Friday, Oct 9th
* Morning selling push clit per unit of measurement area yesterday could non breach overnight as well as prior 24-hour interval lows, continuing the apartment correction. In general, when overnight as well as prior 24-hour interval lows/highs concur on early on 24-hour interval selling/buying, it's worth thinking nearly buying the dip/selling the bounce to exploit the potential designing of higher lows/lower highs. With the Fed minutes, pregnant buying flows ane time over again returned to stocks as well as nosotros over again made novel highs for this move, alongside an expansion inwards the lay out of shares registering fresh highs. H5N1 total of 242 SPX stocks registered fresh 20-day highs vs. lows, the highest since August 17th (raw information from Index Indicators). As emphasized yesterday, I'm non seeing the kinds of divergences that would ordinarily precede a substantial correction. We're ane time over again stretched on a multi-day basis, as well as therefore that leaves me inwards the style of buying pullbacks.
* Earlier entries mentioned the real strong buying push clit per unit of measurement area during this rise. On a five-day basis, we've seen buying forcefulness that has alone been introduce on nine prior occasions since 2012. Ten days later, SPX was upward 8 times, downward ane time for an average gain of nearly +3.0%. Once again, this highlights the momentum upshot ane time institutions dominate on the buying side.
* Volatility continues to decline, alongside VIX straight off below 18. If this is similar past times strong buying cycles, nosotros volition run into pocket-size pullbacks as well as farther grind higher on lower volatility until breadth divergences stimulate to appear.
Thursday, Oct 8th
* Buying dips indeed proved to move a useful strategy inwards Wednesday's session, equally nosotros closed ane time over again alongside strength. Across all exchanges, nosotros saw over G stocks register fresh monthly highs, a novel high for this upleg. In full general I don't decease overly concerned nearly sustained downmoves unless nosotros run into a preceding menses of fourth dimension inwards which fewer stocks participate inwards the strength. Thus far, the participation has been solid, alongside the buying push clit per unit of measurement area mentioned yesterday continuing strong. We're quite extended inwards the curt run, as well as therefore the consolidation we're seeing inwards overnight trading is non unusual. My leaning is to permit this consolidation to run its course of report earlier resuming long positions. Even inwards salubrious uptrends, it's non odd to acquire a pullback inwards which the bulk of shares merchandise below their iii as well as 5-day moving averages. I'd facial expression at such a pullback equally a potential buying opportunity; I'd likewise move interested inwards buying whatever flattish correction that stays higher upward the 1960-ish level.
* Note that VIX continues lower as well as continues to remain below 20. I proceed to take away heed people lay the comport thesis out there, but the marketplace is but non trading that agency at present. I believe investors run into the global weakness out at that topographic point as well as are already buying stocks inwards anticipation of farther easing from cardinal banks. Traders who hold back for the actual cardinal banking concern announcements earlier buying may move making a mistake. With Friday's weak jobs lay out inwards the U.S., an accomodative monetary policy across the the world was pretty good ensured. Markets are forrad looking.
* Below you lot tin run into a short-term charge per unit of measurement of alter indicator (red) plotted vs. ES futures (10/2/15 to the present), where each bar represents 500 cost changes inwards the index. This normalizes for activeness during wearisome periods, such equally overnight. I similar the perspective equally a short-term overbought/oversold measure. In general, I similar buying oversold levels when we're making higher lows as well as higher highs as well as vice versa. I similar taking profits when nosotros acquire overbought/oversold as well as can't brand novel highs/lows.
Wednesday, Oct 7th
* We did indeed acquire the consolidation noted inwards yesterday's postal service and, as well as therefore far, we're seeing some belongings of the consolidation as well as buying of the dip inwards overnight trading. I'm watching to run into if nosotros tin concur those overnight lows, alongside a leaning toward buying weakness that holds higher upward ES 1960. My short-term models remain modestly bearish, however, as well as therefore I'm opened upward to the possibility of farther consolidation.
* Readers volition retrieve that I interruption the uptick/downtick statistics into split upward measures of buying push clit per unit of measurement area as well as selling pressure. The buying push clit per unit of measurement area has been real strong over the past times v trading sessions. Returns 3-5 days out conduct hold been choppy, alongside picayune edge, but 10 days out nosotros run into fifteen occasions up, 2 downward for an average gain of over 2%. We'll ask to run into distinct selling push clit per unit of measurement area to entertain a provide to a bearish regime; we'd likewise ask to run into VIX top 20.
* Put/call ratios conduct hold come upward downward quite a chip from the recent marketplace lows. That's some other argue I wouldn't move surprised past times sloppy trading nigh term. I likewise banker's complaint the upside breakouts inwards emerging marketplace currencies (CEW) as well as commodities (DBC); both are reversals of the previous bearishness unopen to China.
Tuesday, Oct 6th
* Great summary of my recent podcast alongside Better System Trader from The Waiter's Pad; thanks, Mike!
* We saw real proficient follow through to Friday's strength, equally the volatility addition the buying flows (volume-weighted NYSE TICK) created pregnant upside momentum. We saw 780 stocks across all exchanges brand fresh one-month highs against 143 novel lows. We've come upward off a chip overnight as well as my models are moderately bearish over a 3-5 24-hour interval horizon, as well as therefore some consolidation is to move expected. My sense, however, is that many traders conduct hold missed this rally as well as volition move interested inwards buying dips, which could maintain consolidations modest--as much inwards fourth dimension equally inwards price.
* Another argue I facial expression some consolidation is that we're quite stretched on a short-term basis, alongside over 90% of SPX shares trading higher upward their 3, 5, as well as 10-day moving averages. When we've had a moderate VIX nether those circumstances (between fifteen as well as 25; due north = 12 going dorsum to 2006), the side past times side 24-hour interval has been upward iii times, downward nine for an average loss of -.12%. Indeed, 10 of the 12 occasions posted a lower unopen over the side past times side ii trading days. That beingness said, the side past times side 10 days conduct hold been 8 up, four downward for an average gain of +.37%, alongside 10 of the 12 occasions posting a higher unopen inside v trading days. So non much border inwards general, though my base of operations instance is to run into consolidation inwards the side past times side 24-hour interval or ii that is worth buying into.
* I mentioned yesterday that I'm keeping an optic on VIX. We're below twenty for the kickoff fourth dimension inwards a while; if whatever consolidation does occur inwards a flattish fashion, reducing realized volatility, that would advise a provide to the onetime volatility government as well as would move bullish overall for stocks.
Monday, Oct 5th
* In my Forbes blog, I review ane of the best marketplace books I've read inwards a long time. It's a detailed handling of high yield markets as well as a peachy reminder of how nosotros tin larn a peachy bargain nearly the markets nosotros merchandise past times studying as well as agreement related markets.
* Fri was a 24-hour interval worth studying inwards detail. We had a weak payrolls lay out as well as stock futures sold off hard. We opened alongside selling on the day, equally NYSE TICK hitting several quite negative figures, but cost stopped going lower as well as the downticks began making higher lows. This emboldened buyers to come upward in, upticks swamped downticks, as well as nosotros injure upward alongside a real strong 24-hour interval to the upside. That forcefulness has continued into overnight trading, equally it indeed appears that nosotros conduct hold successfully tested the downside. The oversold intermediate-term indicators that I referenced final calendar week volition non hitting overbought levels for a spell as well as volatility appears to move at the bull's back, as well as therefore I facial expression an surroundings inwards which pullbacks volition move bought.
* I volition move watching VIX closely here. One thought I'm playing alongside is that we've entered a higher volatility regime, much equally what happened inwards 2007 prior to the 2008 comport market. VIX mostly bottoms ahead of stock marketplace highs and, inwards the electrical flow environment, that wouldn't surprise me. That 2007 menses was a rangy topping marketplace alongside proficient swings due to the higher volatility.
* Morning selling push clit per unit of measurement area yesterday could non breach overnight as well as prior 24-hour interval lows, continuing the apartment correction. In general, when overnight as well as prior 24-hour interval lows/highs concur on early on 24-hour interval selling/buying, it's worth thinking nearly buying the dip/selling the bounce to exploit the potential designing of higher lows/lower highs. With the Fed minutes, pregnant buying flows ane time over again returned to stocks as well as nosotros over again made novel highs for this move, alongside an expansion inwards the lay out of shares registering fresh highs. H5N1 total of 242 SPX stocks registered fresh 20-day highs vs. lows, the highest since August 17th (raw information from Index Indicators). As emphasized yesterday, I'm non seeing the kinds of divergences that would ordinarily precede a substantial correction. We're ane time over again stretched on a multi-day basis, as well as therefore that leaves me inwards the style of buying pullbacks.
* Earlier entries mentioned the real strong buying push clit per unit of measurement area during this rise. On a five-day basis, we've seen buying forcefulness that has alone been introduce on nine prior occasions since 2012. Ten days later, SPX was upward 8 times, downward ane time for an average gain of nearly +3.0%. Once again, this highlights the momentum upshot ane time institutions dominate on the buying side.
* Volatility continues to decline, alongside VIX straight off below 18. If this is similar past times strong buying cycles, nosotros volition run into pocket-size pullbacks as well as farther grind higher on lower volatility until breadth divergences stimulate to appear.
Thursday, Oct 8th
* Buying dips indeed proved to move a useful strategy inwards Wednesday's session, equally nosotros closed ane time over again alongside strength. Across all exchanges, nosotros saw over G stocks register fresh monthly highs, a novel high for this upleg. In full general I don't decease overly concerned nearly sustained downmoves unless nosotros run into a preceding menses of fourth dimension inwards which fewer stocks participate inwards the strength. Thus far, the participation has been solid, alongside the buying push clit per unit of measurement area mentioned yesterday continuing strong. We're quite extended inwards the curt run, as well as therefore the consolidation we're seeing inwards overnight trading is non unusual. My leaning is to permit this consolidation to run its course of report earlier resuming long positions. Even inwards salubrious uptrends, it's non odd to acquire a pullback inwards which the bulk of shares merchandise below their iii as well as 5-day moving averages. I'd facial expression at such a pullback equally a potential buying opportunity; I'd likewise move interested inwards buying whatever flattish correction that stays higher upward the 1960-ish level.
* Note that VIX continues lower as well as continues to remain below 20. I proceed to take away heed people lay the comport thesis out there, but the marketplace is but non trading that agency at present. I believe investors run into the global weakness out at that topographic point as well as are already buying stocks inwards anticipation of farther easing from cardinal banks. Traders who hold back for the actual cardinal banking concern announcements earlier buying may move making a mistake. With Friday's weak jobs lay out inwards the U.S., an accomodative monetary policy across the the world was pretty good ensured. Markets are forrad looking.
* Below you lot tin run into a short-term charge per unit of measurement of alter indicator (red) plotted vs. ES futures (10/2/15 to the present), where each bar represents 500 cost changes inwards the index. This normalizes for activeness during wearisome periods, such equally overnight. I similar the perspective equally a short-term overbought/oversold measure. In general, I similar buying oversold levels when we're making higher lows as well as higher highs as well as vice versa. I similar taking profits when nosotros acquire overbought/oversold as well as can't brand novel highs/lows.
Wednesday, Oct 7th
* We did indeed acquire the consolidation noted inwards yesterday's postal service and, as well as therefore far, we're seeing some belongings of the consolidation as well as buying of the dip inwards overnight trading. I'm watching to run into if nosotros tin concur those overnight lows, alongside a leaning toward buying weakness that holds higher upward ES 1960. My short-term models remain modestly bearish, however, as well as therefore I'm opened upward to the possibility of farther consolidation.
* Readers volition retrieve that I interruption the uptick/downtick statistics into split upward measures of buying push clit per unit of measurement area as well as selling pressure. The buying push clit per unit of measurement area has been real strong over the past times v trading sessions. Returns 3-5 days out conduct hold been choppy, alongside picayune edge, but 10 days out nosotros run into fifteen occasions up, 2 downward for an average gain of over 2%. We'll ask to run into distinct selling push clit per unit of measurement area to entertain a provide to a bearish regime; we'd likewise ask to run into VIX top 20.
* Put/call ratios conduct hold come upward downward quite a chip from the recent marketplace lows. That's some other argue I wouldn't move surprised past times sloppy trading nigh term. I likewise banker's complaint the upside breakouts inwards emerging marketplace currencies (CEW) as well as commodities (DBC); both are reversals of the previous bearishness unopen to China.
Tuesday, Oct 6th
* Great summary of my recent podcast alongside Better System Trader from The Waiter's Pad; thanks, Mike!
* We saw real proficient follow through to Friday's strength, equally the volatility addition the buying flows (volume-weighted NYSE TICK) created pregnant upside momentum. We saw 780 stocks across all exchanges brand fresh one-month highs against 143 novel lows. We've come upward off a chip overnight as well as my models are moderately bearish over a 3-5 24-hour interval horizon, as well as therefore some consolidation is to move expected. My sense, however, is that many traders conduct hold missed this rally as well as volition move interested inwards buying dips, which could maintain consolidations modest--as much inwards fourth dimension equally inwards price.
* Another argue I facial expression some consolidation is that we're quite stretched on a short-term basis, alongside over 90% of SPX shares trading higher upward their 3, 5, as well as 10-day moving averages. When we've had a moderate VIX nether those circumstances (between fifteen as well as 25; due north = 12 going dorsum to 2006), the side past times side 24-hour interval has been upward iii times, downward nine for an average loss of -.12%. Indeed, 10 of the 12 occasions posted a lower unopen over the side past times side ii trading days. That beingness said, the side past times side 10 days conduct hold been 8 up, four downward for an average gain of +.37%, alongside 10 of the 12 occasions posting a higher unopen inside v trading days. So non much border inwards general, though my base of operations instance is to run into consolidation inwards the side past times side 24-hour interval or ii that is worth buying into.
* I mentioned yesterday that I'm keeping an optic on VIX. We're below twenty for the kickoff fourth dimension inwards a while; if whatever consolidation does occur inwards a flattish fashion, reducing realized volatility, that would advise a provide to the onetime volatility government as well as would move bullish overall for stocks.
Monday, Oct 5th
* In my Forbes blog, I review ane of the best marketplace books I've read inwards a long time. It's a detailed handling of high yield markets as well as a peachy reminder of how nosotros tin larn a peachy bargain nearly the markets nosotros merchandise past times studying as well as agreement related markets.
* Fri was a 24-hour interval worth studying inwards detail. We had a weak payrolls lay out as well as stock futures sold off hard. We opened alongside selling on the day, equally NYSE TICK hitting several quite negative figures, but cost stopped going lower as well as the downticks began making higher lows. This emboldened buyers to come upward in, upticks swamped downticks, as well as nosotros injure upward alongside a real strong 24-hour interval to the upside. That forcefulness has continued into overnight trading, equally it indeed appears that nosotros conduct hold successfully tested the downside. The oversold intermediate-term indicators that I referenced final calendar week volition non hitting overbought levels for a spell as well as volatility appears to move at the bull's back, as well as therefore I facial expression an surroundings inwards which pullbacks volition move bought.
* I volition move watching VIX closely here. One thought I'm playing alongside is that we've entered a higher volatility regime, much equally what happened inwards 2007 prior to the 2008 comport market. VIX mostly bottoms ahead of stock marketplace highs and, inwards the electrical flow environment, that wouldn't surprise me. That 2007 menses was a rangy topping marketplace alongside proficient swings due to the higher volatility.
