08/20/2022 Weekend Update

[Cobra]

Down 1 week, the next week has 60% chances to close up.

[cletus]

Bears aren’t done yet. Might get price recovery at some point but this correction will extend. No positive seasonality until October.

[te_fern]

Over the weekend, please take a little time to vote for Cobra, thanks: https://stockcharts.com/public/1684859/ ... /533449377

[koolblue]

Interesting article from Crl Swenlein, founder of Decision Point.....It occurred to me that some of our primary indicators have created a teachable moment. Specifically, our short-term and intermediate-term indicators are both at fairly extreme overbought levels, and now is a good time to talk about what that means.

The Swenlin Trading Oscillators for breadth and volume (STO-B and STO-V) are near the top of their normal range, and that usually coincides with short-term price tops. The IT Breadth and Volume Momentum Oscillators (ITBM and ITVM) are also near the top of their normal ranges, and that normally coincides with intermediate-term price tops. With indicators from both time frames at overbought levels, there is strong technical pressure for prices to make a noticeable decline. Conclusion: This condition occurs about every two to three months (see the red, downward pointing arrows for previous events), and it is fairly reliable as a top warning. While all four indicators are still rising, they are quite extended, so I would expect a price top soon, probably this week. Not guaranteed, just likely.

[koolblue]

The overwhelming question confronting investors is: Is it still a bear market? Or have we already started a new bull run? There are honestly good arguments for either one. i think those questions may be answered in the next 2 weeks. With seasonals turning strongly up, but cycles down through Tues. The most likely scenerio for me is continued decline for 2-3 days then a good rebound to complete the pattern. The .382. in terms of time is Tues and gdp on Thursday. The rebound could last till around the 29th or so , maybe even stretching into the holiday. Be aware that the 29th has been down 18 of the 18 years! And the next day the 30th has been up 17 of the last 25 years. No guarantees but those are pretty good odds. So far the possible wave pattern is playing out exactly, but dont get married to any conjecture because thats all it is.

[BullBear52x]

From "It is is what it is department" weeks ago most were agreed that it was just a dead cat bounce, Now the bounce ended and the rebound were quite strong we are confusing?. when I am in doubt I will ask myself "What time frame am I trading?" more time than not I got the answer.

Trend following setup: Daily = Buy the dips. swing setup = Sell the rips. Time frame of a trade is always the simplest, keep it simple.

The individual investors are not yet bullish the whole time since the bottom, so from here I see it as nothing more than just traders activities.

High/Low indexes are back to negative once again. caution on the longs side is back.

Intraday: Friday ended the day with somewhat bullish on price action. Let see if Monday could trade above 61.8%, bigger time frames are all pointing south. good trading, Peace!

[Al_Dente]

LONGER TERM, daily:
Perfect spot for a decline
Failed at the long term declining trendline
Failed at the 200 MA resistance ["Previous failures triggered in 2001 and 2008, but overall, it was not a consistent warning sign". Sentimentrader]
I'd like to see a red Elder Bar, but all we have so far are blue bars, which Dr. Elder calls "maybe". (Friday's blue bar was on higher selling volume).
We should at least attempt to fill that gap at circa 415 SPY
If you're still long, you don't need to guess on the direction, just set an "line- in- the-sand" stop and let the stop take you out.

NOT SHOWN HERE: We do have a red Elder on the daily IWM (on higher red sellng volume) and three red Elders on HYG (IWM's cousin)

VERY SHORT TERM, 5min:
Second lower low.
Technically we can bounce, fail, and then go for a third push down ... we'll see...

[JFR]

SPY daily. 3 Line Break. Big picture.

My bias is up. Day by day. Drill down and dig down, time frames, bar styles and various indicators. Plus fundamentals for stocks.

[JFR]

SPY daily. PnF. Price movement, with less consideration of time advancement.

Further to the big picture view.

Long term up.

Mid term down.

Short term up.

Just imo.

[JFR]

SPY 5 minutes. Price action.

Some nice clean movements Friday, subtle, not gang busters. No chop.

[koolblue1413]

Another concern for bulls is the entire rally, the volume has been anemic. Thursday was the lowest volume of the entire year! Avg weekly volume has actually declined for the last 4 -5 weeks! Not a sustainable situation.On the other hand, the put /call ratiois very bullish as is the high/ lows and the advance/decline has been stellar reaching Jan levels! These are longer term indicators but important..Truly a mixed bag here.

[JFR]

As indicated above, my bias is bullish, from 3LB and PnF. But that is not an All-In view. You cannot do that in today's market.

Here is a cautionary view from John Murphy of StockCharts (an excerpt from the article).

https://stockcharts.com/members/analysi ... 819-1.html

S&P 500 STALLS AT 200-DAY AVERAGE...The two month rally in stocks has run into a couple of formidable resistance lines while in an overbought condition. Last week's message showed the S&P 500 nearing a test of its 200-day moving average and a falling trendline drawn over its January/March peaks. Chart 1 shows the SPX starting to pull back after touching both lines (see red and blue arrows). In addition, its 14-day RSI line in the upper box has moved into overbought territory over 70. That combination suggests that the summer rally may have run its course and may be peaking. The flat black lines also show the SPX having retraced just over 50% of its first half losses. That increases the odds that the rally has run into serious overhead resistance.

STOCK INDEXES IN CRITICAL TEST... What stocks do from here is very important from a technical standpoint, and should help determine if the summer rally is just a bear market bounce or something more lasting. This is precisely where the rally in stocks should fail if the major downtrend is still intact. A 50% rebound up to 200-day moving averages and a major downtrend line represents a major test of the downtrend that started earlier in the year. Any serious pullback from current levels would suggest that the summer rally has probably run its course and would also keep the market's major downtrend intact. That also warrants a more cautious view on stocks from current levels.

Caution is advised, at all times. This trader will continue to scalp ES, day trade some stocks, and even swing trade some low risk ETFs.