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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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.
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
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
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
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.
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
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.
Interesting divergence between flat market, new highs on advance-decline, but lower high of advance-decline volume. I wonder which is lying to us?
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.
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.
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.
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.
Old posts: https://stormchaser80.wordpress.com/
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