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The Bull's Last Gasp? No, "premature to be bearish" !


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#1 dTraderB

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Posted 19 June 2018 - 08:20 PM

Look at this  hourly SPX chart which shows how the market opened at almost the low of the day and closed near the high during the past three days. Today, the recovery from the lows was remarkable with the SPX closing smack dab in the middle of the critical support zone 2760/65, but just below the 20ma (2766) and about 14 points below the 50ma (2776); market bounced off the 200ma at 2744. 

So, basically, the important levels tomorrow are 2744, 2766, and 2776. 

 

My VIX hourly and daily indicators are off the BUY mode so I am looking for today's intraday rally to continue but am not optimistic it will go above 2780;  on the other hand, a decline below today's potential swing lo at 2744 will indicate this market is still bearish mode. 

 

BARRON's carried an interesting discussion about the "futility" of the DOW & SPX but one should note the vast number of bulls who want to reassure everyone that all is OK, this is merely a trade spat, things will be fine, and we will soon reach new S&P highs. I don't buy that, two many want to spread that narrative, they seem too eager to do so, as if they themselves do not believe it. See link below chart.

 

spx_619.jpg

 

 

The Bull's Last Gasp?

With the Dow down for five consecutive trading days even before Tuesday's action, this losing streak already ties with the mid-April slide as the longest-losing streak of 2018. And they match in terms of "futility," writes Frank Cappelleri, technical analyst at Instinet, in his morning note.

The Dow Jones Industrial Average has slipped 331.64 points, or 1.3%, to 24,655.83, while the S&P 500 has fallen 0.7% to 2753.77, and the Nasdaq Composite has dropped 0.8% to 7687.72.

What did Cappelleri mean by "futility" of the markets? He says: "It ties for the worst in terms of price action, even before the gap down this morning. That hasn't been much of a focus with tech doing so wellTesla (TSLA) and Twitter (TWTR), whatever." Though neither the electric-vehicle maker's nor the social media company's stocks are doing particularly well today. But what investors should remember is that losing streaks in the last five years have ultimately led to gains 20 days to a month later, says Cappelleri. Of the previous 16 times of 5-day straight losses, the Dow ended higher 75% of the time with an average gain of nearly 3%.

For the S&P to hit higher highs, it needs to break above its March ceiling of 2800. "It doesn't have to happen immediately, because this is a large pattern, but the break above the top will trigger higher highs," he says.

The overall pullback will likely be short-lived, wrote Robert Sluymer, technical strategist at Fundstrat Global Advisors in a note published Tuesday morning that echoes Cappelleri's. "Given the intermediate-term backdrop...it is premature to become bearish," he said, adding that it might be time to ease exposure in former leadership areas.

 

One sector worth keeping an eye on: Consumer discretionary. Cappelleri warns investors to keep an eye on the Consumer Discretionary Select Sector SPDR ETF (XLY), which has been on fire after investors seemed to have gotten over the retail rout. It ended a 10-day winning streak on Friday. However, the explosive action is not sustainable, Cappelleri contends, and given the stocks in this sector seem to be one of "the most extended portions of the market," it poses significant risk, he says.

https://www.barrons....nues-1529428607

 



#2 dTraderB

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Posted 19 June 2018 - 08:22 PM

So, is it the dip buyers buy the low at the opening and the distributors sell to them during the day and take profits ... and repeat each day? 

Or, are these bots that buy dips and sell at the close? or ??



#3 dTraderB

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Posted 20 June 2018 - 08:15 AM

Up up and away.... as one who have surmised from the open-low close-high price action during the past few sessions

 

SPX 2780 is an important level.

 

Will today be the opposite of what happened during the past 3 days ? Open high and close low today? 



#4 12SPX

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Posted 20 June 2018 - 08:21 AM

For sure due for a bounce so many down days, will be interesting to see if it holds or not, think were gonna remain sideways for awhile yet but could test your upper end I think!



#5 dTraderB

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Posted 20 June 2018 - 08:35 AM

Has POWELL put the kibosh on this nascent rally?

 

https://www.wsj.com/...ases-1529501509



#6 dTraderB

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Posted 20 June 2018 - 10:44 AM

Real choppy market.  Frustrating to trade this crap today!

 

"12,800 is the Must Hold line on the NYSE, meaning it's very bearish to be below that on the broad index and we finished the day yesterday at 12,638 and, so far, this morning's bounce isn't going to fix things."

 

Anyone looks at the NYSE?   

New York Stock Exchange Composite Index
12,650.68USD
+11.70+0.09%
 
 

 

NYSE%20June%2020%202018.jpg



#7 dTraderB

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Posted 20 June 2018 - 10:50 AM

Check this gem from GENE INGER:

"Hence, don't be lulled into any new false sense of security; just because Quantitative analysts and others tell you the market has nothing to hold it back for the many months ahead. Technicians are running around pointing to charts saying 'stocks are down to support and ready to spring forward'. That's marketing, not market analysis, at these extended levels.   
 
For sure; some stocks yes; but as many of the priciest are simply showing patterns of declining tops; and now lateral short-term lows, I'd beware lots more. Odds might favor not so strong a rebound as traders suggest, but rather a 'cratering' through those high-level supports on those issues."
Continued here: 

http://www.traders-t...-by-gene-inger/


#8 robo

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Posted 20 June 2018 - 10:53 AM

 

Check this gem from GENE INGER:

"Hence, don't be lulled into any new false sense of security; just because Quantitative analysts and others tell you the market has nothing to hold it back for the many months ahead. Technicians are running around pointing to charts saying 'stocks are down to support and ready to spring forward'. That's marketing, not market analysis, at these extended levels.   
 
For sure; some stocks yes; but as many of the priciest are simply showing patterns of declining tops; and now lateral short-term lows, I'd beware lots more. Odds might favor not so strong a rebound as traders suggest, but rather a 'cratering' through those high-level supports on those issues."
Continued here: 

http://www.traders-t...-by-gene-inger/

 

Getting ready for another TZA trade...

 

Good trading!

 


Edited by robo, 20 June 2018 - 10:55 AM.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”   Jesse L. Livermore


#9 dTraderB

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Posted 20 June 2018 - 10:56 AM

long or short TZA? 
Haven't traded this in a while but will consider a few day trades...

 

Will look at TZA options



#10 robo

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Posted 20 June 2018 - 11:18 AM

long or short TZA? 
Haven't traded this in a while but will consider a few day trades...

 

Will look at TZA options

I call them Beer money trades because I keep they small and stay very nimble when using TZA and TNA. I like to trade both of them when I like the setup...  I just took a small TZA trade .... I always use plain vanilla shares in my Roth IRAs so I don't have to worry about keeping track of the trades for taxes. I MT trade using VXF only, but I remain flat.

 

06/20/2018  12:07:57 Bought 600 TZA @ 8.4051

 

Good trading and the buyers remain in control.  This is a ST counter trend day-trade. We shall see how it plays out....

 

http://stockcharts.c...605&a=601779960


Edited by robo, 20 June 2018 - 11:25 AM.

“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”   Jesse L. Livermore