Friday, March 25th
* Perhaps the most mutual psychological challenge I listen from traders is how to maintain a positive mindset during periods of drawdown. It's rattling hard to lose coin for a stretch of fourth dimension when you're pouring your pump together with best efforts into markets. But at that spot is no surer agency of missing opportunities than becoming self-focused together with negatively focused. This recent article focuses on how nosotros tin sustain well-being together with a positive mindset fifty-fifty when everything seems to hold out going wrong.
* Stocks bounced from their short-term oversold province of affairs noted yesterday amongst the swing overbought/oversold measure. I am watching breadth closely here, every bit it would non surprise me to run across a to a greater extent than selective stage of the marketplace wheel going forward. The relative functioning of little caps is of item interest.
* I'm seeing increasing utter of straight monetary stimulus to economies. I suspect this volition hold out actively considered if nosotros larn a renewed deterioration of fiscal weather together with concerns re: deflation. The implications for asset prices (weak currencies, rigid commodities) would hold out significant.
* I've been putting considerable function into a gear upward of swing measures that rail overbought/oversold weather together with volatility. These are based on trial time, where each bar represents an amount of book or toll drive inwards the market, non a unit of measurement of chronological time. The OBOS mensurate captures momentum together with value effects on a swing basis: swing returns inwards ES convey been best when we're significantly overbought (+.54%) together with significantly oversold (+.49%). Returns convey been subnormal betwixt these extremes (-.05%). Although I bespeak to maintain the specifics of the mensurate proprietary together with express to the managers I function with, I'll happily update periodically on this blog. Swing returns from electrical flow levels of OBOS together with vol convey non been significantly positive or negative.
* Here is a swing volatility mensurate that looks at the volatility of the trial bars. Note how we're close levels that convey lately corresponded to marketplace peaks. This is yet roughly other argue I'm watching breadth closely.
Thursday, March 24th
* Thanks to Aaron Fifield for interviewing me for the Chat With Traders podcast. We demeanour on a set out of topics relevant to factors that brand for trading success. He's assembled an first-class lineup of interviews worth checking out.
* We've seen a recent pullback inwards stocks together with oil; yesterday's closed saw an expanded set out of stocks making novel lows amidst relative weakness amid little caps. I volition hold out tracking breadth closely here, every bit nosotros mightiness hold out seeing a to a greater extent than selective stage of the recent marketplace strength. Below is a nautical chart of stocks across all exchanges making fresh 3-month highs vs. lows:
* I've been exploring a swing overbought/oversold mensurate based on trial bars. As you lot tin see, we've lately entered oversold territory. As long every bit these swing lows are occurring at successive toll highs, I'm willing to give the produce goodness of the doubtfulness to the bulls. The nautical chart tracks the mensurate through the recent motion higher.
Wednesday, March 23rd
* We saw an early on selloff due to the Brussels news, precisely this was bought relatively early on inwards the NY session. It's a skillful trial of how, inwards a momentum environment, participants desire to larn long fifty-fifty on relatively little dips. That beingness said, my breadth volatility measures (volatility of daily breadth numbers) has been coming downwardly together with that has led to subnormal returns over the near-term horizon.
* Interestingly, we're hovering close our highs, precisely yesterday saw alone nigh 40% of SPX stocks trading inwards a higher house their 3-day moving averages. During these momentum periods, corrections tend to hold out rotational together with we're seeing roughly of that. Housing, financials, consumer staples, utilities--all convey been off their highs recently. Technology has been stronger.
* My wheel mensurate continues inwards elevated territory, in 1 trial to a greater extent than dissimilar much of what nosotros saw inwards 2015, where push clit led to weakness. That continued elevation on a shorter-term wheel mensurate suggests that a longer-term wheel is at play together with that this has been to a greater extent than than a bounce inwards a demeanour market.
Tuesday, March 22nd
* We're seeing roughly consolidation overnight next a little upward twenty-four hr catamenia yesterday. While SPX closed higher, nosotros returned to underperformance of little caps together with the set out of stocks across all exchanges making novel monthly highs dropped from 1660 to 886. New monthly lows likewise dropped, however, every bit we're soundless non seeing distinctive weakness inwards whatsoever sector. Volume together with volatility dropped; VIX is forthwith below 14. More on volatility below.
* Below is a short-term mensurate of the set out of SPX stocks making fresh 5, 20, together with 100-day highs versus lows. Notice how nosotros convey stayed elevated for a set out of consecutive days together with how this is different from what nosotros saw through much of 2015. Whereas "overbought" readings were opportunities to sell concluding year, then far inwards this rising we're seeing momentum together with push clit leading to farther strength--one of the signature characteristics of a fresh marketplace cycle.
* Despite the market's push clit together with momentum, the rally has non had a lot of fans. I honour on the Stock Twits site, for example, that messages regarding SPY are 40% bullish, 60% bearish. That ratio hasn't changed much during the concluding 2 weeks of gains. I likewise honour that shares outstanding for the SPY ETF convey in 1 trial once to a greater extent than dipped, forthwith dropping below their levels from 5, 10, together with 20 days ago. Very interestingly, the set out of shares outstanding for SPY has dropped over the course of pedagogy of the rally from mid-February. Share redemption has to a greater extent than oftentimes than non been associated amongst superior returns over a multi-week horizon.
* As mentioned above, volatility has dropped over the course of pedagogy of this marketplace rally. Equally notably, my pure volatility mensurate (volatility per unit of measurement of trading book for the ES futures) has dropped significantly (see below) together with is getting to levels that convey been seen at recent marketplace highs. I am rattling opened upward to the possibility that we're going into a different stage of the marketplace wheel where we'll run across lower volume, less drive per unit of measurement of volume, together with to a greater extent than of a grinding trade. For traders accustomed to the drive that nosotros saw for the starting fourth dimension duet of months of this year, that transition to a depression vol authorities tin hold out challenging, requiring a fresh approach to setting targets, stops, together with asset periods.
Monday, March 21st
* So often, inwards our trading goals, it's gear upward together with forget. We gear upward goals, precisely oftentimes neglect to follow through. This article draws upon recent research to position how tin nosotros transcend away to a greater extent than productive--better at pursuing together with reaching the goals that nosotros define.
* Stocks closed higher overall on Friday, together with we're forthwith seeing over 90% of SPX shares trading inwards a higher house their 20- together with 50-day moving averages. That is odd push clit off the Feb lows. My mensurate of upticks versus downticks amid NYSE stocks (NYSE TICK) showed corporation push clit on Fed twenty-four hr catamenia and, every bit the nautical chart below shows, has been inwards an uptrend on a cumulative basis, eclipsing its previous high. I believe we're pricing inwards a to a greater extent than favorable surroundings for equities, given QE overseas together with a moderating Fed.
* Yet roughly other agency of tracking the push clit together with weakness of shares is to await at each stock on the NYSE together with run across if it has closed inwards a higher house or below its Bollinger Bands. (Raw information from Stock Charts). As the nautical chart below shows, nosotros convey reversed the blueprint of internet weakness from 2015 together with early on 2016 together with convey been persistently inwards a higher house the naught line of piece of job inwards recent days. Bottom line, I'm non seeing the sort of deterioration that would ordinarily precede a major marketplace reversal.
* H5N1 spell dorsum I mentioned the shares outstanding inwards the SPY ETF every bit a useful thought approximate together with noted that it had been flashing bearish sentiment, fifty-fifty afterwards the liftoff from the Feb lows. Sure enough, history repeated together with nosotros continued higher. Now we're seeing an expansion inwards shares outstanding (net bullish sentiment). In the by that has led to subnormal returns for SPY.
* Perhaps the most mutual psychological challenge I listen from traders is how to maintain a positive mindset during periods of drawdown. It's rattling hard to lose coin for a stretch of fourth dimension when you're pouring your pump together with best efforts into markets. But at that spot is no surer agency of missing opportunities than becoming self-focused together with negatively focused. This recent article focuses on how nosotros tin sustain well-being together with a positive mindset fifty-fifty when everything seems to hold out going wrong.
* Stocks bounced from their short-term oversold province of affairs noted yesterday amongst the swing overbought/oversold measure. I am watching breadth closely here, every bit it would non surprise me to run across a to a greater extent than selective stage of the marketplace wheel going forward. The relative functioning of little caps is of item interest.
* I'm seeing increasing utter of straight monetary stimulus to economies. I suspect this volition hold out actively considered if nosotros larn a renewed deterioration of fiscal weather together with concerns re: deflation. The implications for asset prices (weak currencies, rigid commodities) would hold out significant.
* I've been putting considerable function into a gear upward of swing measures that rail overbought/oversold weather together with volatility. These are based on trial time, where each bar represents an amount of book or toll drive inwards the market, non a unit of measurement of chronological time. The OBOS mensurate captures momentum together with value effects on a swing basis: swing returns inwards ES convey been best when we're significantly overbought (+.54%) together with significantly oversold (+.49%). Returns convey been subnormal betwixt these extremes (-.05%). Although I bespeak to maintain the specifics of the mensurate proprietary together with express to the managers I function with, I'll happily update periodically on this blog. Swing returns from electrical flow levels of OBOS together with vol convey non been significantly positive or negative.
* Here is a swing volatility mensurate that looks at the volatility of the trial bars. Note how we're close levels that convey lately corresponded to marketplace peaks. This is yet roughly other argue I'm watching breadth closely.
Thursday, March 24th
* Thanks to Aaron Fifield for interviewing me for the Chat With Traders podcast. We demeanour on a set out of topics relevant to factors that brand for trading success. He's assembled an first-class lineup of interviews worth checking out.
* We've seen a recent pullback inwards stocks together with oil; yesterday's closed saw an expanded set out of stocks making novel lows amidst relative weakness amid little caps. I volition hold out tracking breadth closely here, every bit nosotros mightiness hold out seeing a to a greater extent than selective stage of the recent marketplace strength. Below is a nautical chart of stocks across all exchanges making fresh 3-month highs vs. lows:
* I've been exploring a swing overbought/oversold mensurate based on trial bars. As you lot tin see, we've lately entered oversold territory. As long every bit these swing lows are occurring at successive toll highs, I'm willing to give the produce goodness of the doubtfulness to the bulls. The nautical chart tracks the mensurate through the recent motion higher.
Wednesday, March 23rd
* We saw an early on selloff due to the Brussels news, precisely this was bought relatively early on inwards the NY session. It's a skillful trial of how, inwards a momentum environment, participants desire to larn long fifty-fifty on relatively little dips. That beingness said, my breadth volatility measures (volatility of daily breadth numbers) has been coming downwardly together with that has led to subnormal returns over the near-term horizon.
* Interestingly, we're hovering close our highs, precisely yesterday saw alone nigh 40% of SPX stocks trading inwards a higher house their 3-day moving averages. During these momentum periods, corrections tend to hold out rotational together with we're seeing roughly of that. Housing, financials, consumer staples, utilities--all convey been off their highs recently. Technology has been stronger.
* My wheel mensurate continues inwards elevated territory, in 1 trial to a greater extent than dissimilar much of what nosotros saw inwards 2015, where push clit led to weakness. That continued elevation on a shorter-term wheel mensurate suggests that a longer-term wheel is at play together with that this has been to a greater extent than than a bounce inwards a demeanour market.
Tuesday, March 22nd
* We're seeing roughly consolidation overnight next a little upward twenty-four hr catamenia yesterday. While SPX closed higher, nosotros returned to underperformance of little caps together with the set out of stocks across all exchanges making novel monthly highs dropped from 1660 to 886. New monthly lows likewise dropped, however, every bit we're soundless non seeing distinctive weakness inwards whatsoever sector. Volume together with volatility dropped; VIX is forthwith below 14. More on volatility below.
* Below is a short-term mensurate of the set out of SPX stocks making fresh 5, 20, together with 100-day highs versus lows. Notice how nosotros convey stayed elevated for a set out of consecutive days together with how this is different from what nosotros saw through much of 2015. Whereas "overbought" readings were opportunities to sell concluding year, then far inwards this rising we're seeing momentum together with push clit leading to farther strength--one of the signature characteristics of a fresh marketplace cycle.
* Despite the market's push clit together with momentum, the rally has non had a lot of fans. I honour on the Stock Twits site, for example, that messages regarding SPY are 40% bullish, 60% bearish. That ratio hasn't changed much during the concluding 2 weeks of gains. I likewise honour that shares outstanding for the SPY ETF convey in 1 trial once to a greater extent than dipped, forthwith dropping below their levels from 5, 10, together with 20 days ago. Very interestingly, the set out of shares outstanding for SPY has dropped over the course of pedagogy of the rally from mid-February. Share redemption has to a greater extent than oftentimes than non been associated amongst superior returns over a multi-week horizon.
* As mentioned above, volatility has dropped over the course of pedagogy of this marketplace rally. Equally notably, my pure volatility mensurate (volatility per unit of measurement of trading book for the ES futures) has dropped significantly (see below) together with is getting to levels that convey been seen at recent marketplace highs. I am rattling opened upward to the possibility that we're going into a different stage of the marketplace wheel where we'll run across lower volume, less drive per unit of measurement of volume, together with to a greater extent than of a grinding trade. For traders accustomed to the drive that nosotros saw for the starting fourth dimension duet of months of this year, that transition to a depression vol authorities tin hold out challenging, requiring a fresh approach to setting targets, stops, together with asset periods.
Monday, March 21st
* So often, inwards our trading goals, it's gear upward together with forget. We gear upward goals, precisely oftentimes neglect to follow through. This article draws upon recent research to position how tin nosotros transcend away to a greater extent than productive--better at pursuing together with reaching the goals that nosotros define.
* Stocks closed higher overall on Friday, together with we're forthwith seeing over 90% of SPX shares trading inwards a higher house their 20- together with 50-day moving averages. That is odd push clit off the Feb lows. My mensurate of upticks versus downticks amid NYSE stocks (NYSE TICK) showed corporation push clit on Fed twenty-four hr catamenia and, every bit the nautical chart below shows, has been inwards an uptrend on a cumulative basis, eclipsing its previous high. I believe we're pricing inwards a to a greater extent than favorable surroundings for equities, given QE overseas together with a moderating Fed.
* Yet roughly other agency of tracking the push clit together with weakness of shares is to await at each stock on the NYSE together with run across if it has closed inwards a higher house or below its Bollinger Bands. (Raw information from Stock Charts). As the nautical chart below shows, nosotros convey reversed the blueprint of internet weakness from 2015 together with early on 2016 together with convey been persistently inwards a higher house the naught line of piece of job inwards recent days. Bottom line, I'm non seeing the sort of deterioration that would ordinarily precede a major marketplace reversal.
* H5N1 spell dorsum I mentioned the shares outstanding inwards the SPY ETF every bit a useful thought approximate together with noted that it had been flashing bearish sentiment, fifty-fifty afterwards the liftoff from the Feb lows. Sure enough, history repeated together with nosotros continued higher. Now we're seeing an expansion inwards shares outstanding (net bullish sentiment). In the by that has led to subnormal returns for SPY.
