08/12/2017 Weekend Update

[Cobra]

Just to start a new thread for the weekend chat.

Please don't forget our weekly sentiment poll here: viewtopic.php?f=9&t=2569

[Cobra]

No stock picks for the next week. Here's the latest strong stock count. Not a good picture.
viewtopic.php?f=10&t=2571

[Al_Dente]

Gundlach, Dalio, et.al., recommended “de-risking” your portfolios.
What does that mean exactly?
Well it means sell your crap stuff like high-beta and smalls and junky bonds, then buy a ton of puts on your “good” stuff, then buy ““”safe””” stuff like gold and defensives, etc.
If you walk down this series of charts, it appears that is exactly what is happening.
At a certain point enough-is-enough, and contrarians think that point may be near - at least in the short term - as many “riskys” have their pants hanging down below their lower bolingers. Bears think “you ain’t seen nothing yet” … just as we overshot on the upside, we can easily overshoot on the downside.

[Al_Dente]

Miscellaneous stuff:
“The Russell as a leading indicator for the broader market has a mixed record, but when it loses its 50-day while the Dow reached a new high [like it did last week], almost all stock indexes have lost ground over the next couple of weeks.”
[Jason Goepfert, SentimenTrader]

“Drawdowns happen. Since 1929, there’s always been a 30% chance that a 5%+ drop will occur at some point over the following three months. The S&P is off less than 2% from its all-time high, and (still) hasn’t seen a 5% correction since mid-2016, the longest such streak since 2004.”
Scenario A: “I’d be watching if new lows in the S&P 500 are confirmed by new highs in the VIX.
Scenario B: “The other path, more likely in our view, is that this turns out to be a more ‘normal’ correction. …
… we think there is capacity to add exposure eventually, especially in the US…
[MS 8/13 note to clients]

Finally, an unusual chart courtesy of “Headline Charts” (a Pasta favorite)
“This chart does a good job showing the medium-term trend. It just went negative, and a six week correction seems reasonable.”
SAR on the $NYAD
WEEKLY
First sell signal since prior to the election

[daytradingES]

Hi guys,

I didn't take Thursdays short trade even though I felt certain it would fall and down through the breakdown level.
The reason was that I told myself to wait until 2451.50 (ES Sept) was broken and closed below it. So this happened on Thursday. Then on Friday I expected an up day and I don't trade the long side.

So all this is good news for me. I have been waiting and waiting and waiting for a change in trend. If Monday is down that will be important.

Here is a daily chart for my reasoning on 2451.50

[daytradingES]

Another view