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Rampaging Bulls, can the bears stop them? YES


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#1 dTraderB

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Posted 08 November 2018 - 08:11 AM

More than 200 points from the low, VIX at 16, charts looking constructively bullish, it is as if we are in a totally different world compared to October, and the bulls are on a rampage. So, will it continue? 

YES, but this will soon end, and the markets will pull back, at least to SPX 2780, possibly 2700.  

From there, we will have to analyse and see where it goes. 

 

Looking at the SPX daily, there is nearby resistance at 2817/20 and then at SPX 2833/35,  and then way above at 2885/90

 

I expect that 2880 will be the maximum potential of this rally, but more likely, the markets will find great difficulties in moving beyond 2835/40 on a daily closing SPX basis.

 

My trading this morning has been relatively quiet, 4 NQ trades, 3 long, 1 short. I am still leaning towards NQ long

and I hold net 9 QQQ puts. Looking to add more when cash session opens. 

 

Also, watching the VXX chart for a long trade or two or....

 

That 10-yr yield is now above 3.2, again, near the highs.

FED later, look for any hint of dovishness; if so, then BUY BUY BUY

 

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#2 dTraderB

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Posted 08 November 2018 - 08:12 AM

I don't believe in gaps, but people do and are all excited about those gaps in the SPX and VIX charts. 



#3 dTraderB

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Posted 08 November 2018 - 08:16 AM

Investors Turn Focus to Fed Signals

By Sam Goldfarb, bond market reporter

   

It’s that time again: when Wall Street traders turn into linguists, closely parsing the text of a Federal Reserve statement for minor word changes that could offer clues about the central bank’s future monetary policies.

Few people expect the central bank to raise its key policy rate above its current target of 2%-2.25% when the central bank concludes its two-day meeting Thursday. There is also no press conference after the meeting, limiting the ability of officials to communicate their outlook.

Officials will, though, release a statement that analysts say could potentially tip in a dovish or a hawkish direction.

A glancing reference to recent market volatility or tightening financial conditions could be interpreted as a sign that officials are taking that volatility seriously and could be cautious about raising interest rates if it continues.

At the same time, a reference to rising wages or other forms of inflation pressure could send the opposite signal: that officials are more concerned about inflation than skittish markets and are prepared to raise rates even faster than investors are anticipating.

Either move could send ripples through markets at a time when many investors are uncertain about the economic outlook. There is now little doubt the economy is doing well. The question is whether it is doing too well, with investors increasingly nervous that there could be an upswing in inflation or a hawkish turn by Fed officials intent on mitigating the inflation threat.

A big reason why U.S. government bonds, and then U.S. stocks, declined in recent months was an increase in uncertainty about inflation expectations and the Fed’s potential response, said Karissa McDonough, a fixed-income strategist at People's United Wealth Management.

Some of that uncertainty may have been removed with the conclusion of the U.S. midterm elections, which many analysts say has reduced the chance that Congress could further stoke the economy through additional fiscal stimulus.

Yet much still remains, with the recent data showing the unemployment rate at a 49-year low and U.S. workers garnering their biggest pay raises in nearly a decade.

If Fed officials lean harder in a hawkish direction—suggesting they’ll keep raising rates to the point where it curtails economic activity—investors can expect more volatility, said Priya Misra, head of global rates strategy TD Securities in New York.

"Risk assets will not like that at all," while yields on short-term Treasury notes would likely shoot higher, she said.

Market Facts
  • The tech-heavy Nasdaq Composite, which plunged into correction territory about two weeks ago, has climbed in five of the last seven sessions and is now 6.6% below its August all-time high and back up 9.7% for the year. 
     
  • Wednesday marked the first time the S&P 500 rose at least 1% the day after a midterm election since 1982, according to Dow Jones Market Data. That was also the last time the president was Republican, Democrats had a majority in the House of Representatives and the Senate majority was Republican.
     
  • On this day in 1993, one of the hottest IPOs in history hit Wall Street as Boston Chicken went public at an initial price of $20 a share. The stock leapt 142.5% to close at $48.50 (or 269 times earnings), giving it a market value of $800 million. Less than five years later, Boston Chicken filed for bankruptcy protection; McDonald’s later bought the chicken chain for just $173.5 million.

Are you closely monitoring Fed signals late in the year? Let the author know your thoughts at sam.goldfarb@wsj.com. Emailed comments may be edited before publication in future newsletters, and please make sure to include your name and location. 

         

#4 dTraderB

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Posted 08 November 2018 - 08:17 AM

A Treasury bond auction drew the weakest demand in nearly a decade. The Treasury’s auction of $19 billion of 30-year bonds met the weakest demand since 2009, a sign the flood of new U.S. government debt requires higher yields to attract investors.

The Federal Reserve could move again soon to keep short-term rates in check. The U.S. central bank appears ready to make another tweak that will slow the rise of a key short-term interest rate by the end of the year, analysts say.



#5 dTraderB

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Posted 08 November 2018 - 08:18 AM

DP Alert: Momentum Shift - New PMO BUY Signals on DP Scoreboards
Erin Swenlin |  November 07, 2018 at 07:48 PM

 

https://stockcharts....coreboards.html



#6 dTraderB

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Posted 08 November 2018 - 08:19 AM

Should we trust this rebound?

While I’d love to say we will continue surging up to all-time highs, that isn’t how this works. October’s selloff did a lot of damage to investor confidence and it will be a while before people feel comfortable chasing prices back to the highs.

This rebound recovered nearly two-thirds of the October selloff and that is about as far as these things go before they start running out of steam. Momentum could carry us up to the 50dma and even 2,870 where this whole thing started, but we should expect demand to dry up soon.

For short-term traders, this is definitely a better place to be taking profits than adding new money. At the very least, expect prices to consolidate for a while as investors warm back up to this market. But more likely, volatility will persist and that means a dip back to 2,700 support would be a normal and healthy part of this recovery.

Anyone scared out during October’s selloff and looking to get back in, resist the urge to chase prices higher over the next day or two. Instead, wait for the inevitable pullback and consolidation over the next few weeks. Volatility is still high and that means big moves in both directions are ahead of us. But as long as the economic data holds up, the worst is already behind us.

 

Screen-Shot-2018-11-07-at-5.39.54-PM.png

 

https://cracked.mark...t-this-rebound/



#7 dTraderB

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Posted 08 November 2018 - 08:22 AM

TIM ORD....bullish but....

 

 

1541626625002697566792.gif

 

Today’s SPY rally tested the high of three days ago on lighter volume, suggesting resistance. There is a gap below that was tested three days ago on higher volume, which suggests that gap could be tested again which comes in the 270 range. Not sure if the market will pull back and test the gap, but if it does we expect the gap to hold and reverse back to up. There is evidence that market may at least test the October highs before the year is out. We remain bullish short term and long term (other than a pull back to test 270 SPY gap).

15416266368641865948680.gif

Above chart is a longer term bullish sign for the SPX.  A bullish longer term sign is generated when the McClellan Oscillator falls below -250, then turns back up and travels at least +350 points. This condition suggests initiation of a rally phase in the coming weeks. There can be a test of the recent low in a worst case scenario, but in general the market should work higher. Also worth noting is that during midterm election years the bottom forms in late October (this one bottomed on October 29) and generally move higher into year end with an average gain of 11%. The 11% gain would take the SPX back to the October highs.

 

https://stockcharts....ber-7-2018.html



#8 dTraderB

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Posted 08 November 2018 - 08:24 AM

Watch the HOUSING market!  One of the best and most accurate indicator of the market & economy....

 

The housing slump is not (yet) a recession, writes Howard Gold

#9 dTraderB

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Posted 08 November 2018 - 08:26 AM

I told you this yesterday, right?  So, now let's pullback and then see the real intentions & sentiment of both bulls & bears.

 

Why stock-market investors say ‘gridlock is good’ after midterms deliver split Congress

https://www.marketwa...ress-2018-11-07



#10 dTraderB

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Posted 08 November 2018 - 08:28 AM

Hope this current NQ short nets at least 8 points.....later

 

Stock and bond investors should brace for these 2 crucial dates

Time to focus again on the federal government’s funding and debt limit, so mark Dec. 7, March 1 on your calendar

https://www.marketwa...ates-2018-11-08