Bear Cave 2 (Bull Allowed)

[robo]

XLE monthly and the 50 month MA: You can see on this monthly chart just how far XLE is stretched above its 50 month MA. Based on the historical data on this chart the move lower could continue for some time. Just tagging the 10 month MA gets it back to $80.00ish, but one would think, based on the historical pattern, a move back down closer to the 50 month MA is very possible next year.

However, in the short term I will be watching for a move back down to the 10 month MA. Its clear why the insiders were selling so many shares as the rubber band continued to stretch this index so far above its historical mean. Based on the historical data one would expect to see a RSI much closer to 30 before the move lower has completed.

This opinion is based on XLE is the early stages of a Bear Market. We shall see how that plays out in the next few years....

"IF" that plays out we will see a move below the 50 month MA before Papa Bear is done mauling investors. Watch for when the insiders start buying again, and not selling.

The 3rd chart down XLE chart: A closer look at the monthly data: I will post the daily after the close today....

We could see a bounce soon after the daily tagging the 50 day MA yesterday. (The last chart)

 

[robo]

SPX daily chart after the close:


December 6, 2022
Stocks Crossed The Line

Stocks formed a swing high and closed below the 10 day MA on Monday to signal the daily cycle decline.


Stocks delivered bearish follow through on Tuesday. Stocks closed below the daily cycle trend line to confirm the daily cycle decline. Stocks should go on to turn the 10 day MA lower in order to complete its daily cycle decline. Tuesday was day 37, placing stocks deep in their timing band for a DCL. Stocks are currently in a daily uptrend. If they form a swing low above the lower daily cycle band that will indicate a continuation of their daily uptrend and signal a cycle band buy signal.

https://likesmoneycycletrading.wordpress.com/2022/12/06/stocks-crossed-the-line-3/

 

[robo]

SPX daily: The SPX has now moved back below the 10 and 20 day MA's.... We shall see how this pattern plays out. The 50 day MA be up next.... The 200 day MA remains resistance as one would think if you are trading using Bear Market rules....

I remain flat SPX/SPY and I'm shorting XLE and long VXX.... ( For a ST trade only)

(Beer Money Trades)

12/02/2022 15:57:53 Bought 300 VXX @ 14.375

12/06/2022 12:46:02 Sold 300 VXX @ 15.055


Selling my VXX and XLE short position as I wait for the next move..... Crazy market right now....

 

[robo]

VIX daily: It be on the move...... Made a few bucks so far trading VXX....

 

[robo]

XLE daily: The move down continues, and XLE did tag the 50 day MA. We shall see if buyers come in or the 200 day MA be up next...

 

[robo]

SPX - we have seen this movie before
The crowd did it again, covering shorts in panic. We are once again below that 200 day that got so many people excited and we saw some bears throw in the towel. A close here or lower and things could get "dynamic" to the downside. Don't forget the market will become less and less liquid as we approach Christmas.

SPX's short term problem
That rising wedge is becoming a problem for the bulls as "complex" psychology is developed inside this formation. 4k is a level to watch, but 3950 is the bigger one and the make or break area.
https://themarketear.com/posts/cKS377_Apm

 

[robo]

We have seen this movie before

Remember, remember, one month of December....
Before you get too bulled up on the idea of a Santa Claus rally, remember that during the last midterm in December 2018, the S&P 500 fell -10% in December, with a max drawdown of -14.8%

 

[robo]

XLE daily: A closer look as it moves down to the 50 day MA. The insiders have been selling lots of shares the last several months.

BABY DONE, MAMA NEXT (November 27, 2022):

All we really need to know we learned in kindergarten, including the story of Goldilocks and the Three Bears. 2021 was Goldilocks and 2022 was Baby Bear, so 2023 will be Mama Bear and 2024 will be Papa Bear. If you can remember this then you will invest far better than most grownups.


2022 was a classic first year of a bear market with familiar themes from similar past bear markets.
XLI and XLE are new short positions, with SMH possibly joining them soon.

I began to sell short XLE when it had first reached 93 a couple of weeks ago, and I have been more recently selling short XLI at 101 and above. Both of these sectors are among those which have more than doubled from their respective March 2020 bottoms, have experienced intense selling of their components by top corporate executives, have enjoyed massive net inflows in recent weeks, and frequently climb shortly after the opening bell most days which is when the least-experienced investors do a large percentage of their total trading. SMH has experienced a sharp bounce in recent weeks so I may begin selling it short soon. If QQQ approaches 300 and especially if it surpasses that level, it is also worth adding to my already-existing position.
https://truecontrarian-sjk.blogspot.com/

 

[robo]

SPX daily as we head into the close: Still have big trouble at the 200 day MA. The SPX moved back below the 10 day MA again, as the dollar is on the move again. Good luck trying to guess what this market will do next. I'm still trading like we are in a Bear Market, so I'm using Bear Market Trading rules.....

XLE daily: I'm still looking for this sector to move lower...

 

[robo]

XLE daily: Remains below the 10 day MA, but has moved back above the 10 day MA in early trading as oil is on the move. We shall see how the 10 and 20 day MA crossover move plays out.... It has plenty to do with what the dollar does next.....

 

[robo]

VIX daily: Watching to see how the current daily $BPSPX, and the VIX patterns plays out.
Rate hikes and the SPX monthly:

Stock Market CRASH Signals Triggered:
https://www.youtube.com/watch?v=uQ79o6TwthA&t=75s

 

[robo]

Gold weekly: It looks like gold might have found support. We shall see how that plays out in the weeks ahead... Gold and GLD are both now trending above their 10 week MA's.


December 2022 Portfolio Notes
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John P. Hussman, Ph.D.
President, Hussman Investment Trust

December 2022

Year-to-date market losses have retraced the frothiest segment of the recent speculative bubble, yet valuations remain at levels that we continue to associate with negative expected S&P 500 nominal total returns over the coming 10-12 year period. As of November 30, 2022, the total return of the S&P 500 is down less than 15% from the most extreme level of stock market valuations in history, based on the measures that we find best-correlated with actual subsequent market returns across a century of market cycles. The chart below shows the ratio of nonfinancial market capitalization to gross value-added, including estimated foreign revenues (MarketCap/GVA).

Finally, on the precious metals front, we continue to view the valuations of precious metals equities as reasonable, which encourages us to hold about 10% of assets in this sector in Strategic Total Return Fund. Historically, precious metals shares have performed far better in periods when bond yields are declining (in general, below their level of 6-months earlier) than when they are advancing. Likewise, downward pressure on the U.S. dollar, which often emerges during the mid-to-late stage of U.S. recessions, also tends to benefit precious metals stocks. For now, our investment outlook in this sector is clearly constructive, but not aggressive.
https://www.hussmanfunds.com/comment/portfolio/pn221202/

 

[robo]

SPX monthly: I use the 10 and 20 month MA's..... The SPX did move back above the 10 month MA which is overall Bullish if you are just using one indicator. That is why some are saying the Bull is back. A tag of the 50 month MA and then a move back above the 10 month MA is what you want to see in a Bull Market. We shall see how it all plays out in the months ahead.

 

[robo]

We Won’t See a Bull Charge Anytime Soon
I would love to be able to be bullish here. It’s easier to make money in bull markets than it is in bear markets. So I’m anxious to see the bull charge, and the bear to go back into hibernation.

But that’s not happening – at least not yet.

Take a look at this long-term, monthly chart of the S&P 500…

We looked at this chart one month ago on November 4…

Back then, we noted the 9-month exponential moving average (EMA – red line) had closed below the 20-month EMA (blue line).

That sort of “bearish cross” occurred in 2001 and in 2008 (left red arrows). It preceded “waterfall declines” that sent stock prices lower.

We said this bearish cross was a big cause for concern in the months ahead unless the market rallied hard enough in November to pull the 9-month EMA back above the 20-month EMA.

https://www.jeffclarktrader.com/market-minute/we-wont-see-a-bull-charge-anytime-soon/

 

[robo]

VIX daily: Watching to see if the VIX continues lower or it completes a higher low pattern. A very nice squeeze play yesterday after the FED speak...

 

[robo]

Bullish breadth
10 day moving average of the new 52 week highs minus 52 week lows has risen sharply over the past weeks. BofA writes: "A decisive push above the August high of 13.6 on the SPX would confirm a double bottom for this indicator and increase the likelihood that October did mark a cyclical low from the SPX."

https://themarketear.com/posts/c8sCu4PnFH

 

[robo]

Powell triggers greed

3 bullish tidbits

1. Seasonality, bulls argue that Santa rally typically kick in over the latter few weeks of December.

2. Market breadth, as measured by 10-dma of new 52-week highs minus new 52-week lows (from a competitor firm) is on bullish breakout watch across the US indices.

3. Next couple of weeks represents the strongest corporate buyback period of the year.

Greed squeezing higher
We have not seen these levels of greed in "forever". Extreme greed next for the overshooting phase?

 

[robo]

SPX/USD daily chart:

SevenSentinels Retweeted
Dale Pinkert
@ForexStopHunter
·
3m
#USDJPY Could rise to 144.00 on Rising Yields. Dale explained the possibility of a failing rally in #USDJPY that could extend towards 144. He remains bearish #SPX as it hasn't responded to a weaker dollar.
@TradeGateHub

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

 

[robo]

SPX daily: (See my chart below) - The last two rallies were stopped at the 200 day MA) The 200 day MA remains resistance for now.

"""This bear market has seen three rallies of 11% or more in 2022. But the last two rallies eventually failed and saw the S&P 500 collapse to new lows.""""

Is an Illness Spreading in the Stock Market?

Falling Participation
This bear market has seen three rallies of 11% or more in 2022. But the last two rallies eventually failed and saw the S&P 500 collapse to new lows.

And right before each turn lower, declining participation provided advance warning… and that’s what we’re seeing yet again.

One way I measure breadth is with the McClellan Oscillator.

This figure takes the difference between advancing and declining stocks on the New York Stock Exchange (NYSE), and then averages the difference over a trailing period so we can see how breadth is evolving over time.

Now take a look at the chart below of the S&P 500 (top panel) and the McClellan Oscillator (bottom panel)…

The red circles show where participation is falling as the Oscillator makes lower highs.

The first two circles on the left marked the end of bear market rallies, and the S&P went on to new lows.

That’s my concern with the red circle on the right, which shows breadth deteriorating even as the S&P 500 is moving higher.

It’s not just breadth indicators that are suggesting a cautious approach…

My colleague Jeff Clark showed you yesterday how several other sell signals are piling up as we head into the new year.

While the financial talking heads seem eager for a rally, Jeff warns that traders should be cautious in the weeks ahead.

So be careful hanging around the stock market’s party for too long as signs of illness emerge, lest your portfolio catches a bug.

https://www.jeffclarktrader.com/market-minute/is-an-illness-spreading-in-the-stock-market/

 

[robo]

SPX daily 12:00ish ET..... A closer look, and I don't know if Santa will come to town. My data indicated to step a side and not hold SPX long positions so that's what I did.....

Bottom Line: The SPX remains below it's 200 day MA and is currently below its 10 dma. This late in the daily cycle I will just be watching the show.

Please pass the Popcorn!

https://giphy.com/gifs/snl-saturday-night-live-bill-hader-2UvAUplPi4ESnKa3W0


"""Traders should be careful in the weeks ahead…""""

"""'Most of the TV talking heads are looking forward to a Santa Claus rally. But the VIX is warning us that Santa may not show up this year.""""

Jeff Clark

https://www.jeffclarktrader.com/market-minute/why-we-shouldnt-bet-on-a-santa-claus-rally-ahead/