coolhand's Account Talk

[Robo5555]

I usually pull out for the first couple of weeks in Dec. They are seasonably tough. Then its time for the Santa rally and I'm back in before mid month. I believe this mini pullback is heathy. This year so far I've stayed in playing against my strategy. Do not want to step out and miss an early train. Any thoughts?

 

[coolhand]

I usually pull out for the first couple of weeks in Dec. They are seasonably tough. Then its time for the Santa rally and I'm back in before mid month. I believe this mini pullback is heathy. This year so far I've stayed in playing against my strategy. Do not want to step out and miss an early train. Any thoughts?

It is very healthy. We are okay in that regard. I agree with the potential for an early train. The potential upside can be triggered when we are not expecting it, so being on the sidelines is risky. That's why I'm riding the volatility in TNA.

 

[coolhand]

From a technical perspective, the action the last few days is corrective in nature, which means the bull market remains intact and that higher prices are very likely by Christmas.

NAAIM reports today.

 

[amoeba]

Sentiment unchanged from last week a third bulls, neutrals, and bears. A buy in my book.

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[coolhand]

Sentiment unchanged from last week a third bulls, neutrals, and bears. A buy in my book.

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For our purposes, it's a buy. There were some shorts this time, but even for them shorting this market has generally not been profitable.

The low may be in for now. I see no technical issues. Futures are up a bit so far.

 

[hotwings]

Coolhand,

i agree with your assessment, however, I noticed there are a lot of TSPers moving to the G fund at the ********* Website. Interesting.....a black swan on the near horizon?

http://*********.com/leaderBoard.php?view=Pending

 

[coolhand]

Coolhand,

i agree with your assessment, however, I noticed there are a lot of TSPers moving to the G fund at the ********* Website. Interesting.....a black swan on the near horizon?

http://*********.com/leaderBoard.php?view=Pending

I don't pay attention to them. I have enough to keep track of as it is. If you can tell me why they are bailing, I can better assess the risk. It may be a short term play for them to sell into strength now and try to buy the dip next week. If that's the case, I am not particularly crazy about that idea, though I am not saying we can't have another pullback. I just don't what to miss a potentially big move to the upside.

 

[coolhand]

The market was mixed last week, with the S&P 500 closing moderately higher, while the Wilshire finished moderately lower. The EFA finished modestly higher. Overall, it was not a particularly meaningful week. We are now heading into the 2nd week of December, which means seasonality will soon get more positive.

I was listening to President Trump speaking at Pensacola on Thursday and during his address to the masses he asked about everyone's 401k and whether they were pleased with the gains the market was making. It appeared the audience agreed that their retirement accounts were doing well.

I bring this up because President Trump spoke about this in a very confident tone and gave the indication that next year would be even better.

I would not dismiss that assertion as unlikely. While I do not have a crystal ball, there is power behind the President in helping him deliver to the American people. No one alive today has seen anything like what we are witnessing today and I personally believe that the economy will continue to improve and have a positive impact on many people.

I hope we all get to participate in this recovery!




The charts still look pretty bullish to my eye. In fact, the S&P 500 hit a fresh all-time closing high on Friday.

On the sentiment front, NAAIM remains supportive. TSP Talk come in less bullish, but still more bullish than I'd like. The OEX P/C is bearish for Monday. TRIN and TRINQ both closed at low levels, which is bearish for Monday as well.

However, breadth is still very bullish and that trumps a lot; mainly because it tells us that there is a lot of liquidity driving this market. I remain long TNA and the S fund.

 

[coolhand]

No changes. The options are neutral for today. The S&P 500 keeps hitting fresh all-time highs. Breadth is bullish and momentum has turned up. I remain bullish.

 

[coolhand]

The S&P 500 keeps edging higher. The chart is quite bullish and seasonality has not fully kicked in yet (assuming it's a typical year in terms of seasonality). Small caps are lagging. At some point, I expect them to make up lost ground and perhaps more.




The options show both the smart money and dumb money leaning bullish for Wednesday. That's technically neutral, but might be bullish this time of year. Breadth is still quite bullish, but turned down a bit yesterday. Overall, it very much appears the bulls remain in firm control of the market. By the end of the month and maybe into early to mid-January, it could tack on sizable gains given the liquid environment.

 

[coolhand]

Small caps finally caught a bid on Wednesday. That is additional confirmation that this market has sponsorship.




The options are leaning a bit bearish for Thursday. Breadth hit an all-time high once again.

I am bullish longer term as we get ready to head into the most positive time of year. NAAIM reports this morning.

 

[coolhand]

Wednesday saw the market pull back some. That could be bullish if it's setting up for another rally soon. But sentiment has taken a bearish shift very quickly.




NAAIM got wildly bullish as the bears capitulated. That size of a shift is generally contrarian, but this time of the year maybe not so much. The options are leaning a bit bearish again. Breadth has turned back down, but is still positive. TRIN closed fairly high and that may be bullish for Friday.

We could get more selling out of this, but I'd think it would be in the short term and likely set up a sizable rally after shaking off some newly minted bulls first.

I'm riding it out in any event.

 

[coolhand]

Friday saw a nice finish to the trading week as all 3 TSP stock funds finished in the green, with the S&P 500 leading the way.




Breadth closed at another all-time high on Friday (bears, pay attention). The S&P 500 is overbought, but not the DWCPF; not even close. NAAIM is very bullish. So is the TSP Talk survey, which is troubling, but I don't think sentiment can trump (no pun intended) breadth and liquidity. The options are neutral for Monday.

There are some big news events coming up soon. A possible Government shutdown and a possible tax reform package are 2 of them. I suspect that if tax reform manages to pass, things could get very interesting. If it fails, same thing. But I am focused on breadth, and that has been telling us that there are those who want this market to bias higher; pullbacks notwithstanding.

 

[hotwings]

Good analysis... will probably lighten up on c and go little more heavy in s for the short term.

 

[Robo5555]

Great Friday indeed! The next couple of weeks should be good as well. I'm feeling bullish! Currently 60% S, 25% C, and 15% I. Time for the small caps to outperform the S&P.

 

[Robo5555]

Futures are up nicely. Lets see if they hold for the day.

 

[coolhand]

I don't know about you, but I'm okay with a runaway bull market.

Okay, maybe it isn't exactly a "runaway" bull, but it is a bull. And I've been largely bullish given the indicators even as sentiment is overdone on the bullish side.




I'm not going to analyze these charts, I think they largely speak for themselves.



I said yesterday that I am not as focused on sentiment as I am on breadth. And this chart shows cumulative breadth on the NYSE. That spike higher may be the beginning of another run. I certainly don't know that for sure, but this is how they start. Seasonality couldn't be any better either. The options are showing both the smart and dumb money very bullish.

I'm setting sentiment aside and hoping the market is as bullish as the charts suggest.

 

[coolhand]

Quick update tonight. The market pulled back a bit, which may be an early sell-the-news reaction to the tax bill plan. I would be surprised if the market did not react in a big way once the plan is either passed or delayed (can it fail?). The consensus appears to be that it will pass the Senate. What I am not sure of, is whether the market will in fact rally on the news should it indeed pass.

The OEX P/C is bearish for Wednesday, which is when we could see a vote one way or the other. The CBOE is a bit bearish too.

We'll see what happens. One thing is for sure; this is still a bull market regardless of what happens in the next day or 2.

 

[coolhand]

So the tax bill passed and some big companies immediately announced bonuses for employees and huge infrastructure plans on the news and the market just shrugged.

Not exactly the kind of reaction I expected, but at least we didn't get a big sell-the-news response.




Of course, the charts remain bullish despite the modest pullback.

Sentiment shows the options neutral to modestly bearish for Thursday. We'll get a fresh NAAIM reading today. Seasonality is very positive, but the holidays tend to be slow as many take time off to enjoy the season.

I remain long.

 

[coolhand]

The modest sell-the-news reaction we got on the tax bill passage did not take long to see a moderate upside reversal on Thursday. A late day sell-off tempered gains, but that may be traders who don't want to remain long over the holidays as many may be traveling to enjoy time with relatives. The big picture though, is this is the time of year that you have to be looking for a bias higher. And the tax bill is very bullish event for 2018 and beyond. Seasonality is tough to beat in December and early January.

NAAIM tempered their bullishness this week, but they are still bullish overall. The options are on the neutral side for Friday.

I expect volume to drop over the next 2 weeks or so. The action may be muted, but I'm hoping it will be biased higher even if the moves are incremental. We do have a potential for a Government shutdown, but I don't think that will be much of a factor if it occurs.