Bear Cave 2 (Bull Allowed)

[robo]

Welcome to pure panic

We haven't seen Eurostoxx 50 "VIX", V2X, spike by almost 50% in a long time. This is pure panic. Having much view on volatility here is naive, but if you ever felt like buying when there is blood on the streets, this could be one of those days...
https://themarketear.com/

 

[robo]

Nasty Mean Reversion
Nov. 25, 2021 2:45 AM

Summary
Assets which are dramatically below fair value will have a very high likelihood of rallying toward fair value and beyond to a nearly opposite extreme, while those that have become the most overpriced relative to fair value will have a powerful tendency to plummet to fair value and beyond to a similarly undervalued bottom.

Only a tiny minority of investors will structure their net worth to anticipate this process, since when assets are the most overvalued, they appear to be the most likely to continue climbing, while assets which are the most out of favor and the best bargains will appear to be hopeless and inferior.

This is one of the primary reasons that we have experienced all-time record inflows into U.S. equity funds in 2021. Recent market participants are so confident that they are far more concerned about missing out on gains than they are about the risk of losing money.
https://seekingalpha.com/article/4471899-nasty-mean-reversion

 

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ANALYSIS, PERSPECTIVE, TRADING STRATEGY

AT THE EDGE OF CHAOS: BACK TO THE FUTURE - WHAT IF THE COVID LOCKDOWNS SURGE JUST AS THE FED STARTS TO TAPER?

Editor Joe Duarte in the Money Options

November 21, 2021

Does it make sense for the Fed to taper as a “fourth wave of COVID” begins to develop?

Welcome to the Edge of Chaos:

“The edge of chaos is a transition space between order and disorder that is hypothesized to exist within a wide variety of systems. This transition zone is a region of bounded instability that engenders a constant dynamic interplay between order and disorder.” – Complexity Labs

Talk about that butterfly flapping its wings, eh? Sure enough, recent events suggest that the combination of a pandemic surge occurring simultaneously with the start of the Fed’s QE tapering may be too much for the stock market to handle, despite its heading into what is usually a very positive season.

Not another Perfect Storm Please

Let the games begin. The Federal Reserve will be reducing its bond purchases by $10 billion per month starting in December, formalizing the beginning of the tapering of its COVID-19 pandemic record setting QE. And while the stock market initially took the news in stride it seems as if traders are suddenly running for the exits.

https://www.joeduarteinthemoneyoptions.com/reports/TA.asp

 

[robo]

For the record: I trade using the daily charts.

Things look much different on the daily charts, but much harder to move TSP funds using a daily chart. I like the weekly data for TSP funds.

 

[robo]

VTI weekly: Vanguard's index for the Total Stock Market and the index I'm currently trading. Remains in a uptrend, but testing the 3 ema on the weekly chart. Still a hold long positions, but we shall see how we close this week. One would have to give the Bulls/Buyers the edge.


VXF weekly: Vanguard's index that is close to the S Fund. Back testing the Feb high again. It the pattern holds we are moving down closer to the lower BB. However, that will be up to the buyers as we are in the best 6 months for buying stocks. LOL..... I don't use any of that data for trading. For me VXF remains in a cash position. I just trade the signals based on what is happening and not what I think will happen. Yes, I do get whipsawed, but that is all part of trading. Moves below the 20 sma on the weekly have been a good time to BTD for a trade if you trade the VXF index. I use to trade it often, but not these days. We shall see how this move plays out and I will stick with trading VTI.

 

[robo]

An Overvalued, Overbought & Overleveraged Stock Market While The Fed Tightens, What Could Go Wrong?

Nov. 19, 2021 1:50 PM ETAAPL, ARKK, BRK.A,BRK.B,F,F.PB,GOOG,GOOGL,LSXMA,LSXMB,LSXMK,MP,MSFT,QQQ,SOXX,SPWR,SPX,SPY,TAN,VFFSX,VFIAX,VFINX,VOO76
Summary

Stock market valuations and the Buffett valuation indicator are at historic highs.

411 of 500 S&P 500 stocks are trading above their 200-day moving average.

The weekly RSI on SPY is overbought again just like before September mini-correction, this time the monthly RSI is overbought too, like 1999, 2007, 2013, 2018 and 2020.

Leverage and call option volume are at all-time highs as well.

Meanwhile, the Fed and Treasury are reducing liquidity.

This idea was discussed in more depth with members of my private investing community, Margin of Safety Investing. Learn More »
https://seekingalpha.com/article/44...et-while-the-fed-tightens-what-could-go-wrong

 

[robo]

The Biggest Bubble Of All Time

Nov. 19, 2021 12:07 PM ETAAPL, AMZN, AR,ARKK,CRM,CVX,DIA,EOG,EQT,FB,GDX,GOOG,GOOGL,MSFT,NDAQ,NFLX,PTON,QQQ,RRC,SD,SP500,SPY,TSLA,XLE,XME,XOM,XOP,Z,ZG456 Comments134 Likes


Summary
We have become numb to the magnitude of the bubble today.

When the tide goes out, there's going to be a reckoning, with the pendulum swinging to the other extreme.

Be prepared for the aftermath of this bubble by planning now.

The unwind can take many paths, however, a repeat of a market running in place for a decade, like it did from 1968-1982, or post 2000 is the template.

This will create a golden age for active investing. Thus, now more than ever, it's imperative to own the undervalued assets today, and where these reside might be surprising to many investors.

This idea was discussed in more depth with members of my private investing community, The Contrarian. Learn More »
https://seekingalpha.com/article/44...e?mail_subject=the-biggest-bubble-of-all-time

 

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Are rates going up next year? It depends on who you ask....

Opinion: How one rate hike by a small African nation could derail Powell’s Fed inflation-fighting plans and sink stocks
Last Updated: Nov. 23, 2021 at 1:05 p.m. ET
First Published: Nov. 22, 2021 at 6:51 p.m. ET
The Federal Reserve is beginning the first phase of its very gentle, very conditional, very cautious path to stimulus removal. Fed Chair Jerome Powell, just nominated for a second term at the helm of the U.S. central bank, is intent on pushing back against any speculation about thinking about talking about rate hikes.

But around the rest of the world, something quite different is going on in the halls of central monetary authorities from Latin America to Eastern Europe, Africa, and lately even some developed-market countries.

Back in January 2021 I tweeted half-jokingly, half-seriously that a 300 basis-point rate hike by the Bank of Mozambique was a “Sign of things to come…”
https://www.marketwatch.com/story/h...ans-and-sink-stocks-11637625129?mod=home-page

VTI daily: A close above the 20 sma as BTDer's came in, but a tad short of the 10 sma...... We shall see how it plays out.....

Hedge Funds usually trade together.

 

[robo]

VTI daily: A gap down below the 20 sma on the daily.... Watching to see if buyers come in. Day 3 since the sell signal.

Sold my VXX/VTI hedge and might buy some SDS. I will wait on the next VTI buy signal.

30 minute data: https://stockcharts.com/h-sc/ui?s=VXX&p=30&yr=0&mn=0&dy=10&id=p60482787553&a=1051700172

 

[robo]

Stocks formed a bearish reversal on Monday.

Monday was day 35 for the daily equity cycle, placing stocks in their timing band for a daily cycle low. Monday's bearish reversal eases the parameters for forming a daily swing high. A break below 4682.94 will form a swing high. Then a close below the 10 day MA will signal the daily cycle decline. Stocks should go on to break below the day 27 low in order to complete its daily cycle decline. Stocks are in a daily uptrend. Stocks will remain in their daily uptrend unless they close below the lower daily cycle band.

https://likesmoneycycletrading.wordpress.com/2021/11/22/bearish-reversal-3/

 

[robo]

No puts no problem?

Put call ratio at lowest levels in a long time. Do we see another put puke as markets print new highs?

If this continues higher or not is to be seen, but one thing is sure, puts are hated and people tend to hate them when they should love them...
https://themarketear.com/

 

[robo]

Negative Breadth Rally - I be watching this, but this market just keeps grinding higher.

SevenSentinels
@SevenSentinels
·
2m
1:30

Negative Breadth Rally Producing Record New Lows At Any ATH SPX
https://twitter.com/SevenSentinels?ref_src=twsrc^google|twcamp^serp|twgr^author

 

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EXTREMES: Continue to get more extreme! With that said, the trend remains up.

John P. Hussman, Ph.D.
President, Hussman Investment Trust

Interim Comment: November 21, 2021
Well, on Friday, November 19, we hit the motherlode. Across four decades of work in the financial markets, and over a century of historical data, I’ve never observed as many historical indications of a market peak occurring simultaneously. Noise reduction is always a process of drawing a common signal from multiple, partially correlated sensors, even if each individual sensor might be imperfect. The reason that we follow boatloads of these syndromes is the same reason we base our gauge of market internals on thousands of securities – uniformity conveys information.

Here and now, market conditions are characterized by:

The most extreme valuations in U.S. history, on the measures we find best-correlated with actual subsequent market returns over the past century, and even in recent decades, coupled with lopsided bullish sentiment and historic levels of margin leverage;

Deterioration and divergence across measures of market internals that we believe to be reliable gauges of investor psychology toward speculation versus risk-aversion;

The largest preponderance of overextended syndromes – typically associated with intermediate or cyclical market peaks – that we’ve ever observed in history.

Not a forecast. Not a “limit.” Not a market call. Just sharing what we’re seeing.

Still, it’s fair to add that we’ve never seen such a thing.


https://www.hussmanfunds.com/comment/mc211120/

 

[robo]

SPY daily: Tom covered the market nicely in his recent comments.

Bottom Line: The trend remains up and we just hit another ATH..... LOL.....again!

Biden picks Jerome Powell to lead the Fed for a second term as the U.S. battles Covid and inflation
PUBLISHED MON, NOV 22 20219:00 AM ESTUPDATED 7 MIN AGO

KEY POINTS

President Joe Biden announced Monday that he is renominating Jerome Powell for a second term as Federal Reserve chair and will put forth Fed Governor Lael Brainard as vice chairman.

The move comes after weeks of speculation that Brainard might get the nod.

In making the move, Biden praised Powell for “decisive” leadership during the Covid crisis.

https://www.cnbc.com/2021/11/22/bid...rm-as-the-us-battles-covid-and-inflation.html

 

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SPY monthly: The trend remains up! Some monthly charts...... LOL..... We can all see on these monthly charts why some Bear's are throwing in the towel.

Throw The Damn Towel Complete

https://www.youtube.com/watch?v=TfAYz6p-mlw


Short Sellers Giving In May Be a Bearish Signal Mark Gilbert 11:30 AM IST, 16 Nov 2021 04:01 PM IST, 18 Nov 2021 Save


(Bloomberg Opinion) -- Life is getting even harder for short sellers. Some of the most famous names in the business of seeking to profit by anticipating declines in the value of financial securities are closing their positions. Time will tell if they were right to abandon their bearishness – or whether their capitulation signals a market turn. Russell Clark, who took over John Horseman’s eponymou

Read more at: https://www.bloombergquint.com/gadfly/short-sellers-giving-in-may-be-a-bearish-signal
Copyright © BloombergQuint

 

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Opinion: Gen Z is wildly unrealistic about how much money stocks, crypto and other investments will give them for retirement
Last Updated: Nov. 17, 2021 at 6:09 p.m. ET
First Published: Nov. 17, 2021 at 7:25 a.m. ET
By Mark Hulbert

The future always looks bright in a bull market

Yet even this finding, sobering as it is, is too optimistic.

That’s because today’s stock market is wildly overvalued, making it unlikely that it will produce a 6% inflation-adjusted annualized return in coming years.
Each of eight valuation measures with a long-term record of success suggests that stocks’ return in coming years will be below the historical average.
Some object to this bearish conclusion on the grounds that long-ago U.S. history is not relevant to the current stock market.
But this argument, while compelling on the surface, doesn’t hold water.

Consider what I found upon constructing a simple econometric model for each of the eight indicators, using only data back to 2000.
On average they are projecting that the S&P 500 over the next decade will produce an inflation-adjusted total return of minus 5.4%.

--Mark Hulbert, "Opinion: Gen Z Is Wildly Unrealistic About How Much Money Stocks, Crypto, and Other Investments Will Give Them for Retirement", MarketWatch.com, November 17, 2021.

https://www.marketwatch.com/story/g...them-for-retirement-11637107745?mod=home-page

 

[robo]

Some Stuff from Jesse Felder's free weekend update

https://twitter.com/jessefelder


The Consequence Of Monetizing The Debt Is Inflation'


Topdown Charts
@topdowncharts
This chart shows the ratio of trading volumes of leveraged long vs leveraged short US equity ETFs.

It’s basically a sentiment indicator where spikes indicate excessive risk taking on the long side

More notes: https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-14-november $SPX $SPY

https://twitter.com/topdowncharts/status/1459957015887826944?mc_cid=2dfe690087&mc_eid=5b348a9ca0

 

[robo]

SPY daily: Consolidation or a lower high? We shall see how it plays out.....

Bottom Line: The trend remains up.


We will start off with a look at the Nasdaq.

While the Nasdaq closed below the 10 day MA on day 27, it really did not satisfy the parameters for a DCL. Now the Nasdaq is breakout out to new all-time highs.

Usually breakouts that occur late in the daily cycle are often reversed. But with the flood of global liquidity and stocks entering the most bullish time of the year, this maybe all the correction we will see, so stops should be adjusted to the new breakout level.

The S&P remain is consolidation. A break below the day 27 low of 4630.66 would allow stocks to complete their daily cycle decline. turn the 10 day MA lower in order to complete its daily cycle decline. But close above the 4718.50 level may see the S&P follow the Nasdaq higher.

https://likesmoneycycletrading.wordpress.com/2021/11/20/the-11-20-21-weekend-report-preview/

 

[robo]

Well, I have been hearing this for sometime now, as extremes get more extreme.

Record selling by insiders is setting up stocks for a big fall, says contrarian investor
Published: Nov. 18, 2021 at 7:22 a.m. ET
By Barbara Kollmeyer
comments
Critical information for the U.S. trading day

A contrarian voice has been Morgan Stanley, who is telling clients to resist buying U.S. stocks. From that same neck of the woods, our call of the day from the True Contrarian blog and newsletter’s chief executive, Steven Jon Kaplan, has a warning for investors who have been piling into this market.

“People are really underappreciating the degree of risk that they’re taking because now that we have — especially for the really big megacap names — even greater overvaluation than we’ve had before, the downside risk is extremely high,” Kaplan told MarketWatch in an interview on Wednesday.

https://www.marketwatch.com/story/r...contrarian-investor-11637238152?mod=home-page

 

[robo]

We shall see how this plays out. Waiting on STS.... STS = DOWN 3/4

SevenSentinels
@SevenSentinels

6m
1 PM

Declines, Declining Volume, New Lows Expanding

SevenSentinels
@SevenSentinels
·
46m
Thursday 2:20

SS LOLR STS
Down Down Down
0/7 0/7 3/4

Breadth: -1200/-1800

NYSE McO: -47
NASDAQ McO: -47