Info!! Trading Notes For The Calendar Week Of March 14, 2016

Friday, March 18th

*  Steve Spencer of SMB emphasizes that cost activity next a catalytic lawsuit provides us amongst of import information.  This is especially truthful when nosotros run across a modify inwards the distribution of transactions next a word lawsuit or other catalyst.  Increased book together with a novel skew of book lifting offers versus hitting bids, for example, tells us that fresh buying flows receive got come upwards into the market.  This calls for an updating of our views of the stock or index.

*  This lesson has been especially relevant inwards the wake of the Fed announcement.  My cumulative stair out of upticks vs. downticks has hitting novel highs for this displace together with breadth, which had been waning, vaulted to novel highs.  Below nosotros tin run across the nautical chart of stocks across all changes making fresh 3-month novel highs vs. lows.  The vigor of buying next the Fed annunciation suggests that this, indeed, was a game changer.  Central banks globally are opting for accommodation and, historically, that has been favorable toward stocks.

*  The China/deflation thesis, which dominated give-and-take during recent marketplace weakness, is far less discussed I find, given stone oil clit together with USD weakness.  For stocks, inwards a negative involvement charge per unit of measurement world, anything rubber amongst yield continues to discovery interest.

Thursday, March 17th

*  Interesting commentary on the fright of missing marketplace moves from Victor Niederhoffer.  Many a bad merchandise is made because of the ego, non because of the objective marketplace opportunity.

*  We saw a ascent to novel highs on the heels of the Fed announcement, amongst enterprise buying interest.  Recent posts receive got commented on weak breadth and, for the marketplace overall, the breadth movie did non amend despite the Fed-related strength.  Across all exchanges, nosotros saw 753 novel monthly highs against 254 lows.  The latter is in 1 lawsuit again an uptick inwards novel lows together with the novel highs are one-half of what nosotros saw 2 weeks ago.  Among SPX shares only, stocks making fresh 100-day novel highs versus lows did expand to a marginal novel peak.  Much of the weakness is amid small-scale cap shares, though fiscal together with wellness aid stocks inside SPX are likewise lagging.  With the mixed breadth picture, I'm non surprised to run across some retracement of yesterday's gains inwards premarket merchandise today.

*  Breadth issues notwithstanding, it's clear that this has been a vigorous bull displace from the Feb lows.  Note below how we've stayed "overbought" on my multiperiod clit stair out (daily tracking of SPX stocks making 5, 20, together with 100-day novel highs versus lows) for a number of days.  This exclusively occurs inwards trending markets.  While the breadth issues oft precede correction, my base of operations illustration is to sentiment such a correction equally a buying opportunity.  

 

*  I'm working on creating a cycle-based stair out of short-term momentum together with value effects inwards the ES market.  The thought is to seat when markets are most probable to proceed versus opposite their most recent directional movement.  Interestingly, the market's ascent yesterday occurred on a depression value of the momentum measure.  More to come upwards on this research.

Wednesday, March 16th

*  Jim Dalton, who has pioneered trading via Market Profile, is offering his in conclusion mentorship computer programme earlier his retirement.  I likewise run across Terry Liberman will live doing a webinar amongst Jim afterwards today.  When I taught an internship computer programme inwards Chicago many years ago, Jim's piece of occupation was the exclusively mandated reading.  I proceed to discovery Market Profile helpful equally a conceptual framework for thinking nearly marketplace behavior.

*  After some early on weakness, nosotros saw buying inwards stocks, but small-scale caps proceed to notably underperform large caps.  As a result, nosotros run across continuing deterioration amid the breadth measures.  New monthly lows ticked upwards to 192, the highest degree since Feb 24th together with monthly highs dipped to 451.  Relatively weak sectors lately include unloose energy shares (XLE) together with healthcare (XLV).  Today's trading volition live dominated past times the afternoon's Fed announcement.  

*  We proceed quite stretched on my intermediate clit measure, which looks at the number of SPX shares making fresh 5, 20, together with 100-day highs versus lows.  (Data from Index Indicators).  If the Fed-related merchandise can't interruption us from the breadth deterioration, I await an intermediate-term correction.  That would non necessarily live an terminate to the bull displace from February's lows, but could advise a new, topping stage to the electrical current marketplace cycle.  During a topping stage nosotros tin run across higher overall prices for the index, but amongst deterioration inwards some sectors contributing to lagging breadth.  

   
*  Here is a unique intraday indicator that looks at buying clit per unit of measurement area amid all U.S. listed shares.  It tracks upticks amid all shares (data from e-Signal) together with expresses the final result inwards measure difference units.  This shows us when important buying is coming into the market.  It likewise shows us when at that topographic point is a meaningful absence of buying.  (A corresponding stair out tracks important selling together with absence of selling pressure).  It helps longer-term positions when those are going amongst the flows.  The nautical chart below shows yesterday's market.

Tuesday, March 15th

*  I'll live making an improver to these marketplace notes together with including each 24-hour interval links to readings that I discovery specially informative together with useful.  To boot this off, banking concern check out the Paststat blog for daily trading ideas based upon historical patterns, including this 1 based upon seasonality.  From my perspective, such patterns are the starting signal for analysis, non an terminate point.  Once nosotros run across a pattern, the difficult piece of occupation remains of deciding: 1) is the electrical current marketplace authorities typical of the menstruum covered past times the historical test; 2) is at that topographic point a audio argue for the beingness of the pattern, or mightiness the designing live a random occurrence; together with 3) what is the variability or together with thus the designing (could yous endure the exceptional instances)?  Factoring marketplace history into trading decisions is no guarantee of success--it's slow to aspect inwards together with thus many places that some "significant" designing appears--but ignorance of marketplace history is non just a promising alternative.

*  The relative absence of selling clit per unit of measurement area inwards Monday's session was noteworthy together with helped atomic number 82 to higher prices for much of the session earlier a belatedly selling burst.  Selling has continued overnight amongst no novel shot inwards the arm from the Bank of Japan.  Trading was unusually wearisome on Mon together with nosotros could larn to a greater extent than of the same ahead of tomorrow's Fed announcement.  Note how short-term breadth has been potent for a number of days; the stair out below tracks the percent of SPX stocks closing to a higher house their 3, 5, together with 10-day moving averages.  (Data from Index Indicators).

       
 *  The marketplace looks tired to me--for the origin fourth dimension since the liftoff from the Feb lows.  Specifically, we're getting fewer shares registering novel highs during marketplace rallies.  Much of that relative weakness is coming from small-scale cap shares.  Yesterday nosotros saw 921 stocks across all exchanges brand fresh monthly highs against over 2000 in conclusion week.  (Data from the Barchart site).  No private sector inside the SPX looks distinctively weak together with I'm non at all convinced that we're going into deport mode.  Rather, I await a normal correction inside a bull move.  With the absence of selling having problem bringing us higher, I'm leaning toward selling bounces that cannot maintain us to a higher house the overnight highs.  Of course, the upcoming Fed annunciation volition supply a major catalyst for stocks tomorrow.


Monday, March 14th

*  Those who know me good know that I create non subscribe to the thought that successful trading is by together with large a operate of psychology.  Without an objective trading edge, one's frame of bespeak heed volition but dictate the charge per unit of measurement at which nosotros portion amongst our capital.  Still, psychology is necessary, if non sufficient, for success together with yesterday's post service was mayhap my clearest explanation why.

*  We shut close the highs on Friday, continuing the upswing next the post-ECB selloff.  The ascent left us quite stretched short-term, amongst over 90% of SPX stocks trading to a higher house their 3, 5, 10, together with 20-day moving averages.  This inwards itself is non a mutual occurrence.  Going dorsum to 2006, I could exclusively discovery 12 instances of this happening when VIX has been below 20.  Interestingly, three were up, ix downward the side past times side 24-hour interval for a internet loss, but 10 were up, 2 downward after three days.  We're trading a fighting lower premarket equally I write; the depth of a side past times side pullback volition state us a lot nearly possible upside momentum over the side past times side few days.

*  One line of piece of occupation concern starting to travel inwards my caput is that Friday's highs were the origin inwards which nosotros saw sizable breadth divergences.  If nosotros aspect at all stocks across all exchanges, nosotros tin run across that 1087 made fresh monthly highs on Fri against 2082 the prior Friday.  Much of this is a operate of relative weakness amid small-scale caps.  We exclusively had 92 novel monthly lows on Friday, together with thus naught is standing out equally weak together with I'm non expecting whatsoever grand reversal.  I am concerned, however, that nosotros could run across a decent pullback from these levels equally portion of the start of a topping process.  Bottom line is that I was happy to receive got profits belatedly Fri together with I'm happy to remain on the sidelines together with run across what the bears tin bring.  Ideally, I'd similar to live a buyer of weakness early on inwards the calendar week for at to the lowest degree a retest of highs thereafter.  But I'm non seeing favorably skewed risk/reward right here, right now.

Info!! The Bull Marketplace Is Over For Much Of The Stock Market

The recent post highlighted the unusually weak breadth inwards the recent stock market.  Above is an update.  You tin run into that the Cumulative NYSE TICK--a stair out of upticks vs. downticks across all NYSE shares--has tailed off, fifty-fifty every bit nosotros made fresh cost highs inwards SPX (top chart).  This is the get-go fourth dimension this has occurred since the start of the bull market.

Much of this weakness tin survive attributed to the unusually weak activity amidst pocket-sized caps too latterly yesteryear midcaps every bit well.  As you lot tin run into from the bottom 3 charts (shout out to the Index Indicators site), the percentages of stocks trading higher upwardly their 200-day moving averages bring been making lower highs every bit SPX has made recent cost peaks.  The midcaps made a double cost overstep earlier turning downwards lately, too the small  caps brutal good brusk of their early on July peak.  

As of Friday's close, 74% of large cap stocks (SPX) traded higher upwardly their 200-day moving averages.  For the midcaps, that let on is 45%; for the pocket-sized caps, it is 37%.  Incredibly, every bit we've been making all-time novel highs inwards the large cap averages, the bulk of other stocks bring non been trading inwards uptrends.  Even inside the large cap universe, fewer too fewer shares bring participated inwards the strength.  At the recent peak, exclusively 15% of SPX stocks registered novel 52-week highs, downwards from 22% inwards early on July.

The bull marketplace grows narrower too narrower, precisely the existent intelligence is that the bull marketplace is over for a pregnant portion of the stock market.
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Risk! The Controlled Selling Phenomenon

Hey folks! 

It's similar a shot been precisely 8 weeks since the marketplace position topped out, dorsum inwards the tertiary calendar week of September... 

The marketplace position has been rather tricky to merchandise lately but it's becoming increasingly clear to me why that's been the case. The markets are commonly most volatile in addition to challenging to merchandise at major turning points every bit the residuum of ability tardily shifts from the "old guard" to the "new guard" ..... 

Picture a gigantic cargo tanker ship doing a 180 grade plough inwards the middle of the ocean....

 

These "major marketplace position turning points" takes fourth dimension in addition to crusade to attain in addition to along the path, there's going to live a lot of savage battles ardently fought out betwixt the bulls in addition to bears, each side fighting it out for every twist in addition to turn, back upward in addition to resistance levels on the charts.... 

but later a petty while, you lot accept a pace dorsum in addition to expect at the nautical chart action, a to a greater extent than clear moving-picture demo starts to emerge of what's happening.... 

I shout upward nosotros are at major crossroads hither in addition to i discovery this extremely fascinating since it's been over ix years since the "FED induced" bull marketplace position was born inwards March 2009.... in addition to similar a shot the FED seems intent on reversing their course. 

H5N1 famous hedge fund legend from the 1980s, Marty Zweig was famous for saying: "follow the fed". 

In my humblest of opinions, I believe we're inwards the early on phases of a send marketplace position here... 

Now, send markets come upward inwards all sorts of shapes in addition to sizes, approximately are swift in addition to dramatic in addition to approximately are of the irksome motion downwards grinding, "Chinese H2O torture" types. 

Will this 1 live approximately other 2008?! I lead maintain NO IDEA!... nobody knows! Nobody tin tell you lot alongside absolute certainty how far downwards nosotros go? or how long it lasts? 

All this volition live known inwards hindsight in 1 lawsuit nosotros expect dorsum on it! 

Having said that, every bit traders, nosotros practise non tending almost terminology... The actual terms "bear market" or "bull market" isn't of import since nosotros alone tending almost trading toll action, upward or down... all nosotros desire is a tendency to trade. In an up-trending market, most of your trades in addition to gains volition most probable live focused on the LONG side in addition to inwards down-trending markets, most of your trades in addition to gains volition live focused on the SHORT side. 

**Expect to run into to a greater extent than in addition to to a greater extent than AOT merchandise alerts beingness made inwards ETFs(such every bit that XLE brusque nosotros made before this calendar week for example). 

At whatever rate, these are just approximately quick thoughts on the electrical flow marketplace position atmospheric condition I've seen upward to similar a shot in addition to if proven incorrect downwards the route that this recent big pullback ends upward simply beingness a bull marketplace position correction in addition to the bull marketplace position resumes downwards the road, sure the charts volition Pb us downwards that path in addition to we'll shuffle our feet to readjust! 

Trade the charts, non opinions! 

So the primary exercise behind this weekend postal service was to hash out how come upward despite the big pullback inwards the final calendar week or two, why is it that the NYMO(NYSE McClellan Oscillator) is nowhere close oversold?!  The Dow Jones fell almost 1,200 points this week, the Nasdaq fell almost 4.5%!! 

So how is it that the NYMO in addition to NAMO are yet stuck inwards "neutral" in addition to non closer to "oversold levels"?! 

Now, that's a GREAT QUESTION! Does the NYMO function inwards bearish markets?! 

The response is YES!!    NYMO does function in addition to plant good actually! 

However, since the record has turned decisively to a greater extent than bearish, nosotros postulate to expect at the NYMO(or NAMO) inwards a slightly unlike angle. 

As far every bit I'm concerned, the to a greater extent than meaningful signals we're going to teach from the the McClellan Oscillators isn't necessarily from looking for "oversold" readings to overstep away long, similar nosotros did during the final 8 to ix twelvemonth bull market..... inwards bearish tapes, the to a greater extent than meaningful signals volition most probable come upward when the NYMO overshoots into "over-bought" territory in addition to thence starting fourth dimension looking to growth SHORT positions. That's when this tool is going to overstep away quite useful. Just similar what nosotros saw inwards belatedly Nov during that rattling potent marketplace position bounce in addition to the NYMO went into "extreme overbought" territory in addition to nosotros started to expect for brusque positions accordingly.

 

As you lot tin clearly run into inwards the inwards a higher house NYMO/NAMO charts, the marketplace position has pulled dorsum quite aggressively e'er since early on Nov every bit the bears reasserted their say-so since that "extreme over-bought" signal. 

Now, that doesn't hateful that we're non going to teach approximately useful signals when the NYMO teach into "oversold" but since the record has turned decisively bearish, the improve signals volition lead maintain to come upward on the rare occasions when the NYMO in addition to NAMO teach into "extreme oversold" in addition to so starting fourth dimension looking for hints of a snap dorsum bounce(short crush rally).... 

The NYMO mightiness non teach into extreme oversold often, fifty-fifty though, the marketplace position tin in addition to and has gone downwards big for multiple days inwards a row. 

H5N1 peachy representative of this phenomenon took house this calendar week actually!! The markets took a BIG hitting this week, Dow Jones fell almost 1200 points, Nasdaq fell almost 4.5% yet the NYMO in addition to NAMO remained inwards neutral in addition to barely budged?! Weird huh?

This happens for TWO reasons, inwards my humble opinion... 

1: This bearish tendency is taking house via ROTATION. So basically the exact contrary of the phenomena nosotros witnessed that kept the bull marketplace position going potent for ix years, sector ROTATION! So for example, Energy sector tanks yet the Semis bounce. The Financials accept a hitting 1 twenty-four hours piece Retail sector rallies.... it is this type of activeness that makes the marketplace position overstep away downwards without affecting the NYMO much. The NYMO volition commonly brand a fabric displace 1 means or the other when nosotros starting fourth dimension seeing BROAD BASED moves inwards 1 direction but manifestly when the selloffs are happening inwards a ROTATIONAL manner, the wide based aren't taking place... it is this rattling phenomenon that kept the bull marketplace position running, STRAIGHT UP for many years in addition to that's what's made the marketplace position so impossible to brusque inwards whatever consistent fashion inwards the final few years! 

We are similar a shot witnessing ROTATION type selling, organized, controlled selling(distribution basically) without seeing much panic inwards terms of big mega spikes inwards the VIX(fear gauge).... it is this type of "controlled selling" that makes me shout upward that nosotros are for a prolonged pullback inwards the stock markets.  

2: And this minute point, just comes from years in addition to years of watching the record in addition to seeing multiple bull in addition to send markets through out the years... I lead maintain been telling AOT members inwards the somebody twitter that "in potent downtrends, the bulls command the opened upward but the bears command the close" .... in addition to this calendar week was a perfect illustration of this! 

Notice inwards the inwards a higher house chart, the five day, intra-day charts of the SPY... notice how the marketplace position does NOT overstep away direct DOWN.... (if it did overstep away STRAIGHT DOWN, that's when the NYMO is most probable to teach into "oversold" territory)... instead what nosotros run into is the marketplace position makes early on morn or mid-day bounces, the marketplace position makes these almost misfortunate attempts at rallies/bounces, commonly at the opened upward via a big gap upward or early on morn bounces but most of the time, these weak bounces halt upward dumping difficult into the close..... these weak bounces inwards downtrends, alone assist to salve oversold atmospheric condition from the previous bout of selling which alone helps the bears sink their teeth inwards deeper just a petty to a greater extent than each time... 

It is these weak bounces that allows for the "controlled selling" to accept place... these bounces volition frequently brand traders believe that the marketplace position is bottoming which sucks inwards longs alone to clit the carpet from underneath them in addition to leaves them sitting on failed long positions. 

All that small-scale these small-scale intra-day bounces halt upward doing is assist salve "oversold" atmospheric condition just plenty from the previous bout of selling before stock prices curl over to the downside again... it is literally the EXACT OPPOSITE of what nosotros witnessed during the +9 twelvemonth mega bull market. We are similar a shot seeing this hap on downside. If you lot literally flip your charts upside down, it volition live every bit clear every bit twenty-four hours light! 

This "controlled selling" phenomenon was introduce during the 2007 marketplace position top in addition to thru out the 2008 vicious send marketplace position every bit well... the NYMO alone got into "extreme oversold" alone 2 or three times inwards 2008!! 

Important to emphasize, that this does NOT hateful we're inwards for approximately other 2008!! I'm non claiming this at all! But nosotros appear to live inwards approximately form of a deeper and/or perchance fifty-fifty longer stock marketplace position correction stage than we've come upward to teach used to inwards recent years. Trading opportunities, on long side in addition to brusque side volition live abundant in addition to many opportunities volition live created for traders in addition to investors of all sorts inwards due time!   

I promise you lot constitute this postal service helpful! 

Happy trading! 

Info!! Trading Notes, Calendar Week Of January 11, 2016

Friday, Jan 15th

*  Thursday's rally was short-lived, together with that has been the outstanding characteristic of the recent downturn inwards the stock market.  As noted inwards the prior posting (below), nosotros accept stayed oversold for far longer than has been typical of corrections inwards 2014 together with 2015.  The weakness inwards stone oil continued overnight together with we've broken to novel lows for the displace next the information release this morning.  Selling bounces that scroll over at lower toll highs continues to live on the winning strategy.

*  The nautical chart below of ane of my main bike measures is worth a M words.  Quite simply, this is a dissimilar bike from those of the past times 2 years together with suggests to me that we've entered a dissimilar regime.  Using patterns from the recent past times to extrapolate into the near-term time to come is hazardous to our wealth.

Wednesday, Jan 13th

*  Tuesday was the commencement twenty-four hours inwards which nosotros saw the position out of stocks making fresh novel lows reject twenty-four hours over day.  To this point, it has been quite a wide decline, amongst fewer than 10% of SPX stocks trading inwards a higher house their 50-day moving averages together with exclusively nigh a quarter of the stocks trading inwards a higher house their 200-day moving averages.  Indeed, yesterday was the commencement twenty-four hours inwards nearly 2 weeks inwards which we've seen to a greater extent than than one-half of stocks closing inwards a higher house their 3-day moving averages.  That is unusually consistent weakness together with is but ane of the things leading me to believe that this is to a greater extent than than a mere correction inwards a bull market.

*  Below is a breadth mensurate I hold for SPX stocks, capturing the percentages closing inwards a higher house short-term moving averages (data from Index Indicators).  We tin dismiss encounter that nosotros accept stayed oversold far longer than is park inwards a normal correction.

*  Yet approximately other await at marketplace weakness is a running full of purchase vs. sell signals for all NYSE stocks across diverse technical measures, such every bit Bollinger Bands (data from Stock Charts).  The character of the bounce nosotros tin dismiss muster from these oversold levels volition nation us a lot nigh whether this is business office of a multi-year gain or a commencement leg inwards a larger comport marketplace move.  My bike measures are at lower levels than nosotros accept seen during recent corrective moves, which ane time once to a greater extent than opens my thinking to the possibility that nosotros are inwards a dissimilar regime, non the rangy corrective agency of much of 2014 together with 2015.  

Monday, Jan 11th

*  What is the undercover behind the unloose energy degree of extraordinary performers?  This article tackles this most of import topic.  Success is non nigh controlling your emotions, but rather channeling them toward ever-greater achievement.

*  Late weakness inwards States stock index futures on Fri spilled over to early on overnight trading earlier a reversal inwards European hours.  We are straightaway quite oversold, amongst fewer than 10% of SPX shares trading inwards a higher house their 3, 5, 10, 20, together with 50-day moving averages.  (Data from Index Indicators). Interestingly, where this wide weakness has occurred for the commencement fourth dimension inwards a calendar month (7 occasions since 2006), the marketplace posted a lower daily unopen inwards all 7 occasions inside a five-day period.  Five of the occasions, however, posted a higher daily unopen inside 2 trading sessions, amongst iv of the 5 exceeding 1.5%.  Bottom draw of piece of employment is that I'm prepared for two-way activity together with for volatility, amongst VIX closing Fri inwards a higher house 27.

*  One of my favorite overbought/oversold measures is inwards oversold territory, but banking concern complaint that the lows at October, 2014 together with August, 2015 occurred at fifty-fifty to a greater extent than oversold levels.  Just because we're oversold doesn't necessarily hateful we're at a bottom.  I prefer to remain open-minded.

*  Back to those 7 occasions inwards which nosotros saw fewer than 10% of SPX stocks trading inwards a higher house their 3, 5, 10, 20, together with 50-day moving averages.  The dates inwards which those occurred included September together with November, 2008; May together with June, 2010; together with August, 2011.  In all those occasions, nosotros saw bounces but farther toll lows over coming months.  H5N1 major telephone phone traders ask to brand hither is whether we're currently seeing a correction inwards a bull marketplace or the unfolding of a bear.  I'm opened upward to the latter together with volition live on watching closely for the character of bounces from here.
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Info!! Trading Notes: Calendar Week Of 8/24/15

Friday, August 28th

*  Buying weakness yesterday ended upwards beingness a useful strategy for much of the day, exactly a potent selloff as well as and thus buying reversal inward the concluding 2 hours of the trading session made for volatile trading.  I hold to await these volatility aftershocks to endure amongst us, equally noted inward Wednesday's post.  That beingness said, the pure volatility mensurate has been mostly trending downwards over the yesteryear several sessions, though it's yet at historically high levels.  

*  The blueprint of improving breadth has continued.  Interestingly, nosotros had 131 stocks across all exchanges register fresh novel monthly highs as well as 136 brand novel lows.  That novel depression figure compares amongst 726 as well as 840 during the prior 2 sessions as well as 3553 at what appears to endure a momentum low.  As long equally nosotros encounter higher prices, potent NYSE TICK readings, as well as improving breadth, my game innovation is to purchase weakness, specially if it tin arrive at the axe concord higher upwards the overnight lows.

*    Pertinent to the number of declining, exactly yet high volatility, is the pass upwards inward book inward SPY over the yesteryear several sessions.  We peaked at 507 1 chiliad m shares traded on Monday, as well as thus roughly 369, 339, as well as 275 1 chiliad m the yesteryear iii days.  One of my quant routines estimates the probable day's arrive at (very helpful for establishing cost targets on trades), amongst book equally a major input.  By seeing how today's book unfolds, nosotros tin arrive at the axe approximate the probable day's book as well as brand informed estimates equally to probable cost arrive at for SPY.

*  H5N1 mensurate of the breadth of marketplace position clit that I rails daily is the number of NYSE shares that arrive at purchase vs. sell signals for diverse technical measures.  Yesterday nosotros had 520 purchase signals vs. 20 sells for the Parabolic/SAR measure.  We've had xi occasions where we've had over 400 purchase signals on that mensurate since June, 2014, when I began collecting the data.  Three days later, SPY has been upwards viii times, downwards 3 for an average gain of +.49%.  It's equally good pocket-size a sample to hang our hats on, exactly does serve equally a overnice reminder that potent upside thrust leading to a short-term overbought province of affairs (over 90% of SPX stocks are higher upwards their 3- as well as 5-day moving averages) does non necessarily atomic number 82 to "mean reversion".

Thursday, August 27th

*  Per yesterday's post, nosotros did indeed encounter a seek out of lows inward Wednesday's session, followed yesteryear important buying.  The NYSE TICK has provided really practiced tells for the recent marketplace position action, equally wide downticking was followed yesteryear wide upticking really early on inward yesterday's rally.  That clit has continued into the overnight, all of which is consistent amongst the view of having position inward a momentum depression per Tuesday's comment.

*  Another practiced state inward yesterday's merchandise was the continued drying upwards of the number of stocks making fresh novel lows on weakness.  We had 726 monthly lows across all exchanges yesterday versus 840 on Tuesday as well as 3553 (!) on Monday.

*  The pure volatility mensurate continues at high levels, suggesting that book as well as volatility powerfulness endure amongst us for a while.  We remain higher upwards xxx inward VIX, off the highs exactly significantly elevated relative to close of 2015.

*  I notice that the psychological issues faced yesteryear traders inward this recent marketplace position are related to difficulty adapting to the recent changes of trend, correlation, as well as volatility.  Per the recent Forbes article, a big purpose of emotional upheaval inward trading comes from the mismatch betwixt the patterns we've operate out accustomed to seeing inward markets as well as the novel patterns that are playing themselves out inward electrical flow marketplace position action.

*  I regime annotation that 89% of SPX stocks are right away trading higher upwards their three-day moving averages, exactly alone a piffling over 2% are trading higher upwards their 10-day averages.  I await that latter number to growth significantly, equally our correction from the recent weakness plays itself out inward fourth dimension equally good equally price.  My game innovation is to endure opened upwards to buying weakness equally long equally nosotros remain higher upwards the overnight lows.

Wednesday, August 26th

*  The pause of the 1920 degree inward ES referenced yesterday showed us that the mainland People's Republic of China cutting was non a game changer, as well as nosotros continued the volatile downward market.  Interestingly, fewer stocks made fresh novel lows yesterday relative to the twenty-four hours previous.  Specifically, nosotros had 3553 monthly lows across all exchanges 2 days agone as well as alone 840 yesterday.  This would endure consistent amongst having position inward a momentum low, which on major declines tin arrive at the axe precede ultimate cost lows yesteryear weeks or fifty-fifty months.  

*  Yesterday nosotros had fewer than 5% of all SPX stocks trading higher upwards their 3, 5, 10, 20, as well as 50-day moving averages.  Going dorsum to 2006, at that spot bring alone been iv occasions inward which we've seen similar wide weakness:  10/7 as well as 10/9 of 2008; 11/20 of 2008; as well as 8/8 of 2011.  Over the adjacent iii trading days, SPY moved -9.74%; 9.68%; 13.95%; as well as 4.75%, respectively.  Note the really high volatility going forward.

*  Note also that the dates higher upwards did non brand ultimate cost lows for a number of months, exactly ultimately led to major bull marketplace position moves.

*  I am warning for the possibility of our putting inward lows close term as well as am watching that 1830-1850 degree inward ES closely.  I would await the combination of brusk roofing as well as value buying inward the high volatility surround to create a major snapback rally from these really oversold conditions.

Tuesday, August 25th

*  The volatility warning proved useful for Monday's trade, equally nosotros blew out to a VIX of forty yesteryear the unopen as well as traded amongst a daily truthful arrive at inward excess of 8%.  We traded good off the day's lows, inviting the hypothesis that we've seen a momentum depression for this downwards move.

*  Contributing to the view of a momentum depression is the unusually broad, weak breadth.  Over 400 SPX stocks made fresh 20 twenty-four hours lows yesterday.  We haven't seen that form of wide weakness since early on August, 2011.  That indeed was a momentum low, exactly regime annotation that stocks drifted lower, albeit amongst fewer stocks registering novel lows, for a yoke of months after that.

*  I volition endure watching commodities closely, equally these bring been a useful warning for EM equity weakness as well as weakness inward States of America stocks.

*  I volition also endure watching the ES 1920 area, equally that was the close recent depression prior to the mainland People's Republic of China statement of a reserve ratio cut.  If that displace yesteryear mainland People's Republic of China was a game-changer, that degree inward ES should hold.  Game innovation is to purchase weakness that holds higher upwards that 1920 level.

Monday, August 24th

*  There's a really primal betoken toward the destination of the recent Forbes article:  many times what nosotros translate equally a trading occupation genuinely represents *information*.  For example, the trader who has difficulty pulling the trigger may really good intuit that the marketplace position surround has changed as well as that what had been practiced risk/reward may non endure thus at the moment.  Similarly, frustration could endure a really practiced early, emotional signal that regimes bring changed.  We pass a lot of fourth dimension trying to preclude as well as fighting emotions inward trading when mayhap nosotros should endure focused on learning from them.

*  With honour to the recent article, also regime annotation the v things I facial expression for to position changing regimes.  Very helpful inward adapting to marketplace position conditions.  These volition endure relevant 1 time we're cook for the conduct to turn.

*  We hold to encounter cost behaviour that is wildly unlike from what nosotros seen through close of 2015.  For example, from midnight to viii AM EST thus far today, we've printed 150 bars based upon 500 ticks of cost movement.  By contrast, on the Mon 2 weeks ago, from midnight to viii AM nosotros printed half-dozen such bars.  My pure volatility mensurate continues to brand novel highs, important that we're getting to a greater extent than crusade from to a greater extent than volume, exactly also to a greater extent than crusade per unit of measurement of volume.  This makes gamble management tricky, equally nosotros tend to rely on the same fourth dimension frames for asset periods without realizing that asset a merchandise for a sixty minutes right away is similar asset for a twenty-four hours before inward the year.

*  We closed Fri amongst fewer than 5% of SPX stocks trading higher upwards their 3, 5, as well as 10-day moving averages.  That form of wide short-term weakness has been to a greater extent than typical of 2010 as well as 2011 markets than recent ones.  Very often, when we've had such wide weakness, the showtime thrust downwards has been followed yesteryear farther weakness, which is what we've seen overnight.  I hold to favor selling bounces until there's approximately evidence that selling pressure level cannot hold to yield weakness across the vast bulk of sectors.
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Info!! Trading Notes: Calendar Week Of 8/10/2015

Friday, August 14th

*  For me, the standout observation for today's merchandise is that the yuan stabilized at the overnight fix, nosotros got a little popular inwards stocks, in addition to thus at that spot has been no follow through and, equally I write, that little popular has been alone reversed.  Meanwhile petroleum in addition to copper buy the farm on to languish close their recent lows.  The quest for devaluation inwards Communist People's Republic of China is a answer to economical weakness in addition to perchance the best real-time approximate of that weakness is inwards commodities pricing.  I create got problem seeing whatever sustained bull displace inwards stocks until the deflationary pressures reflected past times commodities weakness abate.

* 

*  My diverse breadth measures create got been peaking and, recently, bounces inwards stock marketplace seat breadth create got non been sufficient to elevator the index to novel highs (see nautical chart of Intermediate Strength above).  I'm content, given the dynamics above, to create got a little swing seat for a displace to oversold levels. The models are neutral, in addition to it would non create got a huge amount of weakness to plow them bullish, thus at this juncture I'm non anticipating a full-on deport marketplace seat move.  Too, equally the higher upwards nautical chart shows, we've seen a drying upwards of the set out of stocks making fresh lows.  Should nosotros larn near-term cost weakness in addition to fewer stocks making novel lows, I volition role that equally a tactical chance to create got profits.  If the weakness hypothesis is correct, nosotros should non create got out the overnight highs inwards today's trading session.  With models non lined up, I'm happy to create got a relatively brusk leash for seat trades.

*  The breadth volatility mensurate referenced yesterday is at the lowest levels seen since piece of cake February/early March.  Such depression levels create got been associated alongside weak returns over a adjacent five-day basis.  Pure volatility has likewise moved below median levels, likewise associated alongside weak forrad returns over a swing basis. 


Thursday, August 13th

*  Yesterday's banker's complaint nearly caution chasing oversold levels when pure volatility is high turned out to last to a greater extent than right than I expected, equally nosotros reversed the recent weakness in addition to rallied strongly inwards SPX.  We dropped all the way below 2050 inwards the ES futures early on inwards the day, a two-week low.  Interestingly, nosotros only saw 1058 stocks across all exchanges brand fresh monthly lows vs. 1078 on 8/6 in addition to 1862 on 7/27.  Note a set out of sectors that held upwards alongside relative strength, including the yield-sensitive utilities in addition to consumer staples shares.  The commodity-related stocks create got likewise held up.  This told us that the early on driblet was to a greater extent than nearly sector rotation than full-on risk-off--a valuable tell.  Market breadth has non been weakening alongside the recent Communist People's Republic of China related selloff.

*  Pure volatility remains unusually elevated fifty-fifty alongside yesterday's rebound; when this occurs, at that spot is unremarkably to a greater extent than upside left inwards the move, equally the combination of volatility in addition to forcefulness leads to near-term momentum.

*  The 3-5 hateful solar daytime models are mixed:  i is neutral, the other mildly bearish.  The adjacent hateful solar daytime model is neutral.  These are the kinds of signals yous buy the farm far the middle of trading ranges.  I could last persuaded to purchase intraday weakness that holds higher upwards the overnight lows for a short-term merchandise higher based on the potent pure volatility, but otherwise don't perceive a potent edge.

*  My breadth volatility mensurate is hitting multi-week lows.  That's a mensurate of the volatility of hateful solar daytime to hateful solar daytime breadth in addition to it's been a helpful measure.  When breadth volatility has been inwards the lowest one-half of its distribution since 2014, the adjacent 5 days inwards SPY create got averaged a loss of -.01%.  When inwards the highest one-half of its distribution, the adjacent 5 days inwards SPY create got averaged a gain of +.34%.  If nosotros were to larn other volatility readings dropping, the models would probable plow bearish.


Wednesday, August 12th

*  Communist People's Republic of China devaluation continues equally major driver of stocks globally.  While developed marketplace seat equities create got traded inwards a arrive at over the past times several months, emerging marketplace seat stocks create got been inwards a consistent downtrend (see EEM nautical chart above).  This suggests that a major engine of recent global economical increment is no longer a contributing factor.  It is this weakness in addition to non the stimulus value of the weaker Asian currencies that is driving stock in addition to commodity markets lower in addition to stimulating a flying to the security of character yield.

*  The 3-5 hateful solar daytime models for SPX are neutral; the adjacent hateful solar daytime model ended Tuesday real modestly bullish.  The models cannot component inwards idiosyncratic marketplace seat factors such equally the devaluation, thus I am non relying upon them for signals at this time.  Sometimes this fourth dimension actually is different.

*  My mensurate of "pure volatility"--the average cost displace per unit of measurement of trading volume--has buy the farm elevated, which way that nosotros could encounter outsized moves (including countertrend ones) equally book picks up.  This has of import implications for the setting of stops in addition to targets on trades in addition to makes it peculiarly unsafe to chase overbought or oversold cost levels.

*  General game invention is to buy the farm on to sell bounces inwards SPX that terminate at lower highs.  If the devaluation genuinely is contributing to an ongoing risk-off trade, nosotros should non merchandise higher upwards the levels seen merely prior to the most recent yuan fix.  I buy the farm on to harbor doubts nearly whatever form of sustained Fed hiking inwards the human face upwards of what is increasingly looking similar a currency state of war of competitive devaluations.  

Tuesday, August 11th

*  Communist People's Republic of China devaluation primal slice of overnight news; USD rises vs. Asia; stocks hand dorsum a chunk of Monday's gains.  Communist People's Republic of China devaluation affirms regime describe of piece of job organisation over economical weakness.  Difficult to encounter much inwards the way of Fed hiking alongside Asian goods becoming cheaper inwards U.S. in addition to dampening inflation.  Also hard to encounter Fed hiking inwards whatever sustained way inwards the human face upwards of what is increasingly looking similar a currency war.  All inwards all, this is consistent alongside the macro themes of late outlined in addition to should last supportive of U.S. stocks offering yield.  Economic benefits of lower inflation/lower prices are tempered past times headwinds from higher USD.

*  My 3-5 hateful solar daytime models for SPX turned modestly bearish at cease of hateful solar daytime on Monday, but reaction to the Communist People's Republic of China intelligence swamps model effects.  Next hateful solar daytime model for SPX turned from modestly bullish to neutral.  

*  General game invention is to sell bounces inwards SPX that neglect to create got out Mon highs.  Commodity markets create got been a adept proxy for the Asia weakness theme, in addition to it is hard to encounter stocks sustaining a rally if that subject is dominant.

Info!! Trading Notes: Calendar Week Of November 23Rd

Friday, Nov 27th

*  Not much changed from yesterday alongside honour to U.S. stocks, equally nosotros boot the bucket on to concord of import back upwards inwards the lower 2080s inwards the front end calendar month ES contract.  I boot the bucket on to move inwards the style of buying weakness that holds higher upwards overnight lows, but await merchandise to move deadening today given the long vacation weekend that many U.S. traders volition move taking.

*  So far, the number of stocks displaying odd forcefulness inwards the recent motion higher has been modest.  Below is a nautical chart of the number of NYSE issues closing higher upwards their upper Bollinger Bands minus the number closing below their lower bands.  (Data from the splendid stockcharts.com site).  To this point, that stair out of forcefulness has been waning.

*  Another resources that I stimulate got constitute quite useful is the Stock Spotter site.  They furnish purchase in addition to sell signals for private stocks based upon their bicycle models.  They also stimulate got toll forecasts for each stock in addition to ETF.  I've constitute those forecasts for SPY to stimulate got value in addition to stimulate got backtested them for the improve operate of ii years.  At present, their forecast is bullish for stocks over a adjacent two-week horizon.


Thursday, Nov 26th

*  Happy Thanksgiving in addition to many cheers to readers!  I aspect frontward to a dandy 2016.  This latest article describes a structured procedure for dealing positively alongside setbacks in addition to failure.  So much of the departure betwixt the successful trader in addition to the unsuccessful 1 is how they bargain alongside the inevitable losses dealt past times markets (and past times our faulty processing of market-generated information).

*  We've continued modestly higher inwards overnight trade, equally the basic strategy of buying weakness that holds higher upwards key prior twenty-four hr catamenia in addition to overnight levels has been a practiced one.  The relative outperformance of little caps is something I'm watching.  Utility stocks, faced alongside the prospect of rise rates inwards the U.S., stimulate got been relatively weak.  Below, the graphic from the splendid FinViz site shows mixed surgical procedure amidst U.S. sectors.  It continues to move a rotational environment.

*  On a to a greater extent than global scale, I'm watching the relative surgical procedure of China, emerging markets, Japan, in addition to European stocks, given the prospect of farther easing from overseas cardinal banks in addition to a charge per unit of measurement hike from the Fed.  Note the relative forcefulness of the U.S. dollar of late; that is also a theme that is impacting U.S. shares.  I know besides many traders who are in addition to so busy looking for short-term setups that they completely immature lady larger themes that are driving stocks on the longer fourth dimension frame. 

Wednesday, Nov 25th

*  We tested the overnight lows inwards early on merchandise yesterday in addition to constitute rigid buying off the lows, bringing us dorsum toward the upper halt of the recent range.  The inability to sustain weakness is consistent alongside a marketplace seat inwards a rise cycle, though I do detect tepid breadth therefore far inwards the motion higher.  For example, the past times duo of days, we've seen to a greater extent than stocks register fresh 52-week lows than highs.  While I do recollect nosotros stimulate got a practiced chance to attempt out recent highs, I am far from convinced that we're launching to a fresh bull leg from here.  

*  Dec promises to move an eventful month, alongside ECB in addition to Fed meetings that could Pb to monetary easing in addition to an involvement charge per unit of measurement hike, respectively.  I recollect it's possible that, alongside a dovish Fed hike in addition to monetary ease inwards Nippon in addition to Europe, nosotros could reckon a renewed "QE" merchandise inwards stocks.

*  The nautical chart of cumulative upticks vs. downticks amidst all listed stocks (red delineate of piece of job below) has been heading to novel highs.  That reflects relative forcefulness late amidst smaller cap issues.  Interestingly, the cumulative upticks vs. downticks for Dow stocks exclusively is inwards a recent downtrend.  This rotational merchandise could good boot the bucket on through this vacation period.

Tuesday, Nov 24th

*  Yesterday's merchandise was interesting inwards that nosotros saw considerable buying involvement inwards early on trade, equally tracked past times NYSE TICK, but much of the forcefulness centered on smaller cap issues in addition to non the NASDAQ in addition to SPX large caps.  What turns a bull, rise stage of a marketplace seat bicycle into a topping stage is that buying involvement fails to accept prices meaningfully higher, equally around segments of the marketplace seat display weakness equally others concord up.  In yesterday's trade, it was the NASDAQ index--and AAPL specifically--displaying weakness.  As buying failed to force indexes higher, sellers came inwards during the afternoon in addition to took us lower.  Yesterday's merchandise was a squeamish illustration of how markets plough on a brusque fourth dimension frame.  It was also a squeamish illustration of how it's of import to rail multiple marketplace seat sectors, non simply the index you're trading.

*  Painful sense has taught me to non move long stocks alongside pure volatility (volatility per unit of measurement of trading volume) is low.  Forward returns simply aren't positive on average.  As you lot tin reckon below, pure vol had gotten quite depression recently, a xanthous caution light.  With the downing of the Russian jet overnight inwards Turkey, stocks stimulate got fallen dorsum in addition to taken out stops inwards the 2070s inwards the ES futures.  Pure vol has expanded meaningfully.  Adjusting volatility expectations in addition to risk/reward is key here.  On 1 hand, corrections that get upwards pure vol offering practiced entry points on the long side.  On the other hand, nosotros at nowadays stimulate got a province of affairs where idiosyncratic (geopolitical) factors are moving markets.  It is hard to successfully merchandise historical patterns when idiosyncratic conduct chances factors dominate.  I'm opened upwards to buying weakness that cannot accept out the overnight lows, but inwards no rush to larn involved.  

Monday, Nov 23rd

*  How much fourth dimension do nosotros waste product in addition to how much mental clutter do nosotros do past times staring at screens, opening superfluous email, in addition to reading cloth irrelevant to our conclusion making?  How does that clutter clog creative processes in addition to interfere alongside generating novel in addition to improve ideas in addition to trades?  This post on media consumption tackles a really of import topic: nosotros can't get together practiced ideas if we're non collecting the right puzzle pieces.

*  We're trading inwards a relatively sideways gain inwards the ES futures, correcting to a greater extent than inwards fourth dimension than inwards price.  That is mostly what markets do when they're trading inwards a practiced uptrend, in addition to that's how I'm treating this marketplace seat until proven otherwise.  The exclusively flies inwards the ointment are depression levels of implied correlation in addition to pure volatility, both of which are associated alongside subnormal near-term returns.  My basic strategy, equally has been the instance recently, is to purchase weakness that holds higher upwards overnight in addition to prior day's lows.

*  I mostly similar to purchase oversold levels inwards rise markets in addition to sell overbought levels inwards falling ones.  Influenza A virus subtype H5N1 large portion of profitability comes from practiced entry execution.  The same applies to move out execution.  When positions become our agency but are stretched to the upside or downside, it mostly pays to accept at to the lowest degree around of our seat off inwards markets that display short-term hateful reversion.  I aspect at a medium term charge per unit of measurement of alter stair out on bars created every 500 toll changes to furnish perspective on overbought in addition to oversold.  It's non something I merchandise off of directly, but utilisation to mostly guide practiced in addition to bad merchandise location.

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.