Friday June 10, 2016

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Stormchaser80, L.L.C.
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  VXX: Bought VXX 14C exp Jul 15 2016 on 4/28/2016 when VXX was near $15.18
  401K: Bearish  
  Long Term: Bear Market, targeting SPX <666 by 2022  

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As always, the Monthly, Weekly, Daily, Hourly and so on SPX charts I show are from all hours of the day, and therefore the prices and indicators will vary from charts which only show action during regular trading hours. I believe this method is more robust and encapsulates global sentiment, better capturing trends.

It’s time for another login-free, free post! For those who missed me last week, I did not post since I was away. Well I’m back and feeling re-energized! I have some tricks up my sleeves for signals, but have to find the time to code some scripts up. Until then, please enjoy the following…

SPX Weekly

W

ADX: Bullish but in a very weak trading range (non-trending)

RSI: Falling slightly for the second week in a row, negative divergence from elevated levels

Candle: Little changed, but the Bulls were kicked in the nuts

Volume: Very very low(!!!!!), well below the slumping 20 dma!

Moving Averages: Close>100>50>20>200 period moving averages

% Bollinger Band: Near the top

Bollinger Band Width: Quite wide, no large move on this scale expected

MACD: Bullish at a positive value, divergence on the histogram since mid April

SPX Daily

D

ADX: Neutral within a trading range (non-trending)

RSI: Weakening more significant from levels that are near price peaks

Candle: Big bearish day but closed off the lows

Volume: Very very very low(!!!!!), below the slumping 20 dma!

Moving Averages: Close>20>50>100>200 period moving averages. Price tested and bounced off the 20 dma

% Bollinger Band: Near the middle

Bollinger Band Width: Still somewhat narrow, though locally blown out

MACD: Bullish at a positive value, histogram ticked lower for the 9th straight trading day. Bad negative divergence (Bearish) since 3rd week of March.

SPX Hourly

H

Testing the 2085 pivot

ADX: Largest trend since the 3rd week in May,

RSI: Bounced back from oversold

Volume: Built through the day, mainly negative

Moving Averages: 100>50>20>200>20>Close period moving averages

% Bollinger Band: Near the bottom

Bollinger Band Width: Blown out

MACD: Bearish at a negative value, positive divergence on the histogram

VIX Daily

VIX

ADX may have bottomed with the strongest +DI since mid Feb developing. Positively diverging MACD since late March which is good for VIX Bulls in the medium term, with a relatively narrow Bollinger Band width supportive of an upcoming large move. It is possible that this move is FINALLY beginning. Note the close was above the Bollinger Band but no divergence yet on any technical indicator, uptrend may carry on early next week.

SPX Breadth

Breadth

While $SPX had been making new highs, there has been a downward trend with number of new stocks seeing new highs. Similarly, the McClellan Oscillator has been trending lower as has the Summation Index. A negative print on the SPX McClellan Oscillator.

SPX %above MA

Percent_MA

There had also been divergence within the SPX for percent of stocks above their 20/50/200  dma and the recent higher prices. All made even greater losses today compared to yesterday.

SPX A-D

SPX_AD

This chart is funny. SPX has not made a higher high but the Advance-Decline of SPX has. HOWEVER, as I have been pointing out with volume for quite some time, the Advance-Decline of SPX volume is making lower highs vs. May 2015.

TLT:TIP Daily

TLT-TIP

I showed this chart yesterday, but will show it again today. The bond market Deflation vs. Inflation metric (iShares Barclays 20+ Year Treasury Bond Fund vs. iShares Barclays TIPS Bond Fund) shows near record Deflation fears, the peak was 10 Feb 2016. Values late in 2014 and pretty much all of 2016 are showing higher Deflation fears than even 2008-2009.

From this chart you can clearly see when the FED stepped in (when this ratio was nearing 1, except things got out of control at the peak of the 2008 downturn until the FED figured some things out).  Clearly things changed since late 2014 and the FED has stepped aside leading to the Deflation fears building beyond the 2008 crisis. This metric has been climbing at an accelerating clip once again since 2 May 2016.

HYG:IEF Daily

HYG-IEF-D

The bond market signals a sideways move in greed vs. fear since mid March, while MACD/RSI/ADX is negatively diverging indicating a large bearish move is expected in the medium term. Fear ruled today and now this metric is nearing the lower Bollinger Band as its very very tight.

Oil Daily

OIL-D

Buying volume has been declining since late May, and diverging +DI and -DI for ADX indicate this strong advance days are numbered. Price fell for the second straight day as volume begins to pick up, now below its 20 dma. MACD has been negatively diverging since late March, signaling the next big move is lower.

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Summary

Divergences are plenty, but the thing about divergences is they don’t tell you when the trend will break. HOWEVER, while only 1 trading day on light volume, SIGNIFICANT technical damage was done in the Stock, Bond and Oil markets. The hourly chart indicated a reversal higher is expected in the very short term. It’s important to note that nothing goes in a straight line. Bulls and Bears alike better keep a sharp eye on the market next week!

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