Friday June 24, 2016

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Stormchaser80, L.L.C.
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  Trading Account: NO POSITION  
  401K: Bearish  
  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.

Update to Subscribers…

First Thoughts…

Today I have another weekend login free post. If you don’t have a login you can’t read my daily posts, take this opportunity to sign up for free at the end of this post!

So I have been holding my tongue on the BRexit since I don’t want to inject my bias into my charts or your heads. Now that the vote is over let’s talk about it. First, the short term is quite status quo. Nothing is going to change overnight.

With that said, I expected this outcome all along. Its the same reason Trump will be our next president. People are PISSED OFF about handing freebies to those who don’t even qualify for them under law, let alone make it a generational habit. This has snowballed into an overwhelming sense of nationalism which will continue to pick off EU countries one by one. Who wants to pay for all the migrants, let alone, Greece, Spain, Portugal, etc? Wonder why there is no middle class anymore? It’s because they have taken away what we have earned to give it to those who have not earned it. And nobody’s better for it, the country is not better for it.

SPX Weekly

W

ADX: Bearish but in a deep trading range with NO momentum

RSI: Near middle of the range

Candle: Hanging man, Bears won big

Volume: Slight increase, but still bellow the slumping 20 ma

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

% Bollinger Band: Middle of the band

Bollinger Band Width: Beginning to contract

MACD: Bearish cross, at a positive value

SPX Daily

D

ADX: Bearish but trading range (non-trending)

RSI: Lower quartile

Candle: Huge bearish engulfing

Volume: Very high volume, well above the 20 dma, most since early March

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

% Bollinger Band: Below the band

Bollinger Band Width: Beginning to widen?

MACD: Bearish at a negative value

SPX Hourly

H

Tested 2019 pivot then 2070 pivot before ending the day below the 2043 pivot

ADX: Bearish, trading range

RSI: Falling to lower quartile

Volume: Mostly baerish

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

% Bollinger Band: Lower quartile

Bollinger Band Width: Narrowing

MACD: Bullish at a negative value

 

VIX Hourly

VIX

Closed above the Bollinger Band, no negative divergences seen yet except weakly on the +DI

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.

SPX Breadth

SPX Breadth

McClellan Oscillator fell markedly as one would expect. Number of new highs decreased (but notably well above zero), and new lows increased somewhat.

SPX %above MA

SPX MA

Percent of SPX stocks above their 20/50/200  dma dropped off a cliff from near 80 percent to near 20 percent. 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.

SPX Advance-Decline

A-D

Interesting divergence between flat market, new highs on advance-decline, but lower high of advance-decline volume. I wonder which is lying to us?

TLT:TIP Hourly

TLT_TIP

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 again today, though techincal indicators suggest there is room for more if that’s the direction the market wants to go.

HYG:IEF Daily

HYG_IEF

Gapped down, but improved during the trading day, staying inside of the Bollinger Band on the highest volume since mid December. By no means do the technical indicators suggest the moves is done.

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.

Oil Daily

Oil

Found support at the 50 dma, and stayed inside the Bollinger Band. Selling volume was only at the 20 dma. Nothing in the short term technicals suggest more doom and gloom on in store right away.

Pretty sure between the technicals and seasonality that we have seen the top for some time.

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Summary

Big down day and I’m sure all the bears got so excited. But the market never goes in a straight line. The technicals on the weekly chart look too muted for me to get excited for a huge move on that chart. The breadth and number stocks below their MA look like a rebound should occur. The move was more muted on the bond side which held up well compared to recent moves and intraday, compared to stocks.

This suggests that while the medium range move will be down as I have been saying for a number of weeks now, in the short term, there should be opportunity to get out of any longs you want, or set up a short. Don’t worry, the socio-economic arena will get much much much worse with time, but not all in 1 day.

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Old posts: https://stormchaser80.wordpress.com/ 

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Note: I want you to know that although I have taken the steps to start the subscription business, I will continue to offer the free service through May 2016. I want there to be a good record of (hopefully) accomplishment. Plus I don’t want to spring anything on anyone unfairly. I thought 3 months was enough lead time. I also want to present something nice, and well worth your visit (and subscription).

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