07/30/2016 Weekend Update

[Cobra]

Smart money keeps buying this week, so no sign of top yet.


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.

[Cobra]

the weekly sentiment poll is here: viewtopic.php?f=9&t=2124

[Cobra]

Summary of the week's stock picks.
viewtopic.php?f=10&t=2118&p=227748#p227748

[Cobra]

Stock picks for the next week are here: viewtopic.php?f=10&t=2126&p=227750#p227750

[Al_Dente]

The stock market has risen 69% of the time during the summer Olympics and the average gain for the DJIA has been a hefty +3.9%. [FactSet]

[Al_Dente]

Usually the dow $INDU leads, but not always.
After making an all-time-high last week, it is leading down now, short term, posting a negative stochastics(9) below the 50 line, and with price under the 10ma (cyan). The next test is the 20ma (red).
Bulls need the dow to wake up and jump up, and squeeze the bears … again…
Side note: Friday there were 321 new-52-week highs on the NYSE, only ONE of those was a dow stock (HD).

QQQ got a big boost from some of the FANG stocks that beat earnings estimates.
Could someone please post a list of the dow $INDU stocks reporting next week? Maybe that will give the dow the boost it needs….

Weekly candles, not pictured:
SPY doji
SPX doji
RSP (equal weighted spy) doji
INDU bear candle
RUT bull candle
COMPQ tall bull candle
NYSE doji

Also note: it’s rare for SPX to make a new high (today) on a day that NYMO is in the red, but I don’t have the stats to support that statement.

Short-term participation (Percent of stocks above 20ma) is waning a bit. That can be easily cured, and as all are still above 50%, buy-the-dips is still the mantra. But note how busting the red ma usually produces a little pullback of at least a couple/few days…

[Trades with cats]

Black Gold –
I read an article on OilPrice.com that just made a whole lot of sense, an a-hah moment for me. http://oilprice.com/Energy/Crude-Oil/Oi ... rices.html
If you take the time and look at the charts it seems to be a bit farfetched but I have been watching the political conventions so I have had my tinfoil hat on for two solid weeks now, as has El Fumar one of my feline trading partners.
Two quotes came to mind that make the authors thesis believable.
First on January 18, 2015 the legendary Stanly Druckmiller made a speech at the Lone Tree Club in Miami area. It made the rounds on the internet. http://www.valuewalk.com/wp-content/upl ... Speech.pdf
In that speech he said he had never met a “Texas oil man who wasn’t willing to dig a hole in the ground with other people’s money”. Then this week Moodys says they are going to downgrade E&Ps that bonus the CEO for drilling money loosing wells. http://oilprice.com/Energy/Crude-Oil/Is ... ustry.html
The second quote is from Michael Lewis book about subprime, “The Big Short”. An article on the new no down payment jumbo loans in the Silicon Valley used a clip from the move version culminating in the phrase “Short everything he touches” after the lead has a discussion with an MBS manager. https://youtu.be/A25EUhZGBws
The point being Wall Street’s greed for yield when they aren’t keeping the paper has led to total insanity in the past, so what has changed to keep it from repeating. Just like MBS they will issue until the junk market collapses.
So those are my borrowed reasons for thinking that this guy is right and we are in for a lot more pain before oil bottoms.

Oil will bottom. Longer term world demand for oil has been going up in a straight line matching the development of the third world so as shale supplies are used up oil prices will be forced to the level where newer, expensive long life field will be developed, but it will take years, not the current media narrative calling for a 2017 bottom. Case in point US production is down from the peak as Alaska dries up but Chinese demand is about to fall hard. Libya will not be off line forever and the Iranians are yet to reach their goals. I am not investing until the "bottom" survives a winter, until then it is an exciting seasonal trade.

[tsf]

https://pbs.twimg.com/media/ConmMPgUAAEU8ft.jpg:large

[fehro]

M/W/D candles. Divergence is the name of the game … until its not. On all time frames, and to various degrees with ATH, Last years highs, Weekly highs, and daily. SPX/NYSE hanging man Weekly. INDU retesting 2015 highs near LOW. TRANSports DJ-20 very weak. Monthly candles look bullish, with TLT toppy, and DXY-USdollar weakish. Do bonds top and money exit bonds and rush to Equities? Big Caps lagged this week as Tech/Small Caps gained.. risk on? Money leaving big caps to higher risk.. as we flirt with ATH (All Time Highs)?
Fwiw. As mentioned during the week 2000/2007 tops suffered from monthly index divergences (chart to follow lower post). Do we continue to diverge or pound out ATH in the months ahead.

[fehro]

Industry % Weeklies

[fehro]

T2 http://www.worden.com/TeleChartHelp/Con ... rs_T2s.htm

Have some cracks showing in with this sideways action, Put/Call nears extreme, and couple indicators showing weakness on sell or nearness to sell side.

[fehro]

T2 Channels % Stocks 1+2 Channels ><200d Weekly ><40d Daily

more stocks slip again with this sideways move

[fehro]

P&F long long term

[fehro]

Yields 5yr and 10yr -7% for the week.. heading down

[fehro]

Yields v2.0

[Al_Dente]

Thank you “tsf” and “trades with cats” and “el fumar”.
In my search for dow stocks that could assist in a rally, I noticed XOM and CVX.
Pictured are “EquiVolume” candles which focus on volume, but if you swap them out for the classic candles you will note that:
XOM printed a bullish hammer that closed near the high of the day, on volume that’s either exhaustion volume or near-exhaustion volume. (Actually a “classic” bottom formation would be another lower price low on REDUCED selling volume, like MCD which printed three lower lows on REDUCED selling volume - selling starts to dry up - which is known to produce at least an interim bottom/bounce).
Some would call XOM a falling knife, which it is, but candle analysis says that the bullish hammer will be confirmed when price crosses above the top of the hammer (and not until then).
Both XOM and CVX printed momentum readings (sto-9) that are ripe for a turn.

I’m also looking to KO (exhaustion volume three days ago) for help in a turn.
In other words, if the strong get stronger (AAPL, et.al.), and the weak can turn from oversold to help a rally, and earnings from PFE and PG help out….the dow might be saved.
Conversely, I could just be smoking the bong....

Also, vote the poll, to see and contribute to the EXTREME skew on the board this week.
viewtopic.php?f=9&t=2124

[fehro]

Fwiw. As mentioned during the week 2000/2007 tops suffered from monthly index divergences (chart to follow lower post). Do we continue to diverge or pound out ATH in the months ahead.

SPX/NDX/COMPQ/INDU/TRANS/RUT. Monthly 2000/2007/2016. - small side note NDX is the only index NOT to take out ATH at 4816.35 from 2000 during 2015. So close here.(Also XLF never took out 2007 highs nor 2015 highs)

[daytradingES]

Cl continues down
From before

[daytradingES]

and now
30 Jul 2016

[daytradingES]

So 46.10 15 Jul
41.60 30 Jul
-9.8% in 2 weeks.