coolhand's Account Talk

[coolhand]

Yesterday, I said that the trend is up until it's not and we got confirmation today that the trend remains up.




I would like to see the DWCPF play some catch-up with the S&P 500, but the S&P at least gives us some solid evidence of who remains in control (the bulls).

My intermediate term system remains positive and breadth remains decidedly bullish. The OEX was very bearish yesterday and I said that I questioned whether I could trust the signal give how much it had spiked. Obviously, it couldn't be trusted. Today, the OEX is on the bullish side, while the CBOE is a bit bearish. NAAIM came in near unchanged, which keeps it bullish.

I don't see any reason to look for a meaningful top at this point. The trend looks to be intact (up).

 

[JamesE]

As always, much appreciated!
P.S. I do agree.

 

[Scout333]

Thanks again Cool! Appreciate your comments as always! Speaking of bulls has your friend heard from Birchtree lately?

 

[coolhand]

Thanks again Cool! Appreciate your comments as always! Speaking of bulls has your friend heard from Birchtree lately?

No. It doesn't look like BT is interested in posting anymore.

 

[JamesE]

What a shame, Dennis was good for the board. Let him know we miss him, especially those of us who've been around.

 

[Scout333]

No. It doesn't look like BT is interested in posting anymore.

Too bad! Wonder if he ever bought the dream retirement house in Cashiers, NC?

 

[coolhand]

So, on Thursday the S&P 500 closed at a fresh high, but the very next day the bears stepped back in and drove price lower; wiping out that week's gains. The S fund in particular got hammered. I highly suspect the recent rise in volatility was driven by the release of the Mueller report. And I would not be surprised if that volatility continues for the moment.




We can see both charts show strength and momentum turning back down. The S&P 500 remains in a bullish configuration for the time being, but the DWCPF saw its 200 dma broken and the 50 dma now being tested. It's looking shaky.

Looking at my intermediate term system I note that only one signal is keeping that system positive. Any more weakness could potentially flip it negative. Breadth remains positive, but turned down on Friday.

The options are looking a bit bearish for Monday. TSP Talk is bulled up for the 2nd week in a row. While that's bearish, NAAIM was bullish too; and that's smart money.

It's difficult to discern from the current indicators how the market resolves from here. The short term is bearish, but beyond a few days or so I think the bulls will prevail. I am anticipating that volatility may remain with us this week. I remain bullish overall.

 

[coolhand]

The volatility remained today, though the moves up and down weren't deep.




We can see that price settled near the neutral line by the close. Interestingly, price on the DWCPF tested the 50 dma and it held so far.

The OEX is modestly bullish this evening. The CBOE is neutral. Breadth remains bullish, but my intermediate term system flipped negative.

I've got signals all over the place, but breadth and NAAIM are in the bull camp and that's a lot for the bears to counter. I remain bullish, but do acknowledge that we may not have seen the bottom yet.

 

[nasa1974]

Unless the "S" fund has a couple of big moves up I don't see the fund ending the month positive.

 

[coolhand]

Unless the "S" fund has a couple of big moves up I don't see the fund ending the month positive.

We'll see what happens. Looks like it could go either way.

 

[coolhand]

We got a bounce, but it was another roller coaster kind of day.




The S&P 500 still looks reasonably bullish. The DWCPF is trying to get back above its 200 dma. Maybe tomorrow?

The options are rather neutral this evening. Breadth moved higher and remains in good shape. Not much else to add this evening.

 

[coolhand]

The volatility remains with us. Today, the bears won, but not much damage has been done.




Since last Friday's sizable decline, the bears have not been able to extend losses, though they are still trying. As negative as this market may feel, price on the S&P 500 is not that far from its high.

My intermediate term system is negative. TRIN and TRINQ are leaning bullish for Thursday. Breadth dipped, but remains positive. The OEX is neutral, while the CBOE is bullish. NAAIM reports in the morning.

The indicators suggest a bullish outcome for Thursday.

 

[coolhand]

The back and forth battle over price continued once more today, this time with the bulls closing with a gain.




To this point, the downside appears to be limited. But the upside appears limited too. I believe this is a consolidation period with a upside breakout eventually emerging (direction of the trend).

This evening, the OEX is bearish, while the CBOE is bullish. I'm reading the options are bearish overall. NAAIM came in less bullish, but it appears some of those money managers are preserving capital rather than going short. They remain bullish overall, but their more cautious stance suggests more downside pressure may be on the way (short term).

Breadth, however, hit a fresh high and remains quite bullish. It's odd to me given my intermediate term system remains negative with no serious sign of turning back up.

Precious metals got slammed today. I follow this market and if you are not aware, Basel III officially goes into effect on Monday. Here's a video that tries to explain one of the more significant global central bank changes in Basel III:

https://www.sgtreport.com/2019/03/andrew-maguire-basel-iii-gold-rocket-fuel-added-for-golds-next-takeoff/

I am not an expert on this, so I do not plan to try and explain it. I just know it's not an insignificant development over the longer term. It may be one of the reasons why the market is acting a bit odd, but that's just conjecture on my part. Maybe that's why NAAIM got more defensive?
Overall, the trend remains intact, just stalled. I'm thinking we see more attempts by the bears to take the market lower, but I am not particularly bearish given breadth.

 

[coolhand]

All 3 TSP stock funds posted gains last week. Since that big plunge over a week ago, those same stock funds have retraced roughly half of those losses.




The DWCPF shows price oscillating around its 200 dma and testing its 50 dma in the process. It's been over a month since the DWCPF hit its high, but the indicators do not suggest that "the" high is in. Looking at the S&P 500 gives me more reason to believe that the current up/down action is likely temporary before a resumption of the upward trend. Price on that chart remains near its previous high and its 50 dma is now seeing a positive cross through its 200 dma.

If that's not enough proof that the bulls remain in control (until proven otherwise), breadth hit a fresh high on Friday. That's a primary indicator that's very good at discerning trend. My intermediate term system now looks like it may be starting to turn back up (it's still negative). It's suggesting that the sideways action may be nearing an end. NAAIM got more bearish last week, but they are not overly bearish as a group. The increase in bearishness could be a function of end-of-quarter action and/or the official start of Basel III come Monday. In other words, the short term got a bit uncertain so risk may have been tempered.

The options are neutral. Our overly bullish stance from the previous week saw a modest dip in bullishness for the new week. We would appear to be largely of the mindset that the bull market remains intact. The survey is neutral overall given current context.

I remain bullish. Let's see if the new quarter sees a change in market character.

 

[coolhand]

The last thing I said in yesterday's post was "Let's see if the new quarter sees a change in market character". Now, I can't be sure, but the S&P 500 posted fresh high since its December bottom and that may be the start of a change in market character. But I don't want to get ahead of myself.




The DWCPF got back to its current resistance level around 1400. If it can clear that level with some degree of conviction, then the market may have legs. It won't take a lot more upside to put the S&P 500 in overbought territory, however.

Still, breadth, which was already bullish is getting a bit vertical again. That's not good news for the bears, but then if they understood breadth, they wouldn't be fighting the market :smile:.

The OEX is a bit bearish this evening. The CBOE is neutral. My intermediate term system improved, but remains negative. The market may give something back on Tuesday, but I'm thinking it may not amount to all that much.

 

[blueroadster]

Curious...How is the level of breadth seen from the charts posted? Is breadth and momentum similar?

 

[coolhand]

Curious...How is the level of breadth seen from the charts posted? Is breadth and momentum similar?

They are related, but not the same. You can see that both breadth and volume show similar chart patterns. I watch them both, but defer to breadth as my primary indicator.

 

[coolhand]

After Monday's pop, the market took a bit of breather on the 2nd day of the new quarter.




Not much change to the charts.

Breadth dipped a bit, but remains darn bullish. The OEX is neutral, while the CBOE is on the bearish side for Wednesday.

I'm neutral for Wednesday.

 

[coolhand]

I was neutral for today and the market was acted much as expect with price rising and falling over the course of the day. But it was a positive close for the bulls.




Price on the DWCPF finally pushed past resistance, but can it hold above it? The S&P suggests it might given it's continued upward bias. These charts certainly remain bullish.

This evening, the OEX is neutral, while the CBOE is modestly bearish. Breadth remains bullish (obviously). My intermediate term system remains negative, but improving.

I'm neutral again as we head into Thursday, but the upside bias should be respected. NAAIM reports in the morning.

 

[coolhand]

The upside bias continued today, but things may be about to get interesting.




Looking at the charts, the bulls eked out some more gains today. The DWCPF looks tired and price has still not broken out to the upside. The S&P 500 is certainly more bullish as price has broken out. We can also see that the 50 dma had a positive cross through its 200 dma a few days ago. Note that RSI is near overbought. At face value, at I can't get overly bearish on these charts.

But this evening the OEX and CBOE are decidedly bearish. Moreover, NAAIM got bulled up quick and that's bearish in the short term. Sentiment alone suggest weakness dead ahead. The charts are bullish, but could be peaked (for now).

Breadth still looks darn bullish, but sentiment suggests it may be time for some give back. Now, I'm not particularly bearish (trend and breadth are bullish), but caution may be warranted for a few days. I'm giving the nod to the bears for now, unless proven otherwise.