Info!! Trading Notes For The Calendar Week Of March 28, 2016

Friday, Apr 1st

*  Top twenty people to follow on Stock Twits as well as Twitter for corking marketplace position content.  Of course, Ivaylo is besides pocket-size to include himself, hence I'll nominate him hither both for his spider web log content as well as his books. 

*  We've pulled dorsum from recent highs, equally my measures of realized resultant fourth dimension volatility hold lower--a province of affairs that, inwards the past, has been associated amongst subnormal forrard returns.  Stocks making novel monthly highs across all exchanges declined from 1221 to 822; monthly lows ticked upward from 106 to 137.  So it's difficult to say that nosotros pick out weak breadth.  As noted yesterday, my mensurate of upticks vs. downticks has continued positive.  Yesterday was positive, but full institutional participation contracted least since the rally began.  Again, this has been associated historically amongst subnormal returns.  Institutional participation is a mensurate of full upticks as well as downticks across all NYSE shares (not mass traded).  The depression mass as well as volatility brand me non peculiarly bullish; the absence of novel lows as well as downticks brand me non peculiarly bearish.

*  My cycle mensurate continues inwards positive territory but off its highs.  Many of my breadth measures await this way:  positive, but off their peaks.  Note how we've stayed positive for much longer than during recent cycles--again a tell that this has been to a greater extent than than a comport marketplace position rally or fifty-fifty a bounce higher inwards a make market. 

*  Are in that location microtrends inside the marketplace position as well as are these tradeable?  Hell, I pick out no idea, but I'm researching it.  Will permit y'all know what I find.  This volition live on a purely systematic implementation.  My other inquiry projection is identifying longer term cycles inwards the stock market, amongst information going dorsum to 1980.  This is based on a unique implementation of the resultant fourth dimension concept.  Basing resultant fourth dimension on mass doesn't move because of the secular differences inwards mass over the catamenia of decades.  If you're non innovating, you're stagnating.  Too many traders pat themselves on the dorsum for doing the same affair 1 time again as well as 1 time again as well as calling it discipline.  Influenza A virus subtype H5N1 disciplined implementation of an outmoded approach volition lose coin amongst admirable consistency.

*  If y'all await at stocks exterior the U.S., such equally the EFA ETF, the longer-term motion painting is pretty unimpressive.  It is non clear to me that negative rates are having the desired affect overseas.  If this is the case, nosotros could run into to a greater extent than aggressive key depository fiscal establishment stimulation of economies, peculiarly if those indicators of deflation--strengthening currencies, weakening commodities, etc.--become to a greater extent than problematic.  

Thursday, March 31st

*  Is the housing marketplace position strong or weak?  See It Market notes mixed signals amidst furnish constraints.

*  Oil as well as commodities overall (DBC) pick out been lagging stock toll gains recently; keeping an oculus on that relationship.  I'm also noticing high yield bonds (JNK) lagging recent toll gains inwards stocks.  These relationships were key during the catamenia of marketplace position weakness.

*  Stocks rallied nicely early on yesterday, 1 time again posting fresh rally highs earlier pulling back.  Breadth 1 time once again expanded, amongst over one m stocks across all exchanges posting fresh monthly highs.  My mensurate of upticks vs. downticks continued quite strong; below nosotros tin run into a 10-day moving average.  As mentioned before, mass has non been impressive, but the mass traded has been quite skewed toward the buyers:

*  One of my pure volatility measures continues at levels to a greater extent than consistent amongst marketplace position highs than lows.  Note VIX straightaway trading a flake higher upward 13.  This has the potential to significantly constrain directional movement across all fourth dimension frames.  There is less mass traded, *and* each unit of measurement of mass moves toll less.

*  Note the continued forcefulness of liquid, high character corporate bonds (LQD).  In a globe of depression as well as fifty-fifty negative rates, whatever yield becomes a prophylactic haven.  Hence the surroundings inwards which stocks as well as bonds pick out been jointly outperforming (the conduct a chance parity trade).


Wednesday, March 30th

*  New Trader U highlights 22 bad trading habits.  Notice how many of them boil downwards to non existence rule-governed, where the rules reverberate trading strengths as well as identified best trading practices.  That suggests that traders are suffering, non simply because they don't written report markets, but because they haven't genuinely studied their ain performance.

*  Stocks liked the statements of the Fed chair as well as that has lifted us to a novel high for this rally.  Interestingly, across all stocks on all exchanges, iii calendar month novel highs versus lows are lagging their peak from a dyad of weeks agone (see below).  Among SPX shares, however, fresh 100-day highs vs. lows did hitting a marginal novel peak.  I would larn concerned nearly the uptrend if stocks making fresh novel lows were to expand from here.

*  Once again, nosotros saw buying pressure level completely dominate selling pressure level via the uptick/downtick measures.  This lifted the cumulative uptick/downtick mensurate to novel highs (see below).  As noted yesterday, mass has non been stellar (though it picked upward yesterday), but what mass has been in that location has been strongly skewed to the buyers as well as that has been associated historically amongst favorable near-term returns (upside momentum).

Tuesday, March 29th

*  How tin y'all honor merchandise opportunities that others miss?  Here is a procedure that tin assistance y'all larn amend at perceiving opportunity.

*  Meh.  Volume has been quite lackluster, as well as that is to a greater extent than typical of marketplace position tops than bottoms.  We remain inwards relatively oversold territory on my swing measures as well as my measures of upticks vs. downticks remain strong.  So my base of operations illustration remains a continued displace higher, but I can't say I'm peculiarly impressed amongst recent action.  Financial as well as unloosen energy shares pick out been relatively weak as well as I hold to hold an oculus on little caps.  Perhaps calendar month end/quarter cease flows volition convey about life to the market.  Stocks making fresh monthly highs did uptick yesterday as well as I'm non seeing an influx of selling at all.  Of the (low) mass acquaint yesterday, buyers were dominant.

*  Put/call ratios were depression yesterday; shares outstanding for SPY pick out been modestly elevated.  Bears are relatively absent.

*  We're working off quite an overbought level, per the intermediate-term forcefulness nautical chart below, which tracks the release of SPX shares making novel highs vs. lows on multiple fourth dimension frames.  To the extent that nosotros tin produce hence amongst minimal toll damage, it is supportive to the bulls.

Monday, March 28th

*  In illustration y'all missed, here's my latest podcast; thank y'all to Chat With Traders.

*  We've bounced from a swing oversold degree and, equally nosotros tin run into below, are non yet at an overbought level.

*  Buying involvement hitting a novel rally high amongst this most recent bounce.  This mensurate tracks upticks versus downticks for all listed stocks, non simply those on NYSE.  

*  The 1 wing inwards the ointment that I run into is the depression mass as well as volatility, which are associated historically amongst subnormal forrard returns over an intermediate-term horizon.  My mensurate of cumulative upticking as well as downticking is non yet at such a depression request that would advise pathetic near-term returns.  As a rule, bull moves decease amongst an absence of buyers.  It's something I'm monitoring daily.

Info!! Reasoning, Preparation, Together With Trading Success

A recent post described a framework for trading inward which evolving marketplace activity (the demeanor of price, volume, together with volatility only about cardinal toll levels) is used to shape ongoing estimates of the odds of touching predefined profits targets. By observing how book together with volatility conduct on upward together with downward movements—and past times gauging the bird of participation inward those movements—we tin obtain a experience for whether merchandise is directional or non-directional together with anticipate continuation together with reversal moves accordingly.

Underlying this framework for trading is a reasoning procedure that synthesizes ongoing information inside together with across markets together with fourth dimension frames. Much of what is learned during the procedure of obtaining marketplace expertise is a refinement of this reasoning process. Psychology becomes of import to trading outcomes insofar every bit it promotes or interferes alongside the reasoning needed to adjust to the flows of market-generated information.

The reasoning process, however, begins earlier markets opened upward every bit constituent of the trader’s daily preparation. By observing how markets merchandise overnight, evaluating the demeanor of correlated property classes prior to the open, together with past times assimilating economical data, news, together with earnings releases (and marketplace responses to these), the trader gains a experience for the marketplace 24-hour interval earlier the opening bell rings.

Key to the trader’s reasoning is an elaboration of “what-if”scenarios that review hypotheses regarding probable marketplace action. What if nosotros opened upward alongside depression volume, nearly the previous day’s pin bird on a 24-hour interval alongside no scheduled economical releases? What if nosotros opened upward weak inward the S&P 500 Index, but meet firmness amid the small-scale cap stocks together with a mixed opened upward amid the major stock sectors? What if the marketplace breaks higher upward a cardinal toll level, alongside bullish demeanor inward bonds, the dollar, commodities, together with the to a greater extent than speculative stock sectors? What if the marketplace breaks below support, but breadth remains mixed?

Each of these scenarios calls for a specific trader response. Each offers potential trading opportunity. By mentally reviewing the scenarios inward advance, the trader becomes to a greater extent than prepared to deed upon them. The trader besides becomes to a greater extent than sensitive to their unfolding, thence that trading opportunities tin move properly anticipated together with mapped out.

Two sources of hypotheses for the 24-hour interval ahead tin move peculiarly useful to preparation. First, past times tracking indicators such every bit stocks making novel highs together with lows; momentum measures such every bit Demand/Supply; together with the percent of stocks trading higher upward their moving averages, nosotros tin gauge whether a marketplace is gaining or losing momentum to the upside or downside (or whether it is trading inward a hit alongside niggling momentum). Drawing on the regulation that strong momentum moves inward ane stream volition tend to send over into subsequent intervals (and weak momentum moves volition tend to reverse), nosotros tin formulate ideas every bit to whether markets are probable to hitting item targets today every bit a constituent of yesterday’s trade.

Second, historical marketplace patterns—queries every bit to how markets convey traded inward the past times nether the acquaint laid of conditions—can aid us formulate hypotheses for the coming day. For example, nosotros powerfulness detect that a depression momentum upward 24-hour interval yesterday which is besides a five-day closing high has a relatively misfortunate conduct a chance of closing higher today. That provides us alongside a hypothesis that enables us to anticipate weakness should nosotros move unable to concur a item upside toll level.

From this perspective, the successful trader is ane who formulates meaningful hypotheses prior to trading together with and thence processes unfolding activity apace together with accurately to create upward one's take away heed whether or non those hypotheses are finding support. Not all traders merchandise this way; nor should they. What I am describing is a framework that I convey cultivated over years of trading together with working alongside traders that makes move of my cognitive strengths inward synthesizing information into meaningful patterns together with themes.

Your challenge is to larn what you lot tin from my means of viewing markets, but non to mimic what I do. Good things come about when discovery where your cognitive strengths prevarication together with adjust the styles of others to create your ain niche.

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Info!! Trading Notes: Calendar Week Of September 14Th

Friday, September 18th

*  In a feel for stocks, non a lot changed with the Fed meeting, every bit a hike is nevertheless inwards play for after this year, but fiscal weather are non justifying a hike at this time.  We traded inwards a higher house the recent hit in addition to since require maintain fallen dorsum into the range, every bit we're straightaway intermediate-term overbought.  Selling buying forcefulness inwards NYSE TICK that cannot generate fresh cost highs is my full general approach going forward; models modestly bearish.

*  This posting is belatedly inwards exercise because of my participation inwards a podcast for the Better System Trader site.  Do depository fiscal establishment correspond out their podcast page; it's an fantabulous laid upwards of resources.  Will link my podcast when it's upwards early on this coming week.

Thursday, September 17th

*  We saw modest buying pressure level early on inwards the session on Wednesday, followed yesteryear a notable absence of selling interest, with NYSE TICK largely staying inwards a higher house the -500 level.  This was significant, given that nosotros were trading at a short-term overbought grade nigh a hit high.  Unlike inwards previous situations, those weather did non convey out sellers, in addition to the termination was an upside breakout on rigid breadth.  It was a dandy example of how indicators in addition to models tin alarm traders to directional tendencies, but it is genuinely the record activeness that makes for practiced intraday trades.

*  I straightaway present over 70% of SPX stocks inwards a higher house their 20-day moving averages in addition to good over 80% inwards a higher house their 3, 5, in addition to 10-day averages.  While my models propose the likelihood of pullback over a 3-5 twenty-four hours horizon, activeness clearly volition survive dominated yesteryear perceptions of the Fed determination in addition to charge per unit of measurement guidance after today.

*  Given the dubiety of the consequence of the Fed coming together in addition to the odd attending placed on this meeting, I hold off considerable volatility surrounding the proclamation in addition to press conference.

Wednesday, September 16th

*  We did indeed agree recent lows on early on selling pressure level on Tuesday, leading to a company rally toward the hit highs.  We're overbought across a give away of the measures that I follow; the nautical chart below tracks the per centum of SPX stocks trading inwards a higher house their 3, 5, 10, in addition to 20-day moving averages (raw information from Index Indicators).  In general, when a minority of stocks are trading inwards a higher house their 100-day averages, my models indicate to subnormal returns when short-term breadth is rigid in addition to superior returns when short-term breadth is weak.  My leaning is to sell bounces that cannot accept out the overnight in addition to previous day's highs.

*  I'm hearing quite a dispersion of views regarding what the Fed mightiness do tomorrow, which leads me to believe a reasonable proportion of traders volition perceive themselves to survive offsides.  That could contribute to meaning volatility.  I was surprised yesteryear the relatively depression index in addition to equity put/call ratios yesterday; both were the lowest inwards the yesteryear 2 weeks.  That has tended to Pb to subnormal returns over a side yesteryear side 3-5 twenty-four hours horizon.

Tuesday, September 15th

*  We saw cyberspace selling flows on the twenty-four hours Monday, but it was a tranquillity vacation merchandise in addition to nosotros held inwards a higher house the recent back upwards around ES 1928-1930.  New monthly highs expanded to 306; lows dropped to 298, across all exchanges.  So piece at that topographic point was cyberspace selling pressure, breadth did non deteriorate.  That unremarkably has me looking for a bounce, peculiarly if nosotros tin agree the overnight lows inwards early on merchandise today.  One of my models is modestly bearish; 1 modestly bullish--not odd to acquire weak in addition to indecisive signals inwards a hit market, every bit the models pick upwards overbought in addition to oversold extremes.  I suspect nosotros could reckon a continuation of the hit merchandise going into Thursday's FOMC meeting.

*  Below is a nautical chart of an 80-period charge per unit of measurement of modify mensurate for ES, where each stream represents 50,000 contracts traded.  I've constitute overbought/oversold measures that normalize for book traded to survive quite helpful inwards putting overnight activeness into context in addition to adjusting to faster in addition to slower marketplace position conditions.  We're bouncing off an oversold condition; I'm watching the lineament of this bounce carefully.

*  The CBOE $SKEW mensurate is at its highest grade inwards a while.  That way that out of the coin seat options are existence bid upwards ahead of the Fed.  Interestingly, as I noted a piece back, skew is non necessarily a reverse indicator.  Near-term returns next high skew readings require maintain been subnormal.

Monday, September 14th

*  What I reckon with successful traders is a network of successful relationships.  There is merely besides much to follow inwards markets to merchandise inwards a completely siloed fashion.  That is why fifty-fifty independent traders in addition to solo portfolio managers cultivate rigid information networks in addition to back upwards systems.  There is a cardinal to edifice rigid relationships that I lately wrote about; ultimately it's a critical exercise of one's long-term border inwards markets.  The strongest individuals acquire that way yesteryear cultivating rigid teams.

*  My models are modestly bearish over a 3-5 twenty-four hours horizon, but I hold off the week's trading to survive dominated yesteryear Thursday's Fed meeting.  The signals I'll survive taking volition survive largely intraday in addition to tactical upwards to that point.  The setups that require maintain worked best lately require maintain been periods of buying/selling that dry out upwards earlier making a fresh novel high or low--it's a blueprint mutual to hit markets.  I exercise NYSE TICK every bit a proxy for buying in addition to selling interest; also the percentages of stocks trading inwards a higher house their short-term moving averages.

*  Not everything is trading weak, every bit a savvy trader pointed out to me over the weekend.  Fully 32% of SPX stocks are trading inwards a higher house their 20-day moving averages, non in addition to then bad after the variety of driblet nosotros had inwards August.  Homebuilders (XHB) require maintain been notably strong, every bit require maintain been some of the tech leaders similar AMZN. I noticed a give away of bearish articles inwards fiscal media the final yoke of days.  Very hard to honor people inwards an chance mindset.  While I do retrieve nosotros could reckon follow through weakness, I do retrieve lineament companies with security dividends volition transcend on to facial expression practiced inwards a the world that remains largely inside QE regimes.

*  Despite a bounce inwards stocks on Friday, nosotros had exclusively marginally to a greater extent than monthly highs on the twenty-four hours (237 vs. 213 across all exchanges) in addition to to a greater extent than monthly lows (368 vs. 305).  I am watching breadth closely for clues every bit to management of the eventual breakout from the recent trading range.  

Info!! Trading Notes: Calendar Week Of 8/17/2015

Friday, August 21st

*  It was a 2d right away twenty-four hr menses of real weak book flows; the failure to sustain bounces was evident relatively early on inwards the twenty-four hr menses in addition to quite telling, every bit the gain marketplace gave way to a trending trade.  Stocks making fresh novel lows expanded in addition to almost 600 NYSE issues unopen below their lower Bollinger Bands.  Interestingly, when that has happened inwards the past times year, at that topographic point has tended to move farther downside over the adjacent v trading days.  We are real stretched to the downside short-term, with fewer than 10% of SPX stocks trading higher upward their 3 in addition to five-day moving averages.  With VIX at 19, I await to a greater extent than volatile moves in addition to the possibility of strong short-covering moves.

*  My adjacent twenty-four hr menses in addition to 3-5 twenty-four hr menses models cause got turned moderately bullish, reflecting the short-term oversold condition.  Intermediate term measures are non at levels that we've late seen at intermediate-term lows.  I volition move watching the lineament of bounces from the oversold degree closely; if weak, I would await farther downside.  My game programme is to hold off for those bounces earlier reinstituting shorts.  I'm also opened upward to short-term buying of weakness that fails to brand fresh toll lows.

*  Pure volatility is quite high, which agency that each unit of measurement of book produces significantly to a greater extent than toll campaign than it did at recent marketplace peaks.  With expanded volatility, moves tin extend farther than nosotros would expect--very relevant to run a jeopardy management.

Thursday, August 20th

*  Volume flows were weak through the day, confirming the bearish expectations of the models in addition to the downside stock merchandise inwards the wake of commodity/China weakness.  This weakness has carried forrad to premarket trade.  Short term indicators are at levels stretched to the downside, but intermediate-term ones are not.  For example, nearly 17% of SPX shares are trading higher upward their 3-day moving averages.  That creates an surroundings ripe for a counter-trend bounce.

*  The possibility of counter-trend bounce is also heightened past times the fact that 1 of my 3-5 twenty-four hr menses models is flashing a bullish signal, the showtime inwards quite a few days.  Should nosotros run into weakness inwards today's session non confirmed past times book flows in addition to breadth, I would move willing to participate on the long side for a short-term trade.  

*  Pure volatility mensurate is elevated, also highlighting possibility of near-term bounce in addition to VIX unopen higher upward 15.  Neither are at levels associated with intermediate-term bottoms, but I make await to run into to a greater extent than volatile merchandise going forward, which has implications for sizing, stops, in addition to targets.

Wednesday, August 19th

*  Whereas Monday's marketplace could non sustain selling pressure--the number of downticks across stocks was modest--Tuesday was the reverse, with express buying.  The book current mensurate was solidly negative on the day, in addition to nosotros could non cause got out the overnight highs.  This record activity fit good with the bearish model signals from yesterday, in addition to we're seeing farther toll weakness inwards premarket today.  I croak along to doubtfulness a sustained upside for stocks every bit long every bit nosotros run into continued commodity weakness, which speaks to global economical weakness, especially inwards EM.

*  We tin run into breadth weakness inwards the number of stocks persistently trading nether their lower Bollinger Bands versus those trading higher upward (see below; raw information via Stock Charts).  Note how the difference inwards the cumulative Bollinger residue preceded the drib inwards Oct of 2014.  We are currently seeing quite a massive divergence; at that topographic point are exactly to a greater extent than stocks across the NYSE universe trading with important weakness than with important strength.

*  Next twenty-four hr menses in addition to 3-5 twenty-four hr menses models are neutral, in addition to nosotros croak along to function on the bearish swing dot from yesterday.  Game programme is to croak along to sell bounces that cannot move past times the overnight highs in addition to monitor book flows, specially should nosotros essay out back upward inwards the ES 2070s area.  Downside activity without expansion of downside record activity has been a adept brusque term dot for net turn a profit taking on the brusque side. 

Tuesday, August 18th

*  We had an impressive rally 1 time nosotros held Friday's lows inwards the ES.  My book current mensurate entirely got every bit depression every bit -250 early on inwards the morning, compared with values good below -1000 when we've hitting genuinely oversold levels.  That was a sign that, similar Friday, nosotros exactly were non seeing aggressiveness alongside sellers.  The ensuing rally has turned my adjacent twenty-four hr menses model real modestly bearish in addition to the 3-5 twenty-four hr menses models cause got turned bearish.  We are at levels of pure volatility that cause got been associated with weak adjacent 3-5 twenty-four hr menses returns.  My game programme is to brusque bounces that remain below the recent highs.  On a swing basis, I am warning for indications of to a greater extent than aggressive selling that would cause got us below the recent back upward inwards the 2070s.  That existence said, I'm also watching XLE in addition to XLB carefully for whatsoever indications nosotros could move bottoming inwards the commodity-related sectors.  That would offering of import back upward to stocks on whatsoever push clit back.

*  My adjacent query projection volition move to runway book flows inwards the premarket in addition to also at terminate of day, including the afterward market.  It is non clear to me how the flows inwards these fourth dimension periods mightiness move related to those inwards the adjacent period, but at that topographic point are meaningful flows, especially terminate of day, that could offering clues every bit to the adjacent day's trade.

Monday, August 17th

*  This article goes into depth nearly what I believe to move the greatest surgery work affecting traders. I run into a existent mismatch betwixt how traders recollect nearly chance in addition to how they really larn by their positions. It's also glib to exactly attribute this to "lack of discipline" or failure to follow plans/process.  Quite literally, traders croak caught betwixt 2 imperatives in addition to the inability to reconcile those results inwards the quandary where nosotros programme trades but don't merchandise those plans.

*  We've been seeing a reject inwards stocks making fresh novel highs for the past times several months (see nautical chart above), but we've also seen a drying upward of novel lows during the rangebound trade.  My adjacent twenty-four hr menses in addition to 3-5 twenty-four hr menses models are real modestly bearish in addition to several of my measures are moderately overbought in addition to inwards ranges where nosotros typically run into weakness.  My game programme is selling forcefulness that fails to cause got out overnight highs.

*  Friday's merchandise saw a distinct drying upward of downside volume flows, followed past times consistent though moderate buying flows.  Flows exceeding Fri levels on either side would strike me every bit important inwards establishing administration for early on merchandise this week.  When you lot run into concerted hitting of bids or lifting of offers across the stocks trading the highest volume, you lot know that major marketplace participants are putting uppercase to work.  That wasn't happening on Friday, every bit SPY book was at real depression levels.  Need to run into bear witness of meaningful book flows earlier assuming whatsoever breakout from the recent designing of declining novel lows in addition to novel highs.
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Info!! Trading Notes For The Calendar Week Of April 18, 2016

Friday, Apr 22nd

*  Excellent shipping service from Jesse Felder questioning the wealth lawsuit from recent key banking concern policy.

*  Stocks pulled dorsum inward Thursday's trade, amongst fewer than 50% of SPX shares closing inward a higher house their three in addition to 5-day moving averages.  Despite the pullback, fifty-fifty my shorter-term measures stay inward overbought territory, as seen below:

*  Note how the pullback inward bond prices (rise inward yield) was accompanied past times drops amidst consumer staples (XLP), utility (XLU), in addition to existent estate shares (IYR).  Because these sectors offering enhanced yield in addition to because authorities bonds offering in addition to thence piddling yield, charge per unit of measurement views are playing out inward these stock sectors.  This is a real relevant dynamic for traders/investors.

*  Retail (XRT) in addition to technology scientific discipline (XLK) shares receive got been underperformers lately; much of the recent strength has come upwards from commodity related sectors (XLB, XLE, XME).  Strong commodities (DBC) are unopen to other macro subject playing out inside stock sectors; the relative surgery of stock sectors has been of import lately...it's non precisely risk-on, risk-off across all sectors.

*  China underperforming recently amidst concerns almost credit defaults.  On the radar...


Thursday, Apr 21st

*  Rob Hanna shares historical marketplace patterns on the Quantifiable Edges blog.  Also cheque out Rob's operate amongst Scott Andrews on the InvestiQuant blog.  Lots of proficient ideas here.

*  Stocks continued their deed higher on continued positive breadth.  Across all exchanges, nosotros had 1205 stocks brand fresh monthly highs against 192 lows.  As noted earlier, it's the absence of distinctive weakness inward whatever of the sectors that is noteworthy inward the recent marketplace strength.

*  Here's a valuable perspective on furnish in addition to need inward the States of America stock market.  It's a 10-day moving average of upticks versus downticks amidst all NYSE shares.  Note that, since the Feb lows, that average has never dipped below zero.  Most late this strength has been due to the depression grade of downticks; quite simply, nosotros are non seeing sustained selling from institutions in addition to this has kept stocks aloft.

  *  Here's a await at what's been relatively rigid in addition to weak amidst stock sectors from the FinViz site.  Note the odd strength amidst commodity related shares--a consummate reversal of the weakness nosotros saw early on inward the twelvemonth in addition to through a proficient chunk of 2015.  Renewed strength amidst commodities has been the clearest indication that markets are no longer pricing inward deflationary forces in addition to that's been proficient for global stocks.

Wednesday, Apr 20th

*  Looking for a sketch pad for quantified patterns inward stocks in addition to ETFs?  Great screener on Kora Reddy's Paststat site.

*  Stocks moved to novel highs for this run, amongst significantly expanded breadth.  Across all exchanges, stocks making fresh three calendar month highs vaulted to a novel peak.  (See below).  The full general dominion is that peaks inward breadth/momentum tend to precede cost peaks for bull cycles.  While breadth is stretched here--and indeed we've pulled dorsum inward overnight trade--we proceed to consider dips at successively higher cost lows, which is what makes for bull moves.

*  Influenza A virus subtype H5N1 different agency of looking at breadth tracks the divulge of NYSE stocks giving purchase versus sell signals across a diversity of technical trading systems.  I hold those stats as a cumulative running total, which has also displayed odd strength inward recent sessions.  (See below).  What is as noteworthy is that few shares are giving sell signals, which is a reflection of the depression grade of selling pressure level evident inward the upticks/downticks data.  Bottom line, I'm non seeing signs of deterioration inward this marketplace at the introduce time.

*  Note also the breakout strength amidst international equity indexes (EFA).  We've seen broadening international strength inward stocks as the States of America dollar has weakened. 



Tuesday, Apr 19th 

*  Limited notes side past times side few days;  working amongst traders inward London. 

*  Breadth continues strong,  with over one k fresh monthly highs in addition to over 80% of SPX stocks closing inward a higher house their 3, 5, in addition to 10 twenty-four hours moving averages. 

*  The stair out of upticks in addition to downticks continues to present unusually depression selling pressure. Stocks are unlikely to sustain weakness if institutional participants are non selling. 


Monday, Apr 18th

*  One of the greatest life risks nosotros take is playing it safe.  Life is also of import to live on wasted on inconsequential goals.

*  Recently the striking charge per unit of measurement on my trades has gone up.  That's because I'm non *trading*.  I am entering positions similar an investor in addition to exiting similar a trader.  Waiting for things to work upwards across different fourth dimension frames provides the proficient entry.  Defining a pregnant deed for a given volatility regime in addition to exiting when that is achieved provides the proficient exit.  Slow to instruct into trades, quick to instruct out when the marketplace gives proficient prices.  Perhaps the border inward such a method lies inward making *not trading* the default.  All I tin laissez passer on the axe say is that my involvement inward markets has redoubled always since I got away from screens.  Frequent trading is similar frequent eating: naught could live on worse for the palate, stomach, in addition to appetite!

*  Stocks opened the weekend lower on the heels of the inability of the OPEC coming together to attain an understanding over production cuts.  Since the early on trade, stone oil in addition to stocks receive got rebounded a bit; I'll live on watching the correlation betwixt stone oil in addition to stocks to consider if nosotros re-enter the regime that was bearish for both, as good as for high yield bonds.  Influenza A virus subtype H5N1 resumption of a rigid dollar merchandise would fuel such a regime; inward the absence of the dollar trade, the correlation betwixt stone oil in addition to stocks may live on less certain.

*  Breadth dipped on Friday, amongst 795 stocks making fresh monthly highs in addition to 137 registering novel lows.  My volatility measures receive got striking depression levels that receive got been associated amongst marketplace tops, including the "pure volatility" stair out that tracks the average volatility per unit of measurement of trading volume.  So far, nosotros haven't seen a pregnant expansion of selling pressure level inward the uptick/downtick stair out or inward the novel lows data; I'm watching those closely.  My "pure correlation" measure, tracking the correlation amidst stocks specific to given volatility regimes, also is at (low) levels historically associated amongst subnormal forwards returns over a several calendar week period.

*  My stair out of intermediate term strength, assessing novel highs versus lows across all SPX shares, has fallen toward neutral levels fifty-fifty as cost has moved higher.  While a few measures await toppy, it would surprise me if this bull deed were to all of a precipitous morph into a bear.  

Info!! Sector Update For November 1St

Last week's sector review noted a pullback to a multiday trading gain equally business office of what appeared to live on a topping procedure next September's momentum highs together with October's cost high. That scenario continued to unfold this by week, equally nosotros broke sharply below the trading gain together with shut nigh the week's lows. As nosotros tin forcefulness out reckon above, this has turned 5 of the 8 S&P 500 sectors that I rail bearish inwards Technical Strength, amongst the others giving neutral readings.

Note: Technical Strength is a proprietary mensurate of short-term trending; sector readings vary from +500 (strong bullish trend) to -500 (strong bearish trend), amongst scores betwixt -100 together with +100 indicating a neutral trend.

Here are the private sector readings equally of Friday's close:

MATERIALS: -300
INDUSTRIAL: -240
CONSUMER DISCRETIONARY: -200
CONSUMER STAPLES: -40
ENERGY: -100
HEALTH CARE: -140
FINANCIAL: -360
TECHNOLOGY: 20

What nosotros reckon is relative strength amid technology scientific discipline shares, which convey seen potent earnings, together with the defensive consumer staples stocks. Particularly weak convey been fiscal stocks together with economically sensitive raw materials shares. We saw a notable driblet inwards strength calendar week over calendar week amid unloose energy stocks, reflecting commodity weakness amid recent U.S. dollar strength.

Friday's considerable weakness next a rigid rally on Th was non a positive for the bulls. While it would non live on odd to reckon a short-covering bounce from here, I volition live on looking for farther signs of bottoming earlier committing to a resumption of the bull market. At this juncture, I am non viewing the electrical flow correction equally a fresh comport market, exactly equally an respite of a relatively novel bull market--not dissimilar what nosotros saw inwards early on 2004 next a steep rally off the 2003 lows. But we'll permit the incoming indicator information enjoin the story: tendency indicators, along amongst strength together with momentum measures, are updated each morn via Twitter earlier the marketplace open. You tin forcefulness out follow those here or hold an oculus on the 5 nearly recent tweets on the weblog page nether "Twitter Trader".

Note that we're going into a Fed coming together this coming week; that should touching how nosotros merchandise equally nosotros approach the announcement.
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