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ST Short, IT LONG - SPX up 5 points in 3 days!


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#1 dTraderB

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Posted 27 March 2019 - 05:46 PM

Thrashing about the SPX 2800 level, and all that for a grand total of 5 points above Friday's close!

 

ST Short

IT LONG

 

 @hmeisler
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SPX closed at 2800 Friday. It is 2805 today. To quote my pal @RampCapitalLLC T4P

2:16 PM - 27 Mar 2019
@OddStats
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Replying to @hmeisler

Here's one for us anyway. When the Total P/C Ratio is over 1.00 after at least 10 straight days under 1.00, over the last 5 years, the next day on $SPX was negative 65% of the time, but a big draw down over the next 5d almost never happened.

2:50 PM - 27 Mar 2019

 



#2 dTraderB

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Posted 27 March 2019 - 05:50 PM

Not scoffing at the 5-point SPX rally since Friday's close but what does it mean, even if it may translate into Minimum Wage returns! 

 

Consolidation of the V-shape rally?

 

Market topping?

 

Market in transition? 

 

TIM ORD may help us answer these questions, over to you, TIM:

 

1553705515571244502211.gifVIX trades in opposition to SPY and can give clues of what the SPY may do next. Back in October 2018, the SPY made a lower low and VIX matched its previous high and a bullish divergence for the SPY, suggesting a low. In November-early December, the SPY matched its previous low and VIX made a higher high, suggesting SPY may make a lower low (and it did). The SPY is matching its December high and the VIX is making a lower low compared to its December low and a bullish divergence.  This condition suggests the SPY may not retrace much of its advance and, once the retracement is done, the VIX suggests the SPY will exceed its December high (the 2800 SPX range). The market could flip sideways. We will wait for a clearer setup.

1553705527009455349432.gifThe top window is the 100-hour moving average of the tick. When the 100-hour tick is above “0,” generally the SPX is moving higher and below “0” the market may be moving lower. The 100-hour tick has turned down but is still above “0,” suggesting that the market is weakening but still in an uptrend. The bottom window is the 30-hour moving average and the same rules apply. This shorter-term moving average has fallen below “0," a short term bearish sign. Next window up is the hourly cumulative tick. The cumulative tick rises and falls as the SPX rises and falls. Over the last couple of weeks, the cumulative tick increased its angle of rising, showing strength, but over the last couple of days it has rolled over and is nearing its moving average. The SPX has reached its November-December high near the 2800 range and a resistance area. The different configurations of the tick are starting to show weakness. Support is near the 200-day moving average, which is near the 2725 SPX range.

https://stockcharts....ch-26-2019.html



#3 dTraderB

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Posted 27 March 2019 - 05:53 PM

Many are trying to reassure us, and themselves, that the yield curve inversion does not mean the sky is falling, at least not for another 6 or 8 or 12 months from now! 

 

Tom McClellan @McClellanOsc
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Inversion of the 10-1 yield spread has marked the end of every expansion of the last 7 decades. But just because you reach an inversion, that moment does not have to be the end point. In the past it has gone much farther into inversion before the episode reached its completion.

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8:55 AM - 27 Mar 2019


#4 dTraderB

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Posted 27 March 2019 - 05:57 PM

Yeah, it's different this time....until it is NOT.

 

The Yield Curve Inverted, but You’re Telling Me This Time is Different

Posted 

March 27, 2019  by blair

Last Friday, the yield curve for U.S. Treasuries inverted. Three-month T-Bills had a slightly higher yield (2.46%) than 10-Year Treasury bonds (2.44%). That sounds crazy because it is. The inverted yield curve made national news because yield curve inversions have preceded the last nine economic recessions. 

I remember the last time the yield curve inverted in 2006.  I remember justifying in my head why “this time it’s different” and we wouldn’t get a recession. Boy was I wrong. We experienced the deepest economic recession since the Great Depression in the 1930’s. Of course, my personal experience is an availability bias. That yield curve inversion is the only one I have experienced as a professional investor. The inverted yield curve neither caused nor predicted the subprime mortgage crisis. It was merely a market occurence adjacent to the event.

However, when I hear “this time it’s different” because the Fed Funds rate is so much lower today than in previous yield curve inversions, my skin crawls. Why does to level of interest rates make it any less crazy that 3-month bond yields are higher than 10-year bonds yields?

If anything, the low Fed Fund rates is scarier. At 2.25%, the Fed doesn’t have much ammunition to loosen monetary policy in the next recession. The Fed’s balance sheet is barely below $4 trillion. Their balance sheet reduction strategy will be halted in a few months, and they’ve barely made a dent. How large is the Fed willing to grow the balance sheet in the next crisis?

fed-balance-sheet-1024x712.png

Source: Federalreserve.gov

On the other hand, the cyclical sectors of the U.S. economy are not overheated. We don’t have far to fall, in theory, if we do get a recession. Home and vehicle sales are below historical averages, and inventories and business investment are not a boom levels. So, while there are signs of an economic slowdown, you might expect any recession to be mild.

http://blairbellecur...e-is-different/



#5 dTraderB

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Posted 27 March 2019 - 05:59 PM

@jessefelder
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Global investors pile into bonds as growth fears mount https://www.ft.com/content/3b150b28-50aa-11e9-9c76-bf4a0ce37d49 

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12:18 PM - 27 Mar 2019


#6 dTraderB

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Posted 27 March 2019 - 06:01 PM

From SENTIMENT TRADER:

 

Close 1-Year Analogs, As Confidence Peaks
  • Jason Goepfert
     
     Published: 2019-03-27 at 10:48:17 CDT

A year like ‘90

Hand-picked price overlays can show some scary comparisons to the past year, like 1937. But the one-year period with the highest correlation since 1928 was 1990, which led to tremendous gains.

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Of the 17 one-year periods with the highest correlation to the past year, the next few months were sketchy, with positive returns less than 45% of the time and more risk than reward.

A little less confident

Consumers are becoming less confident about their present conditions. According to the Conference Board, this measure has gone from a multi-year high to the lowest level in nearly a year.

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This has indicated the peak of most past cycles since 1970, often leading to recession and poor stock returns.

Lots of extremes

More than 45% of our core indicators are now showing excessive optimism, the most since late January 2018. Over the past 20 years, when there were this many extremes, the S&P’s two-month average return was negative. Most dates showed a negative return somewhere between 1-3 months, with the major exceptions being late 2003 and 2004, and early 2017.

https://www.sentimen...onfidence-peaks



#7 dTraderB

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Posted 27 March 2019 - 06:14 PM

@kpak82
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$SPY $ES_F gave tactical bears plenty chances to make money today but once again closed with long bottom wick, constructively holding above 20dma and UTL

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1:16 PM - 27 Mar 2019


#8 robo

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Posted 27 March 2019 - 06:33 PM

.Some good points....  My system remains in a cash position for now, but trading some VXXB tranches during the day. Trading using my Vanguard account and VXF trades are free....


Edited by robo, 27 March 2019 - 06:43 PM.

“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 28 March 2019 - 06:13 AM

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Global stocks slide again as bond-yield drop stokes worry. Asia declining led lower by DM Asian exporters after soft US imports data, & on profit taking into quarter-end. 10y US ylds fall to 2.34%, lowest since 2017. Japan 10y ylds drop to 2016 lows. WTI falls <$60. Bitcoin >$4k.

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11:51 PM - 27 Mar 2019


#10 dTraderB

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Posted 28 March 2019 - 06:17 AM

Apparently, "good" TRADE WAR news give us a pop up from overnight lows; yes, it is from the US side we hear this but trade the pop and forget the BS. 

Then, trade the fade up and the hard down after.  GO WITH THE FLOW!

 

China makes unprecedented proposals on tech transfer, trade challenges remain: US officials

https://www.straitst...enges-remain-us