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Glen
Pretzel Update: From yesterday...... He remains bullish with a target of 5300++
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174384731
"...the most likely (not guaranteed, of course) pattern is still the bull pattern, which suggests we're in a small fourth wave correction now......"
http://www.pretzelcharts.com/
"Last update expected bulls would follow through, and they have, so far, since capturing their first "Bull: 3" target from April 26 (5200-20). Again, I didn't need to even move the label, which is nice, since it saves me approximately 6.39 seconds of work, which really adds up over time and -- if I can amass enough of these -- may ultimately allow me enough extra time for one last leisurely cup of coffee at the end of my life. Hard to put a price on that."
"As the chart above discusses, the most likely (not guaranteed, of course) pattern is still the bull pattern, which suggests we're in a small fourth wave correction now, but that SPX will go on to form an impulsive rally wave that ultimately targets 5290-5340 (okay, that target isn't on the chart because I ran out of space). As also noted, bears are not completely without options here at the infamous, if minor, Bull: 3 Inflection, so we'll stay on our toes just in case any declines start to appear impulsive. Trade safe."
Glen
Pretzel Update: Bulls seem to be in control at the moment.......
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174363711
".....bulls have retaken 5123 SPX, which implies they have more in the tank than bears right now."
http://www.pretzelcharts.com/
"Since last update, bulls have retaken 5123 SPX, which implies they have more in the tank than bears right now. There are still, of course, bear patterns that could materialize, but considering SPX turned up right at the Red C inflection (three waves down being an ABC, and ABCs being corrective patterns), it's more of a stretch to cling to bear patterns than it is to assume bulls are probably going to get what they want (new ATHs, ultimately)."
"COMPQ also turned higher at its inflection, and as mentioned two weeks ago, probably NEEDS another high to start looking like a more complete pattern:"
"In conclusion, bears could always whip out a surprise turn here, but so far, the stars appear to have aligned for bulls. Trade safe."
Glen
Pretzel Update: He has this as a do or die moment for both Bulls and Bears......... Mostly we are waiting for the Fed at the moment.......
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174337861
"So, this is a do-or-die moment for bulls and bears.........."
http://www.pretzelcharts.com/
"Since last update, SPX rallied up into its first target/inflection zone, then the inflection zone did its job and SPX topped right at the "bear: c" label that I'd placed on the chart on April 26. I didn't even need to move it for today's update:"
So, this is a do-or-die moment for bulls and bears. If bulls could turn it back up over this week's high, then they could have a bull nest underway and launch a strong rally. If bears can keep pushing lower and break 4953, then they will be getting into the ballpark of a possible impulsive decline, which could signal a larger trend change. The upcoming sessions could thus be important for setting the intermediate tone of the market. Trade safe."
Glen
Pretzel Update: literally unchanged from Friday...........
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174321823
5184 is still the technical level Bulls want to reach............
http://www.pretzelcharts.com/
"Last update expected SPX would continue higher on Friday/Monday into its upside target zones, and SPX came within literal pennies of the first of those targets (5115-40).
Accordingly, there's nothing to add to Friday's update, or any of the last few updates, for that matter. The annotation is unchanged from 4/26:"
"In conclusion, today's one of those pleasant days where I don't have to scrutinize every squiggle, and there's no material change to anything we've discussed recently. Trade safe.
p.s.-- I've used today's title at least once previously, maybe twice. And I reserve the right to use it again in the future, goldurnit!"
Stock Market Commentary 04/26/24
By Lawrence G. McMillan
"Stocks fell sharply after the beginning of the month of April and reached an oversold condition about a week ago. Since then, a strong oversold rally has unfolded, generating some buy signals along the way. From strictly an $SPX chart point of view, things are still bearish. Most oversold rallies die out after reaching the declining 20-day moving average, and this one just reached that target this morning (Friday, April 26th). Sometimes there is an overshoot, but there is resistance just above there, at 5180, and then of course at the all-time highs, near 5260.
There is support at 4950, the lows of last week, whence this rally began. Below there is the very important support level of 4800. 4800 was the high of the previous bull market that ended in January 2022, and then 4800 was also a resistance area at the end of last year. But once it was broken through on the upside, 4800 became a support level, and still is.
Equity-only put-call ratios remain on sell signals for stocks, though. They have continued to move higher at a rapid pace, even while the oversold rally was taking place in the stock market. These sell signals will remain in effect until the ratios roll over and begin to trend downward.
Breadth has been all over the place. The NYSE breadth oscillator confirmed a buy signal on April 23rd. The "stocks only" breadth oscillator has not really registered a two-day confirmation buy signal, but if today's (April 26) rally holds throughout the day, then the "stocks only" oscillator will fall in line with a buy signal as well.
$VIX has bounced around with these recent stock market movements, and two opposing signals have been confirmed as a result. First, $VIX generated a trend of $VIX sell signal on April 17th, but then followed with a "spike peak" buy signal on April 22nd.
In summary, we are maintaining a "core" bearish position because of the negativity of the $SPX chart and because of the sell signals from the equity-only put-call ratios. However, we have traded the other confirmed signals around that and will continue to do so."
https://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1714327886022
https://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1714327886022
https://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1714327886022
https://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1714327886022
Here's What You Need To Know About Last Week's Rebound
APRIL 28, 2024 AT 12:49 PM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
https://stockcharts.com/articles/tradingplaces/2024/04/heres-what-you-need-to-know-ab-767.html
"The Volatility Index ($VIX) is one of my key sentiment indicators and it has a history of accurately predicting corrections and bear markets. We've had neither without the VIX first clearing an important hurdle in the 17-20 range. Bear markets require a huge dose of fear and panic and the VIX acts as our stock market meteorologist - one that predicts major market storms as they're approaching. Throughout this entire secular bull market, the S&P 500's poor periods of performance have been marked by VIX readings above 20. Rather than repeat these results in this article, you can check out a Trading Places article that I wrote in November 2023, "What Are The Chances Of A Market Crash? This Indicator Says ZERO!"
On recent Trading Places Live YouTube shows and in my regular emails to our EB.com members, I've consistently discussed the significant increase in risk that accompanies a VIX close above 20. I do not take it lightly and neither should you. But check out what happened over the past few weeks as the VIX spiked and neared 20:"
https://d.stockcharts.com/img/articles/2024/04/28/92338402-f78b-40fd-8e8d-18950fa7041d.jpg
"We had a straight-up move off the October 2023 low and the above chart simply reeks of slowing bullish momentum throughout the second half of Q1. I expected March weakness, but it was delayed into April. That final move lower in October was characterized by the big VIX increase - ultimately with closes on the VIX above 20. Once that VIX returned below 17, the selling and correction was over and the bull market resumed. Hence, the reason for my November article linked above.
When I evaluate a bounce like the one we had last week, I like to see if there's a resumption of the "risk on" market environment. Here are a few ratios that I like to follow and how they responded during the bounce:"
https://d.stockcharts.com/img/articles/2024/04/28/c1daf9c7-4d07-4dec-9f05-b4ffae116516.jpg
"These 3 ratios all bounced higher with the S&P 500, but all remain in downtrends that began before the S&P 500 selling did. That tells me that "risk off" still remains in play to some degree and we'll need further confirmation that a short-term bottom is in play. IF we do turn lower again, watch the VIX. If we see fresh new lows on the S&P 500 and the fear dissipates (ie, VIX remains below 20), I'd view that as a positive signal.
Over the past two weeks, I've shared my best upcoming earnings reports in the finance and industrials sectors. They both (AXP and GE) saw very strong reactions to their quarterly results. Tomorrow morning, I'll share my top technology pick with our FREE EB Digest newsletter subscribers. If you haven't already subscribed and you'd like to see the technology company that I believe will report blowout quarterly results ahead, simply CLICK HERE and enter your name and email address. There's no credit card required and you may unsubscribe at any time."
Have a great week ahead and happy trading!
Tom
Glen
Pretzel Update: Bulls are in control......... They are looking for 5184 and more..........
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174309473
"Bigger picture, bulls probably continue to have the advantage unless bears can reverse this and form at least one more new low..........."
http://www.pretzelcharts.com/
"We really only need one chart today, and it's this one:"
"Last update concluded:
In conclusion, bulls have so far turned the market back up where it was expected and where they needed to. Bigger picture, bulls probably continue to have the advantage unless bears can reverse this and form at least one more new low, to give the decline a more impulsive appearance.
And there's really nothing else to add since then, other than to note that we'll probably enter the ABC inflection zone either today or tomorrow. Again, though, as I also wrote last update, "bears should be ready in the event the market elects to disappoint them." Trade safe. "
Glen
Note: Losing those close to us is one of the most difficult things to deal with, positive thoughts go out to you Glen....
Pretzel Update: Bulls do seem to be back in control......
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174295178
"..........right now, all we have in actuality is three waves down, so there's nothing "deterministic" about this pattern and bears should be ready in the event the market elects to disappoint them."
http://www.pretzelcharts.com/
"The last couple updates suggested that a larger bounce could occur any time in SPX, and here we are. The chart below further elucidates the landscape for both bulls and bears:"
"Now, we can't rule out bears making a stand sometime soon and turning things lower in order to create an impulsive decline. But right now, all we have in actuality is three waves down, so there's nothing "deterministic" about this pattern and bears should be ready in the event the market elects to disappoint them.
COMPQ is in a similar position, but (more clearly than SPX) seems like it probably "needs" another wave up to new highs, either immediately or a bit down the road."
"On another, unrelated, note, a few days ago, a friend sent me a link to an interview with the CEO of Redfin, regarding the current real estate market; quoted in part below:
Usually when sales decline, prices drop too, and then sales increase later—that’s the cycle, he said. Homes become affordable again, and sales pick up because of it. This situation is very different. Interest rates are up, and sales volume has fallen through the floor, as he put it, but home prices haven’t followed. “Some of that is just this artifact of 30-year mortgages,” he said. Everything the Federal Reserve is doing has no real effect on homeowners, apart from keeping them where they are. “It actually has the perverse effect of keeping home prices high,” Kelman explained.
Just over two years ago (on April 18, 2022), I went completely against the "everyone knows rising rates will crash housing! Common knowledge!" and instead predicted the following:
Rising rates do, of course, have an impact on future affordability -- but they have no impact on families already in a home (presuming these families have a fixed-rate mortgage, which, as we already covered, the vast majority do). If anything, rising rates might tend to inspire people to hang on to their homes longer instead of putting them up for sale, which would have a tightening effect on inventory. After all, if you're in a mortgage at ~3%, what possible incentive do you have to ever exit that loan with inflation running above or near 8%?
As I mentioned earlier, inflation should provide a tailwind for housing -- in more ways than one. If my reasoning above is in the right ballpark, then rising rates may, perhaps counterintuitively, provide impetus for inventory to ultimately balance. Houses might spend more days on market due to fewer buyers, but if fewer homes are being brought to market in the first place because families are incentivized to stay put (or to turn their old 3% mortgage home into a long-term rental), those seemingly-opposed forces could tend to counteract each other.
While I took some flak for that prediction in the Spring of 2022, as it turns out, that's exactly what has come to pass in the years since.
In conclusion, bulls have so far turned the market back up where it was expected and where they needed to. Bigger picture, bulls probably continue to have the advantage unless bears can reverse this and form at least one more new low, to give the decline a more impulsive appearance. Trade safe."
Glen
Pretzel Update: Pretzel says he is neutral on direction here and suggests that one let the Market tell us what's next........
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174283033
"..I now have something approaching a neutral stance, at least from an analytical standpoint. A big bounce is indeed possible from here....."
http://www.pretzelcharts.com/
"Last update ended with (in part):
In conclusion, SPX captured Target 2, good for around 200 points of profit for readers. It would look a little better if it were to head at least a bit deeper into the 4970-5005 zone, but that's not required and if that's ALL OF 3/C down, a big bounce is possible any time.
SPX did indeed head a bit deeper into the target zone, and even exceeded it slightly. That's about as far as I can get us for the moment and I now have something approaching a neutral stance, at least from an analytical standpoint. A big bounce is indeed possible from here, though I have no strong opinion yet on whether it will materialize directly or if further lows are pending. I can't see around every corner, and sometimes it's best not to attempt to."
"COMPQ discusses one "bullish" option -- and because we don't yet have a larger impulsive turn, bullish options remain very much alive and well for now:"
"Finally, BKX bounced almost immediately after I posted the red "1?" label:"
"In conclusion, unless/until we see a larger impulsive turn, it's worth remembering that SPX and COMPQ are still very much in the running for new highs, and there are now enough waves down for that to happen from this general area. If they do, instead, go on to form larger impulsive turns, then bears will have more leverage than they do now. Trade safe."
Glen
Pretzel Update: I went to bed seeing the Futures all the way down to 4927 last night, but looking now its as if it never happened.... I have a feeling we will need to visit those levels before we finish this correction.........
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174268520
"....It's unusual for a simple ABC correction (i.e.- a three wave move) to show the type of strength we've seen in this decline -- it's far more common to see this during the third wave of an impulse. That said, it's not entirely unheard of, just much less common. So, given that, the odds probably favor this becoming a larger impulse in the end."
http://www.pretzelcharts.com/
"In the prior update, I wrote that I expected SPX to capture Target 2 (4970-5005, from 4/12) and yesterday, it dropped down to 5001, capturing that target. The immediate question now is whether wave v is close to being complete -- or if it will extend.
After that, the next question is as discussed last update:
As we can see on the chart above, to complete C/3 down, bears would need another new low, which I'm currently inclined to suspect they'll get after a bounce. That would complete red v, which would complete THREE waves down [4/19 Note: We are here now, at three waves down.], so from there, a rally to new ATHs would not be off the table. For bears to demonstrate more control, they would then need a bounce in a larger 4th wave, followed by another new low, at which point, we could conceivably label the entire wave off the ATH as an impulse."
"Now, something worth mentioning: It's unusual for a simple ABC correction (i.e.- a three wave move) to show the type of strength we've seen in this decline -- it's far more common to see this during the third wave of an impulse. That said, it's not entirely unheard of, just much less common. So, given that, the odds probably favor this becoming a larger impulse in the end. Keep in mind, though, that odds are just that: Odds. They're not guarantees any more than you're "guaranteed" to win when you start with pocket aces in Texas Hold 'em. Just like in poker, no matter how good your odds, you're still going to lose sometimes, irrespective of how strong your starting hand seemed before the flop.
BKX, though, does seem to continue to suggest that a major turn from the recent all-time-highs is quite possible:"
"In conclusion, SPX captured Target 2, good for around 200 points of profit for readers. It would look a little better if it were to head at least a bit deeper into the 4970-5005 zone, but that's not required and if that's ALL OF 3/C down, a big bounce is possible any time. If SPX does head a bit lower, then we'll have to watch and see if the fifth wave wants to extend or not, and I currently have no opinion on whether that will occur (it's essentially unpredictable), so don't go in "expecting" an extension, nor "expecting" the opposite -- stay nimble out there. And trade safe."
Glen if your not a Guru, I'm definitely not a Guru....... Actually I hope no one construes me as one, I think of myself as a keen observer mostly........
Glen
Pretzel Update: SPX target hit of 5070 hit with the low yesterday......... but is that the full correction?
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174253021
".... we have an apparent impulse down in BKX, but not yet in SPX."
http://www.pretzelcharts.com/
"Since last update, SPX captured its downside target of 5070-90 from April 12:"
"As we can see on the chart above, to complete C/3 down, bears would need another new low, which I'm currently inclined to suspect they'll get after a bounce. That would complete red v, which would complete THREE waves down, so from there, a rally to new ATHs would not be off the table. For bears to demonstrate more control, they would then need a bounce in a larger 4th wave, followed by another new low, at which point, we could conceivably label the entire wave off the ATH as an impulse. The alternate bull count is that a WXY is complete/completing. So, for now, bulls still have options in SPX.
BKX formed another low, which makes the decline appear reasonably impulsive -- although, to be completely objective, it would look a bit better at the micro level with one more low, so I can't be 100% on the "1" label just yet, though I'm leaning that way."
In conclusion, we have an apparent impulse down in BKX, but not yet in SPX. One possible conclusion is that we're closing in on a trend change (BKX could bounce in wave 2 while SPX made another ATH, then the rug gets pulled). That said, if SPX were to go on to form an impulsive decline (conditions for such outlined below the SPX chart) immediately, then, in that event, we would presume the trend had already changed at intermediate, and possibly long-term, degree. Trade safe.
Glen
Pretzel Update: My bad, I saw the futures as the market was opening today and I thought the Correction had to be over, Friday's selling had to be just about the Middle East conflict ahead of the Weekend and I was sure Pretzel was right that the Market was ready to go up to New High's........... Ooooops the Market had other ideas.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174242084
".....we can no longer be 100% certain that it's still bears' ball.....................[but] we'll let the charts lead where they may."
http://www.pretzelcharts.com/
"Last update noted it was bears' ball "for now," and I think we can call that a hit, but today we're going to examine both sides of the trade.
To do that, let's start with BKX:"
"NYA is in a similar position:"
"SPX has kept alive "Option a" from a couple updates ago:"
"Finally, the TLT update I promised on Friday (on the Forum):"
"In conclusion, because of BKX and NYA, we can no longer be 100% certain that it's still bears' ball (I anticipated this potential, which is why I included "for now" in the statement last update). That said, it feels like bears may have more in the tank (perhaps after a bigger bounce), but this market hasn't been kind to "feelings" for a while, so take that with a grain of salt and we'll let the charts lead where they may. Trade safe."
Stock Market Commentary 04/12/24
By Lawrence G. McMillan
"Selling has picked up this week, but mostly on the one big down day on which the CPI report came out. CPI itself wasn't up much (0.1%), but the implications are that rate cuts may not be coming soon (or at all), and that caused some knee-jerk selling. This has caused $SPX to retreat into the previous 5050- 5180 trading area, which is general support. There is resistance at 5260 near the all-time highs set just a couple of weeks ago. At this point, this is just a mild pullback, and it could prove to be healthy if $SPX can subsequently rally to new all-time highs. However, a close below 5050 is going to cause problems, because that is a technical level and thus technically-based selling would come in if that were to happen.
Equity-only put-call ratios, which have been toying with sell signals for weeks, have finally accelerated to the upside. Thus, confirmed sell signals are in place and will continue to be until these ratios eventually roll over and begin to trend downward.
Breadth has continued to be mired in a slump. Yes, there were a few days of positive breadth recently, but the breadth oscillators generated sell signals on April 2nd after some heavy selling that day, and they have remained on sell signals since then. Breadth conditions can change quickly, but so far these sell signals have remained in place.
$VIX has been rising slowly, as the market has faltered in the last couple of weeks, but it hasn't generated any sell signals yet. It is not in "spiking" mode yet, nor has it generated a "trend of $VIX" sell signal.
So, because $SPX has not fallen below critical support at 5050, we are maintaining our "core" bullish position, albeit with out-of-the-money calls. We will trade other confirmed signals around that."
https://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1713115733338
https://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1713115733338
https://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1713115733338
https://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1713115733338
Are The Financials Sending Us A Major Warning Signal?
APRIL 14, 2024 AT 11:42 AM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
https://stockcharts.com/articles/tradingplaces/2024/04/are-the-financials-sending-us-282.html
"I've said for awhile that we could use some short-term selling to unwind overbought conditions and even negative divergences in some cases. I was looking for perhaps 4-5%, but it's really difficult to predict the kind and depth of selling that we'll see when secular bull markets face a downturn. Personally, I'd be shocked if this recent weakness morphs into a bear market. I'm not saying that it's not possible, but my key signals suggest it's very, very unlikely.
We've seen some downside moves in the past of just 1-2% and others, like the correction last summer, that stretched to 10%. I believe earnings will be strong, but the huge move off the October 2023 low may have built in that positive news. You've probably heard that old Wall Street adage, "buy on rumor, sell on news", right? Well, that's exactly what we saw Friday, with respect to the major financials that reported quarterly results Friday morning. The earnings numbers looked pretty good on Zacks:"
https://d.stockcharts.com/img/articles/2024/04/14/efda519f-e152-4289-b7a9-cc18ec03bcd3.jpg
"Reported EPS was significantly higher than estimates in every case. Citigroup (C), in particular, crushed estimates, blowing them away by nearly 40%. There were revenue beats by all 6 companies as well:"
https://d.stockcharts.com/img/articles/2024/04/14/dac6653e-1eaa-4a27-893a-768f9720634f.jpg
Again, it was C that posted the best revenue beat - nearly 4% higher than expectations. From these tremendous numbers, it's easy to NOW see why financials had performed so well.
"But one thing that confuses many retail traders is that strong results do not always translate into higher stock prices. Check out the quarterly earnings price reactions on these 6 stocks:"
https://d.stockcharts.com/img/articles/2024/04/14/a5250411-1802-43f3-b308-e7e7320571ca.jpg
Is this type of market reaction justified after seeing those quarterly results? I don't think so, but the stock market doesn't care what I think. Market makers have a job to do - build positions for their institutional clients at our expense. The short-term is NOT efficient. Prices don't do what you think they'll do. Then you get confused, believing financial stocks are dead. After they drop for awhile, you panic and sell and, after market makers get all the shares they need, financials regain their strength. This is what the stock market does. The short-term inefficiencies wear on traders, causing them to give up, and that creates supply for market makers to build their inventory. Then rinse and repeat. As the late great Yogi Berra would say, "it's deja vu all over again!"
"I discussed why we can't trust this selling in my latest EB Weekly Market Recap VIDEO, "Hot CPI Stokes Inflation Fears". The secular bull market remains perfectly intact. Check it out and leave me a comment. Also, please "LIKE" the video and "SUBSCRIBE" to our YouTube channel, if you haven't already. It'll help us build our YouTube community and I would certainly appreciate it.
On Monday, April 15th, I'll be providing another financial stock that is poised to report excellent quarterly results. This company has been a huge leader among its peers, suggesting a blowout report ahead. If financials reverse their current weakness, I would not be surprised to see a very POSITIVE market reaction to this company's report. To receive this company and check out its chart, simply CLICK HERE to subscribe to our FREE EB Digest newsletter. There is no credit card required to join the EB Digest, just your name and email address!"
Happy trading!
Tom
Glen
Pretzel Update: Pretzel believes the Ball is in the Bear court and if they take the ball and run with it, the first target is 5070-5090........
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174224768
"...Wednesday's break of 5146 is technically significant and implies we may be looking at a developing bear nest, which will lead to a stronger sell-off."
http://www.pretzelcharts.com/
"Last update discussed two options for SPX, and it appears that SPX choose the first of those two options:"
"As discussed on Wednesday, both of those options were ultimately bearish in the event of a break of 5146 -- which means that the "bounce" option was corrective. Which in turn means that it (the bounce) doesn't need to reach the 5230 threshold -- since corrective waves are not bound by rules, targets can be simply described as "most commonly, here's what happens," but being against the larger trend, corrections can (and often do) fall short.
So, presuming bears hold 5257, we may be witnessing a change of trend that's going to last for more than a minute. The bull option is that this will go on to form a larger fourth wave (still likely to be of decent size and duration), and then go on to a last hurrah. Perhaps this is best illustrated by INDU -- though please keep in mind that the fourth wave as drawn on that chart is highly speculative and has been on there since January, so its potential targets will need to be updated as things develop."
"The most bearish option is that the last hurrah is already over, as best illustrated by BKX:"
"In conclusion, Wednesday's break of 5146 is technically significant and implies we may be looking at a developing bear nest, which will lead to a stronger sell-off. There are still other, undiscussed, bull options, but the first thing bulls would need to do to give those more consideration would be to break above 5257. Assuming that doesn't happen, then the "Occam's Razor" interpretation is that bears may have the ball for a bit."
Glen
Pretzel Update: If bears can sustain trade below 5146............ they have something going.
I think the Market seeing CPI numbers this morning, may be coming to its senses....... maybe?
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174210177
"....if bears can sustain a breakdown at 5146, while it doesn't guarantee (anything, ever) it does at least put bulls on significant notice."
http://www.pretzelcharts.com/
"The market didn't go anywhere since last update, but I have outlined a couple of the "bad news" (for bulls) options on the near-term SPX chart:"
"Of course, those are not the only two options in the even of a breakdown at 5146, but just the two "most obvious" -- the market is sometimes more probabilistic than deterministic.
Bigger picture, as the internet is fond of saying: "I'll just leave this here.""
"Not much to add beyond that -- just that if bears can sustain a breakdown at 5146, while it doesn't guarantee (anything, ever) it does at least put bulls on significant notice. Trade safe.:
Glen
Pretzel Update: From Pretzel's point of view, the correction could be complete............ although the pre-Market doesn't seem all that enthused about going up.....
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174195996
" So the question now is whether that's it for the correction, since there are enough waves down for a completed correction."
http://www.pretzelcharts.com/
"Two interesting charts today, first up is the SPX near-term chart:"
"As we can see, there are three pretty clear waves down from the recent all-time high, and it's interesting how perfectly that drop tested the upper boundary of the red triangle (which, if nothing else, goes even further to confirm that pattern as the right read). So the question now is whether that's it for the correction, since there are enough waves down for a completed correction.
Next, is the bigger picture SPX chart, which captured its February upside target:"
"So, if we put these two charts together, we can see that there are enough waves for a completed correction (the bear option might be a bear nest or similar) -- however, in the event bulls do manage a new all-time-high, they do have blue overhead resistance with which to contend. Trade safe."
Stock Market Commentary 04/05/24
By Lawrence G. McMillan
"Things were rolling along pretty smoothly, with $SPX having made new all-time closing and intraday highs on March 28th. There was a little pullback at the beginning of this week, with a modest deterioration in some of the market internals, but it did not appear to be significant. In fact, by noon on Thursday April 4th, $SPX was well on its way to challenging those highs once again. Then, a Fed Governor (Neel Kashkari) made some hawkish statements and selling swamped the market.
$SPX has now fallen back below the first support level at 5180, but there is an entire support zone that extends down to 5050 which should provide the bulls some comfort. It is marked with a scatter pattern on the chart in Figure 1. If $SPX should fall below 5050, then I think some much heavier technical selling will enter the marketplace. But for now, $SPX has merely pulled back to its rising 20-day moving average, which is a normal correction in a bullish market. To me, the $SPX chart remains positive and so we are retaining our "core" bullish positions (perhaps with a slightly smaller delta than before).
Both the standard and weighted put-call ratios are now accelerating to the upside, and that confirms sell signals there.
Breadth hasn't been in the best of shape for quite some time at least breadth in terms of issues traded. Now the breadth oscillators have generated sell signals and confirmed it with a 3-day close.
$VIX is important to watch in an environment like this. So far, it is still mostly supporting a bullish case for stocks. Even though $VIX has risen slightly this week, it has not even gone into "spiking" mode.
A perhaps more serious bearish condition would exist if the trend of $VIX were to turn upward. That would require both $VIX and its 20-day Moving Average to cross above the 200-day Moving Average. As one can see from Figure 4, $VIX is already above the 200-day, but the 20-day is still about 0.70 below the 200-day, so any sell signal is not imminent.
In summary, we are maintaining our "core" bullish position, but we are going to add a bearish component based on the equity- only and breadth sell signals. As usual, we will continue to trade confirmed signals as they appear."
https://www.optionstrategist.com/sites/default/files/SPX.JPG?v=1712339147127
https://www.optionstrategist.com/sites/default/files/PC21.JPG?v=1712339147127
https://www.optionstrategist.com/sites/default/files/PC21_W.JPG?v=1712339147127
https://www.optionstrategist.com/sites/default/files/VIX.JPG?v=1712339147127
Glen
Pretzel Update: He says, Bears don't have much going yet.............. so lets see how today plays out, yesterday started green as well..........
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174182352
".......while bears don't have a lot to sink their teeth into yet, since there's not been an impulsive turn, there are ongoing hints that we're not in "a new paradigm" and stocks have not "reached a permanently high plateau."
http://www.pretzelcharts.com/
"The market took a dive yesterday, after shocking comments by Minneapolis Fed Bank President Neel Kashkari, in which he finally publicly apologized for the fact that his parents apparently had no idea how to spell "Neil." He also mentioned that while he originally had two rate cuts "penciled in" for 2024, he just realized that he actually has a doctor's appointment on that exact same day, so he might be forced to reschedule those rate cuts for 2025. Or beyond, if bulls won't stop leaving annoying messages on his voicemail.
Of course, the market has been banking on a return to "nOrMaLCy!!!!" which, to the market, apparently means ridiculously low interest rates and the printing presses spewing endless free money. The market, of course, ignores the fact that the environment of the prior ~15 years was anything but "normal" and that rates were instead insanely low for insanely long, and QE Infinity is unsustainable.
As I wrote a while ago, though, this market has been suffering from an extreme case of "irrational exuberance," so Kashkari's comments serve as yet another potential wake-up call. Thing is, wake-up calls have been ringing out all over for a while, but the market hasn't cared -- so we'll see if the "irrational exuberance" psychology finally starts to shift a bit, or if the market goes back to fueling itself primarily on the sweet sweat of its own drunken euphoria.
My guess is that when the market finally wakes up for real, it's going to get ugly beyond belief.
But we may not be quite there yet, and another high, even if we correct further in the near-term, is not out of the question. Let's look at two long-term charts for clues, starting with BKX:"
"BKX is probably the most potentially bearish chart going right now in the big picture, though here again, another high is not out of the question as (C)/(3) could still be unfolding. Without even labeling it, we can see that the decline from the most recent high is only three waves down so far. If it becomes impulsive, then bears might be coming out of hibernation.
INDU is interesting as well, though here again, it's unclear if (iii) -- if that's what this is -- is complete."
"In conclusion, while bears don't have a lot to sink their teeth into yet, since there's not been an impulsive turn, there are ongoing hints that we're not in "a new paradigm" and stocks have not "reached a permanently high plateau." We'll keep watching to see if there's already a turn underway, or if bulls can manage another high before the cliff starts to crumble. Trade safe."
Glen
It looks like you finally got the Markets attention, you must have given who ever reached quite a Talking to.........
Pretzel should have more to say in the morning, I think we have an Impulse down but I'm only guessing at the moment, it could be a C-Wave which would complete a correction...... regardless it looks like some folks are taking profits and asking questions later.........
Glen
Pretzel Update: He says, we have a confirmed Triangle.....
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174165284
"..... what we have for certain is a confirmed triangle, and triangles are typically the penultimate wave of the larger wave in which they reside (i.e.- the fourth wave of that larger wave)."
http://www.pretzelcharts.com/
"Yesterday, SPX confirmed the near-term triangle count (as well as any hypothesis is confirmed by the materialization of a predicted outcome, anyway) by revisiting the upper edge of the triangle zone:"
"So, without getting too far ahead of the market, what we have for certain is a confirmed triangle, and triangles are typically the penultimate wave of the larger wave in which they reside (i.e.- the fourth wave of that larger wave). This in turn suggests that a larger wave completed at the most recent all time high -- however, since we don't have an impulsive decline yet, we (in actuality) don't how much correction the market wants. The most bullish case is that the correction is already over/almost over, while the most bearish case is limited only by our imaginations. Problem is, it's too early to qualify as much more than highly speculative, so we should probably just wait to see whether the market forms a larger impulse or not before speculating too much. That said, IF it goes on to form a larger impulse, then there's potential for a decent correction; if it doesn't, then business as usual will continue. Trade safe."
Glen
Pretzel Update: "So, as I've also written before, bears probably want to await an impulsive decline before getting too far ahead of the market. Bull markets can be somewhat boring, since the basic rule is just "follow the trend," but we'll continue to keep our eyes peeled for any interesting developments, nonetheless."
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174150137
" So, as I've also written before, bears probably want to await an impulsive decline before getting too far ahead of the market. Bull markets can be somewhat boring, since the basic rule is just "follow the trend," but we'll continue to keep our eyes peeled for any interesting developments, nonetheless."
http://www.pretzelcharts.com/
"Last update discussed that bears had work to do if they wanted to get anything going -- specifically, that they would first need to break below the blue trend line on the near-term SPX chart:"
"Typical of bears, though, they decided to knock off early for Easter weekend and thus failed to accomplish anything at all, allowing bulls to score another easy first down. It's worth noting that the blue trend line will not be as important heading into today's session.
Bigger picture, the blue bull count and the (still ultimately bullish) diagonal remain the leaders, for now, with the black bear option probably placing as a distant third:"
"Assuming my assessment of those odds is correct, we can see on the chart that bears might have to wait quite a while before getting much beyond some near-term moves, as I've discussed before. So, as I've also written before, bears probably want to await an impulsive decline before getting too far ahead of the market. Bull markets can be somewhat boring, since the basic rule is just "follow the trend," but we'll continue to keep our eyes peeled for any interesting developments, nonetheless. Trade safe."
Q1 Ends With A Small Cap Attack! One Small Cap Sector is EXPLODING Higher!
March 30,2024 @ 7:36 PM
Tom Bowley
Chief Market Strategist, EarningsBeats.com
https://stockcharts.com/articles/tradingplaces/2024/03/q1-ends-with-a-small-cap-attac-658.html
"Let's start off by reviewing a quarterly chart of the S&P 500 ($SPX), NASDAQ 100 ($NDX), and Russell 2000 (IWM) since this secular bull market began in early-April 2013 (44 quarters ago):"
S&P 500:
https://d.stockcharts.com/img/articles/2024/03/30/3eed4713-af58-4fca-9958-7a6b1623d74d.jpg
NASDAQ 100:
https://d.stockcharts.com/img/articles/2024/03/30/50de3ca8-7231-4f7d-846b-fde1acdfb484.jpg
Russell 2000:
https://d.stockcharts.com/img/articles/2024/03/30/874707b2-553c-4fee-92e6-fd120614adcb.jpg
"When you look at these 3 charts, an obvious first conclusion can be made. If we're in a bull market, we want to be invested in the NASDAQ 100 stocks, which have dominated both the S&P 500 and Russell 2000. The 44-quarter rate of change (ROC) provides us roughly the gains made on each of these indices since the secular bull market began in 2013, 11 years ago.
Before we write off the small cap stocks, however, we need to use some perspective and understand that this asset class moves into and out of favor. Because it's underperformed the NASDAQ 100 badly these last 11 years, it makes sense to stick with NASDAQ 100 stocks until small caps tell us otherwise. They could be telling us otherwise right now. Check out this 11-year weekly absolute price chart of the IWM and note when it has outperformed the NASDAQ 100 in the past:"
https://d.stockcharts.com/img/articles/2024/03/30/74d08eaf-fa48-45b6-b487-5a49e9f1b47e.jpg
"When we see key breakouts in the IWM, the group generally shows relative strength vs. the NASDAQ 100 - at least for several months up to a year. That relative strength sometimes will turn higher at bottoms just before key breakouts. The current pattern seems to be looking very similar to prior periods when the IWM went on a relative tear to the upside. While the IWM has yet to show a ton of relative strength, I created a User-Defined Index (UDI) that tracks the relative INTRADAY performance of the IWM vs. the QQQ (ETF that tracks the NASDAQ 100) and it's currently near its highest level since this huge advance began in October 2023. In other words, current rotation is favoring the small cap IWM, which supports my theory that we'll see outperformance by the IWM over the next few months to a year. Check out this chart:"
https://d.stockcharts.com/img/articles/2024/03/30/a80a3528-22cf-456f-8246-c74fc7a4f6eb.jpg
"The IWM has performed well since 2013, but we all have investment decisions to make and we want the BEST performers, or at least I hope that's what everyone else wants. If I'm invested in something that's going up, but underperforming, I feel like I'm leaving money on the table. So if I'm going to overweight an area of the market, I need to see signals that suggest it's a wise move. Right now, the IWM is showing those signals. If and when those signals reverse, then moving back to an overweight position in the NASDAQ 100 makes a ton of sense.
So now that we're finally seeing some relative strength from the beaten-down small cap group, let's review where that small cap relative strength is coming from using an RRG and the Invesco small cap sector ETFs:"
https://d.stockcharts.com/img/articles/2024/03/30/1ab6de02-684a-4535-8fd4-2cd306b5cb56.jpg
"Small cap energy (PSCE) and small cap industrials (PSCI) are the best two small cap sectors right now as they're the only two in the upper right leading quadrant, when compared to the S&P 500. Let's look at both these charts:"
Energy (PSCE):
https://d.stockcharts.com/img/articles/2024/03/30/9764bfb0-828b-4d4c-bbaa-9eba9c9a7324.jpg
"It's hard not to like small cap energy right now, especially inside this bullish ascending triangle continuation pattern. Ultimately, on a breakout, this would measure to 76-77."
Industrials (PSCI):
https://d.stockcharts.com/img/articles/2024/03/30/98d5a3cf-4cad-49f8-add8-12eca4a3910a.jpg
"The PSCI has already broken out and looks extremely bullish, especially if small caps, as a whole, continue strengthening.
In my Saturday, March 30th Weekly Market Recap, I discuss many stocks in this space, with several just beginning what appears to be a very strong uptrend. To tune in and watch this Weekly Market Recap video, simply CLICK HERE. If you like the video, please help us out by hitting that "Like" button and subscribing to our channel so that you don't miss future videos. Thanks!"
Happy trading!
Tom