coolhand's Account Talk

[Robo5555]

While some of the main sentiment surveys I follow are largely on the bullish side, many others show significant bearishness. NAAIM has been bullish for a long time now and they've not been wrong when taken in the long-term context. Breadth and liquidity will continue to trample the bears as long as they remain in their current configurations. We can't know the future with certainty, but it sure looks bullish to my eye. If anything changes, I'll certainly pass that along.

Thanks CH. Your posts are an important part of my strategy. 22% last 12 months, currently split between CSI.

 

[ravensfan]

So Coolhand I have to ask the question; since you are no longer a premium service, will you be posting your moves on AutoTracker?

Thanks again for your insight on the markets, a calming voice in a stormy sea...

 

[Cactus]

I think CH has been posting all along but if you are still a Premium Service Member they don't show up till way later. You don't have any control over that.

 

[coolhand]

So Coolhand I have to ask the question; since you are no longer a premium service, will you be posting your moves on AutoTracker?

Thanks again for your insight on the markets, a calming voice in a stormy sea...

I transferred my TSP funds to a self-directed account in June. I'm still working and contributing to TSP, but the account was zero'd out, so I don't have a ton to work with. I still post my TSP moves, however. I just don't make many moves there for the reason just stated. It's also problematic for me to post on the tracker while still working a day job. At one time it wasn't a problem, but my options were limited in this regard some time ago.

 

[coolhand]

Both charts are showing what I am interpreting as basing action for the next leg higher. Momentum is weakening, but price isn't going anywhere. That's bullish. RSI is still overbought, but with breadth still hitting fresh all-time highs, so what? NAAIM came in less bullish, but there are zero bears taking short positions. So we have capitulation among the smart money in that group. They aren't as bullish as they've been, but they are still heavily long overall. The options are bullish for Friday. TRIN closed at a high reading, which is bullish for Friday as well.

I'm looking higher for Friday. The intermediate term looks bullish too.

 

[evilanne]

I don't really understand some of the references that you use for bullish/bearish. e.g. NAAIM states https://www.naaim.org/programs/naaim-exposure-index/

It is important to recognize that the NAAIM Exposure Index is not predictive in nature and is of little value in attempting to determine what the stock market will do in the future.

Economic indicators seem to be more predictive (e.g. trends in GDP, manufacturing, employment etc.) Political issues like proposed tax policy, NK threat etc. are more unpredictable. Does NAAIM consider any of these factors?

 

[coolhand]

I don't really understand some of the references that you use for bullish/bearish. e.g. NAAIM states https://www.naaim.org/programs/naaim-exposure-index/

Economic indicators seem to be more predictive (e.g. trends in GDP, manufacturing, employment etc.) Political issues like proposed tax policy, NK threat etc. are more unpredictable. Does NAAIM consider any of these factors?

I pay no attention to such nonsense. NAAIM is made up of professional money managers. They don't want to be exploited as such and so the disclaimer is issued.

Economics is largely dead. This is a central bank economy (global). Economics is just a backdrop anymore. It's something for the media to use to justify a given economic narrative while the printing of money goes on endlessly.

Read "Creature from Jekyll Island". There are plenty of other books and sources out there on this subject. The whole rigged system has been blown wide open by many others now.

 

[ravensfan]

Roger that! Thanks for the reply.

 

[coolhand]

The bull market continues. The C and S funds didn't much last week, but the I fund tacked on some nice gains. The fact that the market refuses to sell down is bullish. My intermediate term system is showing some signals flipping negative, but those signals are backing into negative conditions as a result of sideways trading. They don't mean much in that context.




The S&P 500 continues to eke out gains, while the DWCPF tracks a sideways pattern. I think the chances of another spike to the upside is very real. NAAIM remains bullish (not as bullish as they've been) with zero bulls. The options went neutral as we head into Monday. Breadth is still rising and that is my main indicator. The market is being driven higher. Don't fight that.

 

[coolhand]

After a bout of strength to begin the week's trading session, the sellers stepped in and tempered those gains by mid-morning. The S&P 500 still edged up for another closing all-time high.

The options are looking a bit bearish, so we might get some bleed over selling pressure on Tuesday, but as I've been saying for a little while now, this market is not acting like one that is poised to see significant selling pressure. There are plenty of bears in the polls, but not so much in the NAAIM survey. Breadth remains quite bullish.

 

[coolhand]

My intermediate term system continues to deteriorate, though it remains in a positive condition. Breadth is still quite positive, but weakening of late.



The S&P 500 closed at yet another all-time on Tuesday. The moves are incremental, but steadily higher.



Small caps are putting a damper on any further upside on the DWCPF. So far, the pullback in this index has been modest.

There is a chance that a bigger a downside move is coming; maybe even a pullback over several days. BUT, there is no overhead resistance on the charts and this remains a bull market. The danger of stepping aside while the market sorts out its next "big" move is missing another leg to the upside. I suspect that the tax cut narrative may be key to what the market does. As long as that narrative remains positive for middle class tax cuts, the downside is going to be limited. The last rally was due in large measure to a positive market view of those tax cuts.

The options are neutral heading into Wednesday.

 

[coolhand]

There is no change to my outlook this evening. Another closing all-time high for the S&P 500 is in the books. The DWCPF remains in a sideways pattern. It seems no one wants to miss that parabolic launch; assuming we eventually get one.

The options are neutral heading into Thursday. We'll get another weekly read on NAAIM tomorrow.

 

[coolhand]

My intermediate term system has been deteriorating of late, but remains in a bullish configuration. That deterioration did appear to indicate that the market may generate some selling pressure, which we got on Thursday, but the market come back shows us that there are still those who want this market elevated. This morning, the futures are solidly positive, so a continuation bounce off the Thursday low appears likely.



The S&P 500 managed to close positive in spite of the downside pressure. Momentum is and has been weakening, though only marginally.



The DWCPF continues to lag the S&P 500, though no serious price damage to this point.

Breadth remains bullish. NAAIM got more defensive and the reading is now a low as it's been since April. It's a neutral reading. They are certainly getting more defensive, but they are not shorting this market. So they see the deterioration and are taking measured steps to protect capital, but also recognize that this thing can turn back up in a hurry. The options are on the neutral side.

Friday looks to start out bullish. The bulls are still in control.

 

[coolhand]

I've been saying that it is probably not wise to fight this market and last week's action lent credence to my suspicions. The C and S funds both posted weekly gains, while the I fund back up a bit. It has appeared that the powers that be want this market elevated. Driving that perception is the current tax cut narrative, which if successful, could see this market launch much higher than current levels. But if that narrative falls apart, things could go the other way. It is my expectation that there will be at least some degree of success in transforming the current tax structure and tax cuts will be perceived as a solid foundation to corporate profitability, while driving (improving) the job market along with it.




That gap higher on Friday sure does look bullish. There is no overhead resistance and we are approaching the more seasonally positive 6 month cycle.

NAAIM is neutral with no short bears. The options are neutral for Monday. TSP Talk is neutral. Overall, sentiment looks supportive for the bulls. Breadth remains bullish along with liquidity. I am leaning bullish for next week.

 

[JamesE]

Much appreciated CH.

 

[coolhand]

After popping to new highs on Friday, the market turned back around and fell rather hard on Monday. Enough so that we have to consider that the market may be getting ready to have some corrective action. But it's not an easy call to make.



The S&P 500 was hit with its most intense selling pressure since the first part of September. The size of that up-leg begs for a more meaningful pullback.



Both the S&P 500 and DWCPF saw RSI fall back under an overbought condition.

The market could use a pullback and so it would not be a surprise if more selling pressure presents itself. But sentiment is not supportive of a meaningful top. That means that while the short-term could produce more weakness, it may not last long. Breadth did fall hard on Monday, but not enough to go negative...yet. The options are rather neutral heading into Tuesday.

Overall, I'm on the fence after Monday's shot lower. The tax cut narrative could easily breath more life into this bull market if we get some positive news on that front. Futures are positive this evening, so a bounce looks to be in the works for Tuesday. The next couple of days could be telling.

 

[Valkyrie]

Here?s why one chart watcher says the stock market is finally ready for a pullback - MarketWatch

 

[coolhand]

No change from yesterday. The market bounced, but could not hold a sizable portion of intra-day gains. I still see no sure short-term outcome, though I am leaning a bit bearish. The options remain neutral heading into Wednesday. While I may be a bit bearish, I am not taking any short positions. I may however, raise some cash from my longs.

 

[coolhand]

Here?s why one chart watcher says the stock market is finally ready for a pullback - MarketWatch

Aside from the particulars pointed out in the article regarding bearish indicators, the chartist cited in the article sees the same potential for some weakness that others are seeing. I'm seeing it too. I'm just not willing to go short as the set-up is not solid enough for me to put money on it.

 

[pmaloney]

Ms. Stockton can sometimes be too conservative looking for pullbacks but sometimes she is right. Hopefully she is right and this will present a good buying opportunity. :smile: