coolhand's Account Talk

[coolhand]

The aaii bull reading for 7/25 is 32, downfrom 36% the prior week...hasn't really moved either way in July by my eyes.

In my opinion, most sentiment surveys don't have the value they once had. I find that NAAIM is an exception if one knows how to evaluate it. I can't use it for surgical moves nearly as effectively as a longer term strategy, however. But as a longer term strategy it's been pretty accurate. You just have to be willing to endure volatility from time to time.

 

[coolhand]

Last week, the bulls took back control of market direction (short term), pushing both the S&P 500 and DWCPF to fresh highs. Both indexes were up significantly, but the EFA (I Fund) remained near neutral, which may in part be due to a rising dollar.




So the charts are looking decidedly bullish. The long term trend remains up.

My intermediate term system remains bullish, but it did come close to flipping negative just a week ago. That is now in the rear view mirror for the time being.

Cumulative breadth turned back up on Friday and remains bullish.

The options are neutral for Monday. NAAIM is bullish. TSP Talk got bulled up after last week. As long as we are leaning in the direction of NAAIM, risk should be mitigated in the face of rising stock prices (indexes).

And that remains my perspective. Follow the smart money (NAAIM).

 

[Bill3438]

Is the thread open. I not received any new posting since 7/27/19.

 

[Bill3438]

Is the thread open. I have not received any new posting since 7/27/19.

 

[Mcqlives]

Just very quiet around here. Look for people to post more tomorrow and Wednesday since it is the end of the month.

 

[coolhand]

Monday's action continues the back and forth battle between bulls and bears, with the bears taking back some of Friday's gains.




The charts remain bullish. Momentum has gone largely flat, but the upside bias is still readily seen on the charts.

The options are neutral for Tuesday. Breadth is bullish.

I see no changes to the bullish picture. Let's see if the bulls bounced back tomorrow.

 

[coolhand]

Interesting day today as the DWCPF ended the day with moderate gains, but the S&P 500 fell moderately.




Despite the mixed close, both charts are still poised to challenge overhead resistance.

This evening, the OEX is neutral, while the CBOE is leaning bullish. My intermediate term system remains bullish as does cumulative breadth.

Nothing has changed. Wednesday looks neutral, but the bulls continue to hold the advantage and the positive trend should continue.

 

[coolhand]

We have quite a battle going on for control of price in the major averages.




The DWCPF reversed for the 6th day in a row, this time falling back to the bottom of a short-term trading range. Price actually hit a fresh high intra-day, but the bulls were not able to make it stick. One the other hand, the S&P 500 is now having trouble holding ground as price fell rather hard, breaking support intra-day before closing the session near that support level (around 2980). Momentum has turned back down.

My intermediate term system remains positive. I note that TRIN and TRINQ closed at high levels, which is bullish for Thursday, so we may get yet another reversal. Breadth remains bullish. The options look neutral. NAAIM reports tomorrow.

I am expecting this market to break to upside in the days ahead. Let's see how NAAIM positions tomorrow (I anticipate it will be bullish).

 

[coolhand]

Yesterday, I said that another reversal appeared to be imminent given some of the indicators. That meant I was looking for a rally on Thursday. Well, we got the rally. And it was a pretty good one. It just didn't hold up under the tariff narrative floated by POTUS.




Now, we do have technical damage to the charts. It is not serious...yet. The 50 and 200 dma's remain intact. But momentum has turned down rather hard. And the A/D Line is under attack. Cumulative breadth remains positive, but is also under attack. My intermediate term system flipped negative today.

So, is the market in trouble? It's possible, but there is a problem with the bearish perspective.

The NAAIM reading today showed the bears among them avoiding shorts. They are not positioned for a decline. In fact, the reading is darn bullish as they are leveraged long. This is smart money. They are very likely looking past any short term weakness and betting that once the bullish case is more compelling than the bearish one.

The fact that so many indicators are under pressure or flipped negative supports that outcome too.

For Friday, the OEX is bearish, while the CBOE is neutral. I don't think we turn on Friday, but perhaps later next week. Remember, we've seen this kind of volatility before. Weak bulls will be shaken. NAAIM is apparently not among them.

 

[nasa1974]

Stocks still don't like the tariff BS and it looks like it could be a lousy close for the week and a real bad start for the month.

 

[coolhand]

Stocks still don't like the tariff BS and it looks like it could be a lousy close for the week and a real bad start for the month.

It's never fun riding stocks lower, but I remain bullish given NAAIM's position and the fact that the indicators are already oversold. With VIX rising, a snap-back rally could come any time, but I'm not sure it will be today. The tariff stuff is just an excuse to take stocks lower. It's really not about tariffs. Kabuki theater at its finest.

 

[Mcqlives]

It actually looks like April’s action near its highs may be establishing as a floor right now. Hope this is very temporary action today.

 

[coolhand]

It was not a good week for the bulls last week. All 3 TSP stock funds were hammered for big losses.




Friday's action saw price fall through a key support area (50 dma) on the both charts. The S&P 500 recovered to close above it, but the DWCPF closed under it. Both closed well off their lows of the day, so that gives the bulls something to be encouraged about.

NAAIM was solidly bullish on Thursday, which is a key sentiment indicator. Our TSP Talk survey was less bullish, but still bullish nonetheless. The OEX is neutral and the CBOE is bullish for Monday.

Cumulative breadth is now neutral. The A/D Line is bearish. My intermediate term system is bearish.

Taken as a whole, there is reason to look for the indexes to recover. NAAIM's bullish perspective is not trivial. Many technical indicators are oversold and stretched. But they can get more stretched.

I am looking for a bottom at any time. Since price is in the process of testing a key support area, it could come soon. The 200 dma is also a possibility, which is much lower. I don't favor that outcome, but I can't say it won't happen. We'll know next week, which is when I think a reversal is likely to come.

 

[coolhand]

Here's a snapshot of the charts after less than an hour of trading:




There is no denying the significance and emotional response of the market to geopolitical machinations as we start the new week. Monday is picking up where Friday left off (and accelerating). This is what Central Banks do to us. They wipe out gains so fast you have little chance to react. The market goes up on an escalator and down in an elevator. The DWCPF may end up testing its 200 dma today. The S&P 500 appears to be far enough above its 200 dma that it isn't likely to test it today. Volume is elevated. Gold has broken a key resistance area. Crypto is rallying. These are indicators of fear in the financial system.

Last year, I warned that the market was not as healthy as the talking heads would have us believe. That's still true. The only reason the market hasn't tanked is because it is being artificially propped up. Read "Creature From Jekyll Island" to really understand what the Central Bank is all about.

So, where do we stand at this time? As ugly as the market is right now, we could still bottom and maybe even rally smartly back up. I am still of the opinion that this will be the eventual outcome. But I also have to admit that on a global scale the market is fragile. Some time ago, I recommended listening to the X22 Report to get a solid, daily perspective of the Central Bank situation as well the geopolitical picture, both of which may directly impact market behavior at any given time. I can't post the link because there are those on this board who would object in strong terms, but you can still find the link easily enough on your own.

Learn what's really going on in the world. Reality is much different than most think. That's why I have the avatar that I do. We are all in the matrix. It's time to wake up. Take the red pill.

 

[1965Vintage]

I jumped in COB 08/01 Half in C, half in S.
I'm afraid I made a really bad mistake!

Sent from my moto z3 using TSP Talk Forums mobile app

 

[coolhand]

We need to watch the 200 dma for support. The obvious danger is that many bulls bail on the pain and the market then reverses shortly after. And it can be a fast turn as "they" want as few as possible jumping back in near the bottom. This assumes the market does eventually recover, which is still my expectation.

I jumped in COB 08/01 Half in C, half in S.
I'm afraid I made a really bad mistake!

Sent from my moto z3 using TSP Talk Forums mobile app

 

[coolhand]

NAAIM's bullishness last week certainly hasn't translated into rising prices the past few trading days. It is highly unusual given how they have been correctly positioned for a long time now. What does that tell us? I suspect that the current decline was manufactured and likely on very short notice. The battle for control over the global market has quickly manifested in price destruction and caught a whole lot of traders and investors in its crosshairs.




There is no way to sidestep the obvious damage these charts depict. Price on the DWCPF is already testing its 200 dma. Price on the S&P 500 doesn't look far behind. Both gapped and ran lower. The EFA is also in bad shape. RSI is pretty much oversold at that this point, but downside momentum is rising. And futures are currently pointing to much bigger losses come Tuesday's opening bell (barring an overnight reversal).



Breadth on the NYSE is now negative.



Advance/Decline Volume on the NYSE is quite high. It rivals the decline we endured last December. But we recovered, didn't we?

This evening, the OEX Is neutral and the CBOE is bullish (it was bullish for Monday too). That's dumb money, but right now it isn't so dumb. Remember, the CBOE is looked at from a contrarian perspective. They are bearish. That means we treat it as bullish.

So, it appears that Tuesday's action may be a continuation of frenzied selling. At what point will exhaustion occur? We still need to see if the 200 dma holds on the S&P 500, but that's still much lower than we are currently. And that means the DWCPF will almost certainly fall much further under its own 200 dma.

There is no telling where the bottom may be. I still think the market reverses this week, but when traders are running for the exits (globally) it's impossible to know where the bottom is. We can only point to the indicators that are oversold and likely getting even more oversold before it's over. Sentiment is probably going to get more bearish than we've seen in some time (which would be bullish). It's tough to hold on in such times, but if we do indeed reverse it will be even tougher to watch the rally from the sidelines if we aren't in it.

 

[nasa1974]

The question is which fund will be the one to be in once the reversal starts? My guess would be the "S" fund but looking for opinions.

CH, great analysis.

 

[coolhand]

The question is which fund will be the one to be in once the reversal starts? My guess would be the "S" fund but looking for opinions.

CH, great analysis.

They take turns leading and lagging, but generally trend in the same direction. I have no favorites in such an environment, but historically the S fund tends to do well in a sustained rally.

 

[coolhand]

We got a bounce. It may or may not hold. A bottom may or may not be in, but at least the selling has stopped for the moment.




RSI has turned up a bit and momentum is stalling and may begin to turn back up if the rally has any legs. I don't think the selling is over as volatility will likely remain until the market settles down. But let's see how it goes.

Cumulative breadth turned back up, but remains negative. The OEX remains neutral and the CBOE remains on the bullish side.

I don't have much else to add this evening. We'll have to see whether we have a bottom or not.