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"Two more green lights plus one shorter-term yellow light"


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#1 dTraderB

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Posted 13 August 2023 - 03:49 PM

Young BULL market struggling as CHINA struggles to recover.
From SENTIMENT TRADER:
Two more green lights for stock market plus one shorter-term yellow light
Key points

Industry Breadth recently flashed a favorable trend-following signal
The AAII Bull Ratio also recently flashed a favorable trend-following signal
One measure of our Fear & Greed Model, however, recently flashed yellow for the months directly ahead
The Industry Breadth (% > 200d avg) indicator crosses a significant level

The chart below shows the percentage of 23 industries trading above their 200-day moving averages. The upward spike in the indicator value has many shouting "overbought" warnings.


What the research tells us

The number of indicators that have given favorable trend-following and/or breadth thrust signals continues to grow. This bodes well for the potential that the rally in the first part of 2023 has legs and can continue to run. Nevertheless, trees don't grow to the sky, and even the strongest bull markets experience periods of consolidation, pullbacks, and occasionally worrisome volatility. The first two indicators discussed above reassure long-term investors to stay the course. The third indicator reminds us that the stock market is never a one-way street.

#2 dTraderB

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Posted 13 August 2023 - 03:50 PM

"
The S&P has shrugged off an earnings recession
Key points:

Earnings among S&P 500 companies have declined for three consecutive quarters
Earnings declines rarely last beyond four consecutive quarters
When prices held up despite declining earnings, forward returns were above average
An earnings recession

Earnings are dropping, and there is no letup in sight. That has unnerved investors and may explain part of the recent retreat from the months-long rally.

As noted by The Wall Street Journal:

The members of the S&P 500 are on pace to collectively report a 5.2% decline in earnings, their worst performance since 2020. Revenue is on track to rise 0.6% from a year ago, according to FactSet.

While sources vary on the exact makeup and level of earnings for stocks within the S&P 500, the trend is universal - it's down. According to data from Standard & Poors and Robert Shiller, earnings for the S&P have, indeed, declined for three consecutive quarters. By "decline," we mean lower than the same quarter for the prior year."

Young BULL market struggling as CHINA struggles to recover.
From SENTIMENT TRADER:
Two more green lights for stock market plus one shorter-term yellow light
Key points

Industry Breadth recently flashed a favorable trend-following signal
The AAII Bull Ratio also recently flashed a favorable trend-following signal
One measure of our Fear & Greed Model, however, recently flashed yellow for the months directly ahead
The Industry Breadth (% > 200d avg) indicator crosses a significant level

The chart below shows the percentage of 23 industries trading above their 200-day moving averages. The upward spike in the indicator value has many shouting "overbought" warnings.


What the research tells us

The number of indicators that have given favorable trend-following and/or breadth thrust signals continues to grow. This bodes well for the potential that the rally in the first part of 2023 has legs and can continue to run. Nevertheless, trees don't grow to the sky, and even the strongest bull markets experience periods of consolidation, pullbacks, and occasionally worrisome volatility. The first two indicators discussed above reassure long-term investors to stay the course. The third indicator reminds us that the stock market is never a one-way street.



#3 dTraderB

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Posted 13 August 2023 - 03:54 PM

Adam:
Important to remember though that August is not a bearish month seasonally, but rather a consolidation month, green 60% of the last 20 years with a 0.1% average return. Typically, this is divided into first half choppy grind down, and second half strength, and this has certainly been the theme with ES making slight new lows then squeezing all week. ...
...
levels.

In summary for Monday: We are chopping now. My loose lean is that we can continue to base above that 4457 level and below 4492, then try to push up the levels again to 4509 then 4518. Dip there likely. 4457 fails, shorts trigger for a large leg down - and this leg could last days."

#4 dTraderB

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Posted 13 August 2023 - 03:58 PM

Poll almost flat
49.3% UP
50.7% DOWN

Helene Meisler (@hmeisler) posted at 10:35 PM on Sat, Aug 12, 2023:
The results are in and folks are pretty much split. We have not had a poll this narrow since April!

Thanks for voting! https://t.co/kGxZkvO3U6

#5 dTraderB

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Posted 13 August 2023 - 04:01 PM

NVDA now back to testing the 400 level. Will buy CALLS if traded below 400
Looking to buy CALLS in some other TECH stocks ... but not AAPL unless below 170

#6 dTraderB

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Posted 13 August 2023 - 04:01 PM

Helene Meisler (@hmeisler) posted at 7:28 PM on Sat, Aug 12, 2023:

Equity put/call ratio .80, highest since late May

https://t.co/GAb29YAMBQ

#7 dTraderB

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Posted 13 August 2023 - 04:06 PM

BIDEN IS RIGHT, CHINA IN TROUBLE:

Bidens ticking time bomb remark referred to Chinas economy: White House

US President told political fundraiser that China was in trouble due to internal economic and social tensions.

https://www.aljazeer...omy-white-house

#8 dTraderB

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Posted 13 August 2023 - 04:08 PM

BIG LONG POSITION IN CHINA & HSI
SMALL SHORT POSITION IN US.

Large TLT & small UVXY CALLS positions

#9 Keepingcool

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Posted 13 August 2023 - 06:29 PM

79% of S+P  500 firms beat analysts estimates...what does that say...great economy?....maybe not maybe the analysts just aren't that smart in setting their goals.. comparatively to previous years still lots of ground to be made up.



#10 dTraderB

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Posted 13 August 2023 - 09:28 PM

"Caution may morph into outright gloom on Monday, however, after China's biggest privately-owned developer Country Garden said it will suspend trading of its 11 onshore bonds.

The firm's shares are at a record low, it didn't pay two dollar bond coupons due on Aug. 6 totalling $22.5 million, it has liabilities of around $200 billion and last week warned it could report a loss of up to $7.6 billion for the first half.

Investors are wondering how long Beijing will resist pressure to inject any kind of stimulus into an economy that is now officially in deflation with the weakest credit impulse since 2009.

Another batch of sub-par data this week could force authorities' hand."