tsptalk's Market Talk

[tsptalk]

Another test of some serious support after the swift trip from the top to the bottom of the current range / flag. The prior pullbacks have lasted 2 to 4 days, with an uptick in trading volume, and this is day 4.



Is it a shakeout? People like Tom Lee believe so, but now bitcoin is diving so it's becoming more of a risk off - or panic. I will take a look and see if there is a correlation between other recent sharp pullbacks in bitcoin and see what the S&P 500 was doing.

Will this afternoon bring a Turnaround Tuesday, or is the investment community on hold unit COB Wednesday when Nvidia reports and could make or break the market>

 

[tsptalk]

The reversal that started late this morning may have started too early. The best ones, the ones that actually create lows, tend to come later in the afternoon. Let's see if the bears try to take this down to the lows again.

 

[JTH]

The reversal that started late this morning may have started too early. The best ones, the ones that actually create lows, tend to come later in the afternoon. Let's see if the bears try to take this down to the lows again.

View attachment 68110

I was looking at volume today on the smaller timeframes, I don't see anything that convincingly tells me we've flushed out the sellers.

One thing I found interesting, I was looking at 2-day volume, and it's noticeably higher than the Volume-500-MA. I count 17 2-Day sessions over this MA, which is the longest stretch we've seen since Sep-Nov 2022. I don't see a particular correlation, but that 2-day 20-Session timeframe was part of the Oct-2022 Bear Market Bottom.

Prior to this, the next time we saw volume this consistently high was (wait for it) during the COVID bottom. That was a 2-day 46-Session window.

 

[tsptalk]

We finally have a morning gap up that is holding for more than a few minutes. That doesn't mean it will hold into the close, but it looks better.

The S&P 500 (and other charts) tends to struggle getting right back above the 50-day EMA on the first try after being pushed below it, so I see that the highs this morning are testing the 50-day EMA again.



Nvidia reports earnings after the bell and today's rally seems to be related to optimism over those results as tech and small caps lead in the early trading - the opposite of what we had been seeing.

Yields are flat. Oil and gold are up slightly and bitcoin is down a bit again after yesterday's sell off.

 

[cmil1212]

Or the budget being passed by house.


Sent from my iPhone using Tapatalk

 

[tsptalk]

Another gap up this morning, another quick fill and a test of the recent lows. As demoralizing it can be for the bulls, the chart isn't doing anything that isn't typical after a sharp decline.

The problem is, it could be building a low, or it could be creating a bear flag - it's too early to say, but you can see the pattern.



The 10-year / 3-month yield curve has inverted again. We just went through a long period with a yield curve inversion and it was basically a false flag for the economy. They tend to precede recessions, so should we ignore this one?

The 10-year yield is up today, as is the dollar, so the F-fund's winning streak is in jeopardy, and the I-fund is lagging US stocks for a change.

Oil is up, gold is down, and bitcoin is trying to recover from a recent decline that has put it in bear market territory.

 

[tsptalk]

It isn't THAT bad going back 30 years, but ...

Just read this: The S&P has fallen 9 of the last 10 years on the final trading day of February.

Chart provided courtesy of www.sentimentrader.com

 

[tsptalk]

Choppy! I count at least 10 times today, that the S&P 500 has gone from positive to negative, or negative to positive on the day.

 

[tsptalk]

 

[waltj]

Well... At least The gap at 5875 has been filled. that seemed to be the goal the last few days. Now ...?

 

[tsptalk]

Well... At least The gap at 5875 has been filled. that seemed to be the goal the last few days. Now ...?

 

[tsptalk]

We're seeing a nice bounce this morning, but we know how that has gone lately. There's some support, and resistance in the form of old support, being tested on almost every chart after this week's drubbing.

A snap back rally was due, even if only for a short time, and that means anyone looking to sell a rally will have to make some decisions when it occurs. Today could be the start but again, there's 5 hours left of trading and we're heading into a weekend.

Small caps (S) are bouncing above the 200-day average after a open below it. This is a good place for a bounce, but then the old broken 130-day EMA, which had been support, may try to play a role as resistance. It would be a decent gain to get to that level, however.



The Transports have been down and broken, and it is up retesting the breakdown zone. It's actually erase the the last three days of losses already, but this one has been down for a while.

The AAII Investor Sentiment Survey showed extreme bearishness this week, as we might expect, but this much? This typically can cause a rebound but notice how close the Naz 100 (and the S&P as well although not shown) is to its all time highs compared to other readings this bearish.




I'm heading the Vegas right after the deadline. I need a break!

Tonight's end of month AutoTracker with winners may get posted a little late.

Have a great weekend!

 

[tsptalk]

The stock market is digesting Friday's big reversal and gains while processing the incredible geopolitics events we witnessed late last week.

Tariffs go into effect tomorrow for Canada and Mexico so more uncertainty is giving the indices jitters this morning, but the set up for stocks looks fairly good this month based on monetary policies including Fed liquidity, another probable interest rate cut later this year, and some charts that improved some after Friday's reversal day. But the risk of headline driven volatility is still high.

Yields are down (bonds up), the dollar is down, gold is up nicely, oil is down slightly, and bitcoin is pulling back after a monster rally over the weekend.

 

[tsptalk]

That drop in the dollar today has the I-fund outperforming by quite a bit again.

 

[tsptalk]

How's your fear level? We're seeing rare extreme readings right now.


Source: https://www.cnn.com/markets/fear-and-greed


Crashes are rare, but as I mentioned in today's commentary:

As far as what happens next for the stock market is not clear. The odds favor a meaningful relief rally, so that's the most likely outcome, but market crashes tend to manifest from similar situations -- a market that should bounce, but doesn't. I'm not calling for a crash at all - there are some very good signs that the pullback is nearly completed, but can we rule it out? With all the uncertainty out there, probably not.

We have, however, been getting several Titanic Syndrome warning signals. They are by no means pleasant when they work -- when they work. The problem is, you don't know which signals will precede a major fall and which will be false flags. Be careful.

 

[tsptalk]

 

[tsptalk]

Stocks are up slightly this morning but basically we have a stalemate to start the day as the S&P and other indices trade in the middle of the day's range . It will likely change by the close but right now it is a 2nd consecutive spinning top candlestick formation, which is a sign of indecision, but also leans toward reversal -- again if it holds into the close.

So far I don't see any announcements of a tariff compromise as was suggested after the close last night. And with the jobs report coming up on Friday, we're seeing that stalemate.

Buying or selling here may feel risky as we know the indices could move swiftly in either direction depending on the next headline.

Look at the dollar this morning, as exnavyew pointed out here >https://forum.tsptalk.com/threads/exnavyews-account-talk.22280/page-45#post-715184

 

[tsptalk]

Back to the bottom of the recent range and 200 day average.

 

[tsptalk]

The jobs report was in-line, to modestly weaker than, briefing.com estimates, and above January's numbers, while the unemployment rate ticked up a tenth of a percent.

Stocks initially lost ground after the report but they've bounced back with the help of broadcom earnings, plus some support at the 200 day average.

Stocks are oversold and due for some relief. There could be some pushback from the bears who may attempt to sell any rally quickly, however, they may be vulnerable to a short squeeze if the rally gains any traction.

Nonfarm Payrolls For: Feb
Actual: 151K
B.com Forecast: 150K
B.com Cons: 159K
Prior: 125K | Revised From: 143K

Unemployment Rate
Actual: 4.1%
B.com Forecast: 4.0%
B.com Cons: 4.0%

 

[tsptalk]

The S&P 500 and Dow just went positive. It may have been too early for a reversal giving the bears a chance to sell hard into the close again.

If those bears don't show up, we could get a very strong close.

I'm leaning toward the former, but prefer the latter as it would good set up a bullish case for next week.