Bear Cave 2 (Bull Allowed)

[robo]

I remain flat....


A small comment from Kaplan about the VIX:

VIX keeps repeatedly sliding down to 19 or lower.


Without exception, every single trading day since March 30, 2023 has seen VIX fall to 19.00 or below, touching 18.35 on April 6. During the 2007-2009 bear market mentioned just above, VIX slid to 18.64 in August 2008, after which the S&P 500 lost about 43% of its value before Thanksgiving. I expect a very similar percentage pullback during the next several months as QQQ probably bottoms below 190.
https://truecontrarian-sjk.blogspot.com/

 

[robo]

We shall see how it all plays out as we enter May......

Say hello to put hate
Who needs puts when the market never sells off...Put call ratio moving sharply lower. The crowd loves loading up on puts when the market makes a local low...and vice versa.
https://themarketear.com/newsfeed/cEaYpXnuy9

 

[robo]

Shorts
MS Securities Lending estimates investors added shorts street wide on the order of $27-30bn at the single-name level and $6-9bn at the index level. Single-name shorts as a % of market cap now sits above average at 1.4% (75th %ile vs the last 3Y) vs ETF shorts that remain around median levels at 1.5% (59th %ile vs the last 3Y), per Markit. Across Russell 3000 single-names, Cyclical sectors made up the majority of the short additions. Financials shorts, in particular, stood out in March totaling over $10bn – Financials short interest as a % of market cap is now the highest amongst the sectors at 2.2% (96th %ile vs the last 3Y, per Markit). Shorts across Growth and Defensive single-names mostly netted out to flat on the month.

 

[robo]

Bears beware
This normally only ends in one way........

"Large speculators, mostly hedge funds, saw their net short positions in S&P 500 e-mini futures increase to roughly 321,000 contracts as of Tuesday, according to data from the Commodity Futures Trading Commission. That’s the most bearish reading since November 2011 following the downgrade of the US’s sovereign credit rating."

 

[robo]

Top heavy or mother of all catch-up rallies around the corner?
Twenty S&P 500 stocks account for 90% of Wall Street’s gains this year. The rest will now follow...?

 

[robo]

Mark Hulbert
Is April now the time to activate your sell-in-May-and-go-away stock-market strategy?
Last Updated: April 8, 2023 at 9:31 a.m. ET
First Published: April 6, 2023 at 7:18 a.m. ET

Followers of the “Sell In May and Go Away” market-timing strategy may want to consider selling stocks before the end of April.

The “Sell in May and Go Away” strategy, which also goes by the “Halloween Indicator,” calls for being in the stock market for the six months between Oct. 31 and May 1, and out of the market the other half of the year. Investors who mechanically follow this seasonal strategy therefore wait until the close of the last trading day of April to sell and to the close of the last trading day of October to buy.

Other followers believe that you can do better by sometimes jumping the gun. One prominent “jump the gun” proponent is Jeffrey Hirsch, editor of the Stock Traders Almanac. “Beginning on the first day of April, we prepare to exit these seasonal positions as soon as the market falters,” Hirsch writes in the latest edition of the Almanac.

Hirsch does the opposite in the fall: “Starting on the first trading day of October, we look to catch the market’s first hint of an up-trend.” (To determine if the time is right to jump the gun, Hirsch relies on a trend-following indicator known as MACD, which stands for moving average convergence divergence.)
https://www.marketwatch.com/story/y...ay-until-october-actually-starts-now-8398706d

 

[robo]

USD daily: A DCL will put some ST pressure on some indexes..... Watching gold and the gold miners....

 

[robo]

The Right Moment To Strike Your Next Trade
Imre Gams | Apr 10, 2023 | Market Minute
One of the most common reasons that traders fail has nothing to do with their ability to read the market or manage a position…

Wait for the Right Moment to Strike
The best traders I know are sitting on the sidelines, patiently waiting for their moment to strike.

They know exactly what they’re looking for… and when they see it, they pounce.

They don’t trade out of boredom, or on a hunch. Instead, they use a combination of fundamental analysis, technical analysis, and strong risk management to inform their decisions.

That’s why you’ll often hear that good trading is boring trading.

Knowing when not to trade is just as (if not more) important than knowing when to trade. Remember, a trader’s primary responsibility is to preserve their capital.

If you’re looking for thrills, go to the casino. It’ll be a lot more fun than sitting in front of your trading screen and likely just as fruitful, too.

The next time you find yourself itching to get into a trade, take a step back and ask yourself if this is a trade you’ve spent time planning and waiting for.

If it’s a trade you want to take because you feel like you need some action… or because the market suddenly started to move and you don’t want to miss out…


Then you should probably fold your hand and wait for the next set of cards.

Happy trading,

Imre Gams
Analyst, Market Minute
https://www.jeffclarktrader.com/market-minute/the-right-moment-to-strike-your-next-trade/

 

[robo]

SPX weekly: The SPX weekly is looking good......Did we just see an ICL for the SPX? However, the VXF weekly isn't looking so good and it suppose to be leading...... We shall see how it all plays out....

Bottom Line: The SPX chart is telling me the ICL is in, but VXF isn't following the SPX just yet. It should be leading. We shall see if VXF plays catch up this week... VXF weekly remains below its 10,20,50 and 200 week MAs. Still NO CIGAR from our leader....

I currently have No position in SPX or VXF

 

[robo]

Plenty more downside...
BofA's great derivatives team points out: "8 of the last 10 recessions saw S&P 500 drawdowns of over 20%".
https://themarketear.com/posts/cfX8dIpFbv

What do you play at the start of a recession
Hartnett sums it up:

1. Long T-bills…cash outperforms until Fed cuts aggressively

2. Long yield curve steepeners…

3. Long gold…US dollar debasement

4. Short over-owned assets vulnerable to deleveraging/revenue cuts…IG/HY bonds, US tech, EU luxury, industrial/defense stocks, US private equity...(good luck shorting LVMH...)

4. And prepare shopping list…once labor market indicates recession begins, execute on buy list of distressed cyclicals in banks, REITs, small caps, commodities.

Caught in a channel
"One that most believe (and are positioned) to see break on the downside and yet never seemingly does. Tony P pointed out that the S&P spent Q1 in a 10% trading range – 3808 to 4180 – for the tightest band since Q3 2021. On top of the usual debates around rates/inflation and the consumer….we worry about US regional banks, systemic and contagion risks, geo-political shifts, volatility in rates and fx, corporate earnings and margins, commercial real estate and leverage beneath the surface…and increasingly worry also about recession. There was a time where bad news was good news in the sense that bad news meant more stimulus, more liquidity and more backstop. Now it feels like bad news may just be that…..bad news. For now however, we muddle through. Last week the latest round of a gradual and steady rally for no discernible reason." (Bobby Molavi, GS)

 

[robo]

Sell the last rate hike
BofA sticks with their logic and sees the current set up playing out like the one we saw in the 70s/80s. The crowd is too bullish rate cuts and not bearish enough on the recession. Latest JOLTS data vs Fed Funds needs little commenting.

 

[robo]

Fed rates and recessions:

 

[robo]

SPX monthly: However, when looking at the SPX LT investors should have waited until the SPX tagged or undercut the 200 month MA. That is still a long way down.... We shall see how it plays out. Watching for the Fed first rate hike to signal the recession is on its way....

Flat the SPX.

 

[robo]

VXF monthly: Based on the LT chart for VXF, buying VXF after undercutting the 50 month MA was a good move for LT investors. However, in 2009 it was a painful ride down to the final bottom. It went down another 50%ish before the final low marker was printed. We shall see how this time plays out....

Flat VXF.

The last two charts: VXF and the 2009 Bear Market..... Undercutting the 50 month MA......

 

[robo]

VXF monthly: VXF remains below the 10, 20, and 50 month MA...... Lots of investors still trying to pick a LT bottom, and the start of a NEW Bull Market. We sure ARE NOT in a Bull Market right now.

 

[robo]

VXF weekly: Remains below the 10, 20, 50, and 200 week MA. Not what you want to see from what is suppose to be the leader. Another buying op is coming for a multi-week run before the next move lower starts. This chart tells me this Bear is NOT over. I have lots of my funds in 17 week notes earning close to 5%.... Bought another one yesterday... I ladder them in around 5k each... 3 month to 17 week notes...

Plenty of cash still in VMFXX too earning close to 4.8%.... A good place to have most, but not all of your money if you are my age.

7 day SEC yield 4.77%



Dear robo

The following order executed on 04/05/2023 at 1:02 PM, Eastern time:

Account ending in:
Transaction type: Buy
Security: U S TREASURY BILL 0% 08/08/23 04/11/23
Product type: US Treasury Bill
Face value: $5,000.00
Price:* $98.43

 

[robo]

Lower for longer?
Yields are at massive levels. Charts showing the 10 and the 5 year, both trading at the lower part of the range that has been in place since Sep last year. A close slightly lower in yields and we could be looking at a powerful break down move. Note both charts are "well" below the 200 day moving average.
https://themarketear.com/

 

[robo]

Tech - the unstoppable relative king?
The QQQ vs IWM ratio is back to recent highs. Push it a bit higher and we will be trading at levels not seen since Sep 2020. Tech continues to be safe haven as well as risk on...

 

[robo]

A comment from Kaplan about the VIX:

VIX may be forming higher lows as it has been doing for several years.


Recent higher lows for VIX include 18.52, 18.54, and 18.58 on the past three consecutive trading days. Whenever VIX is forming additional higher lows at very depressed levels below 20 then that is a very bearish omen for U.S. equity indices. If the U.S. dollar joins VIX in making higher lows then this will make the negative implications for the U.S. stock market much stronger.


VIX could triple or quadruple before 2023 is over.

 

[robo]

VXF daily: A nice move up for a few days, but VXF is now back below the 200 day MA. Not what you want to see from the so called leader..... VXF remains above the 10 and 20 day MA so no sell signal yet if you are using the MAs to trade. We shall see how it plays out.

Flat VXF....