coolhand's Account Talk

[coolhand]

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:

Sometimes being right describes all of us. Sometimes being wrong too. Ahh, that's the nature of the market. Hopefully, our wins far exceed our losses over time. I'm still not willing to get too bearish yet, but I can understand getting defensive.

 

[coolhand]

Well, the market got hit with selling pressure again on Wednesday. It was significant, but the market recovered a sizable portion of intra-day losses too.




Those longish shadows on today's candlesticks suggest a short-term bottom may be in. Short-term could be just a day or two. The options are decidedly bullish for Thursday. Breadth is a hair from going negative. TRINQ closed at a fairly high level and that suggests a reversal on Thursday.

So, my guess is we bounce again on Thursday. Will it be a dead cat bounce? Maybe. I don't want to bet on it, though it's tempting to be leaning bearish on Thursday bounce. NAAIM reports tomorrow. They got more defensive last week, so if they show more bullishness the downside may be limited. If they aren't, it may support playing the downside or getting more defensive if we get a bounce tomorrow. However, a big shift in bearishness may be bullish in the short-term. I've not seen that kind of signal in a long time from this group. Despite their reduced bullishness last week, they did not take short positions. That obviously means they have reservations about downside prospects, but also not willing to be all-in for the upside either. But that was last week, so we'll see how they are positioning for the days ahead with Thursday's read.

 

[coolhand]

I was looking for a bounce on Thursday and we got one, though it was somewhat modest overall.




Momentum remains negative on both charts. Volume has been picking up of late. RSI is no longer overbought.

Breadth went neutral today. NAAIM actually didn't change much, but some managers took short positions. There wasn't enough movement to get a good read, but they aren't bearish as a group, so the downside may still be at least somewhat contained. I would allow for a potential 1-3% drop at some point in any event. It may not last long if we get it. In fact, I'd view it as a buying opportunity.

The OEX is bearish for Friday (smart money), while the CBOE is neutral. TRINQ remains at a high level.

Overall, I think we give back some gains on Friday, but don't think any weakness will be particularly deep.

 

[hotwings]

Coolhand,

Thanks for sharing your stock analysis with us. It's appreciated.

 

[coolhand]

With the OEX bearish for Friday, I was looking lower to close out the week, though I was not looking for a big move lower.

Not only did we not really get any weakness on Friday, the S&P 500 gapped higher and closed at yet another all-time high on increasing volume. I've said on several occasions recently that even as I may be leaning lower sentiment wise, I was not inclined to short this market. Friday probably surprised some bears (even a few money managers at NAAIM got short). In fact, the last time some of those money managers at NAAIM went short, the market rallied and they eventually took those shorts off. But as a whole, NAAIM has largely remained bullish despite occasional pockets of bearishness.




So we have a snap back rally to end the week last week. Momentum turned back up on the S&P 500, though RSI is back in an overbought condition.

I am not sure at this point, but I am a bit suspicious of Friday's rally. Then again, this is a bull market. The smart money (OEX) was bearish for Friday and the market rallied. Now they are bullish for Monday (as is the CBOE). I don't like to mention politics in my market analysis, but CNN was leaked information about an indictment coming on Monday surrounding the alleged Trump/Russia connection (no, I don't buy it). This is all smoke and mirrors, but it's the kind of news item that can be used to move the market if the powers that be desire such (I'm guessing down, but you never know). Maybe nothing comes of it, but it will be interesting to see if it appears to play a role. I just wanted to throw that out there because it has the potential to screw up my technical analysis.

So, the OEX is bullish as is the CBOE on Monday. That's rather neutral to my eye. NAAIM saw a few managers take short positions, but overall the group remains bullish. Breadth went positive again. To me, any downside is likely still limited. The breakout by the S&P 500 is bullish at face value and the indexes largely have no resistance above. I am looking higher for Monday, but still leave open the possibility for a small correction over the days ahead.

 

[coolhand]

While I was looking for higher for Monday, I said I left the door open for a small correction as well. I just was not seeing enough evidence to look very deep. We got some selling pressure on Monday, but it wasn't too bad. This is where the bears have to be very careful now. Monday's weakness will likely be reversed on Tuesday, but more importantly I think that fresh highs over the days ahead are likely.




There is no real price damage on these charts; just consolidated gains.

The options are neutral to bullish for Tuesday. Breadth went neutral again, but I suspect it will turn back up. Don't be surprised if this market breaks out again as the week plays out. The bears can't get any downside traction.

 

[coolhand]

Monday's weakness gave way to a reversal on Tuesday, which was expected. The downside does indeed remain limited.




Both the S&P 500 and the DWCPF got back most or all of their Monday losses Tuesday. The bears continue to be frustrated by this market.

The options are rather neutral heading into Wednesday. We may see another reversal on Wednesday, but the inability for the bears to get downside traction is a warning to them. If you can handle the volatility, you will likely be rewarded with more gains as head toward the holidays.

 

[coolhand]

I was looking higher for Wednesday, but knew that volatility might still be a factor, which is was; especially for small caps, which started out at a multi-day high and then collapsed to its multi-day low. The S fund's loss on the day was centered around their performance.




I was disappointed that the bulls could not get some thing going and now the market is back in neutral. The options are neutral for Thursday. Breadth is positive, but not moving sideways. TRIN is a bit low as is TRINQ. That may mean more weakness for Thursday. NAAIM reports tomorrow.

The tax bill being debated in Congress may keep a lid on this market. I had hoped for an upside push, but the sellers stepped in today to quell a breakout. Other traders that I follow are getting a bit frustrated on both side of the trade. For now, the bulls still have overall control in despite the up/down action.

 

[coolhand]

After starting out the gate in negative fashion, the market found its feet yet again to eventually close out the day with a gain.




Still no break either way. NAAIM came in a bit more bearish, but not much. This group remains bullish overall, but cautious. The options are bullish for Friday. Breadth is positive, but still tracking sideways. TRINQ close at a high level, which is bullish for Friday.

It think the market tries to head higher again on Friday, though a serious breakout is probably not in the cards yet.

 

[coolhand]

For a number of trading days now, this market has seemingly been going nowhere. That's what the DWCPF has been doing anyway. But if you look at the S&P 500, it closed at yet another all-time on Friday.




For next week, NAAIM is cautiously bullish. The options are neutral for Monday. My intermediate term system is only a hair from going negative. That has not meant much for some time now, but it is what it is. Breadth is still positive, but stalled. I note that TRINQ closed at a very low level on Friday, which is bearish for Monday in the tech sector.

For now, this market obviously remains a bull. I have no reason to expect that to change anytime soon, though a minor correction can happen at any time. It's just darn hard to bet on it. In terms of tops, sentiment is nowhere near a level that suggests we are near a top. For those looking out longer term, it's probably best to stay long, though having some measure of cash on the sidelines is not a bad idea should a decent dip present itself. The risk however, is missing the next big move to the upside.

 

[coolhand]

Yet another all-time closing high for the S&P 500 today. Are you seeing a theme here?




Tuesday will likely see more upside pressure given Monday's lack of weakness. Wednesday is Weird Wollie Wednesday, which can be a wild card given OPEX is Friday. That means any strength now can reverse as the big boyz play their profit grabbing games.

The options are neutral for Tuesday. Breadth looks good and is on the upswing as is momentum. I am not anticipating a big upside breakout this week, but certainly the bulls remain in charge so staying long remains my favored position.

 

[Mcqlives]

Coolhand....you cursed the markets! I didn't know you had such contrarian powers

 

[FireWeatherMet]

Yet another all-time closing high for the S&P 500 today. Are you seeing a theme here?

I do know that whenever I thought that myself...it meant complacency and confidence was so high, that the downtown express was getting ready to leave the station.

But you called it right a few weeks ago, late Sep, saying we were not at a top. I should have listened to you back then and would have snagged a bit more $$.
But the tricky part is always the same...when do you step off the uptown train, before it heads downtown. The conductor doesn't always announce the last stop. :worried:

 

[coolhand]

I do know that whenever I thought that myself...it meant complacency and confidence was so high, that the downtown express was getting ready to leave the station.

But you called it right a few weeks ago, late Sep, saying we were not at a top. I should have listened to you back then and would have snagged a bit more $$.
But the tricky part is always the same...when do you step off the uptown train, before it heads downtown. The conductor doesn't always announce the last stop. :worried:

It's not an easy game. As far as complacency goes, I don't think this market is being driven so much by that as political control of the markets by strong opposing forces.

 

[coolhand]

Coolhand....you cursed the markets! I didn't know you had such contrarian powers

I expected some selling, but thought it would hold off until Wednesday. The RUT continues to drag the DWCPF down.

 

[coolhand]

While the S&P 500 continued to edge higher today, the DWCPF probed lower, but bounced to a positive close. I suspect we may have seen some sort of bottom today, but momentum has not turned back up yet.




I'm looking higher for Thursday and maybe even into the end of the week. There is still plenty of negative technical indicators, but they are not doing a log of price damage across the broader market. It really seems like we are setting up for another move higher, but it is definitely taking its time (broader market, not S&P 500). The EFA continues to do well too.

The options are neutral. Breadth is positive, but neutral. NAAIM reports tomorrow.

As I said above, I am looking higher now that we are past WWW, but I don't have strong evidence of such. I also don't have strong evidence of a decline. The trend is still up and that's the primary concern when positioning for more than the short term.

 

[coolhand]

They sure aren't making it easy for bulls or bears. Significant weakness to start the trading session, but it may turn back up before the day is over. It seems to be trying anyway. NAAIM has still not reported.

 

[coolhand]

Well, this market certainly seems weaker than I anticipated, though the S&P 500 has not exactly rolled over yet.




The DWCPF is looking more on the bearish side. Will the 50 dma hold? A fair portion of losses were retraced on Thursday, but I'd not bet that we won't probe lower.

The options are neutral heading into Friday. NAAIM came in a bit more bearish (very small shift), but what was interesting was that the short positions were taken off. The bears among them do not trust the downside at this point and as a group they are only moderately bullish. Breadth technically went negative, but it's tracking sideways.

Today's reversal may mean a bottom is in, but I am not overly confident of such. I am however, still leaning bullish for the time being. The RUT has to bottom and turn back up, which it has yet to do. That would likely signal that a swing to the upside may begin.

I am certainly willing to shift my sentiment from here, but that will depend on technical indicators, which remain somewhat mixed.

 

[coolhand]

Last week started out looking more bullish than bearish, but as the market played out it was the sellers that had the upper hand. But that downside pressure did not do that much technical damage. There may be more downside to come as we approach Thanksgiving, though we are also due a moderate rally.




Momentum is negative. Breadth is negative. The OEX P/C is bullish for Monday. NAAIM is neutral to bullish. TSP Talk is bulled up. Sentiment looks a bit bearish to my eye, though not enough to look for a serious decline. I'm looking higher for Monday, though it may not last if we get some upside pressure. If we are setting up for a Santa rally next month, there may very well be a bigger decline in the cards. But I am still not looking for anything overly ugly.

 

[coolhand]

Not much changed on Monday. I was looking for more buying pressure then we got. For Tuesday, the options are neutral. Breadth is still negative and weakening. I am neutral, but suspect that we'll see some downside pressure before we get to Thanksgiving.