coolhand's Account Talk

[coolhand]

The market gave us a choppy trading session on Tuesday. There were no big moves in either direction and the indexes closed not far from their neutral lines.




Price on the S&P does seem to be hitting resistance in the high 4180s. The DWCPF is also hitting resistance (near 2250). Is it near time for another dip? RSI is flat on both charts. Momentum is biased slightly lower on the S&P, but is still rising on the DWCPF.



Breadth dipped modestly and remains bullish.

I can't read much into today's action, but the market feels like its running out of steam. We may see some weakness soon prior to another possible push to the upside, but that's just a possibility. Since NAAIM was bullish, I suspect the market will get on track to the upside again at some point.

I remain bullish for now, but watching resistance levels on both charts.

 

[coolhand]

Monday starts the week off on the bullish side as the S&P posted a modest gain, but the DWCPF rallied for more than 1%.




That rally in the DWCPF saw price close above the March peak and it's now testing the closing February peak. Momentum is rising on the DWCPF, but flat on the S&P.



Cumulative breadth hit another all-time high and remains bullish.

With the DWCPF now showing more life, it is highly likely it will push on to fresh highs. It does need to push past resistance, but since this is still a bull market, are there any doubters that it will fail? NAAIM is bullish and we are bullish. That's been a winning combo most of the time.

I am now bullish on both the S&P and the DWCPF.

 

[Cactus]

Interesting article. Makes it sound like a game of musical chairs. We are riding the melt-up until this D-Day for capital markets hits. Then we expect to recognize it and have a chair to sit in when the music stops.

 

[coolhand]

Market resilience remains in evidence as Friday's rally demonstrates. For the week, the S&P dipped modestly, while the DWCPF rose moderately.




Looking at the DWCPF, price closed above the previous week's peak and is now ready to challenge or test the March peak. Price on the S&P closed very near its all-time high.



Breadth hit a fresh high on Friday and remains bullish.

Our TSP Talk sentiment survey didn't change a whole lot and remains bullish, just like NAAIM.

It would seem that the market remains on a mission to burn the bears. It's been going on a long time now. I found this article today and thought it was at least somewhat accurate. https://www.zerohedge.com/markets/shorts-go-extinct-all-market-sell-signals-are-now-completely-useless

I remain bullish on the S&P and will shift modestly bullish on the DWCPF, which still has work to do on the upside.

 

[coolhand]

The market was doing relatively well for about half the trading day and then the announcement of increased capital gains taxes was released and that was just the thing the market wanted to hear and it dove on the news. All in all though, the damage was not that bad on the day.




Surprisingly, the S&P got hit harder than the DWCPF, which was trying (the DWCPF) to break resistance around the 2210 area before the selling began. Momentum is falling modestly on the S&P and is flat on the DWCPF.



Cumulative breadth dipped, but remains bullish.

NAAIM came in almost unchanged, which keeps them bullish.

I am not expecting a lot more selling on the capital gains tax announcement, but the market may feel otherwise and it may not tell us right away. Keep in mind that news is near impossible to use as a predictor of market behavior. Often, the market sees it coming (before we do).

In any event, I am going bullish again on the S&P given the NAAIM reading and will remain neutral on the DWCPF for now.

 

[coolhand]

Latest NAAIM reading shows that they remain bullish. I will go from neutral back to bullish on the S&P and remain neutral on the DWCPF.

 

[coolhand]

Yesterday, the indicators were suggesting that a bottom may not be in. I didn't expect serious selling, just enough selling to flip other signals to bearish before turning back up. But Wednesday's rally turned everything right back up.




Price on the S&P retraced more than half of the previous 2 days of losses. Price on the DWCPF pushed back above support at the 50 dma and closed their as well. It still has a lot to prove, however, given it's trading in a range.



Breadth turned back up smartly and remains bullish.

Today's action was decidedly bullish. I'm still more comfortable with the S&P vice the DWCPF as far as price advancing, but we'll see how things play out for another day or two. NAAIM reports tomorrow.

I remain neutral, but if the market follows through on today's rally and NAAIM remains bullish, I'll probably get bullish as well. Let's see what happens.

 

[coolhand]

It looks like the market has reached one of those intermediate term points where price needs to reverse before pushing price up. Both the S&P and the DWCPF were thrown for losses on the day. That's 2 in a row for the S&P and 3 for the DWCPF




Support at the 50 dma failed on the DWCPF today. This index, which is not exactly falling apart, has not been able to hit a new all-time high since mid-February. And we now have 2 lower highs. But while resistance above is keeping the index in check, support below has keep it afloat. Really, price has gone nowhere in about 2 months (on average).

Momentum has turned down on both charts. The S&P isn't dealing with resistance like the DWCPF is, but we can see it has marched higher for almost a month with only minor dips along the way, so it shouldn't be a surprise if we get more than token selling after that stretch. Volume is only average.



Breadth is also signaling that a turn lower for a few days may be upon us. It's just barely bullish right now.

It's interesting to me that NAAIM got bullish at a time when the indexes (especially the S&P) were vulnerable to a turn down. I don't want to make much of it because so far this selling in within the norm for the market. I suspect that breadth will turn bearish for a bit before a bottom is in. That's how it's been. The indicators have to get bearish first (typically). We'll see.

I am going neutral on both the S&P and the DWCPF. I suspect more downside is in store, but I can't be sure of it.

 

[coolhand]

The market took a step back today.




Once again, the DWCPF got the worse of the selling. We can see in the chart that price kissed support at the 50 dma and backed off (up) from that level. For the moment, it's a successful test. But will it get tested again and if it does will it hold?



Cumulative breadth fell today, but the signal remains above the key averages (bullish).

We'll have to watch how price reacts around the 50 dma on the DWCPF. That's the one real concern that I have. The S&P remains solidly bullish.

I remain bullish on the S&P and modestly bullish on the DWCPF, but that index has to stay above support.

 

[coolhand]

The bulls closed out the week last week with solid gains for the both the S&P and the DWCPF. NAAIM has been bullish, so it should not be much of a surprise that price is rising.




Price on the S&P continues to rise to new all-time highs. That chart is showing on overbought condition (RSI), but we know how overbought can get more overbought. The DWCPF continues to struggle against resistance, but it's still rising.



Breadth looks good on the NYSE and is hitting fresh all-time highs.

The latest TSP Talk sentiment reading shows little change from last week (we remain bulled up). NAAIM is bullish too.

Unless something changes, the indicators continue to favor the bulls. I remain bullish on the S&P and modestly bullish on the DWCPF.

 

[coolhand]

The bulls had control for pretty much the whole day today. And it was a more even rally, which we really needed.




Price on the S&P gapped higher at the open and never really looked back. Price on the DWCPF also gapped higher, but was almost immediately hit with selling pressure that drove it down quickly in short order. That selling pressure got bought not long after it started and the DWCPF continued on a choppy, but productive day. The DWCPF is still hitting resistance, but today's action gives the bulls hope that fresh highs may be coming before too much longer (that's not a prediction).



Breadth looked much better too, which was not a surprise given the rally in the DWCPF. The signal remains bullish.

NAAIM came in more bullish today and leveraged shorts were not much in evidence. That's a green light for the bulls as far as this sentiment indicator goes.

I remain bullish on the S&P and will go modestly bullish on the DWCPF given today's rally and NAAIM bullish stance. It does still need to cut through resistance, but this does remain a bull market and it did show some life today.

 

[coolhand]

NAAIM came in more bullish than last week. Also notable was that collectively they are not using leverage on short positions. Looks like risk remains to the upside, but I don't know if small caps will join that party the way large caps have. They may go up, but they are fighting resistance (DWCPF).

 

[coolhand]

The bulls owned the morning session, but then the bears stepped in and took control in the afternoon. All in all the close was kinda neutral (mixed).




Price didn't move far off the neutral line today. I do note that price on the DWCPF, which was moving higher fairly well in the morning session, fell apart in the afternoon. That does not bode well for small caps as price was rejected near the trend line from the 2 previous peaks.



Breadth ticked higher and broke out of its sideways dance, but then again it's not exactly off to the races. It's still a bullish signal.

NAAIM reports tomorrow.

I remain bullish on the S&P and neutral on the DWCPF.

 

[coolhand]

My guess is that breadth is stalling as a result of small caps going neutral to slightly bullish (which is probably driven by the specter of inflation). No doubt, there are other reasons, but that one is one of the more likely reasons imo.

 

[Whipsaw]

Possibly due to earnings season?

 

[mmk119]

Coolhand - love your charts and insight. thank you.
do you think the breadth is stalling because everyone is waiting to see the health of the financial picture drawn during this reporting period?

 

[coolhand]

It was a choppy morning session on Tuesday, but the afternoon session belonged to the bulls.




The S&P continues its movement higher. The DWCPF gained as well, but it's still in no-man's land (neutral) with a modest bullish bias (overhead resistance).



Breadth has almost stalled the past few trading days, but remains bullish. It's possible the market is getting ready for another turn back down, but we did have a bullish NAAIM reading, so I'm not convinced the upside is over (for the S&P anyway). Still, why is breadth stalling? Just something to watch.

I remain bullish on the S&P and neutral on the DWCPF.

 

[coolhand]

The market spent the bulk of its day underwater on Monday, but the bulls managed to push price back around the neutral line by the close.




The action changed nothing. It was just a sideways kind of day.



Breadth dipped just slightly and remains bullish.

I am keeping it short tonight. I remain bullish on the S&P and neutral on the DWCPF.

 

[coolhand]

The bulls capped a positive week with a rally into the final hour of Friday's trading as we headed into the weekend.




The DWCPF has stalled just above its 50 dma, but price on the S&P continues to posted fresh all-time highs. That chart is quite bullish right now in comparison to the DWCPF, which is neutral.



Cumulative breadth rose on Friday and remains bullish (at least for the S&P).

The TSP Talk sentiment survey came in bulled up, which aligns with a bullish NAAIM reading from Thursday.

It should be obvious by now that the S&P is the fund to be in (C Fund). At least at this time. Exposure to the DWCPF can still reap benefits, but we're just not seeing as much positive action as its large cap counterpart. That could change, but that's a big "if" right now. I suspect inflation fears may keep a cap on it.

I remain bullish on the S&P and neutral on the DWCPF.

 

[coolhand]

The bulls pushed price higher today, this time on both charts.




The S&P is hitting is hitting fresh all-time highs. By comparison, the DWCPF is trying not the break support. It still looks shaky despite the gain.



Cumulative breadth rose and remains bullish.

NAAIM came in bullish today. It's a solid reading, but not as bullish as readings we've seen in the past. Keep in mind that while they are collectively bullish, we don't know what they are trading, so with the disparity between small caps and large caps the sentiment may or may not be even. This is why I have been differentiating my own sentiment between the 2 indexes.

I remain bullish on the S&P and neutral on the DWCPF.