coolhand's Account Talk

[coolhand]

Quick update on sentiment. The options smart money is wildly bearish for Friday, but NAAIM came in more bullish. The options are daily reads. NAAIM is days or weeks. We could see some selling Friday, but it's very likely temporary if we get it.

 

[coolhand]

So, Congress has agreed to fund the Government through September and Trump is contemplating breaking up the big banks. Those were the bigger stories of the day, though I should also mention that earnings continues to impress.



Just one chart this evening. The DWCPF bounced, coming close to retesting that upper line of resistance that was broken for only a very short time.

For Tuesday, the options look to be on the bullish side. Breadth and liquidity also remain bullish (of course). I started the week bullish and that sentiment has not changed. With the averages close to historic highs, I expect another run to the upside eventually.

 

[coolhand]

Somewhat boring day in the market on Tuesday. Price traded in a relatively tight range with the averages closing mixed by the close.



The S&P 500 eked out a small gain on decent volume, but momentum is still weak and strength flat. I seriously doubt the puppet masters are going to let that line of resistance stand unbroken. However, there are gaps below that could still get filled (at least partially) before another run to the upside.



The S fund gave back the bulk of Monday's gains on Tuesday. Momentum is also weakening. We could see at least a partial gap fill here too.



Anyone still doubt the EFA's ability to levitate?

The options smart money is leaning heavily bearish for Wednesday. They aren't always right, but they sure are leaning hard and that makes me lean toward weakness for Wednesday. However, the market needs to reload after the last rally if it's going to make another run to a fresh high so we sometimes have to take the draw downs in stride. As far as any downside goes, I see it as a buying opportunity if we get it. Breadth is flat, but positive as is liquidity. My intermediate term system remains solidly positive.

 

[evilanne]

What's the likelihood that the FOMC announcement has an impact on the markets tomorrow afternoon?

 

[coolhand]

What's the likelihood that the FOMC announcement has an impact on the markets tomorrow afternoon?

They have been relative non-events for some time now, but there is always a chance of a big reaction. I'm not looking for one.

 

[coolhand]

I was leaning bearish for Wednesday and the market gave us weakness, though once again it was the DWCPF that took the bulk of the selling pressure, which isn't unusual. The Fed left rates unchanged today and Apple fell to profit taking after posting disappointing iPhone sales.



The S&P 500 and EFA both dipped, but not much. The DWCPF came close to filling that lower gap. That may be all we get for now, but its possible there could be some bleed over weakness on Thursday morning. The S&P 500 still has its gaps unfilled. It could be weeks before those get filled. Maybe.



The Bank Index posted a moderate gain and is now getting close to testing its falling 50 dma.

After leaning hard toward weakness on Wednesday, the options smart money went neutral heading into Thursday. There will be more sentiment surveys tomorrow. No real change to my other indicators; they remain intermediate term bullish.

 

[coolhand]

We got bleed over weakness Thursday morning; largely confined to the DWCPF once more. That just means that index will likely power back up faster than the others when it's ready.

More importantly, NAAIM came in neutral, but what bears (short positions) they did have last week are now at zero. That's bullish beyond a day or three in my opinion.

 

[coolhand]

Another choppy, up/down/up kinda day. Crude continued its slide. The Healthcare vote made it through the house, which is no minor feat. The Senate will be even more challenging.



The S&P 500 went nowhere on Thursday, while the DWCPF ratcheted a bit lower. It looks like price largely tested and bounced off of the 61.8% Fib level (tested the 50 dma too) and closed above the 50% level. That, and the long tail on that candlestick suggest a bottom could be in. I wasn't looking for this much weakness this week, but it was pretty much contained to the DWCPF.



I wonder how many folks bailed on the I fund over the past week or two? Yeah, I'm not in it myself, but I've never denied how bullish the chart is.

I mentioned earlier today in the previous post that NAAIM looked bullish to my eye beyond the next few days. They are not bearish at all. And they've been positioned correctly for months.

On the bearish side, cumulative breadth, while still positive, is not far from flipping negative. That may be bullish. Liquidity is on the decline too, but is still very much in expansion. I remain long the S fund.

 

[coolhand]

The options are bullish for Friday. That's increases the odds that at least a short-term bottom is in.

 

[nasa1974]

I wonder how many folks bailed on the I fund over the past week or two? Yeah, I'm not in it myself, but I've never denied how bullish the chart is

The "I" fund has stayed a little stronger than I thought. There is still that large gap from the first French election last month and the "I" fund in May generally doesn't do well so that's why I went 50/50 "CS" last Thursday. With the French elections this Sunday the market for Monday will be very interesting.

 

[guppie]

I wonder how many folks bailed on the I fund over the past week or two

I bailed because I was off the grid and didn't want to worry about the market while I was fishing in Florida. I have gone flat the market for many years while I'm on vacation, this year it didn't work out very well, but someone on this forum stated a long time ago to have a plan and execute the plan. Isn't it strange how much more it sucks to miss out on a large pop than it is to actually lose money?

 

[Cactus]

Isn't it strange how much more it sucks to miss out on a large pop than it is to actually lose money?

I can't agree with that. I'm only now making up for my 2008 loss. Remember it takes a 100% gain to recover from a 50% loss. :blink:

 

[coolhand]

I wonder how many folks bailed on the I fund over the past week or two

I bailed because I was off the grid and didn't want to worry about the market while I was fishing in Florida. I have gone flat the market for many years while I'm on vacation, this year it didn't work out very well, but someone on this forum stated a long time ago to have a plan and execute the plan. Isn't it strange how much more it sucks to miss out on a large pop than it is to actually lose money?

My question was me thinking out loud, so-to-speak. I was already 100% S fund and did not want to use an IFT to reshuffle the deck even though it has cost me to this point. I've have not owned any I fund in I don't know how long. And it's soaring again today.

Honestly, it is starting to look a bit parabolic and that could be bearish, but it's still a bullish chart.

 

[coolhand]

The "I" fund has stayed a little stronger than I thought. There is still that large gap from the first French election last month and the "I" fund in May generally doesn't do well so that's why I went 50/50 "CS" last Thursday. With the French elections this Sunday the market for Monday will be very interesting.

Drudge has a link saying that Macron has a 24 point lead. Our mainstream media must be involved in their polling. :laugh:

The point is that if Macron gets smacked, the market will indeed be interesting. Come to think of it, you're right, it will be interesting either way. :smile:

 

[Robo5555]

I made my move on 4/24 from CSI to 100% I. Do not regret it but you are right about the French election results. Let's see what happens Monday.

 

[Robo5555]

Let's see what happens now that Macron won.

 

[coolhand]

Let's see what happens now that Macron won.

I have no idea what to expect. Futures may give us an early clue though.

 

[weatherweenie]

I have no idea what to expect. Futures may give us an early clue though.

Futures were limit down, or close to it, when Trump won.

 

[coolhand]

Futures were limit down, or close to it, when Trump won.

That was an interesting night for sure.

 

[JamesE]

Looks like a non event or even a sell the news now. CH, any prognostications on the S fund through the end of May? I'm starting to think about checking out...