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Trend table status

Trend

SP-500

R2000

COMPX

Primary

? 3/31/20

?- 3/31/20

Up 5/29/20

Intermediate

?- 5/29/20

?- 5/29/20

?+ 5/29/20

Sub-Intermediate

Up 4/20/20

Up 4/22/20

Up 4/17/20

Short term

Up 5/20/20

Up 5/20/20

Up 5/20/20


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Thursday, August 31, 2017

Daily update 8/31

Now that is follow through.


The biggest upside volume bar since back in July.  Breadth was +69%.  New highs increased to 127.  New lows dropped to 19.  Last night I wrote "Maybe the bounce will get some legs.  Closing higher tomorrow would be a good sign."  I think we got some legs.  A test of the highs should be upcoming.


The futures broke out above the upper channel line.  It will be interesting to see how long they can stay out there.  Coming back inside the channel will indicate a pause or consolidation.


The green count shot up and over 50, but remains well below overbought.

Everything seems to indicate SPX should head higher.  Closing back below 2454 would change the outlook.  On the upside we have the high close at 2480 and the intraday high at 2490.  Ever since we hit that 2490 I have had the feeling SPX would hit 2500 in the near future.  This looks like a good setup to make that happen.  Tomorrow is the employment report.  Strong readings have tended to bring out buyers.  I don't see any reason for this report to have a problem.  Next month could be affected by Harvey.

Bob

Wednesday, August 30, 2017

Daily update 9/30 It’s Not Just Amazon’s Fault

The bullish news event causing today's break out was raising the Q2 GDP estimate to 3%.


SPX closed above the 8/22 high, but only by 3 points.  Breadth was +56%.  New highs increased slightly to 72.  New lows came in at 44.  Not the strongest of thrust bars today, but SPX closed above both the 50 and 20 SMAs.


The futures rallied overnight, but pulled back into the open.  Not to worry as buyers stepped in at the open and rallied the market until late afternoon.  The futures stopped at the 100 SMA which can be major support and resistance.  There is no way to know if that MA will be relevant this time.


The volume was light, the breadth was mediocre, new highs did not expand much, and the green count actually dropped a tad.  Like I said it was not the strongest of thrust bars.  Will it attract more buyers or bring out the sellers?

Last night I wrote "The key range on SPX is 2433-2454.  A close outside that range should see some follow through."  However, today was so weak for a break out I have no idea if there will be any follow through or not.  If SPX closes down by three or more points the break out will be a failure.  That isn't exactly a lot of room.  Maybe the bounce will get some legs.  Closing higher tomorrow would be a good sign.


This is an interesting read on the state of retail.  It’s Not Just Amazon’s Fault

Bob

Tuesday, August 29, 2017

Daily update 8/29

The futures were still down this morning, but nobody was interested in selling into the weakness.


This makes five closes in a row inside the range of the 8/22 upside thrust day.  This gives us a nice little box to work with.  Eventually it is going to break out one way or the other.  Breadth was slightly negative.  New highs dropped down to 65 while new lows increased to 69.  Volume was very light indicating a lack of sellers. 


In after hours trading the futures have tagged the 50 SMA.  They are up into what has been resistance during regular market hours. 


The green count crept up a little more, but remains below 50.  All I can say so far is that the market has worked off the oversold condition.  Will it get legs on the upside or will the sellers come back in?

Late in the day QQQ got above 143, but sold off a bit going into the close.  If the futures are still above 2446 at the open tomorrow it will be interesting to see if they can stay up there.  The key range on SPX is 2433-2454.  A close outside that range should see some follow through.

Bob

Monday, August 28, 2017

8/28 Addendum

I realized after I posted the daily update I forgot to include the futures chart.  When I went to get it I saw the futures down a bunch.  After doing some searching I found NK launched a missile that passed over Japan.  Not good.  Here is the current chart.  Where the futures will be by morning is hard to say.  However, this could be serious.


Bob

Daily update 8/28

Another failed attempt to rally above resistance overnight.


Pretty clear consolidation forming below the 50 SMA.  Those usually break to the downside just like consolidations on top of the 50 usually go up.  Can the volume get any lighter?  Breadth was -51%.  New highs dropped a bit to 89 while new lows picked up a bit to 55. 

The futures dropped down to the 200 EMA overnight, but found support again.  By the open they were above the 2446 resistance level, but started selling off right away.  The selling was not particularly hard.  Just enough to push the market down some.  The low hit mid day and the futures rallied slowly in the afternoon.


The green count picked up a bit, but remains below 50.


There are an awful lot of big red volume bars in QQQ.  Especially considering it is this close to the high.  Hard not see that as mass distribution.  Last week the selling in QQQ picked up when it crossed above 143.  It did not get that high today and the selling was rather muted.  Closing above 143 could be a positive sign for the rest of the market.  However, if it gets up there again this week it might get whacked.

I suspect it will take a very bullish news event to break the market out on the upside.  If that does not come along odds favor a break down to new lows.  Obviously earnings were not enough to drive us higher.  What will?  How long we consolidate here is anybody's guess.  There is clearly an increased supply of stock for sale now.  However, there has been plenty of dip buyers as well.  One side will eventually run out.

Sometimes mother nature shows us puny humans who is boss.  My heart goes out to all those affected by Harvey.  What a disaster that just won't end.  Tragic.

Bob

Friday, August 25, 2017

Daily update 8/25

More down to come?


SPX stuck its head above the 50 SMA this morning.  However, around 10:30 QQQ was smacked hard and it took SPX down with it.  This was the second attempt to reclaim the 50 and I have to wonder if it wasn't the last for now.  Breadth was strong at +64%.  Money rotated out of the biggest of the big caps into smaller cap stocks.  New highs picked up a bit to 109.  New lows dropped down to 20.


Last night I mentioned the bulls usual trick of rallying the futures over resistance overnight.  They tried that, but by the open the futures were barely above key resistance.  They ran up a little more to the 50 SMA, but the sellers were waiting.  This looks like it wants to go lower to me.


The green count crossed above the red line today.  You might recall how after a long period of the green count being above 50 a cross below the red line often brings out buyers.  The same thing happens in reverse we just have not seen this in a very long time.  Today's positive cross by the green count could bring out the sellers on Monday.  With the intermediate indicator already below 50 a sizable decline is possible.  That does not mean it will happen, just that it is possible.

Things have clearly changed.  Strength is being sold into unlike what has transpired so far this year.  To get a big decline people have to be willing to sell into weakness.  We don't know if they will do that or not.  Up til now people have been reluctant to sell for fear of missing out.  With the way QQQ has been getting whacked intraday I am not sure that is still true.  I keep wondering if the market is losing patience a little bit with the goings on in D.C.  Unfortunately I have no way of knowing if that is the case or not.  If we end up going a lot lower that is likely the reason why.  Too bad we can't use hind sight in the markets. 

Don't you just love these huge stadium monitors.


Have a great weekend.

Bob

Thursday, August 24, 2017

Daily update 8/24

Dip buyers held firm at the lows.


Somebody sold into the gap up right after the open.  That sent SPX down below yesterday's low.  The selling stopped and the dip buyers went to work.  That is how it went all day with the buyers and sellers taking turns.  SPX spent a considerable amount of time below yesterday's low, but failed to break down.  That is a positive at least for now.


For the last two days the futures have run into heavy resistance around 2446.  They have also found support around the 200 EMA.  At the end of the day the futures were still below the 200 SMA.  However, they moved up immediately after the close to climb back above the 200.  The bounce scenario is still alive.


The counts did not change much. 

The last two days have seen enough dip buyers to absorb the selling volume.  This might embolden more bulls to step in and do some buying.  A gap up tomorrow might have a different market reaction then today.  The usual way the bulls solve a resistance problem is to push the futures well above resistance overnight.  The way the futures jumped up after the 4 PM close that might be what the plan is.  On the flip side we need to watch today's low (2436) should the market test down there again.  After two days of dip buying a market break down will bring out a lot more sellers.

Bob

Wednesday, August 23, 2017

Daily update 8/23

More politics?


The down opening today was attributed to DJT mentioning he might cancel NAFTA last night at a speech.  Dip buyers came in at the open and held the market up all day.  Some indexes even got positive during the day (SOX even closed green).  There buyers and sellers took turns in the afternoon.  There was a drop going into the close.  Breadth was slightly positive though.  New highs were stable at 76.  New lows were also stable at 47. 


The late day swoon and dip after hours has taken the futures back below the 200 SMA.  It would be better for bulls if they are back above that line by morning. 


The red line remains below 50 and above the green line. 

Was today a retrace of yesterday or is the bounce rolling over?  Good question.  I think tomorrow will tell the tale.  If the bounce is going to continue the bulls need to show up tomorrow.  If the bears show up instead we could easily head down to new lows.  A third big down day might give the dip buyers a bit of a pause.

Bob

Tuesday, August 22, 2017

Daily update 8/22

Wow.  An expected bounce actually happened.


SPX closed back above the 50 SMA.  Volume was even lighter then yesterday.  I guess the low volume yesterday was not because of eclipse watching.  The big boys must all be in the Hamptons.  Breadth was +68%.  New highs increased a bit to 82 while new lows dropped way down to 45.


The futures blasted up through the 200 and 20 SMAs.  The 50 and 100 lie just a little bit above.  The 50 was significant resistance on the last bounce attempt.  Can they get through it this time?


The red count dropped below 50, but is still above the green line. 


The short term bull pressure lines got a positive cross today.  That did not happen on the 8/14 bounce attempt.  The intermediate red line looks like it has probably peaked for now.  This chart supports the idea of a short term low being in place.

The bulls kept buying all day as the high came late in the day.  That is certainly a positive.  The 8/14 rally attempt stalled out mid day.  I think we will see better follow through this time.  The volume being even lighter then yesterday's light volume is a bit troubling coming off a low though.  Not a lot of conviction to the move.  As long as the sellers stay on vacation SPX could retest the high.  The news flow could determine that.  We could be in a bit of a quiet period for news to the end of the month.  Maybe the bulls will keep on buying.

Bob

Monday, August 21, 2017

Daily update 8/20

The eclipse probably explains the very light volume today.  I saw some really great video.  We had about 90% coverage here.  I did not expect it to affect the wild life, but I was wrong.  We have frogs here that go absolutely crazy at sunset.  All was quiet as the maximum eclipse approached.  Suddenly the breeze picked, the temperature dropped, and the frogs started croaking like crazy.  We get breezes and temperature drops like that from summer storms and the frogs don't go crazy.  It was not any darker then we would normally see from a storm either.  Somehow they knew something was odd.


SPX tested below Friday's low, but failed to collapse.  Dip buyers stepped in and pushed the market higher.  The afternoon saw some selling and a higher low form as the bulls returned going into the close.  This looks like a reasonable attempt at a short term low.  The ABC pattern remains a possibility.  All the bulls should need is a rally day tomorrow to complete the reversal.  Breadth was about dead even.  New highs increased a bit to 51.  New lows remain elevated at 140.  SPX also touched its 100 SMA this morning as an extra area of possible support.


The futures ended the day on a bullish engulfing candle.  That is a good way to start a reversal.  They are up a couple of points after hours.  The usual way we make a bottom is for the bulls to run the futures up enough overnight to make the shorts run for cover after the market opens.  Lets see if they pull that trick again.


The red count dropped a bit and the green count picked up some.  However, the red line is still above 50.  These counts don't look all that bad considering SPX made a new pullback low.  However, the intermediate indicator is getting pretty weak.  If the market does not bounce here the selling pressure could pick up considerably.

It looks like we have a reasonable pattern to make a short term low.  If the market rallies from here the ABC pattern indicates a high likelihood of a retest of the highs.  The intermediate indicator is low enough we would have to keep a close eye in case the market rolls over before it makes it back to the highs.  However, with congress not getting back until Sept. to argue over the debt ceiling there could be enough quiet time to get SPX back to new highs.  Should that be the case we will probably be looking at some sizable negative divergences that could be a problem for this fall.

Bob

Friday, August 18, 2017

Daily update 8/18 How Welfare States Make Us Less Civilized

A little more down, but ...


SPX closed a little bit lower.  Breadth was actually slightly positive.  New highs were 40 while new lows spiked up again to 160.  If you look at the numbers from the 8/8 intraday high we have a nearly perfect ABC pullback to the lower Keltner channel line.  This looks like a bullish setup to me.


The futures did some testing below yesterday's low over night and shortly after the open.  However, the market did not collapse.  It is trying to find a bottom here.


Curiously there was a pretty big drop in the red count.  That is unusual given SPX closed lower.  This is a much better positive divergence then what we had yesterday.


Also curiously QQQ did not close below its 8/10 low.  This is another positive divergence.  It looks like the 50 DMA is trying to hold as support.

The VIX tested slightly above 16, but closed back below 15.  Despite SPX closing lower the internals suggest dip buyers were active.  There are enough positive divergences here this could turn out to be a short term bottom.  SPX has a classic pullback pattern (ABC) into support (lower Keltner channel line).  All that is need is for the bulls to show up on Monday.  I keep wondering if SPX wants to see that 2500 level since we got so close to it.  If the bears show up instead I think we will see the 2400 area pretty quickly.


This is a great thought provoking article.  How Welfare States Make Us Less Civilized



Have a great weekend.

Bob

Thursday, August 17, 2017

Daily update 8/17

It is different this time.  The VIX crossing above and closing back below 15 did not make a bottom like every other time this year.


SPX closed below the 8/10 low.  Breadth was -79%.  New highs dropped down to 50 while new lows spiked up to 145.  Not good.  The lower Keltner channel line is just a bit lower and may provide some support. 


The futures went well below the 200 MA lines.  They have done that a few times this year and the decline has ended that day every time.  Will that be different as well?  The -DI line crossed over 35 again.  Selling pressure we have not seen in a long time.


There is a slight divergence in the red line from the 8/10 low.  Not big enough to write home about.  The intermediate indicator crossed below 50.  That opens the bearish door a little more.  That happened last fall and we did not get a big decline.  However, the technical condition at the recent high was much weaker then last year.  That does not guarantee a big decline by any means, but I would have to say the odds are elevated and rising.

I have written a few times this year about the dysfunction in D.C. and my amazement that the market seemed to ignore it.  Since yesterday around 12:30 it has stopped ignoring it.  It all started with news of the business advisory councils being ended.  This morning the bulls were actually buying the down opening.  Breadth had gone from -63% after the open to slightly positive.  Then somebody started rumors that Cohn was going to leave the administration and the selling took over.  Word came out later on that the rumors were 100% false, but by then it was too late.  The market has had a very short attention span for anything negative this year.  Is that still true or are we in a different mode now?  This is where it would be helpful to be hooked up with some money managers.  What kind of conversations are they having?  Are they thinking it is time to reduce risk?  Oh to be a fly on the wall in some of those back rooms.  I was not worried about the spat with NK.  I knew that was not going to end up in war.  However, I can't say not to worry about this situation.  This may be significant, but I have no way of knowing that yet.  The market has looked like it was topping for weeks now.  This could be the catalyst that makes the sell off happen.

The selling persisted all the way to the close as SPX closed on its low.  That means a gap up tomorrow is likely to test today's low.  QQQ, IYT and the SOX closed above their 8/10 lows.  That is a slight positive divergence.  However, I don't see anything screaming at me the market is ready to bottom.  An oversold bounce seems likely, but it might be short lived.  There is enough technical damage this time the bulls need to show up in force in the days ahead to contain the pullback.  For support there is the 100 SMA at 2416.  The next level looks like the 2400-5 area.

Bob

Wednesday, August 16, 2017

Daily update 8/16

What a disaster.  I am not talking about the stock market.


SPX stuck its head above the 20 SMA and looked like it might close there.  In the middle of the day news about disbanding the president's business advisory groups sparked a little bit of selling.  That knocked SPX back below the 20, but still positive on the day.  Breadth was +57%.  New highs picked up to 80 while new lows dropped back to 95.  Still not good numbers.


 The futures are struggling around the 50 SMA.  As long as they hold above the 20 SMA they should get through the 50 eventually.


The red count fell and the green count picked up today, but they are still negatively crossed.  The more important thing to watch is the intermediate indicator.  It is getting awful close to 50.  Because of its longer term nature it is possible it keeps falling even if the market rallies.  Downside risk goes up considerably when it is below 50. 

Bob Pisani was talking to traders today about a premium in the market based on the Trump agenda.  He said most people believed there is one.  The general consensus seemed to be stocks were 5-10% higher based on the agenda.  I have commented a few times on the dysfunction in D.C. and that I am surprised the market has ignored it.  President of the U.S. is a very difficult job.  Constantly sticking your foot in your mouth only makes it harder.  Every misstep makes it harder to get things done.  I have been doubting for quite some time that any of it will ever get passed.  Some day the market may get impatient and some of that Trump agenda premium may come out.

In the short term the bounce is still alive even though it is weak.  A test of the highs still seems likely.  To get much past the current highs the bulls are going to have to show more enthusiasm.  There have been plenty of bounces that started off weak and got some legs so this one might also.  I will be watching that 20 SMA on the futures charts for a sign the bounce is rolling over.

Rant on:
Once upon a time there was a news media that wanted to inform the public.  They were a watchdog on the government.  They were careful in fact checking.  Anybody remember the old saying check the facts, check the facts and check the facts again.  The move to a digital medium has seriously changed the world.  The media found out the best way to get people engaged enough in the news to click is to either scare them or make them angry.  Keep that in mind as you absorb the news today.  They are all out to make you angry and scared.  Facts are irrelevant.  The consequence of this method of operation is catastrophic to our democracy.  Many people have a short fuse and/or rush to judgement on everything.  Many people just skim headlines.  I have had many conversations with my wife about how the content of so many articles are completely different then the headline.  This is simply manipulation.  For years I noticed it was happening, but I did not really understand why.  I finally came to the realization it is a quest for clicks.  Our democracy is not going to survive if this situation is allowed to continue.  People deserve to know the facts and form their own opinions.  The first step to fixing any problem is to acknowledge the problem exists.  We need the majority of people in this country to realize they are being manipulated and fight back.  This is not going to be an easy task.  Are you going to let the media manipulate your thoughts and feelings or are you going to demand the facts and make up your own mind?
Rant off:

Bob

Tuesday, August 15, 2017

Daily update 8/15

Small caps were weak.


There was a bit of selling pressure, but mostly in small caps.  Most other indexes were slightly up or down.  Breadth was -62%.  New highs came in at 57 while new lows spiked up to 117.  That is not a very good sign.  SPX remains below the 20 SMA.


The futures are consolidating between the 20 and 50 SMAs.  They should break one of those MAs tomorrow.


Both the green and red counts increased a bit today.  The bulls are not showing much enthusiasm yet.

This is option expiration week which has a pretty strong upside bias.  I would think this bounce has further to go.  However, the action in the small caps and the big increase in new lows are not good things longer term.  Internally the market still appears to be forming an important top.  The bulls can still right the ship, but they definitely need to buy with more enthusiasm.  Maybe they will show up tomorrow and continue the trip towards the highs.

Bob

Monday, August 14, 2017

Daily update 8/14

Bounce initiated.


Friday I mentioned the strength in COMPX supported the bounce scenario.  The futures gapped up and kept on going this morning.  Breadth was +73%.  New highs were 51 while new lows dropped considerably to 53.  SPX easily reclaimed the 50 SMA on the open.  It closed a bit below the 20 SMA.  There is another 15 points to go to a new high close.


The futures got back above the 20 SMA, but still need to confirm a break.  They also need to get back above the 50.


The red count slipped considerably and ended back below 50.  The green count still has some work to do.

The VIX closed at 12.33 well below the 14 level.  If things are still working they way they have all year that should mean SPX hits new highs from here without getting below Thursday's low.  If we break that low instead it would indicate a change in character.  It will be interesting to see how fast the VIX declines should the market continue higher.  On the last rally the market kept going up for days after the VIX closed below 10.  The VIX even got below 9 briefly.  Prior rallies really struggled with a VIX below 9. Lets see what the bulls have in mind.

Bob

Friday, August 11, 2017

Daily update 8/11 By This Measure The Current Stock Market Bubble Is Far Bigger Than The Dotcom Bubble

Test of yesterday's low was successful for today.


Breadth was slightly positive, but down volume was considerably higher then up volume.  New highs were a pitiful 18 while new lows increased again to 152.  At least the market didn't collapse today.


The futures tested below the 200 SMA overnight, but the bulls came out in support.  They were up at the open, but dipped down to test yesterday's low.  After a mid day bounce they dipped back down to the low and held again.  So far so good for the bounce scenario.


The VIX did not close below 15 yet.  The COMPX (+.64%) and a number of other indexes were much stronger then SPX.  That seems to support the bounce scenario.  I guess we will see what happens on Monday.

Interesting chart and read.  By This Measure The Current Stock Market Bubble Is Far Bigger Than The Dotcom Bubble




Have a great weekend.

Bob

Important

The information in this blog is provided for educational purposes only and is not to be construed as investment advice.