Bear Cave 2 (Bull Allowed)

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SPX daily: Testing the 50 day MA...... Two big gaps left behind as this oversold bounce continues.... The odds of a back-test of the 200 day MA and those gap filling on the daily chart have above average odds of filling in my opinion. However, the buy signal is in and I trade the signals. Day 3 since the daily buy signal, and the weekly is in too this morning. We shall see if the weekly buy signal will hold in the days ahead.

The 20 week MA be up next!
 

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Well, a buy signal on the daily and weekly charts, and it looks good on the charts. We shall see if it has legs..... I'll be watching to see if those gaps fill or we back test the 200 day MA early in the daily cycle. We shall see how this daily cycle plays out as it is now labeled day 5.


Santa Rally?

On Thursday we discussed how stocks were rejected by the 50 day MA the previous 2 times that they tested it. And closing above the 50 day MA would be a change of character. Stocks closed above the 50 day MA on Friday.
Closing above the 50 day MA on Friday will have us label day 18 as an early DCL. Stocks also closed back above the upper daily cycle band on Friday. Closing back above the upper daily cycle band ends the daily downtrend and begins a new daily uptrend. Closing back above the upper daily cycle band also signals that the ICL has been set.

In The Weekend Report I will further discuss what this means for both the daily cycle and the intermediate cycle — and the yearly cycle. And what expectations we will have based on cycle framework. But let me give you a hint — its bullish.
https://likesmoneycycletrading.blog/2023/11/04/santa-rally/
 

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David Rosenberg
@EconguyRosie
·
Nov 3
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Rates: No longer under 5%..... Is the Fed done?

The YCL could be in on the monthly chart.
 

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Site logo image Cycle Trading
Consolidation

Stocks rallied for 5.85% last week to close above the 50 day MA on Friday.


Stocks backtested the 50 day MA on Monday but still closed higher on the day. Stocks are now quite stretched above the 10 day MA. Stocks are beginning to consolidate above the 50 day MA, which will help to allow the 10 day MA to catch up to price. Stocks are currently in a daily uptrend. A bullish break out of consolidation will indicate a continuation of the daily uptrend and signal a cycle band buy signal. A bullish break out of consolidation would also shift the odds that stocks are entering a Santa Rally, which was discussed here.
https://likesmoneycycletrading.blog/2023/11/06/consolidation-6/
 

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Oscillators: "Maybe" we will see some back-filling of the larger gaps before the next move higher. We shall see how Jeff's comments play out. I sold the rip last week. My charts below. Notice some of the oversold bounces were fairly quick. Watching to see how this DCL plays out. For now, the Best 6 months remains in play with a buy signal on the daily and weekly charts.


If This Pattern Plays Out, Traders Could Get a Second Chance
Take a look at the McClellan Oscillators for the NYSE (NYMO) and the NASDAQ (NAMO)


These are momentum-based indicators that help determine overbought and oversold conditions.

Readings of more than 60 indicate severely overbought conditions and often preceded declines in the markets. Readings of less than -60 express extremely oversold conditions and usually lead to strong bounces in stock prices.

Both of these indicators closed in extremely overbought territory on Friday. This is only the third time in the past year that both the NYMO and the NAMO have been above 60 at the same time.
In other words, traders who missed the chance to buy ahead of last week’s rally should get a second chance to put money to work on the long side sometime in the next several sessions.

Best regards and good trading,
https://www.jeffclarktrader.com/mar...-plays-out-traders-could-get-a-second-chance/
 

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SPX gaps: We shall see if these gaps fill early into this daily cycle.
 

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SPX Daily and the 50 day MA: The last two times that the SPX moved above the 50 day MA the RSI never got above 70. We shall see how this move plays out. This be day 3 since jumping over the 50 day resistance level.
 

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AGG daily: The daily buy signal remains in play as AGG has now moved above the 10,20, and 50 day MA. A DCL is in play....we shall see if it has legs.

Day 4 since moving above the 50 day MA, and overbought, after being extremely oversold. I would expect some pullback, but this is a MT position for me.

Long AGG, and TLT
 

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AGG weekly: So far the weekly buy signal is confirming what the daily was telling us. If this an a IT and YCL we could see a nice run for AGG, but it will not be straight up. Like myself, others are thinking the Fed is probably done increasing rates. The next step would be cuts..... LOL.... That's a guess, and I trade signals. The weekly is now on a buy signal. We shall see if it has legs.

Week 2 for the AGG buy signal. AGG was very oversold and deep into an IC..... Stay tuned. The dollar remains a player, but the commercials are still very long bonds.

Long AGG, and TLT.
 

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NAMO/NYMO/SPX daily: Based on this chart, the odds continue to increase for a back-test of the 50 day MA, and that the SPX gaps might fill.
 

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"Every past inversion of the 3-month versus 10-year U.S. Treasury, even when much more moderate than the current all-time record going back to 1789, has been followed by a notably severe U.S. equity bear market without exception:"
https://truecontrarian-sjk.blogspot.com/
 

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"If we define an equity Bear Market by a 20% Drop, then we've already had it, right"

You are correct "IF" you define a Bear Market as a mild 20% sell-off.

SPX monthly and Bear Markets: I will be looking for a tag of the 200 month MA before this Bear is done. For now, the SPX remains on a buy signal. I just trade the signals in both directions, but the historical data indicates the Bear market low will be much lower. The final Bear market low will be much closer to the COVID lows in 2020 based on the historically data I'm using..
The Fed will be lower rates big time. Will they hold off until after the election before lower rates is something I will be watching as the stock market remains under extreme pressure due to the world we are currently living in.
 

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We’ve Only Seen This Four Times in Four Decades
Jeff Clark | Nov 10, 2023 | Market Minute | 3 min read
That should just about do it for the Treasury bond bounce.

T-bonds have put on a blistering rally over the past three weeks. The iShares 20+ T-bond ETF (TLT) is up almost 9% since mid-October – which is a remarkable gain for a bond fund.

But all short-term bounces must come to an end.

The longer-term trend must reassert itself. And, in the world of T-bonds, that longer-term trend is down.

Look at this long-term chart of the yield curve…
https://www.jeffclarktrader.com/market-minute/weve-only-seen-this-four-times-in-four-decades/
 
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