coolhand's Account Talk

[coolhand]

The bulls gave up ground last week, but the good news is that the 50 dma appears to be support (to this point).




Yes, it was a lower low that formed, but the 50 dma was not tested. We'll have to see if the bulls can provide some follow through upside action early this week. Momentum is rather flat.



Breadth remains negative, but not by much.

As I pointed out last Thursday, NAAIM went neutral, which means the market may see up/down action for a few days. TSP Talk sentiment got more bearish and is leaning bearish overall.

Since NAAIM is my anchor reading for my overall perspective, I am also neutral at this time. The indicators favor neither bulls or bears. But remember, the trend is still up overall.

 

[coolhand]

In my last post, I said that the indicators were largely neutral, which included smart money (NAAIM). I also expected more up/down action as a result of the reading.




I guess we're starting out with up action this week as the major averages tacked on big gains. That isn't a surprise given it appeared that at least a short term bottom was probably put in last Wednesday. And if you look at where price closed; the S&P 500 hit a higher high and is very close to testing the 200 dma. Price on the DWCPF hit a very marginal higher high.

The last thing I said yesterday was that while the smart money was neutral, the trend is still up. Today was a tangible reminder of this.



Breadth flipped positive on the rally.

So, the big question right now is can the bulls not only sustain this rally, but do so with possible resistance at the 200 dma? I remain neutral until we see what happens in this regard.

 

[coolhand]

After 3 positive days, the market stepped back on Tuesday. That's normal action. However, the 200 dma looms very near on the S&P 500 and that's a potential resistance area.




Not much change to the charts. We remain in somewhat of a sideways pattern right now with price sitting in the upper end of the range.



Breadth remains positive, but is close to neutral.

My outlook remains the same. I am neutral with the smart money. The market needs to show us it can vault past that 200 dma (for more than a couple days).

 

[coolhand]

The bulls turned it right back around after Tuesday's decline.




In fact, price on both charts closed at a higher high. Looking at the S&P 500, we can see that price is snugged up just under the 200 dma.



Breadth remains positive (bullish).

I suspect that a test of the 200 dma is coming soon. Perhaps tomorrow for the S&P 500. That is a resistance point and price is also back in the upper end of a multi-week range (yes, it's biased higher).

I continue to believe that price will eventually vault above the 200 dma, but with NAAIM going neutral last Thursday I thought it might take more time. And maybe it still will if the bulls can't keep it going. We'll know soon enough. I remain neutral, but want to be a bull.

 

[coolhand]

NAAIM remains neutral. There was a bit more bearish and bullish positions indicated in the poll. But the bears are not shorting with both hands. I suspect what we are seeing from this reading is simply money managers covering both sides of the market while uncertainty remains. They are slanted toward the upside, however, which is still the trend.

 

[Whipsaw]

Thanks CH! Not sure to what degree the efforts to 'open up the country' for business are having, but I have to imagine as economic activity improves, so will the market. I do remember, the market is not the economy, but they are related.

 

[coolhand]

The bears tried to take the market back down early on in the trading day, but the bulls turned it back up to erase some of the losses.




The DWCPF actually closed marginally higher, while the S&P was thrown for a moderate loss. Still, no technical damage was done and price remains not far under the 200 dma.



Breadth held up well and remains modestly bullish.

NAAIM got a bit more bullish this week, but the overall reading is still neutral. The trend remains up and that's important. If price can clear the 200 dma, we could see another up-leg. That may take some time yet, but we'll see how it goes. I remain neutral.

 

[coolhand]

All in all, the bulls had a pretty good week last week as price bounced all the way back to the upper end of the trading range, though higher highs were hit.




We can see that price on the S&P 500 is tracking sideways just under its 200 dma. Volume has fallen off. Price on the DWCPF is ebbing higher and closed for significant gains on the week.



Breadth remains bullish.

So, NAAIM remained neutral last Thursday, but there is a tilt toward the bullish side. It just isn't pronounced enough to make it a bullish reading. There are reasons to be wary given price has yet to test the 200 dma on the S&P 500. The fact that price is near its highs is also reason (for the smart money) to not bet heavily either way. It's been about a month now that price has traded up and down in range, but the bulls are still in control.

The 200 dma may be the key to the next up-leg or another reversal to the bottom of the range (generally the 50 dma).

I remain neutral with a modest tilt to the bullish side.

 

[coolhand]

The bulls are in the process of testing the 200 dma on the S&P 500 this morning.



The action feels solid. We need to see price hold this ground for more than a couple days, and if the bulls can do that we may see more bulls jump in and some bears throw in the towel.

 

[coolhand]

Sooner or later it was almost certainly going to happen. The 200 dma got tested on the S&P 500 today.




Price closed largely on that key average at the end of the trading day. Price on the DWCPF closed just under its 200 dma. Momentum turned up. Volume was fairly robust. That's a plus for the bulls.



Looking at breadth, it soared. That's what we want to see as the 200 dma gets tested. There is conviction behind the move.

Still, victory has not been won until price can close above that key average and hold it for at least a couple of days. At the same time this test is occurring, price is hitting new highs. It's looking good for the bulls at this point. We won't get a fresh read from NAAIM for a couple of days. We'll need that to validate the strength we're seeing in the charts. If they get bulled up (we may need some upside follow-through), it'll be an easy bullish read for the following week. I've been wanting to lean bullish of late, but not with NAAIM being neutral themselves. Still, I've also cautioned that the bulls are in control despite the sideways movement the past month or so.

I remain neutral to modestly bullish for now. I'd be more bullish if price wasn't in the process of testing a key resistance area.

 

[coolhand]

Given the strength of Tuesday's rally, it probably shouldn't be a surprise that Wednesday saw more strength. Breadth and volume appeared to be indicating that the move was not transient.




We can see that price has now closed above the 200 dma on the S&P and is sitting on that key average on the DWCPF. Volume was a bit more robust than the previous session.



Breadth soared again and is making a compelling bullish statement.

NAAIM reports tomorrow. That is always a key element of my analysis. I always want to know what the smart money is doing. We'll know very shortly.

I remain neutral to modestly bullish, but could change my position on the NAAIM reading.

 

[coolhand]

Good news bulls. NAAIM is showing a significant increase in bullish positions and very little shorting. I've seen readings that were more bullish from them, but this one is solid nonetheless.

 

[coolhand]

Well, the bull party was going well til some trade news hit the wires, which triggered some selling that sent price below the neutral line. We'll have to see if it was just an initial knee-jerk reaction or not.




For the most part, the charts held up, though the DWCPF dipped back below the 200 dma. But the S&P did not and that is the more visible chart.



Breadth dipped, but not much and remains bullish.

NAAIM came in solidly bullish today, which means I am now flipping to full bull mode.

 

[coolhand]

Smart Money Gets Bullish

Well, the bull party was going well til some trade news hit the wires, which triggered some selling that sent price below the neutral line. We'll have to see if it was just an initial knee-jerk reaction or not.

View attachment 46261
View attachment 46262

For the most part, the charts held up, though the DWCPF dipped back below the 200 dma. But the S&P did not and that is the more visible chart.

View attachment 46260

Breadth dipped, but not much and remains bullish.

NAAIM came in solidly bullish today, which means I am now flipping to full bull mode.

 

[coolhand]

The bulls did well last week, posting more than 3% gains in the C and S funds.




The 200 dma remains a battleground, but so far that average is supporting price on the S&P 500. I am not concerned about it failing with the smart money taking more bullish positions.



Breadth remains bullish.

TSP Talk sentiment came in bullish this week. Guess some of us were waiting for NAAIM to lead the way. Not a bad idea. :smile:

There is no shortage of bad news right now and it's probably going to get worse. That may mean the market soars or at least continues to trend higher,

I remain bullish.

 

[bmneveu]

There is no shortage of bad news right now and it's probably going to get worse. That may mean the market soars or at least continues to trend higher

Markets are so weird.

 

[Happy_Trails]

The markets have been climbing the wall of worry looking past the bad news and forward to recovery.

 

[coolhand]

The wall of worry is alive and well, isn't it? Stocks continued their climb today, slowly recapturing ground from lows hit March.




Price has been above the 200 dma on the S&P for several days now. I would call that average potential support at this point. Price on the DWCPF closed at a fresh high above that same average. Momentum is bullish and rising. We aren't off to the races, but as long as the trend remains bullish, it isn't really a problem.



Breadth is looking rather vertical and confirms strength underpinning the rally.

I remain bullish.

 

[coolhand]

The rally continued today, with both the C and S funds picking up significant gains by the close.




Price is putting more distance between it and the 200 dma. Price on the DWCPF doesn't have the same amount of time above the 200 dma that the S&P does, but I don't think that will be an issue. The S&P has often led the market, which makes sense given the serious apprehensions among "pros" about the sustainability of this market. Just remember, fundamentals really don't matter, but printing presses and algorithms do.



Breadth continues to shoot upward and remains bullish.

We might get a pullback at any time now, but with all of the seriously bad news out there we might not see much selling in the short term either. Remember, NAAIM got bullish just a few days ago.

I remain bullish.

 

[coolhand]

The bulls had their way with the market again today.




The 200 dma on both charts is now quickly disappearing in the rear view mirror. Momentum continues to rise. RSI is near overbought, but that may not be meaningful in a market that might be on a mission.



Breadth continues to look strong.

NAAIM reports tomorrow. Will we see a stronger bullish reading? We might. It's always interesting to see what they are doing week to week.

I remain bullish.