coolhand's Account Talk

[coolhand]

It wasn't an exciting trading day, but the bulls did manage to post gains by the close.




Price is tracking sideways right now, but as long as the 200 dma holds it won't be a problem. Note the rising 50 dma approaching the 200. We could see fireworks if it crosses or gets close to crossing. The bears don't want to see a bullish sign like that as it would likely create additional headwinds for them.



Breath ticked up a bit and remains bullish.

I remain bullish given the recent NAAIM reading and the successful test of support at the 200 dma more than a week ago.

 

[coolhand]

We aren't moving fast, but if you're a bull, you are moving in the right direction right now. But I'd really like to see a breakout to the upside rather than dancing not far above the 200 dma.




Upward momentum is still rather flat. That 50 dma continues to close on the 200 (of course). A positive cross is likely to occur in about a week or so, assuming we don't sell down. That could trigger some volatility, but we'll see what happens when we get there.



Breadth is still bullish, of course.

I remain bullish.

 

[uscfanhawaii]

But the 50day is about to ‘golden cross’ the 200day.
Isn’t that supposed to be a green light for the market to surge ahead?

 

[coolhand]

But the 50day is about to ‘golden cross’ the 200day.
Isn’t that supposed to be a green light for the market to surge ahead?

There is currently a battle for control over market direction. It may not be a daily battle, but the bears do not want a "golden cross", because it makes it more difficult for them to push price lower. This is because the bulls will take the golden cross as a positive sign, which it is, but it may not go unchallenged by the bears. The battle over the 200 dma is another example, and that battle is happening all over again today. The DWCPF is already under it, while the S&P is not far from falling under it.

 

[coolhand]

The battle over the 200 dma is back in focus again as stock prices fell sharply lower today.




The 200 dma did not get tested on the SPX, but it did come close. The DWCPF shows that price did fall under it intraday, but managed to close pretty much right on it. Momentum is falling.



Breadth took a hit and is now neutral.

NAAIM reports tomorrow.

I don't get the impression that this market is going to find it easy to get back to new highs. The are battle lines drawn in the political sphere that can impact our financial health (positively or negatively). So, what I am saying here is that we may have more surprises (volatility) in the weeks ahead as the election draws ever closer. That may sound bearish, but that's not necessarily so. It just depends on control and so far the bulls have had that control.

I remain tentatively bullish till I see that next NAAIM reading.

 

[coolhand]

While the battle over the 200 dma continues, the latest NAAIM reading shows a decrease in bullishness, but still bullish nonetheless. I am not seeing serious shorting among these money manager, so I suspect some managers that got less bullish went neutral rather than bearish.

Bottom line is that the reading is moderately bullish.

 

[coolhand]

The bears tried to press their advantage today after tanking the market on Wednesday, but the bulls drove price back to the neutral line after early weakness and pressed price to the upside in the final hour of trading to give them a solid gain on the day.




Price is now in the middle of the short term trading range, but that 200 dma remains not far below. And with the 50 dma creeping closer to the 200, we may see more attempts to sell the market down. I am sure the bulls know this and may have their own counter to any serious selling. I'm not saying the selling will happen, but there is a lot going on in the chart that could influence price direction (as I've articulated in previous recent posts).



Breadth managed to turn up on the day and is back to a bullish condition (for now).

NAAIM came in less bullish, but as a group they are still bullish; just less so. The bears among them are showing little conviction. That's good news for the bulls.

It may be uncomfortable watching the price action of late, but the smart money certainly seems to indicate that the bulls are likely to prevail (to this point). For this reason, I remain bullish.

 

[coolhand]

The bears put up a fight last week to keep price from trending higher. I had said over the past week or so that the rising 50 dma was nearing a positive cross of the 200, which is technically bullish. This is certainly not lost on the bears, who are trying to turn this market around (lower). The 200 dma is also a key area in this fight.




Volume was elevated on Friday as price closed below the 200 dma on both charts. This is a another test of support. The trend is up, but a battle is in progress to change that. Momentum is falling



Breadth flipped negative on Friday's action.

TSP Talk sentiment came in neutral, which is not surprising. NAAIM was moderately bullish on Thursday.

The up and down action the past few weeks has traders and money managers running in both directions. With price now below the 200 dma once again, we may very well see the bulls mount another upside attack. NAAIM supports this possibility. I think we can expect more volatile action in the current market environment.

I remain bullish, but what happens this week may change my sentiment. We'll see how it goes.

 

[coolhand]

Yesterday, I said that since price fell (closed) below the 200 dma that the bulls may mount another upside attack. Sure enough, the week started out with a rally that pushed price back above the 200 dma. Maybe there's more.




So, price has now closed above the 200 dma on both charts, but not by a lot. Momentum has not yet turned back up either, but it's a start if the bulls continue to press. I still think we may be in for a battle.



Breadth got back into a positive configuration, but with price more or less tracking sideways (in volatile fashion) over the past 3 weeks or so, it doesn't mean a whole lot.

I suspect the battle over control of price will continue. If the bulls can push price to a new high, which is still at least 150 points higher, it may weaken the bears resolve. I do believe we get there eventually.

I remain bullish, but not complacent.

 

[coolhand]

Re: Smart Money Gets Bullish

A headline I just saw late this afternoon said that the market just closed out the best quarter in decades. I would not have expected that if I wasn't told.

https://www.cnbc.com/2020/06/30/stock-market-futures-open-to-close-news.html

The bulls kept it going today as price closed out with decent gains.




Price is now in the middle of the current short term range.



Breadth ticked higher and remains bullish.

So far, so good for the bulls, but they need to eventually push price past the previous peak. I still believe we get there eventually.

I remain bullish.

 

[coolhand]

Re: Smart Money Gets Bullish

We got a choppy day today.




Price eked higher by the close. Momentum is flat. Price is also creeping toward the upper end of its current medium term range (past few weeks). Note that the 50 dma is getting very close to having a positive cross of the 200 dma on the S&P 500.



Breadth was flat, but remains bullish overall. Keep in mind that while it's technically bullish it's not tracking higher (like price).

NAAIM reports tomorrow.

So far, the bulls have kept the bears at bay. I remain bullish.

 

[coolhand]

Re: Smart Money Gets Bullish

The latest NAAIM reading shows a small decline in bullishness and modest rise in short positions. The reading overall looks modestly bullish. It shows bulls much more leveraged than bears (conviction). However, because they are not overly bullish as a group, I anticipate that this market will continue to see up/down action. The trend remains up, so we don't want to lose sight of that. We just can't get impatient or complacent.

 

[coolhand]

The bulls have had a good week as we head into the holiday weekend.




Price is back to the top of the trading range on the S&P, while a bit under it on the DWCPF. Volume was underwhelming.



Breadth ticked higher and remains bullish.

As I pointed out in my previous post today, NAAIM got less bullish, but not by a lot. Overall, they are still collectively bullish, just modestly so. I noted that the bulls are much more leveraged than the bears, which is means there is more conviction among the bulls.

I anticipate more back and forth action on the latest NAAIM reading, but remain bullish overall.

 

[coolhand]

The bulls kept the rally going today, posting solid gains by the close.




Price on both charts continues to put the 200 dma further in the rear view mirror, but potential resistance looms not far above. The goods news is that price has broken above the medium term range, so now its the previous peak made in June that needs to be tested and hopefully broken to the upside. Volume remains on the light side, but momentum is starting to turn up a bit.

Breadth remains bullish.

We could see a pullback anytime now, given how much the market has recovered over the past week or so. Any pullback would likely be a buying opportunity, but it could be a tricky play with resistance overhead. Then again, it may not matter if the bulls power this market forward. We'll see what happens this week.

I remain bullish.

 

[coolhand]

As I said yesterday, the market was due for a pullback. Obviously, we got a pullback today.




Price didn't fall a lot, but weakness may not be over yet either. Volume is still on the low side. The 50 dma is now in the process of having a positive cross through the 200 dma. I am not anticipating that this by itself will drive a rally, but we should note that it is happening as it is bullish.



Breadth remains bullish, but did fall on the negative action.

So, price still remains caught between the June peak (about a month ago) and the 200 dma area. Maybe that 50 dma cross will have a more immediate impact than I am anticipating, but I'd rather see where NAAIM is when the next sentiment survey is released. I remain bullish.

 

[coolhand]

 

[coolhand]

Market Snaps Back - Posted by Coolhand

The bears could not keep it going after yesterday's moderate sell-off as the bulls got back about half of Tuesday's losses.

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There isn't much to say about the charts. Price continues to meander up and down, though it does seem to be biased higher at a very slow rate. Resistance is not far above. The 50 dma continues to rise and is about even with the 200 dma on the S&P.

Breadth ticked higher and remains bullish, but continues to track in a sideways fashion.

NAAIM reports tomorrow, so we'll get a fresh read from the smart money. I remain bullish.

 

[coolhand]

NAAIM came in sharply more bullish today. The bears among them have backed off on their shorts, which were not substantial to begin with. My guess is that they collectively may be expecting some news to hit over the next few days that is likely to push stocks higher. This is just an educated guess, but technically, stocks may be coiling for a jump past the June high. We are, after all, still in a bull market. So, those are my thoughts for this week's reading.

 

[coolhand]

The market remains caught in a back and forth struggle between the bulls and bears for control of market direction. While price has largely been tracking sideways in a range since early June, it is currently dancing around at the upper end of that range (getting ready for a upward push?).




The good news for today is that the bulls closed the market well off the lows of the day. And there is no technical damage, just a sideways battle.



Breadth flipped negative, but we can see by the chart that this signal has also been up and down, so until this sideways pattern is broken, I can't get excited about a positive or negative signal by this measure.

But as I posted earlier this afternoon, the bulls got good news in that NAAIM got more bullish as long positions were added to and short positions were reduced. The bears among them are not excited about their prospects for making money on the short side. But the bulls are highly leveraged on the long side. Remember, this is smart money. I get the impression that they may know that something is coming (news) that is going to push this market to the upside. That doesn't necessarily mean a moon shot, as we have no way of knowing how much of a rally we might see (assuming we do indeed see one). NAAIM is a sentiment indicator, and a pretty good one for the most part. And while it was modestly bullish last week, it is at least moderately so now. Their long positioning in stocks is obvious.

It's been about 5 weeks since the June peak, maybe a breakout is getting near? It's very possible and even likely based on the NAAIM reading. It's all about risk and right now risk favors the bulls.

I remain bullish.

 

[coolhand]

The bulls had a good week last week with Friday's action closing out on a positive note.




There is no breakout yet, but price does remain at or near the top of its trading range. Momentum remains rather flat. The 50 dma has now crossed the 200 on the S&P 500. The DWCPF is not far behind.



Breadth rose on Friday and put the signal back in a bullish configuration, but it also remains in a sideways pattern.

TSP Talk sentiment came in bullish. We already saw NAAIM get decidedly bullish on Thursday. I have to expect more positive action on this sentiment. Something (news) has to push price higher and get the market back on an upward bias. We do have resistance overhead, but NAAIM suggests this is not likely to be a problem. Will that upside catalyst happen this week? I hope so, but it may take longer.

I remain bullish.