coolhand's Account Talk

[coolhand]

Monday's action was uninspiring for bulls or bears. Price on the S&P 500 was not able to retake its 50 dma. That may be a problem, but the DWCPF still looks fine. Breadth was down, but remains positive (for now). The CBOE is neutral for Tuesday, but the OEX is bullish, so that suggests Tuesday could see some upside action, though I am not looking for a big move.

 

[nasa1974]

Monday's action was uninspiring for bulls or bears. Price on the S&P 500 was not able to retake its 50 dma. That may be a problem, but the DWCPF still looks fine. Breadth was down, but remains positive (for now). The CBOE is neutral for Tuesday, but the OEX is bullish, so that suggests Tuesday could see some upside action, though I am not looking for a big move.

I'll take a couple of days of small moves in the positive direction.

 

[coolhand]

So much for a rally on Tuesday as earnings became a catalyst to sell down the market as trading session hit mid-day.




It's not a bullish picture for the S&P 500 as it is spending some time under its 50 dma. However, price bounced off the lows and the 200 dma may be providing support. Momentum is negative. Breadth is now negative too. My intermediate term system remains positive, but under attack.

The CBOE is neutral to modestly bullish. The OEX is bullish.

I am looking for a bounce on Wednesday. Longer term, I am not comfortable with this market and am disinclined to bet heavily on the bullish side. There are signs that this market is in trouble, but we could go sideways (for the most part) for a period of time. In any event, I am more comfortable playing the short side than the long side (outside of TSP) in the current trading environment.

 

[coolhand]

The market has been primed for a rally the past couple of days and instead the market is probing lower. This is not good news for the bulls. Yesterday, I said that price on the S&P 500 was holding under its 50 dma, but I did not mention that the DWCPF had crossed below its 50 dma on Tuesday as well. It just shows the inability of the bulls to get anything going.




Today, The S&P 500 came close to testing its rising 200 dma, but that key support line held and price bounced for modest gain on the day. Hardly a victory for the bulls.

Breadth is negative and still ebbing lower. The options are still bullish, but that hasn't mattered very much of late. My intermediate term system is still positive, but some of the signals continue to deteriorate. The ARMS index will probably keep it positive for a bit yet.

So, support is holding for the S&P 500, but that may not be enough given that overall sentiment is really too bullish given the action (our own survey has 62% bulls). I have a suspicion that price on the S&P 500 may break the 200 dma to punish the bullishness. I also think there is an outside chance of a bigger decline within the next few weeks. May 1st is around the corner (historically, May is the beginning of the negative 6 month Dow cycle). By itself, that may not mean much, but if sentiment doesn't back off, it could spell some trouble for the bulls.

 

[hotwings]

Coolhand,

Regrettably, I’m thinking the same thing. The market is looking a bit sick right now.

 

[DreamboatAnnie]

Definitely agree. I really thought this week would move down a bit and then move upward and break out with All the beats in earnings.

 

[nasa1974]

Right now I would like to get back to my 2017 closing numbers and move to "G". Yeah I would give up the gains I made early this year but big deal. I'm thinking I would rather finish the year with a small gain then a large deficit.

 

[coolhand]

The bounce finally came on Thursday, but can the bulls keep it going?




Price on the S&P 500 was not able to rally enough to test its 50 dma, though it may still happen. The DWCPF closed pretty much right at its 50 dma. Technically, the charts are oscillating up an down, with the DWCPF showing lower highs and higher lows. I would normally be inclined to look for an eventual upside break based on this pattern alone, but we are so deep in the bull cycle and overdue for a major correction (fundamentals suck) that I would be very wary of betting too much on the upside potential of this market. That's not to say it can't break out to the upside; I just don't like the risk profile.

For now, the charts are neutral.

Now that the bounce has occurred, I note that futures are pointing moderately lower this evening. With the weekend now in sight, traders may not be inclined to get long given how easily news can drive the action.

Sentiment remains too bulled up as well. NAAIM is showing some bears beginning to short the market again. They have tended to be right in the short term the past few weeks. The options remain bullish as we head into Friday.

Breadth bounced and managed to flip positive again. That could mean the bulls are ready to mount another upside attack, but the picture is mixed overall.

For Friday, I am looking for the market to give back some of Thursday's gains and NAAIM has me thinking that any weakness could also manifest the early part of next week.

Overall, it's a back and forth battle that could continue for a little while yet before a decisive break up or break down.

 

[coolhand]

Friday's action turned out to be tame with a mixed close. Price on the S&P remains below its 50 dma. The DWCPF dipped under its 50 dma on Friday. Both remain above their 200 dma.




Breadth remains positive as does my intermediate term system. The options are neutral for Monday. NAAIM is bearish for the first part of next week, but neutral overall. TSP Talk backed off their bullishness, but the bulls are still at 50%. I'm viewing it as neutral. For next week, I am neutral. I am also still looking for a breakdown in the market in the weeks ahead.

I am largely in the G fund in TSP and a have been for a couple of weeks now. I am not looking to get long either. I would prefer to short this market on rallies if I had the option, so since that's not an option G fund is where I'll stay. I am in TZA elsewhere.

I am also beginning to ramp up my exposure to crypto-currencies. It's a new learning curve for me, but I feel that this is the wave of the future. If you are not familiar with this alternative monetary system, I highly suggest exploring it. There are some good resources online that can help with the educational process. I am currently using Gemini as a trading platform and using Exodus as my wallet. There are other options. The more I learn about this world, the more I like it.

 

[coolhand]

On Friday, I said that I was leaning bearish the early part of the new week on some NAAIM shorting. While the early part of the trading day was positive, it obviously did not last as the market slowly gave up and gains and then dropped below the neutral line by mid-day followed by a decline that took up the rest of the trading session.




My intermediate term system flipped negative today, though not decisively. What that means is that some of the signals are barely negative. Breadth, which was positive, is now neutral. The options show the OEX bearish and the CBOE modestly bearish.

The indicators suggest we may have more downside to go and another test of the 200 dma on the S&P is very possible. But support has been holding, so I suspect it will continue to hold should price come close to testing it. Having said that, price is also starting to get compressed between the falling 50 dma and the still rising 200 dma. The chart remains neutral, but sooner or later price is going to break out of its trading range. The question is, which way?

 

[coolhand]

On Monday, I said that the indicators suggested we may have more downside to go with another test of the 200 dma on the S&P is very possible. If you look at the chart, price came close to testing that key support line Tuesday. I also said that support has been holding, so I suspected it will continue to hold should price come close to testing it. So far, so good. Now, we have that falling 50 dma to deal with on any further bounce. That is now a significant line of resistance.




Interestingly, the options flipped positive, which makes sense now that support appears to have deflected price back to the upside, so Wednesday will likely see follow through gains. Breadth remains neutral. My intermediate term system remains negative. Watch the 50 dma to see how price reacts.

 

[coolhand]

I was looking for some follow-through upside on Wednesday, and we got some, but it was not applied evenly across the indexes. Not only that, but what gains there were in early afternoon trading soon gave way to a bout of selling pressure that took most of the indexes into negative territory into the close. Small caps managed a somewhat modest gain.




The S&P closed moderately lower, but it did not test the 200 dma and remains pinched between that and the 50 dma overhead.

Breadth is neutral and flat. The OEX and CBOE are both neutral for Thursday. NAAIM releases a fresh sentiment reading tomorrow.

Today's weak close is not what bulls want to see if they plan to retake the 50 dma on the S&P 500. But this market continues to defy the bears too. I'll tell you what, there are a lot of stocks out there are taking a beating, but the indexes don't show it. I also find it interesting that dollar is on a upside tear right now, decisively closing above its falling 200 dma today.

I am neutral for Thursday, but I have bearish leanings for the weeks ahead unless something changes. I am convinced that this market will fall apart, I just can't predict when with any serious precision (sounds like a safe thing to say, huh). Let's just say that I don't think the market will last into the November elections. I actually think the odds favor a significant decline well before that time. But that's my longer term perspective from reading the tea leaves. We'll see how it goes as the weeks progress.

 

[coolhand]

I was neutral heading into Thursday and leaning bearish overall. The market opened lower and continued to drop into late morning trading. That's where it bottomed and staged a comeback to the neutral line and closed with modest losses.




Price on the S&P 500 violated the 200 dma today, but closed back above that key support line (albeit for a loss). That's what I suspected would happen (for now).

Looking at sentiment, the options are decidedly bullish for Friday. However, NAAIM is still showing that some money managers have shorts in place, though the sentiment is neutral overall. So, while the options may be bullish in the short term, NAAIM tells me that more chop and compressed trading are likely going to remain intact. Breadth is negative and falling. That's a big headwind for the bulls.

So, the picture remains neutral, but I retain my overall bearish bias.

 

[coolhand]

Well, Friday's rally seems to suggest that the bulls are ready to mount another upside attack. After penetrating and testing the 200 dma on the S&P 500 Thursday, price shot higher to close out the week, but still fell short of retesting the falling 50 dma.




The DWCPF on the other hand, closed back above its 50 dma. So the bulls have something to build on, but there is significant resistance on both charts (especially the S&P 500) which has both falling trend-line resistance and the 50 dma to contend with. The DWCPF is dealing with trend-line resistance. Volume was not robust Friday, so that may be an issue.

Now, breadth took a decidedly sharp turn higher on Friday and flipped to positive once again. That's a big plus for the bulls. TRIN and TRINQ closed on the low side Friday, which could be bearish for Monday. The OEX is still leaning bullish, but the CBOE got bulled up in hurry and that's bearish. NAAIM projects volatility over the coming days with smart traders taking positions on both sides of the market. TSP Talk sentiment is technically neutral, but there was a sizeable bearish shift and that looks bullish to my eye.

So, the indicators remain mixed and the charts remain neutral overall. This week will be interesting as price challenges overhead resistance. The market may rally and close over that resistance, but sustaining an upside move over the longer term is questionable. I am not comfortable with either the bull or bear case and remain neutral in the short term.

 

[Robo5555]

Bumpy ride!

 

[coolhand]

The market was able to extend its gains today, but upside resistance is now coming into play.




The S&P 500 is now hitting trend line resistance and also the bottom of the cloud (which also represents resistance). It's also hitting the 50 dma.

The DWCPF is also hitting trend line resistance, but is above the cloud (that's bullish, but not overly so in a sideways market) and its 50 dma.

Volume remains low. Breadth moved higher and is bullish. The options are decidedly bearish for Tuesday. TRINQ looks bearish for Tuesday as well.

For Tuesday, there is a lot of headwinds for the bulls to contend with. They do have breadth in their favor at the moment.

For Tuesday, I am looking for some giveback.

 

[coolhand]

The bulls look to be taking control of the market right now. Price on the S&P 500 broke above both its 50 dma and diagonal resistance. There is another lineof resistance just above. Volume was better, but still not impressive.




The DWCPF is also breaking higher. Breadth is rising quickly and is quite bullish. My intermediate term system flipped positive on Tuesday. The options are decidedly bearish for Thursday. That means now that many indicators are flashing green, it's probably time for a pullback. Be that as it may, this rally may not be over, pullback notwithstanding. NAAIM reports Thursday.

 

[felinecrl]

Well, Friday's rally seems to suggest that the bulls are ready to mount another upside attack. After penetrating and testing the 200 dma on the S&P 500 Thursday, price shot higher to close out the week, but still fell short of retesting the falling 50 dma.

I hope it stays steady on the upswing for a longer period.

 

[coolhand]

Well, Friday's rally seems to suggest that the bulls are ready to mount another upside attack. After penetrating and testing the 200 dma on the S&P 500 Thursday, price shot higher to close out the week, but still fell short of retesting the falling 50 dma.

I hope it stays steady on the upswing for a longer period.

It's very possible, but it may not be a steady climb. It's due a pullback and Thursday's rally is starting to stretch the indicators. Longer-term players may want to sit tight.

 

[coolhand]

I wasn't surprised by the early strength on Thursday, but I thought the sellers would appear as the trading day worn on. We did see some selling, but it didn't put much of a dent in the gains.




Price on the S&P 500 broke another line of resistance with strength and momentum climbing. Volume remains unimpressive, but that hasn't mattered to this point. The DWCPF cleared horizontal resistance today and is starting to challenge another falling trend line.

The bearish options on Thursday didn't keep the bulls from having their way with the market. The options remain bearish overall, but the smart money has gone from bearish to neutral. NAAIM saw the short money managers take off their shorts. That's what the bulls want to see. Breadth is hitting all-time highs again.

Most of the indicators are now bullish. That usually means some selling is not far off. The fact that NAAIM is not shorting the market tells that any selling may not be significant. Longs are favored even if we get some selling in the short term.