Friday, November 13th
* We started Th weak but non yet at levels corresponding to intermediate-term oversold. The resulting strategy of selling bounces that could non get got out prior (overnight) highs worked really good during the day, equally nosotros shut weak together with right away get got traded lower during overnight hours. As I mentioned a piece ago, I'm impressed yesteryear the fact that many marketplace moves are offset during London hours together with non during the U.S. twenty-four hours session. My working hypothesis is that moves inwards stocks *will* endure anchored inwards London during periods inwards which the top dog drivers of stock prices are macro-related. Recently, the merchandise inwards stocks has been less nigh turn a profit together with U.S. economic scheme together with to a greater extent than nigh currencies, involvement rates, together with cardinal banking concern dynamics.
* With the recent weakness, we're much closer to intermediate-term oversold levels per the nautical chart below, but non quite at that spot across many indicators I track. The opportunity with selling the bounces downward hither is that the short-covering rallies tin endure to a greater extent than violent. Waiting for short-term overbought weather condition that come about at lower highs together with beingness nimble on exits makes feel equally a twenty-four hours timeframe strategy.
* One implication of the macro driver thought to a higher house is that tracking how other, correlated assets are trading (commodities, USD, rates, etc.) tin give about clues equally to how stocks may bear going forward. The higher rates, stronger dollar, weaker commodity province of affairs has non been practiced for stocks.
Thursday, Nov 12th
* I'm spending the twenty-four hours at the trading desk accompanying a really accomplished trader. Will most probable alive tweet marketplace observations. Stock Twits handle is @steenbab.
* We've made a twosome of attempts to bounce off Monday's lows together with none get got been sustained. Indeed, my breadth measures get got modestly deteriorated during that fourth dimension together with I'm soundless non showing us at levels that get got corresponded to intermediate-term oversold conditions. All that suggests to me that nosotros are vulnerable to a downside break. My leaning is to sell bounces that cannot get got out the overnight highs.
* In general, nosotros tend to run across elevated levels of pure volatility (volatility per unit of measurement of marketplace volume) at marketplace lows together with depression levels at marketplace peaks. Interestingly, we're much closer to levels associated with tops than bottoms.
* I snuff it along to endure impressed yesteryear how the vigorous rally inwards stocks has seemingly hitting a wall inwards the wake of rising rates together with a stronger dollar. That dynamic is really much on my radar.
Wednesday, Nov 11th
* Tuesday attempted follow-through on Monday's selling, but at that spot were divergences with the sectors relative to beingness able to suspension Monday's lows. The SPX held to a higher house those lows inwards a marketplace noted yesterday to endure short-term oversold. That led to tardily twenty-four hours buying which has continued overnight. I'm viewing this equally business office of a topping procedure together with would endure surprised to run across a strong, fresh bull leg here. Buying weakness that holds to a higher house overnight together with previous day's lows inwards anticipation of testing recent highs makes feel equally a short-term strategy. I would lighten upwards on pull that leaves us with upside divergences.
* Where I'm finding about of the best short-term trading opportunities inwards the stock indexes is when nosotros acquire overbought or oversold weather condition followed yesteryear an inability of stocks to snuff it along their upward or downward trajectory. At such points bulls or bears are committed together with the marketplace cannot displace farther inwards their direction. That leads to selling or curt roofing that benefits traders buying at the oversold points that can't snuff it lower or selling at the overbought points that can't snuff it higher.
Tuesday, Nov 10th
* Monday's marketplace was anything but rotational, equally early, wide selling persisted through the morning. An of import agency of recognizing such a shift is yesteryear tracking the early on distribution of NYSE TICK values, which justice the give away of upticks versus downticks with all NYSE shares. When that distribution is skewed to the downside together with SPX stays persistently below its opening cost fifty-fifty during periods of upticking, it's an early on sign that sellers are inwards control. Another "tell" for weakness is tracking how the diverse sector ETFs are trading relative to their opening prices. If they are dominantly trading downward from their opens together with advance-decline numbers are weak, you lot know that this is a broader selloff together with non business office of mere rotation.
* The selling has left us short-term oversold, with fewer than 20% of SPX shares trading to a higher house their iii together with 5-day moving averages. It is non at all odd to acquire a bounce from such oversold levels. Should nosotros exam yesterday's lows, I volition endure watching breadth together with TICK values closely to run across if selling pressure level is continuing or waning. Meanwhile, nosotros are non oversold on an intermediate-term basis, per the nautical chart below, which tracks the give away of SPX stocks making fresh 5, 20, together with 100-day novel lows. (Raw information from Index Indicators). My working assumptions are that this correction has farther to snuff it but too that the bull leg from tardily September has farther to go.
Monday, Nov 9th
* How do nosotros brand changes inwards our lives? In our trading? In our emotional responses to trading? In our relationships? If it was equally tardily equally setting goals together with motivating ourselves with positive thinking, the psychology together with self-help sections of bookstores would endure quite a fighting smaller. I believe the recent Forbes post is i of my to a greater extent than of import ones. The thought is that, inwards a sense, nosotros never actually alter ourselves. Instead, nosotros larn to supervene upon i laid of motivations--the ones that Pb to undesired actions together with consequences--with an existing, stronger laid of motivations. In other words, nosotros alter yesteryear acquire to a greater extent than of who nosotros already are.
* We snuff it along with a rotational market, with about sectors late potent (financials, little caps) together with others weak (interest charge per unit of measurement sensitive utilities together with consumer staples shares). (See the graphic from FinViz below). Across all stocks, however, we're seeing an increasing give away making short-term novel lows. Fri saw 752 stocks across all exchanges register fresh monthly highs, but too 540 brand novel monthly lows. That's the most novel lows since early on October. Longer term, a rotational correction that does minimal harm to the overall indexes would endure a addition for stocks. Short term, I suspect this correction has farther to go. My leaning is to sell bounces that cannot get got out prior overnight together with previous day's highs, but I too excogitation to fade weakness that cannot yield fresh cost lows together with expansion inwards the give away of stocks making novel lows. In short, I'm treating this equally a rotational, attain marketplace until demonstrated otherwise.
* Influenza A virus subtype H5N1 large business office of the rotational dynamic, of course, is the recent displace higher inwards involvement rates together with inwards the U.S. dollar on the heels of potent economical numbers together with growing conviction of a Fed charge per unit of measurement hike. Watching the currency together with rates markets volition endure of import inwards gauging moves for stocks overall together with for the sectors most impacted yesteryear rates. My best guess is that the markets are doing the Fed's hiking for it, that Dec volition convey an uber-dovish hike, together with that nosotros volition snuff it along with cardinal banking concern dubiety into 2016. It is non clear to me that the Fed volition wish an extended displace higher inwards the dollar if a destination is to maintain increment together with inflation on target.
* We started Th weak but non yet at levels corresponding to intermediate-term oversold. The resulting strategy of selling bounces that could non get got out prior (overnight) highs worked really good during the day, equally nosotros shut weak together with right away get got traded lower during overnight hours. As I mentioned a piece ago, I'm impressed yesteryear the fact that many marketplace moves are offset during London hours together with non during the U.S. twenty-four hours session. My working hypothesis is that moves inwards stocks *will* endure anchored inwards London during periods inwards which the top dog drivers of stock prices are macro-related. Recently, the merchandise inwards stocks has been less nigh turn a profit together with U.S. economic scheme together with to a greater extent than nigh currencies, involvement rates, together with cardinal banking concern dynamics.
* With the recent weakness, we're much closer to intermediate-term oversold levels per the nautical chart below, but non quite at that spot across many indicators I track. The opportunity with selling the bounces downward hither is that the short-covering rallies tin endure to a greater extent than violent. Waiting for short-term overbought weather condition that come about at lower highs together with beingness nimble on exits makes feel equally a twenty-four hours timeframe strategy.
Thursday, Nov 12th
* I'm spending the twenty-four hours at the trading desk accompanying a really accomplished trader. Will most probable alive tweet marketplace observations. Stock Twits handle is @steenbab.
* We've made a twosome of attempts to bounce off Monday's lows together with none get got been sustained. Indeed, my breadth measures get got modestly deteriorated during that fourth dimension together with I'm soundless non showing us at levels that get got corresponded to intermediate-term oversold conditions. All that suggests to me that nosotros are vulnerable to a downside break. My leaning is to sell bounces that cannot get got out the overnight highs.
* In general, nosotros tend to run across elevated levels of pure volatility (volatility per unit of measurement of marketplace volume) at marketplace lows together with depression levels at marketplace peaks. Interestingly, we're much closer to levels associated with tops than bottoms.
* I snuff it along to endure impressed yesteryear how the vigorous rally inwards stocks has seemingly hitting a wall inwards the wake of rising rates together with a stronger dollar. That dynamic is really much on my radar.
Wednesday, Nov 11th
* Tuesday attempted follow-through on Monday's selling, but at that spot were divergences with the sectors relative to beingness able to suspension Monday's lows. The SPX held to a higher house those lows inwards a marketplace noted yesterday to endure short-term oversold. That led to tardily twenty-four hours buying which has continued overnight. I'm viewing this equally business office of a topping procedure together with would endure surprised to run across a strong, fresh bull leg here. Buying weakness that holds to a higher house overnight together with previous day's lows inwards anticipation of testing recent highs makes feel equally a short-term strategy. I would lighten upwards on pull that leaves us with upside divergences.
* Where I'm finding about of the best short-term trading opportunities inwards the stock indexes is when nosotros acquire overbought or oversold weather condition followed yesteryear an inability of stocks to snuff it along their upward or downward trajectory. At such points bulls or bears are committed together with the marketplace cannot displace farther inwards their direction. That leads to selling or curt roofing that benefits traders buying at the oversold points that can't snuff it lower or selling at the overbought points that can't snuff it higher.
Tuesday, Nov 10th
* Monday's marketplace was anything but rotational, equally early, wide selling persisted through the morning. An of import agency of recognizing such a shift is yesteryear tracking the early on distribution of NYSE TICK values, which justice the give away of upticks versus downticks with all NYSE shares. When that distribution is skewed to the downside together with SPX stays persistently below its opening cost fifty-fifty during periods of upticking, it's an early on sign that sellers are inwards control. Another "tell" for weakness is tracking how the diverse sector ETFs are trading relative to their opening prices. If they are dominantly trading downward from their opens together with advance-decline numbers are weak, you lot know that this is a broader selloff together with non business office of mere rotation.
* The selling has left us short-term oversold, with fewer than 20% of SPX shares trading to a higher house their iii together with 5-day moving averages. It is non at all odd to acquire a bounce from such oversold levels. Should nosotros exam yesterday's lows, I volition endure watching breadth together with TICK values closely to run across if selling pressure level is continuing or waning. Meanwhile, nosotros are non oversold on an intermediate-term basis, per the nautical chart below, which tracks the give away of SPX stocks making fresh 5, 20, together with 100-day novel lows. (Raw information from Index Indicators). My working assumptions are that this correction has farther to snuff it but too that the bull leg from tardily September has farther to go.
Monday, Nov 9th
* How do nosotros brand changes inwards our lives? In our trading? In our emotional responses to trading? In our relationships? If it was equally tardily equally setting goals together with motivating ourselves with positive thinking, the psychology together with self-help sections of bookstores would endure quite a fighting smaller. I believe the recent Forbes post is i of my to a greater extent than of import ones. The thought is that, inwards a sense, nosotros never actually alter ourselves. Instead, nosotros larn to supervene upon i laid of motivations--the ones that Pb to undesired actions together with consequences--with an existing, stronger laid of motivations. In other words, nosotros alter yesteryear acquire to a greater extent than of who nosotros already are.
* We snuff it along with a rotational market, with about sectors late potent (financials, little caps) together with others weak (interest charge per unit of measurement sensitive utilities together with consumer staples shares). (See the graphic from FinViz below). Across all stocks, however, we're seeing an increasing give away making short-term novel lows. Fri saw 752 stocks across all exchanges register fresh monthly highs, but too 540 brand novel monthly lows. That's the most novel lows since early on October. Longer term, a rotational correction that does minimal harm to the overall indexes would endure a addition for stocks. Short term, I suspect this correction has farther to go. My leaning is to sell bounces that cannot get got out prior overnight together with previous day's highs, but I too excogitation to fade weakness that cannot yield fresh cost lows together with expansion inwards the give away of stocks making novel lows. In short, I'm treating this equally a rotational, attain marketplace until demonstrated otherwise.
* Influenza A virus subtype H5N1 large business office of the rotational dynamic, of course, is the recent displace higher inwards involvement rates together with inwards the U.S. dollar on the heels of potent economical numbers together with growing conviction of a Fed charge per unit of measurement hike. Watching the currency together with rates markets volition endure of import inwards gauging moves for stocks overall together with for the sectors most impacted yesteryear rates. My best guess is that the markets are doing the Fed's hiking for it, that Dec volition convey an uber-dovish hike, together with that nosotros volition snuff it along with cardinal banking concern dubiety into 2016. It is non clear to me that the Fed volition wish an extended displace higher inwards the dollar if a destination is to maintain increment together with inflation on target.
