coolhand's Account Talk

[coolhand]

Looks like the NAAIM got more bullish today as well.

Yes, they got bulled up. They continue to shun the downside, so the risk remains up as far as they are concerned. Yes, money can be made shorting if one is nimble and generally operating outside of TSP, but the bigger money appears to be to the upside.

 

[Cactus]

Looks like the NAAIM got more bullish today as well.

 

[coolhand]

Happy Veteran's Day to all you Veteran's! :smile:

Today's action had a more "normal" feel to it than that of the past 2 trading days. The bulls tacked on solid gains on normal volume.




The uptrend still remains intact. Momentum is still rising. Price on the S&P is still contending with resistance, so that's a area we want to watch.



Breadth leveled off today, but remains bullish.

We get a fresh NAAIM reading tomorrow. As always, that will help frame my outlook for the following week. I remain modestly bullish.

 

[coolhand]

The bears tried to take price lower today, but they were not successful as price on both the S&P and DWCPF closed near the neutral line. I will say that other indexes fared better or worse depending on the index.




Volume was not as impressive today, but it was still high. There does appear to be a battle raging with gaps and long wicks. And there may be rotation going on as well given how poorly technology fared today. While this market may have a bearish feel about it, price always has the last say and so far it's staying elevated (on the indexes we care about as far as TSP goes). Be that as it may, the S&P is also battling resistance. The DWCPF is faring better, but it hasn't really proved all that much to this point. Normally, I'd be more concerned about the gaps, but this market can be very deceptive. I said yesterday that I had some angst about this market, but I also remind myself that NAAIM, while neutral, is not showing any inclination to short this market (as of last Thursday). So that tells me to be careful about the downside until more proof is offered.



Breadth on the NYSE rose today and hit a fresh all-time high. Nothing bearish about that.

As I mentioned yesterday, this market is showing mixed signals depending on the index. I anticipate the market will continue to act in ways that may keep us guessing what is going on and where it is actually headed. So far, the rally has not been broken so much as stalled. It may be a peak and it may not.

I remain modestly bullish.

 

[grimmjsg123]

Clearly a strong rejection. I am glad I held both moves in my quiver for November and moved out the last day in October. We shall see if we consolidate or we have another pullback coming; my magic ball says yes as the tech stocks that has held this up during this pandemic sold off on the Vaccine news. We are at the upper Bollinger Band at close yesterday even with the pullback so nowhere for it to run up and its overbought. As you said, that candle from yesterday looks wicked.

 

[bmneveu]

View attachment 47635.

Look at all the wicks on top of the candlesticks on this leg up. Now look at every other leg up. Hardly any. Not a good sign.

 

[coolhand]

The bulls came out hard to start the new week off, but that was the morning session. And while the averages closed with nice gains, they closed well off their lows of the day as price fell dramatically in late afternoon trade. Something is going on. I saw this article early in the trading day. Make of it what you will.

https://www.zerohedge.com/markets/most-major-retail-brokerages-are-suiffering-outages

And did you see what happened to precious metal? Slammed.




The biggest thing that jumps out at me is that volume stick. Huge. And notice that the S&P 500 did push past its previous all-time high before getting swamped with selling.

What do we make of this action? Why did most retail brokerages suffer outages today? Why did NAAIM go largely neutral last week?



Breadth on the NYSE did move higher and remains bullish.

I have more questions than answers about what to make of the current market environment. And something tells me today won't be the only interesting trading day we'll see in the coming days/weeks.

Futures are up currently. I generally have no reason to be bearish, but the late day selling does make me uneasy.

I am remaining modestly bullish. My angst may be a good thing.

 

[coolhand]

The TSP stock funds were all up more than 7% each, last week. Friday's action saw a modest dip to cap the huge rally.




The S&P 500 is still pushing against resistance at the October peak and there is more resistance just above that at the September peak. Price on the DWCPF needs to show us it can hold its all-time high hit last Thursday. Volume was lackluster on Friday.



Breadth fell on Friday, but the signal remains bullish.

The TSP Talk sentiment survey came in bullish (assuming we are now smart money). NAAIM was rather neutral, but showed little evidence of bearish leanings.

The neutral NAAIM reading may be profit taking prior to a pullback, or it could also mean the smart money is waiting for something else to happen before they commit (bullish or bearish). I am not sure. And there is still uncertainty for the market to deal with in general right now.

I am leaning modestly bullish, but would not be surprised with a pullback at any time.

 

[coolhand]

Gaps do not always get filled quickly. Look at the large gap from mid-May on the S&P.

 

[nasa1974]

CH,
What do you think about the large gaps over the last week in this explosive moves?

 

[coolhand]

A few days ago I said -

"...given NAAIM has not been bearish through any of this selling pressure may very well be an indication that a market recovery could come soon and has the potential to be explosive. I am not making predictions. I am just reading the technical and sentiment landscape as I see it."

I like to think I do a good job of capturing market action most of the time by using the smart money to frame my analysis. I know many of you find it well worth consideration and while I don't post for the purpose of gather "likes" they do tell me how my analysis is being received, so thank for that.




The market rallied hard once again today. The market is really telling us that it is not confused about current events, otherwise it likely be moving in the other direction. It already knows the outcome and is apparently betting on it.

Price on the DWCPF closed at an all-time high today. Price on the S&P 500 is not far behind, but does have some resistance to push through before it can (hopefully) join the DWCPF. Momentum continues to rise.



Breadth is looking good and remains bullish.

Earlier today I said that the smart money (NAAIM) went neutral, but that they are not shorting in any serious measure, which keeps risk to the upside. I think it may very well be possible they are allowing for a pullback to reenter the market, but they may also feel the need to reduce risk for some other reason.

I remain bullish, but anticipate some profit taking and consolidation at any time.

 

[coolhand]

NAAIM came in a bit less bullish for the 3rd week in a row today. I'd say they are now neutral. However, I still do not see any serious shorting going on with these money managers. They appear to be either neutral or long, so the risk remains to the upside in my opinion. Having said that, the caution that they are showing may be short term given the extent of the rally as a pullback could come at any time. Some of them may be keeping powder dry to buy in at a lower price point. That's my educated guess.

 

[coolhand]

The rally continued today, even as uncertainty appeared to reign over the political sphere. Market generally do not like uncertainty, so I thought the rally was interesting for that reason. Of course, the smart money may not be as surprised.




Price on the S&P 500 retook its 50 dma today. Price on the DWCPF moved further past its own 50 dma. Volume was above average and momentum has now turned up. Potential resistance at the previous peak is not far off on either chart.



Breadth was not as impressive today, but did eke a bit higher and does remain technically bullish.

At some point, the market is likely to pause or consolidate gains if this rally continues. Any unexpected news could also turn the market around, so I can't rule that out. NAAIM reports tomorrow and that will be an important reading given all of the uncertainty. We'll see how the smart money is positioned heading into next week.

I remain bullish.

 

[coolhand]

Monday's positive action seemed to suggest a bigger move may be near. Tuesday's rally confirmed it.




Price on the S&P 500 surged upward and almost tested the 50 dma. Price on the DWCPF blew past and closed sell above its 50 dma. Volume was only average. Momentum is starting to turn back up.



Breadth on the NYSE surged to the upside and flipped bullish in the process.

We may be seeing the early stages of a solid rally. I am not sure if it will be challenged by the bears or not. I also suspect the bears could get overwhelmed (smart money is bullish), but for how long?

I remain bullish.

 

[coolhand]

Was today's positive action a precursor to a bigger move? Early positioning? I don't want to read too much into it, but it's possible. We know the smart money has not been embracing weakness either.




The charts are not much changed, but is momentum ready to turn up? It looks like it might be.



Breadth remains bearish, but it has been trending up the past few trading days.

Well, the big day is upon us. It's going to be crazy. While I remain modestly bullish I also know that things can get chaotic. There is a lot of emotion out there and how that affects the markets will be interesting, if not unnerving. I am not talking about tomorrow's action so much as the days and weeks ahead. Buckle up.

 

[coolhand]

Last week was not pretty for the bulls. All 3 TSP stock funds were down more than 5%.




The charts are now showing significant technical damage with price on both charts sitting below their 50 dma's. Momentum continues to fall. The S&P 500 looks like it may try to test its 200 dma. It's an attractive target for the bears, but that would require another day like we had last Wednesday. Volume has been elevated the past 3 trading days. RSI is still not oversold.



Breadth ticked lower and remains bearish.

NAAIM is modestly bullish. Our TSP Talk survey came in modestly bullish as well.

As difficult as this market has been the past 3 weeks and especially last week, the weakness appears to be driven by numerous elements within the political and financial spheres. All of this is likely going to see an inflection point after November 3rd. Exactly what happens at that point (and how long it takes to happen) will be quite interesting.

As I have said in recent posts, given NAAIM has not been bearish through any of this selling pressure may very well be an indication that a market recovery could come soon and has the potential to be explosive. I am not making predictions. I am just reading the technical and sentiment landscape as I see it. However, the selling may not be over so don't be surprised by continued weakness in the very short term. We need to see what happens on the other side of November 3rd to get a better idea of whether anything changes with the market.

The smart money has been looking higher for 3 weeks, though they have slowly tempered their long side trades as the selling increased. But they never got bearish. They certainly seem intent on not missing out on a turn higher. Even though loses over the past 3 weeks have been significant, the gains off a bottom could be much more so. That's what I think they are telling us.

I remain modestly bullish despite the potential for more selling in the very short term.

 

[DreamboatAnnie]

Awesome points and assessment Coolhand! Thank you!

 

[coolhand]

The bulls finally bounced the market today. There is no way to really know if the market has bottomed so I'd not bet on it unless you're positioning yourself for a possible launch (or at least bottom) over the days ahead. Some rallies can manifest quickly and go deep, just like declines. NAAIM is straddling the market between neutral and bullish positions. They are definitely not bearish.




Not much to say about the charts. Price is back at the 50 dma on the DWCPF, but still below it on the S&P 500. Momentum has yet to turn back up. I note that the market is not oversold (not that it needs to be for a turn higher), so that could be reason for remaining at least cautious.



Breadth bounced, but remains bearish.

As I noted earlier today, NAAIM was less bullish, but still bullish (modestly so). It was notable that there is little evidence of any serious shorting with these money managers, so I'd be careful about getting too bearish. These guys appear to be waiting for something and that something may mark a bottom before moving price to the upside. But when? Likely before not much longer as they are still holding significant long side trades.

Now that I've seen how they are positioned heading into next week (with Nov. 3rd in sight) I am moving from neutral to a modestly bullish sentiment. Weakness may still manifest until the market gets whatever it is looking for.

 

[coolhand]

NAAIM came in a bit less bullish this week. That's 2 weeks in a row that they've dropped their bullishness. I would say they are now modestly bullish. They are still not taking any serious positions on the short side, which does seem odd given the weakness over the past 2 weeks.

So, what does this tell me?

This is just a guess, but obviously they are still expecting a rally and I don't think it will be a garden variety type. I get the impression they are expecting gains (significant?) on the long side and that any weakness prior to that rally starting is just part of being ready for the real money. Again, this is just a guess, but why else would smart money stay largely long? What happens on the other side of November 3rd? Is there something else that they are waiting for? This is why I follow smart money. I may not know exactly what they are collectively thinking, but they often know things that I do not.

Anyway, those are my thoughts.

 

[coolhand]

The bears really took it to the bulls today. Neither a bullish smart money reading nor the wall of worry has kept this market from probing lower.




We'll, price on the S&P 500 is now approaching the September low. Will that act as support or do the bears have other ideas like testing the 200 dma? Price on the DWCPF closed below its 50 dma today. Volume was a bit elevated. Momentum is hard to the downside.



Breadth is now about as bearish as it gets before a turn higher (in most cases, but not necessarily this time).

With the election still a few days away, I hope the bulls aren't waiting for the results. The Covid thing always ramps up to divert attention as key times too (like now). That's what happened in Florida a few weeks back when our Governor continued to open the state. Covid magically increased (immediately). It's a very smart virus that tracks closely with the political sphere. And then there's the battle over stimulus.

My point is that it is near impossible to predict this market under current circumstances. Just ask the smart money.

Speaking of smart money, NAAIM reports tomorrow. I am holding neutral till I see where they are at. Let's see if today's pounding shook any of the bulls among them.