might get a surprise correction here. As with yesterday, I have to be looking for bounces at every support. I'd not be patient at all with shorts until we confirm a trend change. I see the potential for lower prices, even as I can confidently look for bounces.
Last time, I said that if we were to get selling, it would likely be subdued if not choppy. Yup. We advised that while there's truly room to pull back, we know that they'll buy support all the way down. They are. Today I see some lower prices if only because of the $-weighted OEX and the big Bullish shift at AAII. I'm not sure how far it goes, but I know that I'll at least scalp long at support. Oddly and surprisingly, we noted that our best trend indicator turned negative last night. That was NOT what I expected. It may be an anomaly, but I sense a strong urge to get more long. That's the emotion that can set up a capitulation top. I'm not predicting that, but I see the potential for lower prices, even as I can confidently look for bounces.
Last time, I said that despite a ST Sell from ISEE and the $-weighted OEX, AND a strong FL/FS Sell, because it was the 1st we would likely trade higher. Honestly, not that much higher, but that's the way this market is. If we get selling today, it'll likely be subdued if not choppy. There's truly room to pull it back but we know that they'll buy support all the way down. Sure, we can and probably will take some sells, but we're a buyer at every support for at least a scalp. This is a very strong market with all the powers that be invested in higher prices. They'll only be pulling it back enough to reload. That's what we're looking for too. There is little to worry about until the cumulative A/D volume turns negative along with trend.
Last time, I said that there was a lot of damage done on Friday, but despite that, there wasn't much Bearishness generated. I was especially concerned that there wasn't much Put buying, if only to hedge longs. That said, I thought that the "powers that be" would martial the forces and bounce the market and indeed they did--immediately. I had thought that perhaps they would take it down on Monday first. Really, I should have known better. this crew wants the market up and two ugly days in a row is too risky. Today, we have a ST Sell from ISEE and from the $-weighted OEX. We also have a strong FL/FS Sell. The thing is, today is the 1st. They almost always rally the market on the 1st. If we get any selling, it'll likely be subdued today and probably late. It is more likely that we'll get selling tomorrow. So, it's up first then down.
Last week, I said that I was suspecting that we might be in for another leg down and it appears that we are getting it. I'm still not all that Bearish, but I must respect the change in trend. Our trend indicator went negative on Friday and the weekly MACD also turned down. The Cumulative A/D volume flashed a caution signal and may go to a Sell shortly. There was a lot of damage done. What disturbs me is that it hasn't brought much Bearishness. I'm really not sure why there wasn't a ton of Put buying if only to hedge longs. That we didn't see this implies that the market may have to trade down hard one more time. That said, I think that the powers that be will martial the forces and bounce the market. My thinking, embarrassingly, is identical to last week's-- that we'll trade down Monday and Tuesday and then find a low below the recent lows. Then rally up into Friday. Friday, the rally will likely fade.
We are still in a bull market, but the intermediate term may not be bullish. Of course that remains to be seen, but technically my system is still on a sell so I'm inclined to think we're going lower. Especially after today's rout.
Last time, I said that we were more open to shorting thanks to another FL/FS 2X sell and a big ISEE jump. The only issue was that momentum turned back up. Still, I was looking for weakness yesterday or today. Looks like today will have to be it. The current sentiment is iffy. The options are mixed and despite a solid FL/FS Sell and two 2X sells, we have a goodly number of partially short Bears in the polls and those types of readings typically generate a rally to shake the weak-handed Bears loose. Also a problem for the Bearish case is ISEE which fell hard generating a Short-term Buy. Of course we had a Short-term Sell yesterday, that can still play out. This market is overbought and the sentiment will support selling, but chances are, we'll bounce at every support. So, short at resistance, but don't swing for the fences until support is broken. Buy every decent support for a bounce.
The Seven Sentinels all flashed buy signals yesterday, which flips the system to an "unconfirmed" buy. Once NYMO hits a fresh 28 day trading high the signal would be deemed confirmed. Currently, NYMO closed at 14.32. It would need to close above 34.0 to achieve that trading high.
Last time, I said that despite a solid FL/FS Sell, we had a goodly number of partially short Bears in the polls. We advised that these types of readings typically generate a rally to shake the weak-handed Bears loose. We figured that the typical cheer-leading after the SOTU would limit the downside. We were right. We were and still are open to shorting today. The FL/FS just generated another 2X sell and ISEE jumped enough to trigger a ST Sell too. Momentum turned up, but some of the sentiment is just bothersome. The modest shift toward more Bearishness by individual investors is actually consistent with a decline. The good news for the Bulls is that this is not matched by II. The amateurs are a much less important part of the market than the pros are these days. In any case, it's iffy in this market, but the technicals say that weakness today or tomorrow is likely. I'm looking short, but I'll scalp long at support all the way down, too.
Last time, I said that my basic scenario still held and that we could easily sell off Tuesday and today. We sort of sold off yesterday, though we came back on the majors. That's telling too. There's real selling under cover of strength. The FL/FS 2X Sell gave us about what we were looking for, and today we have a solid FL/FS Sell. We've also got a goodly number of partially short Bears in the poll as well. Typically, they will rally the market in this context to shake the weak-handed Bears loose. I'm thinking strength is a short. Due to the typical cheer-leading one might expect after the SOTU, the downside today is limited, but weakness tomorrow is likely. Of some import: our best trend indicator gave a Sell last night. That was very unexpected and warrants at least a bit of caution, though we really don't expect too much of a disaster. I'll scalp long at support all the way down, too.
Last time, I said that I suspected that we might be in for another leg down though I was not all that Bearish. I was looking for the market to trade down Monday and Tuesday and then find a low below the recent lows. After that, I figured we'd see a rally. Instead of declining, the market rallied on Monday. That said, Friday's highs weren't breached. The basic scenario still holds and we could easily sell of ftoday and Wednesday. We have a FL/FS 2X Sell and the $-weighted options are rather Bearish for the market. I have to think that we can easily get a correction, though I doubt we'll get the 20 points traditionally expected from a 2X Sell. We ought to see weakness sooner rather than later. I'll scalp long at support all the way down, too.
If that's their position on Gov workers, I'd can't imagine what the private sector is going to go through during the same time frame.
Last time, I said that chances were, the decline was really just pre-expiration jockeying, and not the start of anything important. We noted that ISEE implied a bounce yesterday or today and some more weakness out a bit later. We got the weakness (to fulfill the "Infinity" FL/FS Sell and then bounced smartly. Is that all the rally we get? Probably not. Was that all the weakness we are to see? Also, probably not. Today is options expiration and chances are, they will hold things together. I have to think that "the Boyz" liked the volatility and will give us a bit more next week. After that, we'll have to see. Breadth is pretty well negative save for the Cumulative A/D volume. The trend is up, but the MACD gave a Sell (though that is a "Best Fade" Buy). My best read here is that we chop a bit higher over the next two days and then try for lower prices again. We are disinclined to look for too much weakness unless bonds take off.
Last time, I said that ISEE was WAY up there on a huge one-day jump, and the FL/FS was giving us an "infinity" Sell again, with NO fully short Bears. I thought that this might might be a marker for a top zone, but that was longer term. Near term, I thought that any strength was a short, though not for a home run. So far, that's the case. I was hoping to get some serious clues from the market yesterday. Support levels were broken, but not in any important way. We should have bounced and didn't, but then we should have collapsed and we didn't. Chances are, this decline is really just pre-expiration jockeying, and not the start of anything important, as yet. ISEE says that we ought to bounce today or Friday and that's reasonable. ISEE also says that we ought to see some more weakness out a bit later.
The Seven Sentinels flipped to a sell condition after yesterday's action.
Last time, I said that we had good Sells from the $-weighted options and the FL/FS but no evidence that any selling wouldn't end at support. The one thing that was different was that the daily MACD had turned back up generating a "Best Fade" Sell signal. This signal ought to play out here, but then, so should a lot of other things. There's just an absolute ton of Bullishness. ISEE is WAY up there and the one-day jump was huge too. More disturbing, the FL/FS is giving us an "infinity" Sell again. We have NO fully short Bears. I have seen this just once before and that was 10 trading days ago. At that time, I didn't think it would result in much immediate weakness, but I did think that it might be a marker for a top zone. This time around, I don't see any real reason to differ. I think that if we rally much here today or tomorrow, it's a short, though not for a home run. This is options expiration, so weakness ought to be contained. I do think that with all the Sells, we're getting into some sort of topping zone. Again, with the liquidity situation, I'm not sure we can expect much weakness, but as we said, if support that should hold doesn't, then things will almost assuredly get ugly fast.
Last week, I said that the big problem with the Bear case was that despite having a great set-up from all the sentiment our trend indicator had not turned down and in fact improved. Furthermore, the bid drop in ISEE triggered a ST Buy which, as we know is a reliable indicator, bringing Tuesday's and Wednesday's rally. We figured that every support level will tend to halt the declines and bring another rally attempt. We saw just that, over and over. This week, we are looking at much the same, with good Sells from the $-weighted options and the FL/FS but no evidence that any selling won't end at support. The big difference is that the daily MACD has turned back up, which generates a "Best Fade" Sell signal. The Buy was a winner. Will this Sell be as well? Perhaps. The Bear case has to be made, but implemented very carefully. Patience with shorts is NOT indicated. As we said, this market has structural buyers, but if support that should hold breaks, things will almost assuredly get ugly fast. You can chase it then. My call for the week is for a decline on Tuesday and then a rally on Wednesday into Thursday and chop lower on Friday.
Last time, I said that while the old FL/FS Sell expired, we had a fresh strong FL/FS Sell. Today, we add a FL/FS 2X Sell as well. Both are in effect and suggest weakness sooner rather than later. Also, we still have a very marginal "Best Fade" Sell in effect for the next few days. I'd rather see a clear cross up, but by the same token, a "kiss of death" kiss of the signal line is Bearish too. No doubt that this is still a strong market, but I'm really smelling a fast and furious correction. The NAAIM lack of any shorts indicates that there is a dearth of players to support the market during a news-related fall. Don't assume that we're not open to longs at support. We are. In fact, we'll be buyers in the event of a hard sell off too. The powers-that-be want a nice, orderly, higher market.
Last time, I said that ISEE, the Bearish tell from the $-weighteds, and the FL/FS Sell all suggested some weakness. Nope. This market has a tough time going down, it seems. The technicals have improved, too. Summation gave a buy. Interestingly, though, while the old FL/FS Sell expired, today we have a fresh strong FL/FS Sell. Also, we have a "Best Fade" Sell in effect for the next few days. This is still a strong market, but we have to take our sells, too. There's definitely a chance that this market can absolutely get creamed if the Bulls get surprised. It won't last long, but it could be deep. Until support levels fail, however, we have to play it very nimble. We're even open to longs at support.
After issuing an "unconfirmed" sell signal Tuesday, the Seven Sentinels reaffirmed the current buy signal yesterday by triggering a repeat buy signal.
There has been many instances in the past few months where the market has looked ready to roll over only to quickly reenergize at the 11th hour and make new highs.
Richard Band is one of several services I watch, he being more of an investor vice trading service. He currently thinks the market will continue higher for the next 2 quarters, but that by the 3rd or possibly 4th quarter we should hit significant resistance. He states that he's quite aware that the "bloom will come off the rose" at some point, but is milking this bull run very effectively in the meantime.
Last time, I said that we had confirmed the Sell from Summation, but that the ITBM remains borderline. Same thing today. The ST sell from ISEE is still in force as is that Bearish tell from the $-weighteds and the FL/FS Sell. All of these suggest some weakness today, and the FL/FS is still in effect tomorrow. We are still seeing a lot less follow through on the down side so if we short we want to be nimble, at least until support levels fail. When they do, it will signal a change in character for the market and we can really get ugly fast because there are so few folks short.
The Seven Sentinels issued an unconfirmed sell signal yesterday. The only thing I need to confirm it is for NYMO to hit a 28 day trading low. It's currently just under a -8 and needs to go below -22 to confirm the sell.
Last time, I said that Summation was Bearish but unconfirmed as was ITBM. Today, we have confirmed the Sell from Summation, but the ITBM remains borderline. The big problem was and is that despite having a great set-up from all the sentiment our trend indicator has not turned down. It remains stubbornly just above a Sell. The Bears can take heart, however, as ISEE jumped a lot, triggering a ST Sell. The $-weighteds are also suggesting some weakness today or tomorrow. We've seen a lot less follow through on the down side recently and so we don't want to over-stay our welcome if we short. But if support levels fail, we can get much more Bearish. The early rally today may fulfill the daily MACD "Best Fade" Buy signal. Remember, a good decline is more likely to come after sentiment ameliorates a bit. Become MORE vigilant not less on the next benign sentiment readings you see.