coolhand's Account Talk

[coolhand]

The market had another good week, last week. Especially the S fund.




I don't know how long these indexes can keep powering higher, but they remain bullish. Friday's action saw both indexes hit fresh all-time highs. There is no resistance above on either chart either. Momentum is rising on both charts and both are also overbought.



Cumulative breadth remains bullish.

My indicators remain bullish and that includes the smart money, of course.

I remain bullish.

 

[coolhand]

Yesterday, I said that while the market was probing all-time highs it wasn't able to close at those levels. I also said I wasn't sure if the market was ready to do such, but that I did expect it to happen at some point. Today, the market left little doubt where it wants to go as the bulls ran rampant over the bears.




The charts sure look like they are breaking out the upside again. The DWCPF wasted no time getting overbought once more. We know what happened the last time it got overbought. It stayed that way for about 5 weeks (not saying we are about to see a repeat of sorts, but hey, you never know). Momentum is moving higher on both charts now.



Cumulative breadth moved higher, of course and remains bullish.

The big news is that NAAIM, which was already moderately bullish, got more bullish. What's not to like if you're a bull?

I have moved from neutral to bullish today.

 

[coolhand]

NAAIM came in more bullish today. I'm going from neutral back to bullish now.

 

[coolhand]

The rally may have faded a bit today, but it still closed with good gains.




I note that both charts show price probing fresh all-time highs today, but neither was able to close at that level. However, this market could propel past resistance (we're still in a bull market after all). I suspect it will, but I'm not sure the market is ready for it just yet. Momentum is starting to turn back up on the DWCPF, but is still flat on the S&P.



Cumulative breadth is looking better and remains bullish. This signal has been bullish for more than 2 months now.

I went neutral earlier this week because of the transition from one year to the next and the fact that the indexes were struggling a bit (especially the DWCPF). Now, we have a 2-day rally that has retraced a good portion of previous losses, which makes me wonder if the rally if ready to now continue. NAAIM was moderately bullish and if the market continues to bias higher they are likely to remain that way when we see the latest sentiment reading tomorrow.

I'll stay neutral for now.

 

[coolhand]

So, after Monday's first trading day of the year loss, the market follows up with a bounce on the 2nd day. While it was a decent bounce, it didn't retrace all of Monday's losses on the S&P. The DWCPF retraced almost all of its losses.




We can see from the charts that the uptrend has at least stalled (short to mid-term) for now, but the charts still remain bullish. Technical damage is still limited.



Cumulative breadth remains bullish.

This market isn't exactly easy to figure out right now. A lot of potentially market moving events are in play this month. Some are not visible yet. Today's bounce calls into question how this month is going to go. And it may stay that way (or not) for the time being.

I am going to remain neutral. I'd like to see what NAAIM does later this week once they've had time to assess the first week's trading activity.

 

[grimmjsg123]

From the futures we have more bold statements ahead.

 

[coolhand]

So, the first trading day of the year starts us out on a negative note. That's not a good sign at face value and could be a problem if there is follow through.




The S&P gave up most of it's past week gains, but it did close well off the lows of the day. But that candlestick isn't pretty. The DWCPF continued to give up gains, now closing negative for 5 out of the past 6 trading days. Momentum is falling on the DWCPF.



Cumulative breadth remains bullish, but it was negative today and is no longer ascending at the rate it did for all of November into early December.

We did see NAAIM rein in their bullishness to some extent the past 2 weeks. It is important to remember though, that they were still positioned in a moderately bullish stance. However, they can change their sentiment whenever they want as they are certainly not held to the sentiment they reported on any given Thursday. As I said last week, they may have tempered their bullishness because they are waiting to see if anything changes as we end one year and start another. And something "may" be changing.

Futures are positive right now (Monday evening), but that doesn't mean much of anything other than perhaps there is no panic selling. Still, I think it would be prudent to reduce risk for the time being until the market makes a bolder statement one way or the other.

I am going from bullish to neutral.

 

[nasa1974]

Last week saw somewhat of a reversal of fortune between the S&P and the DWCPF. For the week, the S&P was up more than 1%, while the DWCPF was down more than 1%. What do we make of that? I can't read much into it given that last week was the last trading week of year and the quarter. Now we start a new year and a new quarter.

Friday's action was modestly negative for both indexes, but the yearly gains were impressive; especially for the DWCPF, which was up more than 31%.

As January goes, so goes the year is an often quoted axiom among traders. I remain bullish as we head into the new trading year.

Interesting for January 2020 the "F" fund was a positive 0.38 while the "C, S & I" funds were negative 0.02, 0.35 & 0.89 respectively. Of course the "C, S & I" funds tanked in February and March. But all funds ended up positive by the end of the year.

 

[coolhand]

Last week saw somewhat of a reversal of fortune between the S&P and the DWCPF. For the week, the S&P was up more than 1%, while the DWCPF was down more than 1%. What do we make of that? I can't read much into it given that last week was the last trading week of year and the quarter. Now we start a new year and a new quarter.

Friday's action was modestly negative for both indexes, but the yearly gains were impressive; especially for the DWCPF, which was up more than 31%.




Price on the S&P closed out the year at a fresh all-time high, while the price on the DWCPF is off of its all-time high, but that by all that much. Both charts remain bullish, but the S&P has an improved technical aspect. I can't read too much into that either so I'll have to wait to see how market character shapes up as we move through January.



Cumulative breadth remains bullish as we head into the new year.

NAAIM is bullish (moderately) for the new week. TSP Talk came in neutral.

As January goes, so goes the year is an often quoted axiom among traders. I remain bullish as we head into the new trading year.

 

[coolhand]

What NAAIM number (or range) is the breaking point from bullish to bearish? Other than the March/April 2020 timeframe, the NAAIM has not been below 50 in the past two years. After 5 weeks above 100, I see the drop to 89 and then 82 as a somewhat significant shift in position, no?

It's important to understand that when observing the NAAIM info that the site does not explain exactly what the numbers mean (how high they can go, or how low, etc.). From experience, I see a reading of 60 as neutral (give or take). Anything above that number gets progressively more bullish and lower gets more bearish. Using this guideline has worked well for me.

 

[Mcqlives]

What NAAIM number (or range) is the breaking point from bullish to bearish? Other than the March/April 2020 timeframe, the NAAIM has not been below 50 in the past two years. After 5 weeks above 100, I see the drop to 89 and then 82 as a somewhat significant shift in position, no?

CH can probably expound on it...but I view NAAIM as a sentiment, put into statistical form, of risk managers. Here is a chart showing the past 2 years NAAIM. https://www.naaim.org/programs/naaim-exposure-index/

and here is a link to a page explaining NAAIM that I read up on a few years ago (shortly after I knew NAAIM existed). https://seekingalpha.com/article/3993108-sentiment-bullish-institutions-versus-bearish-individuals

 

[flalaw97]

What NAAIM number (or range) is the breaking point from bullish to bearish? Other than the March/April 2020 timeframe, the NAAIM has not been below 50 in the past two years. After 5 weeks above 100, I see the drop to 89 and then 82 as a somewhat significant shift in position, no?

 

[coolhand]

For the 2nd week in a row, NAAIM has come in a bit less bullish. The reading is still bullish overall, however. So, they are tempering bullish expectations, but not by a ton. It could be profit taking and then waiting to see how the new year shapes up in January. It could be tax positioning too. It could be both or something else. But the bottom line is that the signal is still bullish, just less so.

 

[coolhand]

The market bounced back on Wednesday with both the S&P and DWCPF closing with gains.




It's nothing to write home about, but at least it breaks the string of losses on the DWCPF. Volume remains low, which is understandable at this time of the year.



Breadth recovered nicely and is sporting a fresh all-time high.

We get a fresh NAAIM reading tomorrow. As always that reading will help frame expectations heading into next week.

I remain bullish.

 

[coolhand]

The last trading week of the year is seeing what appears to be profit taking and tax shifting as we wind down 2020.




Both the S&P and DWCPF were lower today. Notably, the S&P was hitting fresh all-time highs early in the trading session, but could not hold those gains. The DWCPF went lower quicker than the S&P. It was more like a bear ambush within minutes of the open. Still, the technical damage is limited to this point. The S&P doesn't have any technical damage to speak of, but the DWCPF shows momentum going negative, which is obviously bearish. However, RSI has finally fallen out of overbought territory after spending more than 5 weeks in that area. The question is, how much more selling might we see? I suspect we might get another couple of days worth and then things may change next week, but I'll know more when we get a fresh NAAIM reading.



Cumulative breadth took a hit, but is still technically bullish.

Despite the selling pressure, there is nothing particularly abnormal as far as market action goes. Especially as we wind the down the year and quarter. It's also not a surprise given how far the indexes have gone; especially the DWCPF.

It is too soon to get bearish on the action as it may be short term. NAAIM will tell us more about risk in another couple of days. For now, I remain bullish.

 

[coolhand]

Once again, the market closed mixed on the trading day. Mixed closes seem to be getting almost routine.

But this time, instead of the DWCPF leading the S&P, it was the other way around. The S&P closed almost 1% higher, while the DWCPF closed about 1% lower.




Price on the S&P closed at another all-time high. Price on the DWCPF gave up come recent gains.



Cumulative breadth ticked a bit higher and remains bullish.

Well, is market character about to change? We are winding down the year (and quarter) so it's possible that portfolios are shifting.

Be that as it may, it isn't bearish at face value. Overall, the indicators remain up and I remain bullish.

 

[coolhand]

The holiday shortened week last week was mixed with the S&P closing out the week with a modest loss, but the DWCPF ending the week with a gain of over 1%.




Still no changes overall to the charts. Both remain bullish, but as has been the case for some time now, the DWCPF continues to lead the S&P.



Cumulative breadth remains bullish.

NAAIM came in bullish again, but not as bullish as previous weeks. Still, the difference is not meaningful. TSP Talk came in bullish as well, but not as much as last week.

Futures are rising this evening. The indicators tell me to remain bullish. Seasonality still favors the bulls.

 

[TSPIntel]

Very impressive Coolhand, the MA 50 and MA 200 are very good technical indicators. HAPPY HOLIDAYS! THE BEST 2021!

 

[coolhand]

The bears made an attempt to take the market down today, but it was quickly countered by the bulls. Price bottomed after the 1st hour and recovered to close mixed on the day.




There isn't anything particularly notable on the charts today. Volume was actually average given the holiday week. Normally, I'd expect less volume. Momentum is still negative on the S&P, but price remains not far from the peak.



Breadth was not impressive, but the chart is still bullish.

I remain bullish.

I am going to be away from my computer the rest of this week, so I won't be posting for a few days. Have a safe and joyful Christmas!

 

[coolhand]

Just a few days ago I said "Someone wants this market higher and NAAIM knew it."

Today is one of those days that makes it fairly obvious that this is indeed the case. I won't be surprised if we close positive, but let's see how it goes.