Bear Cave 2 (Bull Allowed)

[robo]

SPY daily: Well, we hit a 50% retracement on this bounce off the lows. Will it bring in more shorts or buyers or maybe just some sideways action. It depends on who you ask!

Bottom Line: The new daily cycle puts me back on a buy signal, but will it fail? We shall see how today plays out.

Long GDXJ, EQX and VXF

 

[robo]

Small traders are panicking to a record degree

Jason Goepfert

Published: 2022-02-01 at 07:20:44 CST

Small traders are showing record levels of panic

Last week saw some of the most volatile price action in 2 years, a barrage of nasty headlines, and a cutting in half of a near-majority of stocks on the Nasdaq.

It was enough to trigger panic among the most leveraged traders in the market.

Small options traders bought to open nearly 12 million put options last week, spending $6.5 billion for the privilege of protecting their portfolios. That's a remarkable jump in trades meant to hedge against further losses. It's 40% higher than even the worst week during the March 2020 meltdown.
https://www.sentimentrader.com/blog...l&utm_term=0_1c93760246-0b26b855e2-1271291994

 

[robo]

An Ongoing Problem for the Fed
Eric Shamilov | Feb 1, 2022 | Market Minute | 5 min read
Goldman Sachs recently came out with some very interesting market calls…

One of them is that the Fed will be forced into five rate increases this year. That may seem like a groundbreaking and enlightening projection, especially considering the Fed itself is only calling for three.

Essentially, they think the Fed will have to get much more aggressive than they’re letting on publicly.

But they’re not the only ones… the market is also actively betting against the Fed, and pricing in five hikes this year.

That’s important because we’re now in the middle of the relief rally we called for last week.

Relief rallies are dangerous because they tend to make people believe the worst is behind us… and forget the tectonic shift that is underway in the global economy.
A Projection That’s Too Close for Comfort
Bloomberg has a great index that extracts the estimated number of rate hikes from various interest rate derivatives.

The information packed into this one chart is very telling…
https://www.jeffclarktrader.com/market-minute/an-ongoing-problem-for-the-fed/

 

[robo]

SPY daily: Where is the BEEF! Are they selling the RIP? SPY having trouble moving above the 50% Fib level. Waiting to see how we close.....


SPY daily a closer look at the Fib Levels: Second SPY chart

 

[robo]

VXF daily: ( S Fund) So far so good......

Long VXF, GDXJ, EQX

VXF daily: A closer look.....

thomas
@VolumeDynamics

2h
Say, What happened here? This doesn't look like your garden variety "Every month starts with a gap up" to me. They puked in the first 30 min. Most indices are + or - single digits... is that all today? A disgusting unch day to start the month?
https://twitter.com/VolumeDynamics

 

[robo]

Bear market rallies can be furious

During the first phase of the dot.com correction, we saw three huge bear market rallies ranging between 18-30%, before the entire "thing" imploded later. If this is the top, it sure will frustrate most people and produce huge p/l pain, both ways.



Did FOMO finally get triggered by the dip?
First serious downtick in "cash on the sidelines" Money Market funds. Chart shows cumulative fund flows across assets. Caning down Wall Street..


https://themarketear.com/

 

[robo]

Go ahead and make my day: I would like to see lots of rate hikes.......


S&P500 price and EPS during the 2004-2006 hiking cycle


https://themarketear.com/



David Rosenberg
@EconguyRosie

9h
Strip out all the government handouts, and real personal income has all but stagnated since the pandemic started. With the handouts, incomes are up 3.3%. The U.S. economy's 'vitality' rests on the policy stimulus that is now in the rear-view mirror.

David Rosenberg
@EconguyRosie

9h
This claim from the Fed on how great the economy is doing compared to late 2015 is nutty -- what would things look like today absent an 11% deficit-to-GDP ratio (2.8% then) and a $9 trillion Fed balance sheet (2x the size back then)?

https://twitter.com/EconguyRosie?lang=en

 

[robo]

Daily Cycle Expectations

Stocks closed convincingly above the converging 10 day MA and 200 day MA on Monday. They delivered bullish follow through on Tuesday, further confirming that day 33 was the DCL.

Stocks should break above the declining trend line as they rally out of their daily cycle low. However, the drop into the day 33 DCL caused the 10 day MA to drop sharply. There is a good possibility that stocks will need to consolidate between the 200 day MA and the 50 day MA to allow the day 10 MA to turn higher. The daily cycle will not likely gain traction until the 10 day MA turns higher and stocks close above the 50 day MA.

 

[robo]

Has the Dollar Entered the Death Zone?
Imre Gams | Feb 2, 2022 | Market Minute | 3 min read
Mountain climbers refer to the “death zone” as any altitude above the point where there isn’t enough oxygen to sustain human life.

This level typically comes in around 26,000 feet. So, if a climber stays at that altitude too long…

Well, it’s not called the death zone for nothing…

Financial markets aren’t all that different.

Many markets have their own death zones – price levels where there’s been a historically high chance of a trend reversal.

And right now, the U.S. dollar is trading just inside its death zone.

And while this might be bad for dollar bulls, it’s likely going to be good for assets that move counter to the dollar, such as gold, silver, and other commodities.

https://www.jeffclarktrader.com/market-minute/has-the-dollar-entered-the-death-zone/
Another beneficiary of a weaker dollar would be foreign currencies that are reliant on commodity exports.

 

[robo]

The end of short-term selling for the world's most important index
Jason Goepfert
Jason Goepfert
Published: 2022-02-02 at 07:30:00 CST
Finally, a short-term break for stocks

Buyers just couldn't catch a break. Finally, on Monday, the S&P 500 index closed above its 10-day average for the first time in 17 consecutive sessions.

Dean assessed the outlook for the S&P 500 when the index closes above its 10-day average after trading below the average for 17 consecutive days or more. He further filtered the signals to look for times when stocks were not too far removed from a new high at the time.

This signal triggered 20 other times over the past 84 years.

https://www.sentimentrader.com/blog...l&utm_term=0_1c93760246-fe40e18365-1271291994

 

[robo]

Interest costs alone are projected to surpass 5 trillion [U.S. dollars] over the next 10 years and will amount to nearly half of all federal revenue by 2051, according to the Peter G. Peterson Foundation, an organization focused on raising awareness to the fiscal challenge.
--Matt Egan, "America's National Debt Surpasses 30 Trillion [U.S. Dollars] for the First Time", cnn.com, February 1, 2022.

https://www.cnn.com/2022/02/01/economy/national-debt-30-trillion/index.html

U.S. housing prices soared in 2021--but may be starting what I expect will be a dramatic downtrend averaging about half in the U.S. and even greater losses in many other countries to restore fair value.


For at least several hundred years (see Herengracht) global housing prices have traded near three times the average household income in any neighborhood, so recent ratios of seven to eleven times average household income are not going to last very long:


Kaplan

https://truecontrarian-sjk.blogspot.com/


True Contrarian
@TrueContrarian

14h
Instead of trying to guess what the market will do each day, week, or month, gradually accumulate anything which is esp. undervalued realizing that its bottom is unknowable, & gradually sell anything which is at a rare overpricing w/ the understanding that u can't guess its top
https://twitter.com/TrueContrarian?ref_src=twsrc^google|twcamp^serp|twgr^author

 

[robo]

SPY daily: I sure don't like the action...... This could turn out to be a failed daily cycle and we head back down to make a lower low...... Watching for now as this buy signal just might get whipsawed.

Long GDXJ, EQX, and VXF

VXF and VTI daily charts: On a new daily cycle....

 

[rangerray]

Fibonacci Tracking: Tagging the 50 = I DO NOT USE this tool for trading, but track the levels as we move back up or down based on the cycle tops and bottoms. We can't rule out that this daily cycle could left traslate.

Trading Tip #6: How To Use The Fibonacci Retracement Tool

https://lmtoolbox.wordpress.com/cycle-translation/


https://www.youtube.com/watch?v=LznyjkxqrDc&t=59s

FIBONACCI RETRACEMENT [For Beginners] - The ULTIMATE Beginner's Guide
https://www.youtube.com/watch?v=xHiqgY85GuU

Great post! I learned a lot with those links.

 

[robo]

Great post! I learned a lot with those links.

Glad it helped you out. A few more tools that you can add to your trading tool box. Trading tools can help you improve your odds when taking a new position. I track cycles and Fib's for Risk Management - Position size and adding additional shares.


In my opinion this is going to be a tough market to trade this year. It still looks like rallies are being sold.

 

[DreamboatAnnie]

Really like the TSI on your charts plus use of VXF. Using VXF to study volume since DWCPF does not provide any volume data. Thank you Robo. Definitely learning a lot from you!

I noticed volume dropping last two days of January while price was going up. I think I read somewhere that this can signify people selling the rally, but not really sure how that works.

 

[robo]

Really like the TSI on your charts plus use of VXF. Using VXF to study volume since DWCPF does not provide any volume data. Thank you Robo. Definitely learning a lot from you!

I noticed volume dropping last two days of January while price was going up. I think I read somewhere that this can signify people selling the rally, but not really sure how that works.

The only time I’m really tracking volume is when I’m looking for a DCL or an ICL. We sometimes see extremes when we see capitulation (large down volume) or at the start of a new IC ( large up volume ). At least that is why I’m tracking it.

As for the selling, the insiders in many sectors continue to sell at record rates. So yes there is plenty of selling going on. They sell their stocks as they do buy backs with share holder funds. Buy backs should be stopped in my opinion, but that will never happen.

 

[robo]

Fund flows..... Some continue to sell the SPY as we bounce and get close to the next Fib Level. Stopped at the 61.8% fib level for now. We shall see how we close.

Most Recent Flows DataData available since 01/29/1993 Flows for 01/26/2022 - 02/01/2022

https://www.etf.com/etfanalytics/etf-fund-flows-tool

SPY daily: Getting close to the 61.8% fib level. Depending on who you ask some think this bounce is about over, and others are saying buy, buy, buy!


David Hunter
@DaveHcontrarian

21h
The melt-up is underway. As I have said previously, I expect it to be a broad,steep rally with both growth & value & large & small cap playing. Semis, FAANGs, industrials, airlines, autos, commodities incl copper & steel,miners, financials & even small cap tech will perform well.

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



thomas
@VolumeDynamics

2h
Say, is there a pattern here? First Rachel Madcow, Now Zucker... somebody trying to get out of Dodge before the SHTF ???

https://twitter.com/VolumeDynamics/status/1488913038509965315?cxt=HHwWhoCsnaOh16kpAAAA


I like Sentiment Trader for many of the indicators I use, but it's a paid service so unable to post here.

SentimenTrader https://www.sentimentrader.com/blog/

 

[robo]

VXF daily: WEAK! Unable to even get back to the 38.2% Fib level...... We shall see if it's going to be a slow grind higher or we come back and test the lows..... Maybe a lower low. However, I will stay long ( holding my position) since my trading system remains on a hold long positions after the latest buy signal. ( A confirmed DCL and the start of a new daily cycle) That doesn't mean it will be a winner overall. So far it is a winner if you bought the bottom as some here hit it perfectly. For those here at TSP that did, well done! Still, things looking weak overall.

Long- VXF, GDXJ, and EQX

 

[robo]

IWM daily: WEAK, but a BT of the 10 sma held..... The 50 dma be up next and it's very close to the Fib 50% level...... If we can get there that would be a plus for Da-Bulls!

The Bullish thing for my trend trading tracking system is the index is holding above the 3 ema..... so far.

Bottom Line: The trend remains up and I trade what is happening not what I think will happen.

Long: VXF, GDXJ, EQX..... ST trading other stuff!

 

[robo]

ICL? Maybe..... Time will tell.

Bubble update: Human nature never changes

https://www.youtube.com/watch?v=_y6phAyxSjs&t=74s