Friday May 6, 2016

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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  

!ADLINETOT   +5.25%  
!CUMVOLTOT   +0.31%  

All the waiting and anticipation I was talking about yesterday lasted until the release of the jobs number, then THEY dumped and then pumped the market. But we knew to be careful at these levels and a bounce could be coming.

Weekly

W

ADX: Declining momentum (from Dec-Feb downturn), in a trading market

RSI: Middle of the road, neither overbought nor oversold. Near where we have been topping of late.

Candle: Doji, tight trading range with pushes by bears and bulls without a winner.

Volume: Weak, below the 20 dma

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

% Bollinger Band: Upper portion of the band

Bollinger Band Width: Quite wide, no huge move expected here

MACD: Bullish at a positive value, histogram continuing to weaken

Daily

D

ADX: Potentially moving from a trading to (a negatively) trending environment, unless we stall here

RSI: Middle of the road, neither overbought nor oversold.

Candle: Bears were out early only to be overtaken by bullish price action

Volume: Stronger, above the 20 dma

Moving Averages: 20>Close>50>200>100 period moving averages, close occurred just above the 50 dma

% Bollinger Band: Bottom of the band

Bollinger Band Width: Still quite narrow, a large move at this scale is still on the radar (1990-2035)

MACD: Bearish but at a positive value, historgram ticked higher

Hourly

H

Well below the 2070 pivot, bounced off the 2043 pivot once again (after almost losing it pre-market!)

ADX: Negatively trending, but a change could be brewing

RSI: Closer to overbought, near where past bullish waves have exhausted recently.

Moving Averages: 200>100>Close>50>20 period moving averages, quite bearish alignment but price is trying to swing this the other way

% Bollinger Band: Riding the top of the band

Bollinger Band Width: Starting to widen with the bullish move playing out

MACD: Bullish at a positive value, histogram highest since mid April (!!!)

VXX (Daily)

VXX

ADX: Weakening negative trend

RSI: Lower part of range

Moving Averages: 100>200>50>20>Close

% Bollinger Band: Near the middle of the Bollinger Band

Bollinger Band Width: Still quite narrow (and narrowing again), suggesting a big move could be on the horizon

MACD: Bullish with a negative value, been basing since late March

NYSE Internals

NY

Despite a higher low compared to early April, number of stocks making new highs is much lower, while the number of stocks making new lows is accelerating. Stock-only $NYMO shows a negative divergence with a lower low vs. early April, just like at the mid April peak vs. early March. While the stocks only summation index recently made a higher high, the Full STO made a lower low and is rolling over lower.

All bad signs for the $NYSE stocks.

%Stocks above 200dma

200

Full STO for %stocks above 200dma in 5 different market classes is rolling over from the highest level since late 2014 (!!!). Awful time to buy the dip.

%Stocks above 50dma

50

While the full market made a higher low vs. early April, the number of stocks above their 50 dma across 5 market classes made lower lows. Also a bad sign for stocks is the huge rolling over signature of the Full STO, the last time we saw a signal like this was early-mid Nov 2015.

%Stocks above 20dma

20

Again, while the full market made a higher low vs. early April, the number of stocks above their 20 dma across 5 market classes made lower lows. Full STO has been on a sell since for the past several weeks.

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Summary

All signs from the internals to the technical charts at multiple levels suggest the tug-of-war between the bears and bulls is being won by the bears, yet we have not seen substantial volume come back into the market. That’s when the real fun begins for the bears!

As I said yesterday, a bounce was due, with the 2043 pivot, 50 dma (2045) and bottom of the daily Bollinger Band (2040) aligned. Yet, internally the market is much more fractured than earlier in April. This posses much more profit potential in the weeks ahead being a bear than a bull.

VXX has been basing for a month and a half and really could start to see a lot of volatility come back to the market in a hurry. Like I said yesterday, the higher probability play is to see the market bounce off of support (2043) and make a run for the 2070 pivot and 20 dma. If this happens it will be time for the bulls to run for the hills.

Volume today was noted higher than the 20 day average and it was green. Very bullish, right? Well if you looked at the hourly chart closely, you would notice much of the volume came early in the morning. While their was significant buying volume at 13 UTC, there was even more negative volume at 14 UTC. After that, the bullish volume waned through the day. THEY blew some stops out during the morning which led to the auto-rally in the afternoon hours.

I noticed a New Moon took place 19:29 UTC today (Friday). There is usually bullishness through the New Moon plus a couple of days.

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4 Comments on "Friday May 6, 2016"


  1. Storm, I see that you posted 401K bearish. are you posting buy/sell signals again? have a nice weekend.

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    1. Only because I was repeatedly asked to. These are not generated by new signals, rather my head after looking at all the data.

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  2. Storm, I want to buy in my 401k but seeing your bearish signal gives me pause. Do you think I can buy in for a swing trade if we drop down to the 2019 pivot or so? Thanks Storm. I hope you’ll let us know when you buy back into your own 401k.

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    1. On the weekly, I’ve seen several weeks with significantly higher sell volume than the flash crash 6 years ago (2010). Volume on the downturn in 2011 with pathetic compared to current downturns. We are also coming off the highest weekly MACD histogram in either of the past 2 bear markets. The daily ADX and MACD looks very similar up to Dec 7 2015. We all know what Dec, Jan and early Feb looked like. Just a bit more info.

      The internals have to improve drastically before I consider going back in to my own 401k and I dont think they can by 2019 pivot. I always do!

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