254 replies to this topic

[EntropyModel]

quick update

https://www.screenca...om/t/CvWCCD7vYK

[Waver]

Entropy - still not trusting this market? See much more upside?

[EntropyModel]

Entropy - still not trusting this market? See much more upside?

 

To be clear Waver -   its the signals ability to give an edge I don't trust - important thing i've learned, to understand when system is tuned

well to market, and when it isn't - mostly it depends on LQ as explained, also x-games (which are off the charts here).

 

We actually had 4th in row ST_LQ up pulse on FED day!  ( after drop to neutral ) including the

historic one - so the tidal wave continues, which on my model means just REACT to price, and don't try to predict.(low signal tuning).

 

At some point we will correct again, cd be close here, but until the seemingly infinite LQ machine ends, we go higher no matter what.

Note. pure guess work i will say, there is no historical similar period to this, so, can't really make any predictions - but appears FED have been scared to death by

something and have flooded system for now, my take right now, is that means we likely go into a new parabolic bubble but there is time

to determine that still here ( i'm hoping at least - we are close to tipping point of going parabolic right here, but VIX 16 area could produce a pullback first)

Edited by Entropy3.0, 01 February 2019 - 10:26 AM.

[EntropyModel]

FWIW - A break of 2700 here today, will turn me Short term bearish here for several reasons, mostly the VST LQ  dropped this AM & the price setup ( differential to VST LQ)

[Waver]

About to go parabolic!?

[EntropyModel]

About to go parabolic!?

 

It's going to be close I think, whether we get a pullback first to shake the bull bus which is getting very overcrowded or not.

tomorrow looks key - if it doesn't reverse down tomorrow, and or breaks about 2750 (closing value) then I'd lean no pullback before going

parabolic. the RTE ( reversion to extreme) gives me a projection of 3500 on the SPX for the move this year if that is the case, unless 

ST LQ reverse down before that breach. The difficulty is, as explained, it all relies on LQ and no TA is relevant, so for all I know, 

we breach 2750, close above it ..the FED reverse LQ and we collapse ...so as said, prediction is kinda moot, but, since i'm not

privy the FED's intensions, and can only guess, based on the historic intervention it would be fairly insane for them to reverse it down again,

but if they do, I will get heads up on the LQ.

Edited by Entropy3.0, 04 February 2019 - 06:17 PM.

[kaiser soze]

20 Nasdaq stocks determine the direction of this market just like before the 2018 correction/bear market.  Never was this more evident than today when NDX raced ahead to nearly a percent gain early in the day while the SPX and Dow were languishing at nearly unchanged.  Then NDX strength bled over to other sectors and SPX ended the day two-thirds of a percent higher.

 

After the Fed turned "full dovish", the market is back to levitating FAANG stocks and the Cloud Kings.  NFLX, AMZN (despite recent weakness) and FB have staged stunning recoveries since their Fall lows. Even AAPL is now joining the party. VMW, WDAY, NOW, TWLO are making new all time highs on a daily basis while CRM and SPLK are close to making ATHs. 

 

Ultrahigh P/E is after all the trade that worked for much of the Bull Market since the 2009, particularly during periods of low growth or declining growth.  The "logic" is that fast growing, well-managed companies deserve a rich premium in a world starved of organic growth, leading to continuous valuation expansion for the FAANG stocks.  The logic for buying CloudKings is similar albeit more reliant on ever-increasing demand for productivity boosting software in both expansionary and recessionary economic phases. The other piece of this puzzle is that excepting AAPL and MSFT, the FAANG stocks and CloudKings have the lowest China exposure of any sector.  After all, China does not even allow FB & GOOGL to operate, and does not need AMZN when it has Ali Baba. NVDA was the one FAANG stock to have significant China exposure and this is the one stock that has been kicked to the kerb (at least for now). 

 

I'm not sure there is going to be a parabolic move upward.  Just day after day of the market grinding higher led by NDX, and periodically punctuated by consolidation phases (but with no real downward moves of any significance in the broader averages).  In this scenario, Energy and Materials will continue to get hit sporadically.  Banks will continue to be flaky. Most mall-based specialty retailers will drift lower with time. And NDX will roar higher.

[EntropyModel]

Yep agree Kaiser - when I say parabolic, I just mean like u say, mostly up little or no pullbacks...though I think there 

will be a large up day on close above 200dma ... a 'point of recognition' type day and fast move to 28xx.

 

But alot depends on what happens today/tomorrow from what I see. 

We actually got a 5th ST LQ up pulse today ..but price not following ..biggest divergence i've seen, so either some major 

selling is starting to come in here, or , price will play major catchup late today or tomorrow after state union speech.

 

Once I see this action i'll have firmer view.  A drop under 2720 here today, and failure to rally tomorrow AM wd turn be more bearish ST.

Edited by Entropy3.0, 05 February 2019 - 01:16 PM.

[EntropyModel]

We did fail to rally today ..as said leans me slightly more now to the retracement ..which will come here price/time or not at all.

I need some confirmation here soon, next couple sessions, most of all need LQ to stop going ballistic.

Today there were alot of market distortions creeping in again, very noticable, which suggests as well PTB has pushed the envelope to max extreme

and might have to stop pressing the magic LQ button.

[kaiser soze]

Yes, the market did seem to run out of gas in the 2730s.  But then again, yesterday was WWW.