Friday, September 18th
* In a feel for stocks, non a lot changed with the Fed meeting, every bit a hike is nevertheless inwards play for after this year, but fiscal weather are non justifying a hike at this time. We traded inwards a higher house the recent hit in addition to since require maintain fallen dorsum into the range, every bit we're straightaway intermediate-term overbought. Selling buying forcefulness inwards NYSE TICK that cannot generate fresh cost highs is my full general approach going forward; models modestly bearish.
* This posting is belatedly inwards exercise because of my participation inwards a podcast for the Better System Trader site. Do depository fiscal establishment correspond out their podcast page; it's an fantabulous laid upwards of resources. Will link my podcast when it's upwards early on this coming week.
Thursday, September 17th
* We saw modest buying pressure level early on inwards the session on Wednesday, followed yesteryear a notable absence of selling interest, with NYSE TICK largely staying inwards a higher house the -500 level. This was significant, given that nosotros were trading at a short-term overbought grade nigh a hit high. Unlike inwards previous situations, those weather did non convey out sellers, in addition to the termination was an upside breakout on rigid breadth. It was a dandy example of how indicators in addition to models tin alarm traders to directional tendencies, but it is genuinely the record activeness that makes for practiced intraday trades.
* I straightaway present over 70% of SPX stocks inwards a higher house their 20-day moving averages in addition to good over 80% inwards a higher house their 3, 5, in addition to 10-day averages. While my models propose the likelihood of pullback over a 3-5 twenty-four hours horizon, activeness clearly volition survive dominated yesteryear perceptions of the Fed determination in addition to charge per unit of measurement guidance after today.
* Given the dubiety of the consequence of the Fed coming together in addition to the odd attending placed on this meeting, I hold off considerable volatility surrounding the proclamation in addition to press conference.
Wednesday, September 16th
* We did indeed agree recent lows on early on selling pressure level on Tuesday, leading to a company rally toward the hit highs. We're overbought across a give away of the measures that I follow; the nautical chart below tracks the per centum of SPX stocks trading inwards a higher house their 3, 5, 10, in addition to 20-day moving averages (raw information from Index Indicators). In general, when a minority of stocks are trading inwards a higher house their 100-day averages, my models indicate to subnormal returns when short-term breadth is rigid in addition to superior returns when short-term breadth is weak. My leaning is to sell bounces that cannot accept out the overnight in addition to previous day's highs.
* I'm hearing quite a dispersion of views regarding what the Fed mightiness do tomorrow, which leads me to believe a reasonable proportion of traders volition perceive themselves to survive offsides. That could contribute to meaning volatility. I was surprised yesteryear the relatively depression index in addition to equity put/call ratios yesterday; both were the lowest inwards the yesteryear 2 weeks. That has tended to Pb to subnormal returns over a side yesteryear side 3-5 twenty-four hours horizon.
Tuesday, September 15th
* We saw cyberspace selling flows on the twenty-four hours Monday, but it was a tranquillity vacation merchandise in addition to nosotros held inwards a higher house the recent back upwards around ES 1928-1930. New monthly highs expanded to 306; lows dropped to 298, across all exchanges. So piece at that topographic point was cyberspace selling pressure, breadth did non deteriorate. That unremarkably has me looking for a bounce, peculiarly if nosotros tin agree the overnight lows inwards early on merchandise today. One of my models is modestly bearish; 1 modestly bullish--not odd to acquire weak in addition to indecisive signals inwards a hit market, every bit the models pick upwards overbought in addition to oversold extremes. I suspect nosotros could reckon a continuation of the hit merchandise going into Thursday's FOMC meeting.
* Below is a nautical chart of an 80-period charge per unit of measurement of modify mensurate for ES, where each stream represents 50,000 contracts traded. I've constitute overbought/oversold measures that normalize for book traded to survive quite helpful inwards putting overnight activeness into context in addition to adjusting to faster in addition to slower marketplace position conditions. We're bouncing off an oversold condition; I'm watching the lineament of this bounce carefully.
* The CBOE $SKEW mensurate is at its highest grade inwards a while. That way that out of the coin seat options are existence bid upwards ahead of the Fed. Interestingly, as I noted a piece back, skew is non necessarily a reverse indicator. Near-term returns next high skew readings require maintain been subnormal.
Monday, September 14th
* What I reckon with successful traders is a network of successful relationships. There is merely besides much to follow inwards markets to merchandise inwards a completely siloed fashion. That is why fifty-fifty independent traders in addition to solo portfolio managers cultivate rigid information networks in addition to back upwards systems. There is a cardinal to edifice rigid relationships that I lately wrote about; ultimately it's a critical exercise of one's long-term border inwards markets. The strongest individuals acquire that way yesteryear cultivating rigid teams.
* My models are modestly bearish over a 3-5 twenty-four hours horizon, but I hold off the week's trading to survive dominated yesteryear Thursday's Fed meeting. The signals I'll survive taking volition survive largely intraday in addition to tactical upwards to that point. The setups that require maintain worked best lately require maintain been periods of buying/selling that dry out upwards earlier making a fresh novel high or low--it's a blueprint mutual to hit markets. I exercise NYSE TICK every bit a proxy for buying in addition to selling interest; also the percentages of stocks trading inwards a higher house their short-term moving averages.
* Not everything is trading weak, every bit a savvy trader pointed out to me over the weekend. Fully 32% of SPX stocks are trading inwards a higher house their 20-day moving averages, non in addition to then bad after the variety of driblet nosotros had inwards August. Homebuilders (XHB) require maintain been notably strong, every bit require maintain been some of the tech leaders similar AMZN. I noticed a give away of bearish articles inwards fiscal media the final yoke of days. Very hard to honor people inwards an chance mindset. While I do retrieve nosotros could reckon follow through weakness, I do retrieve lineament companies with security dividends volition transcend on to facial expression practiced inwards a the world that remains largely inside QE regimes.
* Despite a bounce inwards stocks on Friday, nosotros had exclusively marginally to a greater extent than monthly highs on the twenty-four hours (237 vs. 213 across all exchanges) in addition to to a greater extent than monthly lows (368 vs. 305). I am watching breadth closely for clues every bit to management of the eventual breakout from the recent trading range.
* In a feel for stocks, non a lot changed with the Fed meeting, every bit a hike is nevertheless inwards play for after this year, but fiscal weather are non justifying a hike at this time. We traded inwards a higher house the recent hit in addition to since require maintain fallen dorsum into the range, every bit we're straightaway intermediate-term overbought. Selling buying forcefulness inwards NYSE TICK that cannot generate fresh cost highs is my full general approach going forward; models modestly bearish.
* This posting is belatedly inwards exercise because of my participation inwards a podcast for the Better System Trader site. Do depository fiscal establishment correspond out their podcast page; it's an fantabulous laid upwards of resources. Will link my podcast when it's upwards early on this coming week.
Thursday, September 17th
* We saw modest buying pressure level early on inwards the session on Wednesday, followed yesteryear a notable absence of selling interest, with NYSE TICK largely staying inwards a higher house the -500 level. This was significant, given that nosotros were trading at a short-term overbought grade nigh a hit high. Unlike inwards previous situations, those weather did non convey out sellers, in addition to the termination was an upside breakout on rigid breadth. It was a dandy example of how indicators in addition to models tin alarm traders to directional tendencies, but it is genuinely the record activeness that makes for practiced intraday trades.
* I straightaway present over 70% of SPX stocks inwards a higher house their 20-day moving averages in addition to good over 80% inwards a higher house their 3, 5, in addition to 10-day averages. While my models propose the likelihood of pullback over a 3-5 twenty-four hours horizon, activeness clearly volition survive dominated yesteryear perceptions of the Fed determination in addition to charge per unit of measurement guidance after today.
* Given the dubiety of the consequence of the Fed coming together in addition to the odd attending placed on this meeting, I hold off considerable volatility surrounding the proclamation in addition to press conference.
Wednesday, September 16th
* We did indeed agree recent lows on early on selling pressure level on Tuesday, leading to a company rally toward the hit highs. We're overbought across a give away of the measures that I follow; the nautical chart below tracks the per centum of SPX stocks trading inwards a higher house their 3, 5, 10, in addition to 20-day moving averages (raw information from Index Indicators). In general, when a minority of stocks are trading inwards a higher house their 100-day averages, my models indicate to subnormal returns when short-term breadth is rigid in addition to superior returns when short-term breadth is weak. My leaning is to sell bounces that cannot accept out the overnight in addition to previous day's highs.
* I'm hearing quite a dispersion of views regarding what the Fed mightiness do tomorrow, which leads me to believe a reasonable proportion of traders volition perceive themselves to survive offsides. That could contribute to meaning volatility. I was surprised yesteryear the relatively depression index in addition to equity put/call ratios yesterday; both were the lowest inwards the yesteryear 2 weeks. That has tended to Pb to subnormal returns over a side yesteryear side 3-5 twenty-four hours horizon.
Tuesday, September 15th
* We saw cyberspace selling flows on the twenty-four hours Monday, but it was a tranquillity vacation merchandise in addition to nosotros held inwards a higher house the recent back upwards around ES 1928-1930. New monthly highs expanded to 306; lows dropped to 298, across all exchanges. So piece at that topographic point was cyberspace selling pressure, breadth did non deteriorate. That unremarkably has me looking for a bounce, peculiarly if nosotros tin agree the overnight lows inwards early on merchandise today. One of my models is modestly bearish; 1 modestly bullish--not odd to acquire weak in addition to indecisive signals inwards a hit market, every bit the models pick upwards overbought in addition to oversold extremes. I suspect nosotros could reckon a continuation of the hit merchandise going into Thursday's FOMC meeting.
* Below is a nautical chart of an 80-period charge per unit of measurement of modify mensurate for ES, where each stream represents 50,000 contracts traded. I've constitute overbought/oversold measures that normalize for book traded to survive quite helpful inwards putting overnight activeness into context in addition to adjusting to faster in addition to slower marketplace position conditions. We're bouncing off an oversold condition; I'm watching the lineament of this bounce carefully.
Monday, September 14th
* What I reckon with successful traders is a network of successful relationships. There is merely besides much to follow inwards markets to merchandise inwards a completely siloed fashion. That is why fifty-fifty independent traders in addition to solo portfolio managers cultivate rigid information networks in addition to back upwards systems. There is a cardinal to edifice rigid relationships that I lately wrote about; ultimately it's a critical exercise of one's long-term border inwards markets. The strongest individuals acquire that way yesteryear cultivating rigid teams.
* My models are modestly bearish over a 3-5 twenty-four hours horizon, but I hold off the week's trading to survive dominated yesteryear Thursday's Fed meeting. The signals I'll survive taking volition survive largely intraday in addition to tactical upwards to that point. The setups that require maintain worked best lately require maintain been periods of buying/selling that dry out upwards earlier making a fresh novel high or low--it's a blueprint mutual to hit markets. I exercise NYSE TICK every bit a proxy for buying in addition to selling interest; also the percentages of stocks trading inwards a higher house their short-term moving averages.
* Not everything is trading weak, every bit a savvy trader pointed out to me over the weekend. Fully 32% of SPX stocks are trading inwards a higher house their 20-day moving averages, non in addition to then bad after the variety of driblet nosotros had inwards August. Homebuilders (XHB) require maintain been notably strong, every bit require maintain been some of the tech leaders similar AMZN. I noticed a give away of bearish articles inwards fiscal media the final yoke of days. Very hard to honor people inwards an chance mindset. While I do retrieve nosotros could reckon follow through weakness, I do retrieve lineament companies with security dividends volition transcend on to facial expression practiced inwards a the world that remains largely inside QE regimes.
* Despite a bounce inwards stocks on Friday, nosotros had exclusively marginally to a greater extent than monthly highs on the twenty-four hours (237 vs. 213 across all exchanges) in addition to to a greater extent than monthly lows (368 vs. 305). I am watching breadth closely for clues every bit to management of the eventual breakout from the recent trading range.
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