57 replies to this topic

[dTraderB]

It was CHINA Trade Talks the last time markets got a great excuse to rally; this time it is STIMULUS, mainly. 

But, this market is now priced for perfection, with strong Price Action that trumps Weak Seasonality, so expect several attempts to rally near to SPX 4k. All will eventually fail. 

Of course, in the long run and eventually we are all dead so who cares if the markets will fail after more rallies? Not me.... LOL. 

 

 

Seasonality Looks Weak, but Price Action is Strong

Arthur Hill |  February 05, 2021 at 11:44 AM

 

The seasonal patterns over the next two months are not very strong, but price action is strong with the S&P 500 hitting a new high. Price action is more important than the seasonal pattern because profits and losses are driven by price changes, not seasonal tendencies. Seasonality becomes a force when it aligns with price action. Let's investigate.

The chart below shows the seasonal patterns for the S&P 500 over the last twenty years (2001 to 2020). Note that I shifted the slider one year to the left to exclude 2021. Thus, data for January 2021 and February 2021 are

not included.

At this stage, I do not have June on my mind. However, looking out over the next three months, the seasonal patterns show a 50/50 chance for a correction of some sort in February and/or March. Such a correction could make for a great buying opportunity with April around the corner.  

The price chart for SPY goes not confirm the seasonal pattern because the ETF hit a new high this week, as did QQQ and IWM. Thus, thoughts of a correction are on hold for now. With this week's big bounce, SPY established short-term support with the January lows. A break below these lows would show the most selling pressure since September and argue for a correction, especially with weak seasonality in February-March.

https://stockcharts....ut-pri-763.html

 

 

 

[dTraderB]

ST has a good post here:
Shorts have left the market
Jason Goepfert
Jason Goepfert
Published: 2021-02-04 at 09:00:00 CST
The big topic over the past week has been short interest. By the sounds of mainstream media, there's a massive build-up of shares that greedy hedge funds have borrowed and sold, hoping to buy them back later at a lower price.

As usual, it's uninformed hyperbole. Short sellers provide an invaluable service to the investment world, and in any case, their thesis is completely wrong. In some stocks, there surely had been a huge build in the number of shares sold short.

In the average stock, not so much. The average stock across the S&P, Dow Industrials, Nasdaq 100, and Russell 2000 has just over 2% of its float sold short, a 17-year low.

https://www.sentimen...rket--4-2-2021/

[dTraderB]

ADAM:

Have a great weekend! Only pattern to watch in #ES_F is a textbook "megaphone" controlling all action since Jan 5

Plan next week: Resistance/target = 3920. Thats pullback zone with 3870 then 3830 supports. They hold, its sets up major breakout to 4000 & 4100. Details below $SPX https://t.co/qqtTmdhExr

[dTraderB]

Three decades ago!

JAPAN'S NIKKEI 225 TOPS 29,000 YEN FOR FIRST TIME SINCE 1990

[dTraderB]

Vertical ascent

https://www.mcoscill...adth_data/?s=03

[dTraderB]

Adam Mancini (@AdamMancini4) tweeted at 8:42 pm on Sun, Feb 07, 2021:
Fantastic strength for #ES_F at the open and grinding its way towards my 3920 target! 3900 (being a big round psychological level) could offer some near term resistance en route
(https://twitter.com/...7354639363?s=03)

[dTraderB]

SPACmania!

Mohamed A. El-Erian (@elerianm) tweeted at 4:50 pm on Sun, Feb 07, 2021:
Re below and, importantly, with absolutely no disrespect whatsoever for Elliott Management, it's increasingly as if you are a nobody in #investment management unless you have #SPACs.
I wonder if this will prove yet another one of those innovations that goes way too far initially. https://t.co/U1I39grGGf

[dTraderB]

Bulls rampaging, according to this poll:
UP 61
DOWN 39

Helene Meisler (@hmeisler) tweeted at 8:40 am on Sat, Feb 06, 2021:
Saturday Twitter Poll

The next 100 points for the S&P?
(https://twitter.com/...2130662400?s=03)

[dTraderB]

Two LONG NQ trades to start the week

[dTraderB]

Did well on Friday to claw back from early losses to end with a small profit but this was not enough for a weekly profit. Will close HEDGE LONG if profit of 210 points or highet.

47 QQQ PUTS
1 NQ HEDGE LONG 13472