coolhand's Account Talk

[coolhand]

The bulls made it 2 in a row on Tuesday. Much of the previous losses have now been erased and price is not far from the peak now. However, there may be resistance as price tries to move higher.




We've seen this before too. Every bout of weakness of some size gets reversed at some point with new highs eventually being hit. Are we going to see fresh highs again? Let's just say I'm not betting against the bulls after today's rally. Momentum is now starting to turn up.



Breadth also got well in a hurry and is back to a more solid bullish reading.

There are many reasons to be cautious right now. Certainly the bears might take back control, but they might not either. We do have resistance above, but we're still in a bull market. I was leaning bearish given the action in certain market segments, which were not typical market activity (gamestop, silver short squeeze, etc.). We also saw the smart money pull back on their bullishness last week, which meant they saw the potential for selling pressure in the short term. Now, we have 2 solid up-days of action, which in the past has meant new highs were eventually hit.

I am moving back to a neutral stance. Monday's rally was simply a bounce off support. Today's follow up rally now calls into question the bearish argument. Can the bulls now push past resistance? Probably. But I can't get bullish just yet. I'd like to see another day or 2 of action (by then we'll have a fresh NAAIM reading).

 

[coolhand]

So, metals are now falling hard, XRP has reversed a lot, the market is back in rally mode...I can see that this market is going to keep everyone guessing. There's something for everyone right now, bulls and bears.

 

[coolhand]

The bulls bounced the market Monday to start out the week on the positive side.




The biggest takeaway I see here is that the 50 dma held (so far) on the S&P 500. That certainly doesn't mean the market is out of the woods; especially when we see headlines regarding short squeezes that are forcing the powers that be to shut down trading and change the rules to protect themselves (not you). One thing I am certain of is that we'll see more headlines like these down the road. And I don't think we'll be waiting long either.

And the silver short squeeze is more dangerous as the big banks are heavily short that metal. Physical metal is almost gone and that is very likely going to break the paper/physical price point (spot). Isn't it interesting how physical disappeared very quickly (over the weekend in many cases). If the banks lose control of the price of silver (I'm betting they will), their shorts are going to get infinitely expensive. How might this affect the market? It won't be a positive thing, that's for sure.



Breadth flipped positive on today's positive action.

So, as I've described above, it's going to be interesting to see how things play out in the days/weeks ahead. Risk remains elevated in my opinion. I remain modestly bearish.

 

[coolhand]

Regarding silver...

https://www.zerohedge.com/markets/cme-hikes-silver-margins-18-paper-physical-disconnect-set-explode

 

[Bullitt]

XRP down 45% in last 4 hours.

 

[bmneveu]

Something's afoot. Watch silver. I'm seeing panic buying in some circles. I am even seeing 100oz bars on ebay for $600 to $1,000/oz. I think these folks are early, but the financial system is being tested. Money Metals Exchange has halted all silver sales till tomorrow morning. They are out of inventory under heavy demand this weekend. Just something to think about and investigate.

I have a sleeve of TSP Talk 1oz silver coins that I would be willing to let go for $1,000 each. Hate to do it, but I suppose I'll let them go if you twist my arm....

 

[joblin20]

Is this a bull trap perhaps?

 

[coolhand]

XRP making big moves. Connected? I think so.

 

[coolhand]

I don't think there is anything novice about what is happening. Futures are up right now. Let's see how they trade to start the new week.

 

[tsptalk]

Trap? Wall Street will probably punish (take their money) these traders eventually - or at least the novice stragglers who think this will be easy money.

 

[James48843]

Something's afoot. Watch silver. I'm seeing panic buying in some circles. I am even seeing 100oz bars on ebay for $600 to $1,000/oz. I think these folks are early, but the financial system is being tested. Money Metals Exchange has halted all silver sales till tomorrow morning. They are out of inventory under heavy demand this weekend. Just something to think about and investigate.

Reddit uses have initiated a short squeeze Silver buy. All those folks who spent the last couple of days playing GameStop stock have now jumped into silver.

See https://www.cnn.com/2021/01/31/investing/silver-price-squeeze-reddit-wallstreetbets/index.html


Sent from my iPhone using TSP Talk Forums

 

[coolhand]

Something's afoot. Watch silver. I'm seeing panic buying in some circles. I am even seeing 100oz bars on ebay for $600 to $1,000/oz. I think these folks are early, but the financial system is being tested. Money Metals Exchange has halted all silver sales till tomorrow morning. They are out of inventory under heavy demand this weekend. Just something to think about and investigate.

 

[coolhand]

The bears took price lower today. The action started out negative in morning trading, but price rose from opening lows and peaked about 1 hour after the open. The DWCPF was positive at the peak. But after that, it was a choppy ride downhill till midday and then a feeble attempt to recover that failed.




Price on the S&P is now testing the 50 dma. It's holding for now, but I'm not confident that will last. The DWCPF is faring a bit better and remains well above that same key average. Momentum is diving. Volume is elevated, but not panicky.



Breadth reversed from its short-lived pop into positive territory yesterday and fell back into negative territory.

I do not feel good about this market right now. I've allowed the indicators and sentiment to give me a better picture and for the bulls to prove they still have control, but I'm not seeing that right now. NAAIM backed off their bullishness late last week, but like me, appears to be making the market prove where it's going.

The Gamestop story is very interesting and I believe that this may be evidence that the game is changing. I would not be surprised if more stories appear in the days/weeks ahead that are out of the ordinary with regard to the market.

I am going modestly bearish after being neutral the past 2 trading days. The market may still turn around, but risk is very elevated in my opinion.

 

[coolhand]

After yesterday's heaving sell-off, the market opened on a positive note. The S&P continued to rise into mid-day then peaked and sold down into the close, erasing much of its intraday gains. The DWCPF was more up and down, peaking later in the afternoon than the S&P, but also sold down in the final hour or so. Both closed positive, but the late afternoon selling pressure is not bullish.




Price remains well below the peak on both charts. Momentum remains negative. The 50 dma is a very possible target.



Cumulative breadth flipped positive again, but that's not reassuring given the afternoon swoon.

NAAIM saw a sizable drop in bullishness today, but they are still bullish. They appear to be waiting to see if the market is really rolling over or whether the bulls are going to trample the bears again.

I am not as confident about this market as I was. Anything can still happen, but I tend to think market character may be changing. My sentiment is neutral, but I think the selling may not be over. Let's see of the bulls prove me wrong.

 

[coolhand]

CH,
Looks like the NAAIM went down to 83.51... less bullish for sure.

Yes, it's less bullish by a good bit, but still not bearish. This is not a go signal; this tells me they have the caution flag out too. It's too soon to be sure if the market is rolling over. As I said yesterday, "It may still take a few days or more before the market's true intent is known."

 

[hotwings]

Big rally today. We can see how hard it's going to be to guess where this market is going. Yes, it's still a bull market, but that's not forever. The question is more about how much longer it's going to go on. I'm still waiting for NAAIM to report.

CH,
Looks like the NAAIM went down to 83.51... less bullish for sure.

 

[coolhand]

Big rally today. We can see how hard it's going to be to guess where this market is going. Yes, it's still a bull market, but that's not forever. The question is more about how much longer it's going to go on. I'm still waiting for NAAIM to report.

 

[coolhand]

While I've maintained my bullishness for some now, I've cautioned that I am wary of this market even as the indicators (and smart money) were still largely bullish. Market character can change quickly under the right (or wrong) circumstance. In this case, a new administration was a potential circumstance because the market is always looking ahead and if sees something it doesn't like it will let everyone know it. Is this what we are seeing now? Perhaps.




We got a deep decline today (for one day) and some technical lines were broken to the downside. Price on the S&P is not far from testing its rising 50 dma. Volume was not high, which is interesting. Momentum on both charts is falling.



Cumulative breadth went negative today.

We've seen this kind of action before on a number of occasions, though not recently. I'd like to think that the market is going to bottom and turn back up and maybe it will, but there may be more going on than is obvious (behind the scenes). NAAIM reports tomorrow and that will help a little bit to see what they think moving forward. But early last year it took them an extended time to react to bearish action so I don't want get complacent.

I am inclined to get bearish here even without a fresh NAAIM reading. I do have a bearish breadth reading and it comes on a long-in-the-tooth bull market with a new administration in charge. We also have technical damage, which is still not severe, but notable as all deep declines have start somewhere.

For now, I am going neutral until I see the futures tomorrow morning along with tomorrow's NAAIM reading. It's certainly possible that the market comes back, but I have a feeling that market changes may be starting to manifest. It may still take a few days or more before the market's true intent is known.

 

[coolhand]

Today's very negative open may be a warning that market character is changing. I have harbored some concern that with a new admin the market may change. Consider a defensive plan if this weakness is not reversed. We'll see if the bulls counter today. NAAIM reports tomorrow.

 

[coolhand]

The market started out positive again today, but it quickly headed south, struggling in choppy trade all the way into the close. Both the S&P and DWCPF closed out in negative territory.




So, we have weakness in the short term (to this point), but no technical damage worthy of concern. Momentum is now falling on the DWCPF, but still flat on the S&P. I note that RSI on the DWCPF has fallen out of overbought territory.



Cumulative breadth was also weak today, but remains bullish.

The after-market is flat as type this. The reality is that the selling we are currently seeing is not unusual or even unexpected. It's just weakness, which may be setting up for another push higher. Keep in mind that the smart money was bullish, so I'm not anticipating a change in market character right now. We'll see how things go as we go further into the week.

I remain bullish.