Friday, Oct 30th
* Stocks continued their upside, hitting novel highs for this leg fifty-fifty every bit nosotros continued to reckon closed to continued lagging from modest cap shares too from interest-rate too commodity-sensitive issues. Still, with abide by to the SPX, corrections are occurring inwards relatively apartment fashion, creating launching pads for fresh moves higher. As long every bit pullbacks are occurring at successively higher levels too nosotros hold to brand fresh cost highs, buying weakness continues to last the favored strategy.
* I lately compared cumulative upticks/downticks for the Dow stocks versus the NYSE Composite. The Dow ticks receive got been powering to novel highs, whereas the cumulative NYSE ticks receive got remained flat. It's yet closed to other indication that the bull motion is most robust with large cap issues, with smaller cap issues lagging.
Thursday, Oct 29th
* Stocks began the solar daytime quite strong, with an NYSE TICK distribution skewed to the positive side. When nosotros larn multiple readings > +800, it's to a greater extent than oft than non an indication of institutional buying, especially when accompanied yesteryear inwards a higher house normal volume. That clit returned next the reflex selloff later a Fed proclamation perceived every bit hawkish, with enterprise breadth too an expansion of clit to the modest caps. Once in ane lawsuit again it's a province of affairs inwards which short-term pullbacks that accept the bulk of SPX shares below their short-term moving averages terminate upwards providing expert long side entries. Those pullbacks are too occurring at successively higher cost lows which, every bit noted yesterday, gives the produce goodness of the uncertainty to the bulls.
* I'm keeping an oculus on the strong USD, every bit a theatre Fed too an ECB too BOJ soundless inwards QE agency should contribute to farther USD strength. That puts pressure level on EM countries tied to USD, essentially tightening their weather condition fifty-fifty every bit their economies are slowing. That could pose farther challenges for mainland People's Republic of China inwards particular. Note overnight bearish cost activity inwards Asia today.
* Tuesday saw 460 stocks affect fresh monthly lows; yesterday nosotros had the strong cost activity too 306 lows. If the rally really is broadening, nosotros should non supply to these levels of novel lows; that's something I'll last watching closely.
Wednesday, Oct 28th
* I'll last tweeting from the QuantFest conference tomorrow; I similar what InvestiQuant is doing with identifying edges at the intraday, overnight, too swing levels too human face frontward to having something to study this weekend.
* Tuesday saw closed to farther correction on farther dull trading, with continued breadth divergences with larger too smaller cap stocks. Looking at the information from Index Indicators, nosotros tin reckon that most 67% of Dow stocks closed inwards a higher house their five-day moving averages but exclusively most 23% of modest caps too 34% of midcaps. Yesterday was the commencement recent solar daytime where to a greater extent than shares really touched monthly lows than highs. While I produce intend nosotros could reckon farther cost clit from hither (I orbit produce goodness of the uncertainty to the bulls when short-term oversold weather condition are occurring at successively higher cost lows), that clit is probable to last selective, accompanied yesteryear divergences.
* My working hypothesis is that we've entered a "Nifty Fifty" form of surroundings where, amidst slowing global growth, investors assay condom large caps that offering prospects of growth too yield too avoid everything else. Hence the clit inwards the Amazons too Googles too avoidance of retail, energy, too smaller cap shares. I'm watching breadth closely to reckon if that hypothesis is supported over time. In general, my leaning is to last long the large caps on short-term corrections too lighten upwards on short-term strength.
Tuesday, Oct 27th
* Thanks to Michael Covel for a stimulating podcast interview. I'll post the link in ane lawsuit it's up. His archive of 390 podcasts is an impressive trunk of work; really worth checking out.
* Mon was an unusually narrow trading day, with book inwards SPY slowing to its lowest story inwards weeks. Given anticipation of a Fed proclamation on Wednesday, nosotros could reckon farther standing aside inwards today's trade. So far the marketplace has been ascent on superior volatility too book too correcting on lesser volatility too volume, creating relatively apartment corrections. That, of course, is what helps sustain uptrends. We receive got a expert amount of economical information out this week, on transcend of the Fed too Bank of Nihon meetings. I don't await the dull merchandise to hold throughout the week.
* I rest unimpressed with the activity of modest caps (IJR) too midcaps (MDY), every bit reflected inwards the recent failure of the Russell 2000 Index (IWM) to brand fresh highs. Note too the recent weakness inwards stone oil too inwards release energy shares (XLE), every bit good every bit the weakness inwards retail shares (XRT). I snuff it concerned most the upside when the ascent tide is non lifting all boats.
* Here's an interesting statistic: During 2015, when fewer than 30% of SPX stocks receive got traded inwards a higher house their five-day moving averages, the side yesteryear side 5 days inwards SPX receive got averaged a gain of +.76%. All other occasions receive got averaged a five-day loss of -.21%. (Raw information from the fantabulous Index Indicators site). Waiting for short-term clit earlier entering on the long side has been a losing strategy, too waiting for short-term weakness to come inwards on the brusque side has too lost money. That's a expert argue why the merchandise based on fearfulness of missing moves has been then deadly.
Monday, Oct 26th
* If I were edifice long-term positions inwards companies every bit investments, I'd select companies that gain a high story of solar daytime of the month with employees. This is why. If your trading is your business, you lot are both director too employee. Does your administration really engage you? Vitally of import topic.
* Great listing of takeaways from the recent Stocktoberfest conference from Howard Lindzon.
* Stocks continued their clit on Friday, every bit nosotros striking novel highs for the recent upleg too fresh three-month highs expanded to 483, the highest since June. This suggests that momentum continues strong too that increases the probability that nosotros volition ultimately reckon novel highs inwards stocks every bit business office of the electrical current cycle. We receive got pulled dorsum from Fri highs inwards overnight trading too closed to short-term corrective activity tin last expected later the recent strong performance. So far, however, dips receive got been bought aggressively. The terminal 2 occasions inwards which to a greater extent than than one-half of stocks dropped exactly below their three-day moving averages receive got resulted inwards strong buying.
* Ultimately 2 factors seem to last leading stocks higher: enterprise earnings (most lately from large cap tech names) too really accommodative monetary policy globally. That, combined with the perception that the Fed is unlikely to heighten rates, has resumed the QE trade. Of course, every bit fiscal weather condition improve, the Fed becomes to a greater extent than probable to heighten rates inwards December, then nosotros could reckon interesting year-end dynamics.
* During this most recent motion higher, the mensurate of upticks/downticks that I rails for all U.S. stocks (red describe on nautical chart below), non exactly NYSE issues, has remained relatively flat. This is because we've seen recent relative weakness with modest cap issues. I volition last watching that closely early on this week, every bit an expansion of modest cap clit would broaden out the rally too back upwards the thought of a continued upside, whereas a broadening of weakness (larger caps next modest caps lower) would betoken to a greater extent than pregnant potential for correction.
* Stocks continued their upside, hitting novel highs for this leg fifty-fifty every bit nosotros continued to reckon closed to continued lagging from modest cap shares too from interest-rate too commodity-sensitive issues. Still, with abide by to the SPX, corrections are occurring inwards relatively apartment fashion, creating launching pads for fresh moves higher. As long every bit pullbacks are occurring at successively higher levels too nosotros hold to brand fresh cost highs, buying weakness continues to last the favored strategy.
* I lately compared cumulative upticks/downticks for the Dow stocks versus the NYSE Composite. The Dow ticks receive got been powering to novel highs, whereas the cumulative NYSE ticks receive got remained flat. It's yet closed to other indication that the bull motion is most robust with large cap issues, with smaller cap issues lagging.
Thursday, Oct 29th
* Stocks began the solar daytime quite strong, with an NYSE TICK distribution skewed to the positive side. When nosotros larn multiple readings > +800, it's to a greater extent than oft than non an indication of institutional buying, especially when accompanied yesteryear inwards a higher house normal volume. That clit returned next the reflex selloff later a Fed proclamation perceived every bit hawkish, with enterprise breadth too an expansion of clit to the modest caps. Once in ane lawsuit again it's a province of affairs inwards which short-term pullbacks that accept the bulk of SPX shares below their short-term moving averages terminate upwards providing expert long side entries. Those pullbacks are too occurring at successively higher cost lows which, every bit noted yesterday, gives the produce goodness of the uncertainty to the bulls.
* I'm keeping an oculus on the strong USD, every bit a theatre Fed too an ECB too BOJ soundless inwards QE agency should contribute to farther USD strength. That puts pressure level on EM countries tied to USD, essentially tightening their weather condition fifty-fifty every bit their economies are slowing. That could pose farther challenges for mainland People's Republic of China inwards particular. Note overnight bearish cost activity inwards Asia today.
* Tuesday saw 460 stocks affect fresh monthly lows; yesterday nosotros had the strong cost activity too 306 lows. If the rally really is broadening, nosotros should non supply to these levels of novel lows; that's something I'll last watching closely.
Wednesday, Oct 28th
* I'll last tweeting from the QuantFest conference tomorrow; I similar what InvestiQuant is doing with identifying edges at the intraday, overnight, too swing levels too human face frontward to having something to study this weekend.
* Tuesday saw closed to farther correction on farther dull trading, with continued breadth divergences with larger too smaller cap stocks. Looking at the information from Index Indicators, nosotros tin reckon that most 67% of Dow stocks closed inwards a higher house their five-day moving averages but exclusively most 23% of modest caps too 34% of midcaps. Yesterday was the commencement recent solar daytime where to a greater extent than shares really touched monthly lows than highs. While I produce intend nosotros could reckon farther cost clit from hither (I orbit produce goodness of the uncertainty to the bulls when short-term oversold weather condition are occurring at successively higher cost lows), that clit is probable to last selective, accompanied yesteryear divergences.
* My working hypothesis is that we've entered a "Nifty Fifty" form of surroundings where, amidst slowing global growth, investors assay condom large caps that offering prospects of growth too yield too avoid everything else. Hence the clit inwards the Amazons too Googles too avoidance of retail, energy, too smaller cap shares. I'm watching breadth closely to reckon if that hypothesis is supported over time. In general, my leaning is to last long the large caps on short-term corrections too lighten upwards on short-term strength.
Tuesday, Oct 27th
* Thanks to Michael Covel for a stimulating podcast interview. I'll post the link in ane lawsuit it's up. His archive of 390 podcasts is an impressive trunk of work; really worth checking out.
* Mon was an unusually narrow trading day, with book inwards SPY slowing to its lowest story inwards weeks. Given anticipation of a Fed proclamation on Wednesday, nosotros could reckon farther standing aside inwards today's trade. So far the marketplace has been ascent on superior volatility too book too correcting on lesser volatility too volume, creating relatively apartment corrections. That, of course, is what helps sustain uptrends. We receive got a expert amount of economical information out this week, on transcend of the Fed too Bank of Nihon meetings. I don't await the dull merchandise to hold throughout the week.
* I rest unimpressed with the activity of modest caps (IJR) too midcaps (MDY), every bit reflected inwards the recent failure of the Russell 2000 Index (IWM) to brand fresh highs. Note too the recent weakness inwards stone oil too inwards release energy shares (XLE), every bit good every bit the weakness inwards retail shares (XRT). I snuff it concerned most the upside when the ascent tide is non lifting all boats.
* Here's an interesting statistic: During 2015, when fewer than 30% of SPX stocks receive got traded inwards a higher house their five-day moving averages, the side yesteryear side 5 days inwards SPX receive got averaged a gain of +.76%. All other occasions receive got averaged a five-day loss of -.21%. (Raw information from the fantabulous Index Indicators site). Waiting for short-term clit earlier entering on the long side has been a losing strategy, too waiting for short-term weakness to come inwards on the brusque side has too lost money. That's a expert argue why the merchandise based on fearfulness of missing moves has been then deadly.
Monday, Oct 26th
* If I were edifice long-term positions inwards companies every bit investments, I'd select companies that gain a high story of solar daytime of the month with employees. This is why. If your trading is your business, you lot are both director too employee. Does your administration really engage you? Vitally of import topic.
* Great listing of takeaways from the recent Stocktoberfest conference from Howard Lindzon.
* Stocks continued their clit on Friday, every bit nosotros striking novel highs for the recent upleg too fresh three-month highs expanded to 483, the highest since June. This suggests that momentum continues strong too that increases the probability that nosotros volition ultimately reckon novel highs inwards stocks every bit business office of the electrical current cycle. We receive got pulled dorsum from Fri highs inwards overnight trading too closed to short-term corrective activity tin last expected later the recent strong performance. So far, however, dips receive got been bought aggressively. The terminal 2 occasions inwards which to a greater extent than than one-half of stocks dropped exactly below their three-day moving averages receive got resulted inwards strong buying.
* Ultimately 2 factors seem to last leading stocks higher: enterprise earnings (most lately from large cap tech names) too really accommodative monetary policy globally. That, combined with the perception that the Fed is unlikely to heighten rates, has resumed the QE trade. Of course, every bit fiscal weather condition improve, the Fed becomes to a greater extent than probable to heighten rates inwards December, then nosotros could reckon interesting year-end dynamics.
* During this most recent motion higher, the mensurate of upticks/downticks that I rails for all U.S. stocks (red describe on nautical chart below), non exactly NYSE issues, has remained relatively flat. This is because we've seen recent relative weakness with modest cap issues. I volition last watching that closely early on this week, every bit an expansion of modest cap clit would broaden out the rally too back upwards the thought of a continued upside, whereas a broadening of weakness (larger caps next modest caps lower) would betoken to a greater extent than pregnant potential for correction.
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