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Trading Account: NO POSITION
Long Term: Bear Market, targeting SPX <666 by 2022
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.
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On to our main event!
ADX: Bearish but in a deep trading range with NO momentum
RSI: Near middle of the range
Candle: Bearish week but bulls were able to come off the lows
Volume: Slight increase, but still bellow the slumping 20 ma
Moving Averages: Close>100>20>50>200 period moving averages
% Bollinger Band: Upper quartile
Bollinger Band Width: Still somewhat narrow
MACD: Bullish at a positive value, histogram ticked lower
ADX: Bearish but trading range (non-trending)
RSI: Middle of the range
Candle: Bearish but some indecision each way
Volume: Increased on this options expiration day, above the 20 dma
Moving Averages: 20>50>Close>100>200 period moving averages, 5th day closing below the 50 dma
% Bollinger Band: Lower quartile
Bollinger Band Width: Still somewhat narrow
MACD: Bearish at a positive value, histogram ticked lower for the 14th straight trading day. Bad negative divergence (Bearish) since 3rd week of March.
Back down to the 2070 pivot
ADX: Bearish, trading range
RSI: Falling to lower quartile
Volume: Mostly baerish
Moving Averages: 200>20>100>50>Close period moving averages
% Bollinger Band: Above the bottom
Bollinger Band Width: Narrowing
MACD: Bearish at a negative value
I did a quick Fib analysis of the recent drop in June. The 0.5 retrace is 2085.6 (note 2085 is also a pivot). Other popular destinations would be 2094 and 2105 should the uptrend occur next week.
3rd day in a row closing back in the Bollinger band, with positive divergence on the -DI, negative divergence on RSI and lower MACD histogram, all bearish.
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.
McClellan Oscillator improved. Both number of new highs and lows decreased.
SPX %above MA
Percent of SPX stocks above their 20/50/200 dma have steadied and are now increasing. What I find particularly interesting is how much lower the Full Stochastic indicator will be topping. That negative divergence is very bad news for the market in the medium term.
Interesting divergence between flat market, new highs on advance-decline, but lower high of advance-decline volume.
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.
Deflation fears came back in today, we are not far from the 11 Feb 2016 All Time Highs.
Closed back in the Bollinger band. Improvement seen in RSI, ADX DIs and MACD histogram.
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.
Big up day on low volume. Back in the Bollinger band, with improving RSI and MACD histogram.
Pretty sure between the technicals and seasonality that we have seen the top for some time.
Still thinking a short term reversal higher is underway (see I am not a perma-bear!), but obviously off the highs seen Thursday evening. At support of 2070 pivot. The next target if we head back up will be at least being 2085 (Fib and pivot), likely higher. VIX looked weak again today, with risk on oil and HYG vs. IEF. Also breadth was better again, with %stocks vs. moving averages starting to rise again.
Finally, while I believe all markets are in trouble medium term, keep a sharper eye on high yield (HYG) and oil. These should start to tank at a quicker pace initially compared to the market when our trend changes back down.
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