coolhand's Account Talk

[coolhand]

After 3 days of hard selling in a row, the market bounced on Wednesday. The bounce comes in the area of the 50 dma. Will that act as support? Maybe, but I'm not betting on it.




We can see that the 200 dma is still well under the 50 dma. That may be a target area for the bears (assuming the 50 doesn't hold).



Breadth bounced, but remains bearish.

Considering the speed at which the market declined (from all-time highs) I think it is too soon to look for a bottom. The bears may be looking to trap any dip-buying bulls in here with this rally.

NAAIM reports tomorrow. Let's see what changes the smart money may have made since their last reading.

I remain bearish.

 

[coolhand]

NAAIM came in bearish today. That confirms the bearish action and what we might expect for at least the next few days, but I suspect it may be longer than that; perhaps 2 or more weeks of overall negative action.

 

[Beester15]

NAAIM came in bearish today. That confirms the bearish action and what we might expect for at least the next few days, but I suspect it may be longer than that; perhaps 2 or more weeks of overall negative action.

Wonderful...:worried:

 

[flalaw97]

NAAIM dropped from 95 to 53. Last time it dropped that much was in March. I think you are right that we are in for a few more weeks in Bearish country.

 

[coolhand]

The bulls tried to add to Wednesday's gains, but were eventually beaten back by selling, which took the indexes into negative territory in afternoon trade. Confirmation of the negative action came today in the form of a bearish NAAIM reading.




The 50 dma is the current battle area and is providing support to this point, but I suspect it will not hold.



Breadth remains bearish.

The latest NAAIM reading showed a significant shift from bullish sentiment to bearish sentiment. This tells me that the smart money does not expect a quick turn back higher, so I believe we are looking at overall negative action for more than just a few days. If support at the 50 dma fails, watch the 200 dma for support.

 

[amoeba]

I disagree. The volume and volatility are simply not there, but rather peaked, and declining. The aaii likewise flipped strongly bearish (low 20s bulls), which is bullish. The 50 DMA/EMAs are so far supportive. I say today is/was the buy.

 

[Scout333]

Thanks Cool, You saved me a world of damage to my TSP account this year! I appreciate your posts and analysis! :smile:
Scout

 

[coolhand]

Last week, the S&P 500 and the DWCPF were thrown for a weekly loss.




So far, support at the 50 dma is holding on the S&P 500, but closed under that level on the DWCPF on Friday. Volume has fallen off since the initial 2 days of the sell-off, which we might see as at least somewhat supportive for the bulls. Momentum is falling and the indexes are not oversold (not that they need to be for a potential reversal).



Breadth remains bearish, but it is holding steady at the moment.

The TSP Talk survey came in less bullish, but it's still bullish. On the other hand, NAAIM had a significant reduction in bullish positions and I now view the reading as bearish overall (maybe bullish in the very short term (1-2 days)). I warned that NAAIM may go bearish if the selling continued and went bearish myself before the reading was released. I said that the action was reminiscent of the action back in February and that NAAIM may not see a bearish reading as quick as we might like (for confirmation purposes).

But we got confirmation from the smart money, so that's a warning.

Yes, the worst may be over, but without confirmation (no, we don't have any yet imo) I cannot embrace that. I think risk is now to the downside until proven otherwise. I am not bearish because I want to be bearish, I am bearish because the smart money is bearish. That doesn't necessarily mean the market falls apart, but downside risk is elevated regardless. If the 50 dma doesn't hold, price may test the 200 and that's much lower. We'll just have to see how it goes.

I remain bearish unless the bulls can prove they still have control.

 

[coolhand]

The bulls made it clear today that they are not just going to stand around and get pounded by the bears. That's really not a surprise to me, which is why I said in previous posts that I can't be sure how this plays out. It's not just financial indicators I'm looking at as I watch this battle for control of price. This battle goes beyond the financial bedrock of the market itself. I alluded to this the other day and it's why I take the bearish NAAIM reading seriously. It doesn't guarantee a decline, but it sure does raise the odds.




So, while the rally feels good it hasn't proved that the bulls have control (yet). Support at the 50 dma does remain intact to this point.



Breath actually flipped positive on the rally.

So, there's hope that the bulls have turned the market, but not a lock. Not with a bearish NAAIM reading. We need more confirmation.

I am remaining bearish for now. The rest of this week may answer the question of whether the bulls have wrested control back or not.

 

[nasa1974]

It always seems like September is one of the battleground months between the Bulls and the Bears. So who gets bragging rights for the month?

 

[coolhand]

It always seems like September is one of the battleground months between the Bulls and the Bears. So who gets bragging rights for the month?

Wonder how many times the battle in September had to do with the month of the November?

 

[coolhand]

The bulls started out strong today and held their ground a good part of the day, but the bears mounted a counter in late afternoon trading that cut gains by about half by the close. That's not necessarily a negative, but it does show that the bears haven't gone away.




It appears the bulls have retraced roughly half of the losses from the peak. Momentum is turning up.



Breadth wasn't impressive today, but it did manage to eke out a gain.

So far, the bulls are making a case that maybe the bottom may be in, but the late day selling makes it difficult for me to get bullish. Not to mention the bearish NAAIM reading.

We are 2 days from a new NAAIM reading. I'd really like to see what the smart money thinks before I get bullish. I am willing to go from bearish to neutral, however.

 

[coolhand]

The bulls came out early and strong again today, but like yesterday the bears mounted an attack to drive price back down. We ended up with a mixed close, but it's the bulls I have to give the nod to because they are holding price above the 50 dma to this point.




Price remains not terribly far above the 50 dma. A retest of the 50 dma is still very possible. Momentum dipped on the S&P.



Breadth actually ticked a bit higher and remains bullish.

NAAIM reports tomorrow. We'll soon know if they've shifted in either direction. I'm anticipating some degree of a bullish shift, but that's just a hunch.

I remain neutral.

 

[coolhand]

I said in yesterday's post that I suspected NAAIM might shift toward the positive side and today's reading shows that they did, but not by a lot. The reading is now neutral to modestly bearish. That's not a subscription for the market to fall apart, but it does validate the volatility we are seeing. This reading keeps me in my current neutral sentiment.

 

[coolhand]

It was bears turn to make a run out the gate today as price fell hard at the opening bell.




I said yesterday that a retest of the 50 dma was still possible and we only had to wait 1 day to get that retest (the test is still in progress). Price closed just above that key average on both charts. To this point, support is holding, but will it last?



Breadth dipped today, but technically remains positive. Since the 21 and 39 day averages have flattened, I'd look at it as more neutral.

NAAIM came in a bit more bullish today, but not enough to change sentiment a whole lot. I am now viewing the reading as more neutral to modestly bearish. We could see more selling with this reading, but I'd not expect a deep dive. We can also anticipate continued rallies mixed in, so basically volatility may remain with us. The 200 dma is still a possible target, so we'll have to watch for that if support doesn't hold.

I remain neutral.

 

[coolhand]

The week ended on a negative note Friday as the S&P and DWCPF both fell. However, the S&P 500 closed for the week with a moderate loss, while the DWCPF closed with a significant gain. Isn't that interesting.




Volume was much higher today. Momentum is falling on the S&P, but flat on the DWCPF. The 50 dma failed today on the S&P 500, but not the DWCPF.



Breadth fell and is now bearish again, but it remains in a range at the moment.

I said more than a week ago that I did not know how this was going to play out when the selling first began. I expected an up and down battle, which is what we got. Now, price has closed below the 50 dma on the S&P, which makes things a bit more dicey, but the DWCPF is in better shape, though it may eventually follow the S&P (or not).

Is it really a wonder why NAAIM is neutral to modestly bearish?

It's not going to be easy to figure this market out, which is why I'll be following NAAIM as closely as I do.

I remain neutral.

 

[coolhand]

Seemed like everything was under attack today (stocks, precious metal, crypto). We've seen this before.




The DWCPF joined the S&P under the 50 dma today. Volume was very elevated. If there weren't 2 sides battling this out, I suspect the market would have fallen apart altogether. But even if it isn't falling apart, it's moving lower. The 200 dma is still further below and we may yet test it.



Breadth hit a fresh low since the August peak. It's bearish.

The bears are going to do their best to screw up the market. This is about optics heading into November. I'll leave it at that.

Since NAAIM was largely neutral last Thursday, today's sell-off may have shaken some of those bullish positions. If the bulls can't counter the selling to a large degree and the market continues to lose ground, I anticipate that NAAIM may increase their bearish positions. That's an educated guess since we only get weekly readings.

I am remaining neutral, but with a modestly bearish bias. I am giving the bulls the benefit of the doubt that they will mount a counter attack.

 

[coolhand]

The bulls fought back on lighter volume to close with a gain today.




The 50 dma was not retaken, but it isn't far under that key average. It's possible it may act as resistance given price has been below that average for 3 days now (on the S&P 500).



Breadth ticked higher, but remains bearish.

We're just going to have to see if the bulls can consistently fight back. They need to push price back above the 50 dma soon or it might get tougher to retake it in the short term.

I remain neutral to modestly bearish.

 

[coolhand]

The technical picture got more bearish today as the bears hammered price lower.




It's looking more likely that the 200 dma is going to get tested. Momentum is negative. The market is not oversold (just an observation).



Breadth fell along with price. It remains a bearish indicator.

Today's action was decidedly bearish. The market opened with modest gains and went downhill from there. This makes it more likely (not a certainty) that we'll see a more bearish reading from NAAIM, which reports tomorrow.

My gut feeling is that a bottom may not be near. And if price does test the 200 dma, that key average may not hold. This is more than a financial battle, which is what concerns me. I also do not like that precious metals (crypto too) are getting hammered. This is also part of the overall battle. It's possible that the bulls may elect to wait for the bears to expend their ammunition before waging a serious counter (under the circumstances) and that may mean price goes much lower from here. This is not a prediction, it's just a possibility.

Let's see where NAAIM is tomorrow and whether the 200 dma becomes a factor. My bearish leanings are gut feelings at the moment (based on bearish action), but the indicators have the final say.

I am flipping bearish as a result of the negative action and indicators.

 

[stingrayiii]

I also do not like that precious metals (crypto too) are getting hammered. This is also part of the overall battle. It's possible that the bulls may elect to wait for the bears to expend their ammunition before waging a serious counter (under the circumstances) and that may mean price goes much lower from here. This is not a prediction, it's just a possibility.

This is what is making me move to very bearish. Something is afoot and I don't know what.