Friday, Oct 23rd
* The combination of prospects of farther QE from the ECB as well as positive turn a profit tidings breathed fresh life into the market, equally nosotros rose on substantially increased volume. The increased book told us that fresh participants were coming into the market; the positive skew of the NYSE TICK told us that the participation was dominantly to the purchase side. Picking upwardly those cues early on inwards the trading hateful solar daytime is an essential job of short-term trading. Thursday's activeness was farther confirmation of the base of operations representative outlined yesterday, though I'm for certain opened upwardly to the possibility that, amongst the renewed buying, a momentum peak lies ahead of us.
* Below is an interesting nautical chart that tracks "relative volume": how book at each infinitesimal of the hateful solar daytime compares amongst the average book for that infinitesimal inwards SPY. Influenza A virus subtype H5N1 value of 1.0 way that book is average for that fourth dimension of day. Influenza A virus subtype H5N1 value of 2.0 is a total criterion difference inwards a higher house average; 3.0 is 2 criterion deviations inwards a higher house average; etc. Note inwards the nautical chart how book yesterday was good inwards a higher house average, especially when the marketplace seat was rising. Great tell.
* Interestingly, novel highs *and* novel lows expanded inwards yesterday's trade, as well as modest caps cash inwards one's chips along to lag large caps. I'm watching that human relationship closely, equally good equally the novel highs/lows.
Thursday, Oct 22nd
* Weakness inwards modest caps noted before contributed to a sell off inwards stocks through much of the hateful solar daytime Wednesday. My mensurate of buying vs. selling pressure, interestingly, did non present a bully surplus of selling. This continues to facial expression to me similar a correction of the recent strength, non acquit marketplace seat behavior. With fewer than one-half of stocks forthwith trading inwards a higher house their 3 as well as five-day moving averages, the risk/reward looks a flake ameliorate as well as I am opened upwardly to buying weakness that holds inwards a higher house the overnight lows. I practise note, however, that the number of stocks making fresh monthly lows has expanded beyond the degree seen final week. Continued expansion of that number would brand me to a greater extent than concerned regarding the market's downside.
* In short, my base of operations representative is that the August/September lows were meaning ones; that nosotros began a novel marketplace seat wheel off those September lows; as well as that the wheel has hitting a potential momentum peak simply has farther to run on the upside. Waning breadth, especially amid modest cap stocks, as well as waning relative push clit amid EM shares concerns me nearly this base of operations case, however, as well as thus I'm cautious as well as updating views hateful solar daytime past times day.
* Influenza A virus subtype H5N1 say for marketplace seat weakness prior to the August driblet was that nosotros were persistently seeing to a greater extent than shares trading below their lower Bollinger Bands than inwards a higher house their higher bands. At present, we've been seeing the opposite: to a greater extent than stocks trading inwards a higher house their upper bands (see nautical chart below). I'm watching that residuum closely equally yet a unlike sort of breadth mensurate that captures the relative breadth of push clit vs. weakness.
Wednesday, Oct 21st
* Stocks showed continued resilience on Tuesday, amongst pullbacks limited, ultimately leading to higher daily lows as well as higher highs. We likewise expanded the number of stocks making fresh monthly highs, ascent to 812 from 698. Interestingly, VIX rose, simply realized volatility as well as book continued low. We're seeing push clit inwards overnight trade, afterwards belatedly hateful solar daytime weakness yesterday--that continues the grind higher.
* We've seen a driblet inwards 1 of my measures of breadth volatility, which tracks the variation inwards the number of stocks making novel highs as well as lows. Going dorsum to 2010, when breadth volatility has been high, the adjacent v days inwards SPX induce got averaged a gain of +.52%. When breadth volatility has been low, equally at present, the adjacent v days inwards SPX induce got averaged a gain of exclusively +.03%. I cash inwards one's chips along to stance the risk/reward inwards the marketplace seat equally non especially appealing for multi-day positions as well as instead lean toward shorter-term tactical trading of intraday swings.
* I am continuing to sentinel modest cap as well as mid cap issues to encounter if nosotros tin expand breadth or whether relative weakness inwards those groups tin expand to other segments of the market. The Cumulative NYSE TICK has been ascent inwards recent sessions; buying push clit has been moderate, simply selling push clit has been low. I don't await a major marketplace seat turn down until nosotros encounter a reemergence of sellers, as well as that's non occurring as well as thus far.
Tuesday, Oct 20th
* The topping conduct referenced yesterday was evident inwards Monday's trade, equally nosotros terra firma higher inwards SPX. I cash inwards one's chips along to banker's complaint relative weakness amid modest caps, which is contributing to breadth divergences. We saw 698 novel monthly highs on Mon against 166 lows. That is against over K novel highs on the seventh through the 9th. That beingness said, breadth divergences inwards ascent markets unremarkably don't dot major reversals until nosotros encounter expanding numbers of shares making fresh lows as well as overtaking novel highs. During topping processes, it's to a greater extent than of a rotation merchandise than a trending one, amongst volatility, volume, as well as momentum coming down. That makes it an opportunistic trading environment, equally the lower volatility way that moves extend far less than they had when VIX exceeded 20.
* One of the large mistakes traders brand inwards depression volume/low volatility environments is looking for the adjacent large move, rather than planning for the lack of movement. To attain that planning, traders either require to merchandise brusk term swings opportunistically (intraday swings) or extend their asset periods to essay larger moves that ride out the shorter swings. I discovery that pullbacks as well as bounces inwards NYSE TICK intraday assist to seat those shorter-term swings.
* Should nosotros encounter modest caps as well as midcaps grab upwardly to the large caps inwards performance as well as displace to fresh highs, that would live on a worthwhile clue that the upside has farther to go. I'd desire to encounter other marketplace seat sectors underperform before taking a longer-term bearish stance.
Monday, Oct 19th
* I'll live on tweeting from Stocktoberfest the adjacent duet of days. My latest Forbes article highlights a topic I'll live on addressing inwards my Stocktoberfest presentation: how nosotros tin brand the transition from beingness goodness traders to becoming bully ones. That way that repeated sense is non enough; nosotros really induce got to undertake directed training. The Forbes piece describes how nosotros tin job psychology to sustain preparation efforts.
* Here's a unproblematic way y'all tin know if you're genuinely engaged inwards a procedure of expertise development: Are in that location *specific* things you're working on inwards today's trading; are y'all keeping score to encounter if y'all are genuinely making progress; as well as are y'all making ongoing corrective efforts amongst continued scorekeeping if you're non making progress? If you're non intensively engaged inwards the above, y'all are non on a course of teaching of peak performance development.
* Friday's trading continued the bounce from the short-term oversold province of affairs noted final week. We 1 time once again are at a juncture where I'm non enamored of the risk/reward province of affairs here. Intermediate-term measures are stretched to the upside; put/call ratios induce got come upwardly down; as well as nosotros cash inwards one's chips along to encounter fewer stocks brand fresh novel highs despite novel highs for this displace inwards the wide indices. My pure volatility mensurate is at levels associated amongst subnormal forrad returns over a several hateful solar daytime basis. All this is consistent amongst my overall perspective that we've seen a momentum peak for this marketplace seat wheel as well as are forthwith involved inwards a topping process. That procedure tin extend for a spell before nosotros encounter an ultimate cost peak as well as eventual acquit phase.
* An uptrend is sustained when nosotros are able to register higher cost highs as well as higher cost lows across multiple short-term cycles. So far, that is what we've been doing. Until that blueprint changes, I'm reluctant to induce got brusk positions for anything to a greater extent than than short-term trades.
.
* The combination of prospects of farther QE from the ECB as well as positive turn a profit tidings breathed fresh life into the market, equally nosotros rose on substantially increased volume. The increased book told us that fresh participants were coming into the market; the positive skew of the NYSE TICK told us that the participation was dominantly to the purchase side. Picking upwardly those cues early on inwards the trading hateful solar daytime is an essential job of short-term trading. Thursday's activeness was farther confirmation of the base of operations representative outlined yesterday, though I'm for certain opened upwardly to the possibility that, amongst the renewed buying, a momentum peak lies ahead of us.
* Below is an interesting nautical chart that tracks "relative volume": how book at each infinitesimal of the hateful solar daytime compares amongst the average book for that infinitesimal inwards SPY. Influenza A virus subtype H5N1 value of 1.0 way that book is average for that fourth dimension of day. Influenza A virus subtype H5N1 value of 2.0 is a total criterion difference inwards a higher house average; 3.0 is 2 criterion deviations inwards a higher house average; etc. Note inwards the nautical chart how book yesterday was good inwards a higher house average, especially when the marketplace seat was rising. Great tell.
* Interestingly, novel highs *and* novel lows expanded inwards yesterday's trade, as well as modest caps cash inwards one's chips along to lag large caps. I'm watching that human relationship closely, equally good equally the novel highs/lows.
Thursday, Oct 22nd
* Weakness inwards modest caps noted before contributed to a sell off inwards stocks through much of the hateful solar daytime Wednesday. My mensurate of buying vs. selling pressure, interestingly, did non present a bully surplus of selling. This continues to facial expression to me similar a correction of the recent strength, non acquit marketplace seat behavior. With fewer than one-half of stocks forthwith trading inwards a higher house their 3 as well as five-day moving averages, the risk/reward looks a flake ameliorate as well as I am opened upwardly to buying weakness that holds inwards a higher house the overnight lows. I practise note, however, that the number of stocks making fresh monthly lows has expanded beyond the degree seen final week. Continued expansion of that number would brand me to a greater extent than concerned regarding the market's downside.
* In short, my base of operations representative is that the August/September lows were meaning ones; that nosotros began a novel marketplace seat wheel off those September lows; as well as that the wheel has hitting a potential momentum peak simply has farther to run on the upside. Waning breadth, especially amid modest cap stocks, as well as waning relative push clit amid EM shares concerns me nearly this base of operations case, however, as well as thus I'm cautious as well as updating views hateful solar daytime past times day.
* Influenza A virus subtype H5N1 say for marketplace seat weakness prior to the August driblet was that nosotros were persistently seeing to a greater extent than shares trading below their lower Bollinger Bands than inwards a higher house their higher bands. At present, we've been seeing the opposite: to a greater extent than stocks trading inwards a higher house their upper bands (see nautical chart below). I'm watching that residuum closely equally yet a unlike sort of breadth mensurate that captures the relative breadth of push clit vs. weakness.
Wednesday, Oct 21st
* Stocks showed continued resilience on Tuesday, amongst pullbacks limited, ultimately leading to higher daily lows as well as higher highs. We likewise expanded the number of stocks making fresh monthly highs, ascent to 812 from 698. Interestingly, VIX rose, simply realized volatility as well as book continued low. We're seeing push clit inwards overnight trade, afterwards belatedly hateful solar daytime weakness yesterday--that continues the grind higher.
* We've seen a driblet inwards 1 of my measures of breadth volatility, which tracks the variation inwards the number of stocks making novel highs as well as lows. Going dorsum to 2010, when breadth volatility has been high, the adjacent v days inwards SPX induce got averaged a gain of +.52%. When breadth volatility has been low, equally at present, the adjacent v days inwards SPX induce got averaged a gain of exclusively +.03%. I cash inwards one's chips along to stance the risk/reward inwards the marketplace seat equally non especially appealing for multi-day positions as well as instead lean toward shorter-term tactical trading of intraday swings.
* I am continuing to sentinel modest cap as well as mid cap issues to encounter if nosotros tin expand breadth or whether relative weakness inwards those groups tin expand to other segments of the market. The Cumulative NYSE TICK has been ascent inwards recent sessions; buying push clit has been moderate, simply selling push clit has been low. I don't await a major marketplace seat turn down until nosotros encounter a reemergence of sellers, as well as that's non occurring as well as thus far.
Tuesday, Oct 20th
* The topping conduct referenced yesterday was evident inwards Monday's trade, equally nosotros terra firma higher inwards SPX. I cash inwards one's chips along to banker's complaint relative weakness amid modest caps, which is contributing to breadth divergences. We saw 698 novel monthly highs on Mon against 166 lows. That is against over K novel highs on the seventh through the 9th. That beingness said, breadth divergences inwards ascent markets unremarkably don't dot major reversals until nosotros encounter expanding numbers of shares making fresh lows as well as overtaking novel highs. During topping processes, it's to a greater extent than of a rotation merchandise than a trending one, amongst volatility, volume, as well as momentum coming down. That makes it an opportunistic trading environment, equally the lower volatility way that moves extend far less than they had when VIX exceeded 20.
* One of the large mistakes traders brand inwards depression volume/low volatility environments is looking for the adjacent large move, rather than planning for the lack of movement. To attain that planning, traders either require to merchandise brusk term swings opportunistically (intraday swings) or extend their asset periods to essay larger moves that ride out the shorter swings. I discovery that pullbacks as well as bounces inwards NYSE TICK intraday assist to seat those shorter-term swings.
* Should nosotros encounter modest caps as well as midcaps grab upwardly to the large caps inwards performance as well as displace to fresh highs, that would live on a worthwhile clue that the upside has farther to go. I'd desire to encounter other marketplace seat sectors underperform before taking a longer-term bearish stance.
Monday, Oct 19th
* I'll live on tweeting from Stocktoberfest the adjacent duet of days. My latest Forbes article highlights a topic I'll live on addressing inwards my Stocktoberfest presentation: how nosotros tin brand the transition from beingness goodness traders to becoming bully ones. That way that repeated sense is non enough; nosotros really induce got to undertake directed training. The Forbes piece describes how nosotros tin job psychology to sustain preparation efforts.
* Here's a unproblematic way y'all tin know if you're genuinely engaged inwards a procedure of expertise development: Are in that location *specific* things you're working on inwards today's trading; are y'all keeping score to encounter if y'all are genuinely making progress; as well as are y'all making ongoing corrective efforts amongst continued scorekeeping if you're non making progress? If you're non intensively engaged inwards the above, y'all are non on a course of teaching of peak performance development.
* Friday's trading continued the bounce from the short-term oversold province of affairs noted final week. We 1 time once again are at a juncture where I'm non enamored of the risk/reward province of affairs here. Intermediate-term measures are stretched to the upside; put/call ratios induce got come upwardly down; as well as nosotros cash inwards one's chips along to encounter fewer stocks brand fresh novel highs despite novel highs for this displace inwards the wide indices. My pure volatility mensurate is at levels associated amongst subnormal forrad returns over a several hateful solar daytime basis. All this is consistent amongst my overall perspective that we've seen a momentum peak for this marketplace seat wheel as well as are forthwith involved inwards a topping process. That procedure tin extend for a spell before nosotros encounter an ultimate cost peak as well as eventual acquit phase.
* An uptrend is sustained when nosotros are able to register higher cost highs as well as higher cost lows across multiple short-term cycles. So far, that is what we've been doing. Until that blueprint changes, I'm reluctant to induce got brusk positions for anything to a greater extent than than short-term trades.
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