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Risk Windows for the Week of April 12th


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#1 Douglas

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Posted 12 April 2021 - 08:15 AM

According to my risk summation system, the days this week with a slightly higher risk of a turn in or acceleration of the current trend are Monday the 12th, Wednesday the 14th and Friday the 16th.  Given the low level of these signals and how lousy the system is performing in this FED funny money fuelled rally, I don't expect much from these risk windows.

 

Speaking of lousy, last week's Wednesday risk window tagged a very minor low and Friday's a minor acceleration up in the direction of the trend.  Neither marked anything worth getting too excited about.  Also the low probability, high risk cycle low near the end of the week that I noted didn't amount to a hill of beans.  Maybe the one this coming fall will be more interesting.  All in all a dismal week for my cracked crystal ball gazing.  

 

There is an interesting development on the sentiment front.  The casino gamblers that have been buying volatility futures and their options expecting an end to this rally are finally starting to throw in the towel.  Also the bad memory of the March 2020 panic is finally far enough back in the rear view mirror that risk premium is heading south in a hurry.  The last bears are finally starting to hang up their fur coats just in time for spring.  The only question is where is the new support line, down around the previous one at 11 or so or maybe somewhere in the middle closer to 15?  

 

dekiKi9.png

 

Regards,

Douglas

 

 



#2 Douglas

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Posted 12 April 2021 - 10:55 AM

The following plot shows a lovely megaphone expanding triangle pattern in the weekly DJIA close.  I've posted a lot a chart patterns here over the last few months that have pointed to a turn down of one degree or another.  Hardly any of them have worked out which is real testament to the strength of this market.  I don't hold out much hope for this one either, but it is interesting never the less.  In a strong trend like this I pay a lot more attention to the Chandelier stop heavy red line.

 

F90hZ5k.png

 

Regards, 

Douglas



#3 LMF

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Posted 12 April 2021 - 01:35 PM

Looking at the number of SPX stocks above the 200 day MA for the past 6 months.......this market is getting more bullish, not less. This is like a breadth thrust when its above 90 percent. A high that sticks for a while is to the right. The horse manure top of 2008 top continues to be a very instructive thing. All time understatement......

#4 Douglas

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Posted 12 April 2021 - 03:50 PM

LMF, please explain how the $NYA200R, or the $NYA50R for that matter, plots below are getting more bullish.  They are both diverging with the S&P index.  What am I missing?  Granted divergences can persist for a frustratingly long time, but they do reasonably often foretell of some unrequited need for a correction.  

 

Uw2DHZi.png

 

Regards,

Douglas



#5 LMF

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Posted 12 April 2021 - 04:13 PM

I think you correlate things like this with price. Historically the high is way to the right. Once everything gets above the 200 day......its not anywhere close to a top.