Bear Cave 2 (Bull Allowed)

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SPY daily: A nice bounce after moving down very close to tagging the 100 sma on the daily chart. Another new ATH be coming next week? I use the daily closing price for my signals and the SPY remains long. However, I currently have NO position in the SPY index. The futures look like many are placing bets for the next trading day after xmas which is usually up. We will see how it plays out, but last week was a nice start. The buy signal, if you use the monthly chart ( a move above the 10 month sma) was 20 months ago and a very nice run indeed.....
The 12/24/21 Weekend Report Preview

Stocks rallied to close above the 4715 resistance level on Thursday.

Closing above the 4715 resistance level was our signal to add to positions. Stops can now be raised to the rising 10 day MA. RSI 05 formed a quick bullish reversal on Monday. We are now watching to see if RSI 05 will embed in overbought to indicate a continuation of the intermediate cycle advance. A quick bearish reversal will be a signal that stocks are shifting into the declining phase of their intermediate cycle.

https://likesmoneycycletrading.wordpress.com/2021/12/24/the-12-24-21-weekend-report-preview/
 

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A very interesting read!


Chart In Focus

December 17, 2021
The Planet Has Something to Say About Inflation Being “Transitory”

People think that the Fed controls inflation, and they think that because they were taught to think that while getting expensive educations at institutions of higher learning. And besides, everyone says so, and so it must be true.

But what if I could model the movements of inflation rates using no financial or economic data at all as inputs? What would that do to your own personal confidence about the premise of the Fed controlling inflation?

This is the quandary I am going to confront you with in this week’s chart, and it is understandably going to make you feel uncomfortable. You are going to have to unlearn a whole bunch of the belief systems that you may have paid a lot of money and spent a lot of time developing.

The FOMC members think that they are powerful and can guide the economy and the inflation rate. They have expensive college degrees and hold high-paying positions of great importance, so their readings of the economic tea leaves must be very relevant. Everyone thinks so, and so it must be true. But planet Earth has something to say about the affairs of men, and the pricing of that which we hold dear.

Tom McClellan
Editor, The McClellan Market Report
https://www.mcoscillator.com/learni...hing_to_say_about_inflation_being_transitory/
 
GDX and GDXJ: Both remain on a hold long positions after a buy signal 6 days ago.
 

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Insiders: The reason that it matters is at some point, somebody is left holding the bag.
Today, you have record numbers of CEOs selling their stock.

A great indicator markets are bad is when, at peak prices, companies are buying shares to continue to prop up their stock.
And maybe the incentive structure of their CEOs is based on their share price.

The only thing that mattered was pump the stock.

And if you're along for the ride, that's great.

But when the CEO starts selling—now 10 billion in Musk’s case and billions of dollars in many other cases—the people left holding the bag are the people that were last in.

The tragic thing would be if those people are lower-income or lower-middle-income people that shouldn't be gambling or speculating, but they see all of their friends making money, their stock portfolios getting bigger, and they are lured deeper and deeper at the worst time.

--Maxwell Strachan, "The ‘To the Moon’ Crash Is Coming", Vice.com, December 16, 2021.

https://www.vice.com/en/article/7kbx9b/the-to-the-moon-crash-is-coming

Year-end melt-up
"Since 1980, there have been 10 instances where the S&P 500 was up 20% or more going into the last stretch of trading and in 9 of those years, it ended the final 6 days higher…" (Cem Karsan)
https://themarketear.com/
 
Small caps: We shall see..... Waiting to see if VXF can close above the 50 sma on the daily.

Size has mattered a lot
Striking divergence of performance between large vs. small cap growth stocks. Crescat: "The riskier parts of the market almost always lead the way".
https://themarketear.com/


True Contrarian
@TrueContrarian
·
Dec 23
People would rather avoid a loss than seek a gain, according to prospect theory. See this article, where I am quoted:

https://twitter.com/TrueContrarian?ref_src=twsrc^google|twcamp^serp|twgr^author

https://www.businessinsider.com/personal-finance/prospect-theory
 

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Update and correction on my VXF chart: I should have said the 200 sma on the daily chart be up next, and we shall see if it's resistance or the start of the next move up..... So far the move up looks good!
 

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VXF daily: The move up continues..... A nice close above the 200 sma on the daily! The 50 and the 100 sma be up next if VXF can stay above the 200 sma.....


SevenSentinels
@SevenSentinels

3h
FWIW: Thursday December 23 was the lightest volume full session for 2021. But that record didn't hold for long. Based on the current run rate, today will set a new record.
 

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Front running the January effect
Never forget, January is the monster inflow month. Front running the January effect at these levels in the short term looks slightly late, but don't be surprised if your shorts are killing you lately...
https://themarketear.com/
 

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SPY daily - Buying Panic? We shall see how it plays out as the trend remains up! The SPY tagged the upper BB as buyers push the SPY higher.....

SevenSentinels
@SevenSentinels

4h
8 PM, December 27, 2021

Buying Panic

https://twitter.com/SevenSentinels?ref_src=twsrc^google|twcamp^serp|twgr^author

Stocks Cross Above Resistance Line
After consolidating below resistance for 2 months, breaking out convincingly above the resistance level can lead to a a trending move. Stops can be moved to the new breakout level.
https://likesmoneycycletrading.wordpress.com/2021/12/27/stocks-cross-above-resistance-line/
 

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SPY daily: Day 6 since the low was made..... One should expect some slower action now..... For me, I just go to cash and don't stay long once the upper BB is tagged.

Flat after this run: Buying a small position of VXX for a ST trade.


SevenSentinels
@SevenSentinels
·
46m
3:30

DJIA Higher while NDX, IWM, SPX Falling
https://twitter.com/SevenSentinels?ref_src=twsrc^google|twcamp^serp|twgr^author
 

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Put hate is back
Here we are again, people hating puts at market highs. Hedge frustration continues where people load up on puts at local market lows and puke puts at local market highs. Let´s see if this time is different....

https://themarketear.com/


SPX - time to chill?
The Santa rally played out this year again. Note the SPX is trading in the upper part of the trend channel that has been in place since September. So far, this is the first doji candle in a long time (indicating indecision). Watching closely for possible reversal clues.

The great volatility divide is back
Yes, bond and equity people are once again starting to price "fear" in different ways. Watch this gap closely. Our most recent equity vol logic has played out well as VIX has come down sharply over past weeks (recall the latest from the VIX guy here). At current levels it is too late to sell volatility and we are soon leaning into the inverse, i.e playing long volatility, especially using long premium strategies for directional plays. More on this later this week.
 

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SPY daily: The move up continues and so do the risks!

VXF weekly: Still having trouble holding above the 50 sma on the weekly.
 

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SPY/VIX/VXX 2 hour chart: Headed into the last hour of trading and the trend remains up for the SPY!
 

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The VIX puke

VIX has halved since the intra day highs in early December. People have gone from chasing VIX in panic to almost selling VIX in panic lately. VIX isn't dirt cheap yet, but given the many macro narratives coming up, VIX has little downside from here according to us. We have started looking at long vol trade set ups, but ideally we would like to get that call from the VIX guy. Note the "gap" between VIX and VIX over past months.
https://themarketear.com/
 

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VIX getting ahead of itself?
All vols are down lately, but VXTLT remains elevated compared to VIX. Nothing new really, but watch the gap between the two closely.
https://themarketear.com/



LOL..... Let's Party! (Second Chart)

Haven´t seen this since 1999
Nothing new really, but households are the biggest owners as well as the biggest "punters" these days. Everything is great as long as the market continues marching higher. Let´s see how long term the current punters will prove to be should we ever reverse lower...
 

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