12 replies to this topic

[dTraderB]

From Yesterday:

 

"ST & IT bullish

 

IT will remain bullish unless daily close below SPX 2580 (this changes after the close each day)

 

ST bullish unless daily close below SPX 2617 (also changes every day)

 

enjoy this rally while it lasts because markets will down in 2019"

 

These humongous daily ranges are indicative of a fierce battle that will determine the market direction in the near future, and possibly  on an IT basis.  

 

My system is still on ST and IT Long but the bulls have to make a stand here to keep SPX above 2600 or else there will be a 5 to 10% decline. I still think the BULLS can win this one because the market has been hammered with bad news and yet it has not CRASHED! 

Also, techs have recovered and are leading the way. 

 

Technically, the daily candle yesterday represents the range extremes for a breakout up or down so we will have to wait for that to happen. 

 

Politically, it's a mess, and not only the US/CHINA spat but also in Europe.

 

The markets today were spooked by the threat of shutdown and UK PM MAY's impending defeat and her removal from the PM's office This may happen before the cash session opens tomorrow.

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My system is defiantly bullish but politics & geopolitical events are now trumping technical & fundamental analysis...but soon TA and FA will reassert their authority.

 

ST bullish unless SPX closes below 2615

 

IT bullish unless SPX closes below 2578

 

 

[dTraderB]

Brexit breakdown could be bullish for U.S. stocks

 

Investors’ growing fear and pessimism may be seeds of a future market rebound

Stock market timers haven’t been this gloomy since late June 2016, after the U.K.’s Brexit referendum. And that’s encouraging, since the extreme pessimism in the wake of that vote provided a textbook illustration of a contrarian buy signal for U.S. stocks

https://www.marketwa...ocks-2018-12-11

[dTraderB]

I also think there is more than a 50% probability of a 200-point SPX rally from current levels.

But, I also think there is at least a 25% possibility of a 200-point decline from these levels, as the market churns.

Nomura strategist Charlie McElligott on Monday called for a “violent short squeeze” in the market,” and nothing about that session’s whipsaw turnaround and Tuesday’s opening push higher has him changing his mind.

In fact, he’s doubling down on his bull call.

We have “kindling for a massive short-squeeze over the next month,” McElligott wrote in a follow-up note highlighted on the Heisenberg Report blog.

 

https://www.marketwa...says-2018-12-11

[dTraderB]

"Bond King" is bearish on equities

 

effrey Gundlach, Wall Street's bond king and a well-respected prognosticator on all financial markets, painted a bearish picture of the stock and corporate bond markets, as well as the U.S. economy, on Tuesday. He cited weak chart patterns, a rising deficit and signs of an economic slowdown.

"It certainly looks like the U.S. is going to break down to me and to a lower level," said the founder and chief executive officer of DoubleLine of the stock market on a webcast for his firm.

 

Gundlach used charts to tell his bearish story, showing a long-term chart of chip stocks going back to 2000 and how they were unable to stay above their highs made during the dotcom bubble.

https://www.cnbc.com...de-mission.html

[dTraderB]

While the intraday moves have been huge, the directional moves have not. We are still stuck inside the two-month-old trading range between 2,600 and 2,800. The thing to remember about market collapses is they are breathtakingly quick. Markets don’t wait to see how bad things are before they tumble, traders race for the exits at the first hints of trouble. But that isn’t happening here.

Monday’s dip under October’s lows on awful headlines was the perfect setup for bears. But rather than trigger an avalanche of emotional selling, supply dried up and prices bounced 60-points above the morning lows. Rather than sell the weakness, big money is more inclined to buy these discounts. After two months of relentless bad news, it the market chased off most of the weak owners and replaced them with confident dip buyers. That’s why these relentless waves of bad news are failing to dent this market.

Every bottom always feels like things are about to get a lot worse. By rule, it has to. If it didn’t, no one would sell and we wouldn’t dip. At this point, I’m a lot more impressed with the market’s resilience than I am afraid of these fearmongering headlines.

That said, we need to continue respecting support. A dip back under 2,600 support over the next day or two tells us demand is absent and lower prices are ahead of us. But if we hold above the lows for the next few days, the trading range is intact and a run back to 2,800 resistance is in the cards.

Buy weakness. Sell strength. Repeat.

https://cracked.mark...the-smart-move/

 

[dTraderB]

X FEAR:

 

https://money.cnn.co...fear-and-greed/

 

 

https://www.mcoscill...t_breadth_data/

[dTraderB]

1. Douglas Kass‏Verified account @DougKass 5m5 minutes ago

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   Coming up on @realmoney * Where I Stand - a year end rally seems possible but the upside is muted. * Shorting Self Confidence, Looking for the Conspicuous Consensus In Searching for Thin Reed Indicators * S&P Profit expectations are reduced @jimcramer @TeamCavuto @tomkeene

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   Jim Cramer‏Verified account @jimcramer 3h3 hours ago

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   If you are buying stocks/futures on China hopes i urge you to realize that the Justice Department is not going to stop its Chinese hacking prosecutions and they will be big headlines

[dTraderB]

D-Day for Bulls - put up or shut up time

[dTraderB]

From WSJ:

The Russell 2000 index of small-capitalization stocks has slumped 17% from its Aug. 31 all-time high and closed Tuesday at its lowest level since September 2017. After a nearly 10-year bull run, the index is the only one of the major U.S. stock benchmarks teetering on the brink of a bear market—typically defined as a fall of at least 20% from a recent high.

In comparison, the S&P 500 is off 10% from its September record, while the Dow industrials have tumbled 9.2% from its October high.

Small-cap stocks are also correlated to the rising and falling of an economic tide. Shares of small caps went into a freefall as banks were reining in credit ahead of the financial crisis in 2008, one of the early indicators of the recession, said Tom Essaye, president of investment research publication the Sevens Report.

Another reason the outlook has soured for small caps: Small companies tend to be more reliant on borrowed capital than larger firms. The Russell 2000’s debt burden is more than double that of the S&P 500, according to Lindsey Bell, an investment strategist at CFRA Research.

The Federal Reserve is widely expected to boost interest rates next week and continue raising them in 2019. But officials have recently signaled a more patient approach to policy in the coming year.

A more dovish Fed would likely put pressure on the dollar, as higher borrowing costs make the U.S. currency more attractive to yield-seeking investors, according to Talley Léger, investment strategist at Oppenheimer Funds. That, in turn, would give large caps a leg up against small caps because a weaker greenback would give multinationals a boost, making U.S. exports relatively less expensive in world markets.

Market Facts

• The Nasdaq Composite is up 1.9% so far in 2018 but is on pace for its worst year since 2011. Still, the tech-heavy index is on course to end higher for the seventh straight year, which would mark its longest annual winning streak ever.
   
• Shares of General Electric ended Tuesday down 2.5% at $6.76, their lowest close since March 2009. The stock has plunged 61% in 2018, putting shares on pace for their worst year on record.
   
• On this day in 1914, the New York Stock Exchange reopened after closing in July amid jitters over the outbreak of World War I. By the end of 1915, the stock market had risen nearly 82% as Western Europe supplied its war effort with American-made goods and weapons.

[dTraderB]

To that end, our sentiment analysis suggests that we will likely be stuck in this corrective environment for some time going into 2019. While I still think that a larger degree rally can be seen once the initial leg of this correction completes in the coming weeks/months, and that rally may even strike the 3011 target we failed to strike in the primary trend, the ideal target for a correction of this degree resides in the 2100/2200 region in the SPX. So, that remains my target for the larger degree correction, which means I expect a lot of volatility in 2019.

In the meantime, I may be looking to buy long positions once the initial stage of this correction completes in the 2450/2480 region, from where we may see an intermediate term rally I in 2019 before the bigger decline takes hold to 2100/2200. But, I would need a 5-wave structure to complete into that support to strongly consider entering those long positions.

-- AVI GILBERT