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05/25/2019 Weekend Update

05/25/2019 Weekend Update

Postby Cobra » Fri May 24, 2019 4:23 pm

Down 3 weeks in a row, 68% chances lower low ahead the next week, so the worst may have yet to come.
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Re: 05/25/2019 Weekend Update

Postby Trades with cats » Sat May 25, 2019 11:05 am

Hey how about some great doomer PORN to get the weekend rolling!
I did look these people up. Harvard Degrees and CFA's selling fancy charts to institutions. So laugh if you want this is what some of the big trading shops are paying to see. You get the concept free here from Cobra as he shows you the standard topping formation, these guys are wrapping that information up and putting it in a Tiffany Blue box ;)
[attachment=0]2997 parallel.png[/attachment
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Re: 05/25/2019 Weekend Update

Postby Al_Dente » Sat May 25, 2019 2:48 pm

Inverted VIX and SPX, so they should both be green (or red)
Divergence
They need to realign
60 min (ignore vertical lines)
525inv vix.png.png
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Re: 05/25/2019 Weekend Update

Postby Al_Dente » Sat May 25, 2019 2:51 pm

Cobra and Cats, me vote yes
https://stockcharts.com/public/1684859
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Re: 05/25/2019 Weekend Update

Postby Al_Dente » Sat May 25, 2019 3:57 pm

Price moves with the AD, as usual
Meaning: strong AD, strong rally, and the converse is true
I’m worried that the massive-panic buying at Friday’s open (bulls 8x bears, pink arrow, not seen in at least 28 days), which failed immediately, is telling us something important… I’m just not sure what it is saying….
Anyone?
5m
525internals.png.png
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Re: 05/25/2019 Weekend Update

Postby Trades with cats » Sun May 26, 2019 12:41 pm

Chattering class is putting out lots of words on how the market has finally figured out that the trade war is on.
Should mean we see lots of strange stuff on the charts as longer time frame institutional types start shifting.

Bond market is going crazy.
GDP forecasts are getting marked down into the 1 % range as 1st quarter weakness is no longer seen as a one time event.

The forecast is still for corporate debt to be the instrument of our economic destruction. The way it works is that there are trillions in one or two notch above junk bonds, a lot of which were used for buybacks and dividends (inset your own favorite sarcastic comment about CEO's). If the ratings agencies start downgrading then those who must play by written rules (Pensions, Trusts, Mutual Funds, ETFs) will have to sell, leading to a collapse in the junk bond market as it locks up. Current estimate is that 50% of this potential downgrade pool is equal in size to sub prime debt of the last crisis (1.3 trillion dollars).

Professor Carmine Reinhardt, co author of "It's Different This Time" has been publicly speaking about her new research. She, it is said. with an army of grad students, has reviewed a huge amount of corporate debt history. Her conclusion is that corporate debt behaves like third world government debt. So that means the odds greatly favor an unpredictable untimeable exogenous event causing a sell off (the A Ha moment when it suddenly breaks).

So market forecasts or actual numbers drag earnings down further along with gross sales. Diminished capacity causes bond downgrades to start causing rules based holders to sell what was investment grade into the junk market. (insert potential quotes from Jay Powell, Maxine Waters and Donald Trump saying it is under control here) Prediction has been that the change to junk by a major household name will panic the retail junk etf market locking it up. Net result great financial crisis round two.
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Re: 05/25/2019 Weekend Update

Postby BullBear52x » Sun May 26, 2019 1:27 pm

From " It is what it is department" short term bearish bias, but longer term support is clear that bulls will not give in without a fight.
Long term historical support.
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short term as long as we stay under 5dam selling to continue,
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Good luck I'll be gone most of June, no trade. Peace!
My comments are for entertainment/educational purpose only. NOT a trade advice.
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Re: 05/25/2019 Weekend Update

Postby Al_Dente » Sun May 26, 2019 2:48 pm

“What I want out of each and every one of you is a hard target search of every gas station, residence, warehouse, farmhouse, henhouse, outhouse and doghouse …”

HOLIDAY READING:
Hindenburg Omen: According to The Wall Street Journal, this indicator has successfully predicted a meaningful pullback less than 30 percent of the time [meaning that there are far more Hindenberg-sell signals than there are big market drops... best to look for “clusters” of Hindenberg signals].
https://stockcharts.com/articles/dancin ... pdate.html
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Re: 05/25/2019 Weekend Update

Postby Daniel » Sun May 26, 2019 11:53 pm

Sunday nite: Asia futures mixed, China down about -1/2%, Australia down small, Japan up small. European futures modestly higher. US flat, to slitely down on Naz.

No catalysts in sight. The McClellan Osc. (on their website) shows a higher low was made last week, after failing to reach the -200 level it hit earlier in the month. Volatility may subside a bit in the days ahead.
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Re: 05/25/2019 Weekend Update

Postby Daniel » Mon May 27, 2019 12:18 am

Al_Dente wrote:I’m worried that the massive-panic buying at Friday’s open, which failed immediately, is telling us something important… I’m just not sure what it is saying….

Well, what are Doctors Copper and Lumber saying?
Dr. L is saying I'm near an 18 month low. Dr. C is saying I'm not doing much better.

Bernie Schaeffer, veteran pundit, always liked to watch $FVX (5yr Treasury yield) as a favorite indicator of broad economic strength or weakness. He felt it was less tracked, less skewed by short-term speculation. $FVX is currently AT an 18 month low.

So upcoming econo-weakness is already priced in. Thus, the Fed cannot "take away the punchbowl". But they also don't have much punch to put out. The market is always balancing the risk of lower profits in a weak economy with the enhanced P/E of lower interest rates. Signs of distribution (which that dumping on Friday may have been) are what we need to watch for, as clues that the market expects recession rather than soft landing.

Also, signs of increased quantative easing by the Fed should be watched for. They seemingly have little appetite to further swell their engorged balance sheet.
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