coolhand's Account Talk

[coolhand]

Price on the S&P 500 tagged declining trend line resistance on Monday and fell back. It could be another lower high. Support is not far below should the index reverse once more.



The DWCPF gave back some of Friday's gains on momentum that continues to get more negative.

It's tough to get excited about this market right now. Monday's weak close does suggest we may see more selling pressure over the next day or two. A test of recent lows is very possible. Breadth does remain positive as does liquidity and they have been trumping most other indicators (as usual). Unfortunately, many other indicators are acting as a drag on price in spite of breadth and liquidity.

I am looking for more weakness over the next couple of days, but since the market is not all that far from its previous low, any additional weakness is not likely to be long lived. If market character is any indication, anyway.

 

[coolhand]

I was looking for weakness today and we got it. But we also got price resilience as price closed well above its low of the day. Take note that the 50 dma was tested and held. That may be the retest I was looking for, but I had hoped to see price drop further than it did.



Price on the DWCPF closed for gain, but it spent some time in negative territory. I sure looks like a bottom may be in.

Having said that, tomorrow is Weird Wolly Wednesday, so there is likely to be some volatility that may include yet another retest. But I think it's time to be a buyer as the upside is looking like the more likely outcome once we get past Wednesday.

None of my indicators have changed. The OEX P/C is neutral for Wednesday.

There remains cross-currents in the market, but the bulls continue to be favored.

 

[coolhand]

Yesterday, I said that WWW had a good chance to see some volatility and maybe even a retest of the previous lows, but that it would likely be a buying opportunity before the market turned back up.

I got that one only partially right. We didn't get the volatility or any weakness at all, but the market turned up as expected. And it did so at the open, never looking back. I was too late on the trigger as the time to buy was Tuesday.



That string of lower highs got broken decisively today. That gap makes for a good downside target at some point, however. Maybe a retest of June high first? Volume was only so-so, but momentum turn positive...finally.



The DWCPF hit a fresh, all-time intra-day high on Wednesday before closing back under that declining line of resistance. Momentum has yet to turn positive on this chart.

Cumulative breadth hit another all-time on Wednesday, and of course that means liquidity remains solidly bullish. The OEX P/C is bearish for Thursday, so maybe some give-back is on tap.

It's possible that the weakness I was anticipating on Wednesday shows up on Thursday, but I am fairly certain the bottom is already in. A new all-time high in the S&P 500 seems to be a likely scenario in the intermediate term. My intermediate term system has not turned positive yet, but I think the chances are high that it will before long.

 

[coolhand]

Despite bearish OEX P/C yesterday, the market did not see much downside. I am not entirely surprised given that a bottom is in and a fresh all-time high in the S&P 500 may be in the cards. I'm thinking this higher bias could remain with us for a few more days, but a Summer swoon is likely lurking on the horizon somewhere.



The S&P 500 tacked on some modest gains to Wednesday's upside pop. The June high is within range now. Momentum is still rising.



The DWCPF eked out some gains too, but is having trouble with that line of resistance. Of course, early weakness didn't hold, and that's at least somewhat bullish.

The market is back on a bullish tack, so bears beware. Breadth and liquidity are looking very good. I know this isn't going to last, but for now I would not fight it.

 

[coolhand]

No charts this evening. The market was fairly flat, though the DWCPF managed a small gain. My current view has not changed. The upside remains the path of least resistance, but the market is susceptible to a pullback. I went all "G" fund today; not because a pullback is necessarily imminent, but that I think the bulk of the upside move may be over.

 

[coolhand]

The S&P 500 eked out a gain to close at another all-time high on Tuesday. Momentum is still positive, but weakening.



The DWCPF closed modestly lower, but price does remain above previous resistance.

The OEX P/C is flashing a sell today, but it's only a 1-day signal, so Wednesday has a good chance to bring weakness. While the charts look toppy, it is likely going to remain resilient even on a moderate pullback.

I'm cutting it a bit short tonight as I have a thunderstorm over my house and could lose power.

 

[JamesE]

Thanks as always, looking for a nice big red candlestick to buy for a quick play.

 

[coolhand]

Just a quick drive-by this evening as I have other pressing matters to get to.

Today's upside was surprising, but not too surprising. I was looking for some degree of weakness, even if it wasn't a ton, and we got practically none at all. Breadth and liquidity are formidable elements for the bears to overcome when they are positive and trending higher. However, the lack of weakness today increases the likelihood of it tomorrow. But it still may not amount to much. Things can obviously still turn, but tops can be very hard to predict.

NAAIM report tomorrow. They've been bullish and they've mostly been right in the longer-term context.

 

[coolhand]

We got weakness today, but as I said yesterday, it might not amount to much...and it didn't. Strength and momentum are leveling off. The market may be starting to weaken.



Same story with the DWCPF.

Even if the market is running out of steam, it may not see a serious move lower for days or weeks. The last somewhat big decline was in May, about 2 months ago. When it hit its next peak, it moved largely sideways for about 5 weeks. So, while were due a pullback, it may be only that...a pullback. A bigger decline will come eventually, but liquidity is pretty high right now.

NAAIM came in relatively unchanged, which is to say they are still bullish. Or at least not willing to short this market. The options are leaning bearish for Friday, though with all of the liquidity sloshing around the downside will likely remain limited.

 

[coolhand]

As expected, the market started out rather neutral for the week; with weakness eventually giving way to buying pressure that took the stock market back to neutral or modestly positive territory, depending on the index.



The S&P 500 closed just slightly negative. Momentum continues to weaken, but notice how little price damage there is.



The DWCPF posted a modest gain on the day.

Once again, not much has changed. The options are neutral heading into Tuesday. My sentiment remains neutral as well.

 

[coolhand]

The bull took the market higher once more today. Is it really all that unexpected? Just because we are due some weakness, doesn't mean we'll get it. Especially with liquidity levels remaining at very high levels.



There was some volume behind the moderate run higher too. RSI is not far from overbought, which is where it's been for a few days now.



Same story for the DWCPF.

I got out of the market last Monday thinking that most of the upside was behind us. Well, that is potentially true, but becoming less true every time the S&P 500 and DWCPF hit a fresh high. For Wednesday, the OEX is neutral. Breadth and liquidity remain bullish. Any weakness from here in the short-term is likely going to be limited. It is very possible this market has a good ways to run yet, but I can't speculate to what extent since there is no resistance above. I started the week neutral and I'm going to remain that way for now.

 

[coolhand]

It was another relatively ho-hum day today, but the S&P 500 did hit a fresh high. Small and mid cap stocks sent the DWCPF moderately lower.



Volume has been elevated the past 2 trading days. Momentum is flattening out as is RSI. Still, price is holding firm.



Price on the DWCPF tumbled moderately, but no technical damage was done. Momentum is starting to level out and RSI dipped.

Overall, nothing serious to report from a technical perspective. The OEX P/C is bearish for tomorrow. Breadth and liquidity remain bullish.

I remain neutral. NAAIM reports tomorrow.

 

[coolhand]

It was a rather odd trading day on Thursday. Stocks started out largely positive in the morning session, but got hit with a sell off in the afternoon. Technical damage was limited by a bounce that saw the major averages retrace a portion of their intra-day losses.



We can see that the S&P 500 was down hard at one point in the afternoon and the retrace saw price form a long shadow on today's candlestick, which suggests a bottom. Volume was heavier than normal. Momentum continues to slide.



The DWCPF took a bigger loss on Thursday than it did on Wednesday. Like the S&P 500, it closed well off its low of the day.



The NASDAQ was thrown for a sizeable loss of 0.63% today, the what got my attention along with other traders was the nosedive in the transports. That is a good-sized red candlestick on heavy volume. I'm not sure what this might mean, but it could be an early omen of some kind.

Today's selling pressure was not expected by many, but the market weathered it like it generally has with hallmark resilience. While the transports make me wonder if trouble is ahead, NAAIM came in a bit more bullish and showing no inclination to fight this market. Breadth remains bullish, but has gone a bit sideways. The CBOE P/C is bullish for Thursday and the OEX P/C is neutral to modesty bullish. I don't think Thursday's weakness will see much downside follow through on Friday, though I am not complacent as this market is due for more than a token pullback. I am interested in seeing what happens to transports from here.

 

[Valkyrie]

transports, fear of large oil price increases coming due to saudi cutting production and the continued dollar weakness. that's what I'm thinking.

 

[coolhand]

I heard such talk in the media today. It certainly makes sense at face value. Question is; is the rest of the market going to follow? I'm seeing a select few traders calling for a short-term sell-off in the neighborhood of 5%. We're due, but tops are notoriously hard to predict. But that's why I'm looking sideways at the transports. I do have a position in TZA. Caught the weakness on Wednesday for almost 1% and sold it the same day. Took another position today. It's speculative, so we'll see how it goes. Shorts are risky in this market.

transports, fear of large oil price increases coming due to saudi cutting production and the continued dollar weakness. that's what I'm thinking.

 

[coolhand]

The market continued to pullback as the new week has begun, though losses were pretty limited. Hardly a surprise.



The S&P 500 closed slightly lower and spent a good portion of the day in the plus column. Momentum continued to weaken, but price remains not far from the top.



The DWCPF is giving up more ground than it's large cap cousin, but that's to be expected. Price is still well above the rising 50 dma.

Transports gave back Friday's gains, so there may be a bear flag in play with fresh lows coming soon. For now, I am not taking it too seriously as this market is hardly a model of fundamental economic principles.

Breadth and liquidity remain bullish. The OEX P/C is bearish for Tuesday. More weakness looks to be on tap.

 

[coolhand]

Yesterday, I said I was looking for more weakness given the bearish OEX P/C. We got some, but it didn't stick. Of course, the bulls did not exactly run to the races either.



The S&P 500 posted a modest gain, but is that a bear flag forming? Maybe, but that would be a risky bet in this market.



The DWCPF put up a moderate gain on Tuesday. Momentum has not turned up, however.

I did not realize it until today, but my intermediate term system had been under pressure the past day or so. It is and has been positive still, but it has been under attack. Despite the technical weakness, cumulative breadth on the NYSE is still hitting fresh all-time highs. We can't ignore that, which is what I have been saying for a long time now. Liquidity levels heavily favor the bulls. But weakness does occur, it just isn't overwhelming weakness. The OEX P/C is bearish again as we head into Wednesday. I'd not be surprised by a shot lower, but whether it sticks or not is another matter. Someone wants this market elevated and they are doing a good of job of making it happen.

 

[coolhand]

Yesterday, I said that despite technical weakness, cumulative breadth on the NYSE was still hitting fresh all-time highs and that this was not something that can be dismissed out-of-hand. Liquidity levels have been in the bull's favor for a long time too. But I also noted that weakness does occur, it just hadn't been overwhelming weakness. I said the OEX P/C was bearish again as we headed into Wednesday and that I'd not be surprised by a shot lower, but whether it stuck or not was another matter.

We got the shot lower that I thought we might given the bearish options reading. And while the S&P 500 actually held up well (and closed positive), the DWCPF got whacked, but closed well off its lows.



How bearish could today's market have been with price on the S&P 500 still poking around near its all-time high?



The DWCPF tested its rising 50 dma and bounced to close well above it. Still, it isn't as bullish a picture as the S&P 500, but should be surprised since it's small and mid cap stocks, which tend to get hit the hardest in a turn lower?

Cumulative breadth turned down today, but not much. The OEX P/C is now neutral, but the CBOE P/C is bearish, which is bullish. The market is probably due a bounce on Thursday, but the selling pressure may not be over just yet; at least over the days ahead. NAAIM reports tomorrow. I suspect they'll remain largely bullish, but we'll see.

 

[coolhand]

I thought we might get a bit of a bounce on Thursday, but for the most part we got more weakness. My intermediate term system is now a hair from going negative. Time to turn?



Price on the S&P 500 has formed a triangle in the short-term. Those usually break in the direction of the trend, which is obviously up. Momentum remains negative, but this is not a bearish chart.



The DWCPF is another story as price settled lower just above its rising 50 dma. Momentum is still falling. That 50 dma tends to be supportive, but could get violated before the market turns back up.

NAAIM came in bullish (surprise). Cumulative breadth is deteriorating, but still positive. Overall, this market may be looking for bottom. The S&P 500 looks poised to rally and maybe support holds on the DWCPF. The OEX P/C is a bit bullish. I would not short this market right now. While more weakness is a real possibility, the risk remains to the upside.

I may jump back into the S fund soon.

 

[coolhand]

In my last weekly blog, I said that the market was showing mixed signals, but that the signals that count are bullish. Be that as it may, I was neutral for last week since I had no conviction on which way the market might go for the week. I noted, however, that the bulls continued to have the advantage despite short-term weakness or sideways action in the market. The week ended mixed for the TSP stock funds with the C and I closing higher by 0.23% and 0.87% respectively, but the S fund shed 0.57%.



Price on the S&P 500 remains in that triangle area, which should eventually see an upside breakout at some point. However, price may track sideways out of the triangle, though that would not invalidate the likely direction of the break.



The DWCPF bounced on Friday, which keeps price above the rising 50 dma. Momentum has not turned yet.

NAAIM remains bullish. Our TSP Talk survey came in less bullish, but is still neutral overall. The OEX P/C is still bullish as we head into Monday.

Breadth picked up a bit on Friday and liquidity remains bullish. Overall, not much has changed after last week and that keeps me neutral overall. I do expect another rally, but the market may want to retest recent lows first. That may happen this coming week, but Monday could see a poke higher first, given the bullish OEX P/C.