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Uncertainty high, markets volatile, possibility of further price declines


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#31 K Wave

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Posted 16 May 2020 - 09:52 AM

Note what happened on my historical data chart below after a "VIX spike of 80".  It better be different this time, and maybe it will be  with the amount on money the Fed is throwing at this. 

 

https://stockcharts....619&a=735946766

It looks to me like RUT went up 5X afterwards.


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#32 K Wave

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Posted 16 May 2020 - 10:03 AM

I am in agreement with most of the stuff in this column:

 

The next move

Despite the unprecedented nature of the 2020 stock market moves, my mix of indicators has done a surprisingly good job of identifying the next move.

The current evidence is not as clear as it’s been, but unless the major indexes break above their May highs, I expect more weakness to take hold next week (May 18-22), and I would seriously think about buying stocks again after a pullback of about 10%.
https://www.marketwa...ewsviewer_click

This one I can agree with...unless bulls continue Friday's turnaround next week, the swing up is likely done for now.

 

But looking at where we are, IF it turns down here, I could see more than 10% down over next couple months.

RUT, if it took out the key pivot on the chart below made on Thursday, would likely do a full retest of the lows.

Other indexes likely a bit stronger.

But if RUT were to break back above 1300, any further downside would likely be aborted, and an absolute whoosh move to the upside could follow (1500), while NDX goes to new all time highs.

The 15 min 900 looks to be the key for the next swing move on RUT.

 

rut.png


Edited by K Wave, 16 May 2020 - 10:04 AM.

The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#33 K Wave

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Posted 16 May 2020 - 10:13 AM

Trannies also bear close watching here. Note how much weaker they performed than RUT after the Thursday drop and reverse, and that they have already convincingly broken the 15 min 900.

 

This will be your leader if we breakdown next week.

 

Unless they gap up and take out 8100 pretty quickly, this chart gives the most credibility to bear thoughts at this point.

 

A gap down here on Monday, and things could get ugly in a hurry....

 

djt.png


Edited by K Wave, 16 May 2020 - 10:13 AM.

The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#34 K Wave

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Posted 16 May 2020 - 10:17 AM

 

After trillions pumped in... and more trillions to come.. FED is either VERY WORRIED or in coverYAHarse mode or both:
 

 

Fed says pandemic has created U.S. financial sector fragility that will last for some time
May. 16, 2020 at 9:25 a.m. ET by Greg Robb
Fed says risks to the financial system are worrying insiders
May. 16, 2020 at 9:28 a.m. ET by Sunny Oh
Justice Department, state attorneys general poised to hit Google with antitrust lawsuits: report
May. 16, 2020 at 9:22 a.m. ET by Jon Swartz

 

Depending on how the stock acts on Monday, this could conceivably be the thing that generates the sell signal on the BIG 5....


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#35 K Wave

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Posted 16 May 2020 - 10:33 AM

 

 

All the major indexes I track remain below their 13 EMA.....

 

You left out the leader that is powered by the BIG 5.

 

NDX just bounced off the 13 and QQQ is clearly still in bull mode above 220, with a real possibility of new swing high being made next week.

 

To ignore that is trading with blinders on...plain and simple.

 

Now, if QQQ comes back under 220 on Monday, then the odds of a sharp pullback would grow.

 

But for now, the Big 5 and NDX/QQQ are still above the 5 min 900 and have NOT yet generated a swing sell signal.

And it is pretty unlikely we are going to see a big decline until they do generate that signal.

 

My 2 cents

 

LOL.... I track indexes with a high numbers of companies. I could careless about a index that is moved higher because of 5 or 6 stocks. It is you that have the blinders on in my opinion, but we can leave it at that. Until those indexes get back above the 13 EMA it's my opinion this market has trouble ahead. 

 

I do respect your opinion as many traders trade those sectors and do well. However, I don't trade where the MOMO traders trade most of the time..

 

Take Care.

 

Despite what you may believe about the unimportance of "5 or 6 stocks" (which happen to be over 20% of SPX as well), the market is simply not going to rollover without the BIG 5 cracking.

 

And to not be paying attention to what they are doing is taking away a key piece of information...completely unnecessailry in my view.....

 

If you think that is somehow an attack...so be it. To me it is just facts.


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#36 K Wave

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Posted 16 May 2020 - 10:39 AM

And here is a look the the DOW

 

Again, with a possibly key reversal on Thursday, and then right back up to the level of the BIG BREAKDOWN yet again.

 

I think this may be the final battle of 23700, and whoever wins it next week takes the ball for a while....

 

 

dji.png

 

 


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#37 K Wave

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Posted 16 May 2020 - 10:51 AM

And here is the the BIG DADDY SPX...clearly the strongest of the bunch at this juncture (other than NDX)

 

Back above that 15 min 200, and bears will likely get their heads handed to them on platter....

 

In any event, next week should give some good clues as to whether or not there may be a retest of the lows.

 

spx.png

 


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#38 CLK

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Posted 16 May 2020 - 11:57 AM

There WAS divergence, in sync with Tom's post above"

 

McClellanOsc_796.gif

 

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

 

 

There was divergence in spring of 2019, NYMO cratered further, price did not. These oscillators work until they don't, hit and miss. Yeah, it dropped 200 in 2019, but not the 600-1000 bears are looking for now.


Edited by CLK, 16 May 2020 - 12:03 PM.


#39 CLK

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Posted 16 May 2020 - 12:07 PM

I'm neutral on market direction until NYSI turns back up, downside is very limited, imo.

 

http://schrts.co/VXiJHaKZ



#40 dTraderB

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Posted 16 May 2020 - 02:23 PM

Stuck In The Middle As Seasonal Sell Signals Trigger

Currently, we seem to be stuck in the middle even as seasonal sell signals trigger. It reminds me of the lyrics of one of the classics.

“Trying to make some sense of it all,
But I can see that it makes no sense at all,

Is it cool to go to sleep on the floor,
‘Cause I don’t think that I can take any more
Clowns to the left of me, jokers to the right,
Here I am, stuck in the middle with you” – Stealers Wheel

It’s a fascinating dichotomy in the markets currently. As noted last week:

“There is currently a “Great Divide” happening between the near “depressionary” economy versus a surging bull market in equities. Given the relationship between the two, they both can’t be right.”

This week, the continuation of depressionary economic data continued:

These numbers are mentally hard to grasp. Yet, the markets remain range-bound between the 50% and 61.8% retracement levels, consolidating the advance from the March 23rd lows.

SP500-Chart1-051520.png

The reason for the dichotomy is simple.

Fed-Balance-Sheet-051520.png

The bullish argument for stocks remains simple. As long as the Federal Reserve is pumping in liquidity, buy stocks.

https://realinvestme...igger-05-16-20/