Friday, Jan 29th
* Easy to driblet dead burned out sitting inwards forepart of screens all twenty-four hours in addition to trying to rest disciplined. Here is an of import antidote to burnout.
* I've been offline for a pair of days, swamped amongst coaching run amongst traders. Whenever that happens, it's a sure sign that markets are tricky in addition to people are having problem making money. We had a existent run a risk off start out to the year, amongst oil, stocks, in addition to emerging markets lower in addition to firmness inwards the U.S.A. of America dollar. Late in conclusion calendar week nosotros saw a abrupt rebound in addition to these posts talked almost having set inwards a momentum depression for this marketplace position cycle. Evidence was also suggesting that this cycle was non similar ones nosotros had seen inwards 2014 in addition to 2015, amongst far to a greater extent than persistence of weakness inwards stocks. This calendar week nosotros get got mostly continued the bounce, but inwards a highly choppy fashion, making it hard to brand coin from either the bull or deport side. Hence the recent frustration of traders.
* Influenza A virus subtype H5N1 momentum depression implies the possibility that farther cost lows could remain ahead, albeit amongst breadth divergences. That is what nosotros saw inwards the merchandise next May, 2010; August, 2011; in addition to sure enough January, 2008. Thus far, this has been a depression Sharpe ratio bounce; non the variety of resumption of uptrend that nosotros saw following, say, the October, 2014 low. That uneven bounce increases the likelihood inwards my estimation of those retests of lows.
* Which brings us to today's trade. With the motility to negative rates inwards Japan, nosotros saw a abrupt rally inwards stocks, followed past times a abrupt dip, followed past times to a greater extent than rangy behaviour inwards the ES futures. Oil has rallied significantly from its lows; VIX has remained higher upwards 20. I'm concerned that we're having problem making fresh highs inwards ES inwards pre-market merchandise fifty-fifty amongst the Nihon easing in addition to crude strength. That has me looking to sell forcefulness every bit long every bit nosotros tin remain below the shipping BOJ highs.
* Note that at that topographic point is a difference betwixt a retest of lows in addition to the start out of a fresh deport marketplace position leg. When nosotros had extended bottoming processes inwards May, 2010; August, 2011; in addition to fifty-fifty that January, 2008 period, at that topographic point was a two-way merchandise in addition to rallies interspersing the declines. My leaning volition live on to get got profits opportunistically on brusk trades in addition to non necessarily assume a resumption of a high Sharpe downtrend.
Tuesday, Jan 26th
* After failing several times to rest higher upwards the 1900 level, nosotros saw a selloff inwards the ES contract that featured numerous real negative NYSE TICK readings. The inability of buyers to driblet dead the upticks much higher upwards +500 for whatever sustained menstruum was a clear indication that nosotros had set inwards a plow over in addition to that sellers were inwards control. Prices continued to weaken during Asian hours in addition to right away get got rebounded inwards premarket, amongst a bounce inwards oil. All of this is consistent amongst a marketplace position that has made a momentum depression in addition to is early on inwards a bottoming process. Note that such a procedure took months inwards early on 2008, mid-year 2010, in addition to autumn 2011, amongst multiple rallies in addition to pullbacks. This two-way activity tin live on frustrating for bulls in addition to bears alike in addition to highlights the importance of non assuming that moves volition extend.
* Note the meaning weakness inwards KRE, the ETF for regional banks. Some of those banks get got exposure to energy-related loans, which could live on inwards risk if crude prices proceed weak. That's a dynamic I am watching closely. I'm also watching the big banks (XLF) to meet how global economical weakness, peculiarly amid emerging marketplace position countries, mightiness deport upon loans in addition to marketplace position exposures.
* Note that nosotros proceed to live on significantly oversold on most breadth measures. I aspect farther working off of this oversold grade inwards the adjacent pair of weeks. My cycle stair out has turned up, but is non at levels that get got corresponded to intermediate-term highs. As noted before, we've made a lower depression inwards that cycle measure, which opens my thinking that what we're seeing is to a greater extent than than the kinds of corrections that nosotros experienced inwards 2014 in addition to 2015.
Monday, Jan 25th
* Fri saw a continuation of the rebound from momentum lows, amongst breadth finally touching short-term overbought levels. Over 80% of SPX shares unopen higher upwards their three in addition to 5-day moving averages; that's the start out fourth dimension we've seen that since Dec 24th. (Data from Index Indicators). The rally took the keen bulk of stocks off their lows. Across all exchanges, nosotros had 139 monthly highs against 208 lows. Compare that amongst 44 monthly highs in addition to 3250 lows simply 2 days previous. (Data from Barchart).
* One sign of continued forcefulness on Fri was that meaning negative readings inwards the uptick/downtick stair out (NYSE TICK) could non halt us from making higher cost lows in addition to higher cost highs. I volition live on watching for that dynamic inwards early on trading today. Influenza A virus subtype H5N1 driblet below the Fri afternoon in addition to overnight lows would probable interruption that designing in addition to betoken fresh selling interest.
* I volition also live on watching this calendar week to meet if the bearish marketplace position themes (weak oil; weak emerging marketplace position shares; potent dollar versus EM in addition to commodity currencies) reassert themselves. I'm also watching to meet if nosotros tin impress fresh cost highs for this rebound amongst continued potent breadth.
* Influenza A virus subtype H5N1 overnice sentiment of the market's cyclical behaviour is provided past times the reveal of NYSE shares giving purchase vs. sell signals for the Parabolic-SAR measure. That cumulative full has tracked marketplace position cycles good over the past times 2 years. (Data from Stock Charts). As y'all tin meet from the nautical chart below, we've bounced, but are non all the same close levels that get got corresponded to intermediate-term cycle tops.
* Easy to driblet dead burned out sitting inwards forepart of screens all twenty-four hours in addition to trying to rest disciplined. Here is an of import antidote to burnout.
* I've been offline for a pair of days, swamped amongst coaching run amongst traders. Whenever that happens, it's a sure sign that markets are tricky in addition to people are having problem making money. We had a existent run a risk off start out to the year, amongst oil, stocks, in addition to emerging markets lower in addition to firmness inwards the U.S.A. of America dollar. Late in conclusion calendar week nosotros saw a abrupt rebound in addition to these posts talked almost having set inwards a momentum depression for this marketplace position cycle. Evidence was also suggesting that this cycle was non similar ones nosotros had seen inwards 2014 in addition to 2015, amongst far to a greater extent than persistence of weakness inwards stocks. This calendar week nosotros get got mostly continued the bounce, but inwards a highly choppy fashion, making it hard to brand coin from either the bull or deport side. Hence the recent frustration of traders.
* Influenza A virus subtype H5N1 momentum depression implies the possibility that farther cost lows could remain ahead, albeit amongst breadth divergences. That is what nosotros saw inwards the merchandise next May, 2010; August, 2011; in addition to sure enough January, 2008. Thus far, this has been a depression Sharpe ratio bounce; non the variety of resumption of uptrend that nosotros saw following, say, the October, 2014 low. That uneven bounce increases the likelihood inwards my estimation of those retests of lows.
* Which brings us to today's trade. With the motility to negative rates inwards Japan, nosotros saw a abrupt rally inwards stocks, followed past times a abrupt dip, followed past times to a greater extent than rangy behaviour inwards the ES futures. Oil has rallied significantly from its lows; VIX has remained higher upwards 20. I'm concerned that we're having problem making fresh highs inwards ES inwards pre-market merchandise fifty-fifty amongst the Nihon easing in addition to crude strength. That has me looking to sell forcefulness every bit long every bit nosotros tin remain below the shipping BOJ highs.
* Note that at that topographic point is a difference betwixt a retest of lows in addition to the start out of a fresh deport marketplace position leg. When nosotros had extended bottoming processes inwards May, 2010; August, 2011; in addition to fifty-fifty that January, 2008 period, at that topographic point was a two-way merchandise in addition to rallies interspersing the declines. My leaning volition live on to get got profits opportunistically on brusk trades in addition to non necessarily assume a resumption of a high Sharpe downtrend.
Tuesday, Jan 26th
* After failing several times to rest higher upwards the 1900 level, nosotros saw a selloff inwards the ES contract that featured numerous real negative NYSE TICK readings. The inability of buyers to driblet dead the upticks much higher upwards +500 for whatever sustained menstruum was a clear indication that nosotros had set inwards a plow over in addition to that sellers were inwards control. Prices continued to weaken during Asian hours in addition to right away get got rebounded inwards premarket, amongst a bounce inwards oil. All of this is consistent amongst a marketplace position that has made a momentum depression in addition to is early on inwards a bottoming process. Note that such a procedure took months inwards early on 2008, mid-year 2010, in addition to autumn 2011, amongst multiple rallies in addition to pullbacks. This two-way activity tin live on frustrating for bulls in addition to bears alike in addition to highlights the importance of non assuming that moves volition extend.
* Note the meaning weakness inwards KRE, the ETF for regional banks. Some of those banks get got exposure to energy-related loans, which could live on inwards risk if crude prices proceed weak. That's a dynamic I am watching closely. I'm also watching the big banks (XLF) to meet how global economical weakness, peculiarly amid emerging marketplace position countries, mightiness deport upon loans in addition to marketplace position exposures.
* Note that nosotros proceed to live on significantly oversold on most breadth measures. I aspect farther working off of this oversold grade inwards the adjacent pair of weeks. My cycle stair out has turned up, but is non at levels that get got corresponded to intermediate-term highs. As noted before, we've made a lower depression inwards that cycle measure, which opens my thinking that what we're seeing is to a greater extent than than the kinds of corrections that nosotros experienced inwards 2014 in addition to 2015.
Monday, Jan 25th
* Fri saw a continuation of the rebound from momentum lows, amongst breadth finally touching short-term overbought levels. Over 80% of SPX shares unopen higher upwards their three in addition to 5-day moving averages; that's the start out fourth dimension we've seen that since Dec 24th. (Data from Index Indicators). The rally took the keen bulk of stocks off their lows. Across all exchanges, nosotros had 139 monthly highs against 208 lows. Compare that amongst 44 monthly highs in addition to 3250 lows simply 2 days previous. (Data from Barchart).
* One sign of continued forcefulness on Fri was that meaning negative readings inwards the uptick/downtick stair out (NYSE TICK) could non halt us from making higher cost lows in addition to higher cost highs. I volition live on watching for that dynamic inwards early on trading today. Influenza A virus subtype H5N1 driblet below the Fri afternoon in addition to overnight lows would probable interruption that designing in addition to betoken fresh selling interest.
* I volition also live on watching this calendar week to meet if the bearish marketplace position themes (weak oil; weak emerging marketplace position shares; potent dollar versus EM in addition to commodity currencies) reassert themselves. I'm also watching to meet if nosotros tin impress fresh cost highs for this rebound amongst continued potent breadth.
* Influenza A virus subtype H5N1 overnice sentiment of the market's cyclical behaviour is provided past times the reveal of NYSE shares giving purchase vs. sell signals for the Parabolic-SAR measure. That cumulative full has tracked marketplace position cycles good over the past times 2 years. (Data from Stock Charts). As y'all tin meet from the nautical chart below, we've bounced, but are non all the same close levels that get got corresponded to intermediate-term cycle tops.
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