01/16/2016 Weekend Update

[Cobra]

Institutional buying and selling chart from stocktiming shows distribution up and accumulation down so it's topping phase, i.e. no bottom yet.

• When accumulation and distribution are down means we're in trending phase.

• When accumulation is up, distribution is down, it's a bottoming phase.

• When accumulation is down, distribution is up, it's the topping phase.

[Cobra]

Smart money buying a lot so according to the case 2.), this is a good sign. However, the buying still is not huge enough (I prefer it touching or at least near the green line above) so probably still some room on the downside.



How I use the chart:

I don't care what's the logic behind the chart. I found it works in the following two cases:

1.) When market up huge, if I see smart money huge short, best if new record short, then I know a short-term pullback is due soon.
2.) When market down, if I see smart money suddenly rises sharply from very negative value, then I know the pullback was over.

So I only use this chart for the above 2 cases. Besides those 2 cases, it means nothing to me. i.e. the absolute value of this chart means nothing to me, I only care if it rises sharply or drops sharply.

[josephli]

Smart money buying a lot so according to the case 2.), this is a good sign. However, the buying still is not huge enough (I prefer it touching or at least near the green line above) so probably still some room on the downside.



How I use the chart:

I don't care what's the logic behind the chart. I found it works in the following two cases:

1.) When market up huge, if I see smart money huge short, best if new record short, then I know a short-term pullback is due soon.
2.) When market down, if I see smart money suddenly rises sharply from very negative value, then I know the pullback was over.

So I only use this chart for the above 2 cases. Besides those 2 cases, it means nothing to me. i.e. the absolute value of this chart means nothing to me, I only care if it rises sharply or drops sharply.

Boss I wonder how this chart was during 2008-2009, especially those big dead cat bounce?

[Cobra]

Smart money buying a lot so according to the case 2.), this is a good sign. However, the buying still is not huge enough (I prefer it touching or at least near the green line above) so probably still some room on the downside.



How I use the chart:

I don't care what's the logic behind the chart. I found it works in the following two cases:

1.) When market up huge, if I see smart money huge short, best if new record short, then I know a short-term pullback is due soon.
2.) When market down, if I see smart money suddenly rises sharply from very negative value, then I know the pullback was over.

So I only use this chart for the above 2 cases. Besides those 2 cases, it means nothing to me. i.e. the absolute value of this chart means nothing to me, I only care if it rises sharply or drops sharply.

Boss I wonder how this chart was during 2008-2009, especially those big dead cat bounce?

[josephli]

Smart money buying a lot so according to the case 2.), this is a good sign. However, the buying still is not huge enough (I prefer it touching or at least near the green line above) so probably still some room on the downside.



How I use the chart:

I don't care what's the logic behind the chart. I found it works in the following two cases:

1.) When market up huge, if I see smart money huge short, best if new record short, then I know a short-term pullback is due soon.
2.) When market down, if I see smart money suddenly rises sharply from very negative value, then I know the pullback was over.

So I only use this chart for the above 2 cases. Besides those 2 cases, it means nothing to me. i.e. the absolute value of this chart means nothing to me, I only care if it rises sharply or drops sharply.

Boss I wonder how this chart was during 2008-2009, especially those big dead cat bounce?

Thanks Cobra, I was referring to the commercial hedger chart. Any chance that you have those?

[uempel]

This data might be crucial: Shanghai is 13 hours early, so in US EST time the data is published Monday evening at 9:00 p.m.

[DellGriffith]

Consecutive trading days without hitting / approaching upper bb
ALL of SPY history

33 days from Oct - Dec 2012
33 days from Apr - June 2010
34 days from May - June 2006
35 days from Aug - Oct 2002 (dot com bust)
36 days from July - Aug 2011 (end of QE2 and before Operation Twist)
36 days from Feb - Apr 2015 (end of QE3 & worry over rate hikes)
37 days from Oct - dec 2007 (recession officially began in dec 2007)
39 days from May - June 2011 (end of QE2)
39 days from Sept - Oct 2000 (dot com bust)
39 days from Jan - Mar 2003 (dot com bust)
40 days from Dec 2014 - Feb 2015 (end of QE3)(longest streak in 7 years)
42 days from Aug - Oct 1999 (a series of fed rate hikes to slow economy)
42 days from Aug - Oct 2001 (dot com bust)
43 days from July - Sept 1998 (asian flu)(russian economic crisis)

-- anything 45+ days happened during an economic bust (until 2015 unless it turns out we are in a recession already in future revisions to government data) --

45 days from Feb - Apr 2001 (dot com bust)
46 days from Mar - May 2002 (dot com bust)
48 days from Jan - Mar 2000 (dot com bust)
48 days from May - July 2008 (credit bubble bust)
49 days from Dec 2007- Feb 2008 (credit bubble bust)
49 days from Nov 2015-??? (China economic collapse + US rate hike) (CURRENT)
58 days from June - Sep 2015 (China economic collapse + end of QE3 + threat of US rate hike)
60 days from May - Aug 2002 (dot com bust)
82 days from Sept - Dec 2008 (credit bubble bust)

At 49 days, our current streak is tied for 4th longest of all time.
We set the 3rd longest streak of all time just last September at 58 days.
Amazingly, the market has set two of the top 4 streaks in the past few months.

The Atlanta Fed at one point said 4Q GDP would be 2.3%
http://seekingalpha.com/article/3707846 ... ember-2015

"Meantime, the widely followed GDPNow model via the Atlanta Fed is looking for a 2.3% increase in GDP for this year's final quarter (as of the Nov. 18 projection)."

But the GDP Now model used by the Atlanta Fed has slipped to just 0.6% for 4Q15 as of January 15th
https://www.frbatlanta.org/cqer/researc ... px?panel=1

"The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 0.6 percent on January 15, down from 0.8 percent on January 8. "

[uempel]

My favorite chart into next week. Most likely algos, traders and hedge managers will unite to move the market on Thursday.

[DellGriffith]

We have set a new low on friday, 49 days after last visiting the upper bb on daily SPY. By this point, all other streaks had already set their low except for the biggest one (82 days in 2008) which set its low on day 56. So if we can set another new low 8 days from now, history will be made.

[jason_70]

No of stocks < 10MA have been only lower or similar twice in the last 30 years. Both cases SPY bottomed and never made significant lows after that point for many months or even years. Hope this helps others

[uempel]

DellGriffith, you are talking about daily BB, right? In 2008 weekly BB 20/2 didn't hit the upper band for over a year - May 2008 until August 2009. And the last time weekly BB 20/2 hit the upper band was in November 2014.

I'm not sure if we can use "touching the upper or lower band of BB 20/2 after a certain number or days" as a reliable indicator for reversals. I might be wrong

What I do know is that continuous hits at the upper band or lower band signify that the bullish or bearish trend is ok.

[DellGriffith]

2015 birthed the #3, #4, and #13 streaks on the all time list. The #4 is pending since it isnt over yet and could move up.

[DellGriffith]

If we don't get a HUGE powerful rally immediately, then in all likelihood our current streak will finish AT LEAST as the second longest streak of all time. The second longest is 60 days and that's just 11 more days. We'd probably have to IMMEDIATELY have a rally averaging close to 1% over 10 days to prevent us from beating #2 on the list.

[DellGriffith]

DellGriffith, you are talking about daily BB, right? In 2008 weekly BB 20/2 didn't hit the upper band for over a year - May 2008 until August 2009.

Yah well since its a daily count I wouldn't use the weekly

[DellGriffith]

Since June 23th, 2015, daily SPY has only visited the upper BB 3 times.

1. September 17 (close enough to count)
2. October 8 (close enough to count)
3. November 2-3

In my list, I say if its really really close but doesn't touch, that's good enough.

Since June 23th, we have only actually touched the upper bb on one day, November 3rd, 2015. That's it.

[DellGriffith]

If you want to get completely technical down to the penny and demand a physical touch, our current stretch where we've touched the upper bb once in 143 days is ridiculous.

[uempel]

Suggest that all the bulls who want to fight the bear google: Lawrence D. Fink, CNBC Squawkbox Friday Jan 15th. The boss of BlackRock sees another 10% to the downside. BlackRock is one on the biggest Moneymanagers and can influence the markets.

Fighting the trend here is playing rouge/noir in Roulette. The odds are 50/50 and that's not attractive.

[DellGriffith]

The longest streak is 82 days without daily SPY hitting (or nearly hitting) the upper bollinger band. We can set a new record at 83 days if the current slump can extend to March 7th. If we can just keep slamming new lows for 2-3 more weeks, price will be so far beaten down it might become automatic.

[DellGriffith]

What I find interesting is that, the longer these streaks go, the more BEARISH traders seem to get. We're on day 49. There's serious danger of a huge relief rally at any moment now. Yet, traders are more bearish than ever. They seem to expect things will tip over NOW, on day 49, to SPY 1600 or something. I've seen those predicitons. That's like saying things are worse now than they were in 2008. That seems silly to me. I loaded up on calls instead and I think its the right move. My soul is ready.

[brokebybernacke2]

What I find interesting is that, the longer these streaks go, the more BEARISH traders seem to get. We're on day 49. There's serious danger of a huge relief rally at any moment now. Yet, traders are more bearish than ever. They seem to expect things will tip over NOW, on day 49, to SPY 1600 or something. I've seen those predicitons. That's like saying things are worse now than they were in 2008. That seems silly to me. I loaded up on calls instead and I think its the right move. My soul is ready.

Yes dandruff wars saw head and shoulders win , given few support levels between here and below , it is possible H s plays out and we slide..but think oversold levels long in tooth...

New low next week or 2 spy 182/3 (uempel thursday?)
Bounce to 198 spy dead cat super resistance there..
Then big time vix moves ...