So we retraced a little at EOD which also provided a confirming trigger to take a short but who want to short at the start of a long weekend? Well, if you're using options it's not a big deal, and the market price of puts at TA levels was really cheap so I guess I must raise my hand! My algo timing wave is showing the bull move timed out at mid-day today. There was quite a large number of guys who decided to establish a bearish position in the market today, and I'm saying this just to let you know if you took a short position today...you are not alone. So if we all lose we can cry over our bowl of cereal together! If you decided to close long positions and lay flat until the market gives you a signal on Tuesday you are very wise, don't let anyone tell you otherwise. So what did we see:
1. The SPX hit topside of uptrend channel which is mildly bearish 2. We could not push through old levels of resistance which is also mildly bearish 3. VVIX moved down lightly which is supposed to be bullish, but it still could not go under 90 after such a big run = bearish 4. Gold is up = bearish 5. CL was flat = neutral 6. DXY is at 92.85 = no comment
Regardless of whether this bull move continues or dies, a technical pullback is overdue. Nothing moves in a straight line forever. For all these reasons I am 'short'. The stops are set at 82 and the levels of intermediate support are at 2466.2 and 2451. If we break under 2444.2 I expect an ABC push to new lows.
Trade Safely and do your homework
Comentarios
⋅
I forgot to adjust the crossover timing line. It occurs on Monday 9-11!!!
Comentarios
⋅
Watch for signs of more weakness in the Asia and London open. I expect to see an early wave of market redemptions starting tomorrow as Hurricane Harvey victims will begin drawing down cash to cover immediate expenses and retirement savings for recovery costs. This is a two-fold imbalance since these individuals will also cease contributing to retirement plans. This will be a highly distributed event affecting all asset classes. Based on the size of the draw-downs this may cause a domino effect in banking, insurance, REIT's, and will also represent the end-game for many small businesses as cash-strapped individuals and families will walk away from mortgage-laden homes, car payments, and credit card balances. Many will now be unemployed due to business and work stoppage. The loss in tax revenue and demand for Federal Aid may also shorten the fuse for congress to raise the National Debt Ceiling. Pay attention to Hurricane Irma. The effect to Florida will be exponential to what we have seen from Hurricane Harvey.
Comentarios
⋅
We had a good downstroke at the open and we bounced into decision land at the close. Unless you are willing to stay awake for the next hours I suggest remaining flat
Comentarios
⋅
Timing has accelerated based on intraday movement to 9/8. Inertial line is now at 2437.8
@dkh, I read today an article on bloomberg: "Insurance stocks were the biggest decliners in the S&P 500 Index, with Barclays Plc estimating insured losses in a worst-case scenario at $130 billion. Shares in Carnival Corp., Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. tumbled as Irma aimed at the South Florida hub for cruise-line operators. Mandatory evacuations were ordered in Monroe County, which encompasses the Florida Keys. Governor Rick Scott declared a state of emergency."
dkh
⋅
@roxananechita, it's going to be a lot higher than that. Between Harvey, Irma, and potentially Jose, the losses will include those who walk away from their mortgages, auto payments, and credit card debt. The stacked-on derivative CDO's and NPL floats will be severely tested. The claims on Harvey should be hitting the insurers by Friday. I do not believe that the NPL's will show up until next month as the issuing banks will wait 60-days to report a violation of their buffers. The financing units for the automakers will be the canary in the coal mine as their balance sheets were teetering prior to Harvey. Secondly, many of the institutional and commercial structures in these areas had been re-capitalized including malls which were also teetering prior to these Hurricanes. Thirdly, not many people know this, but hospitals have been expanding their credit liabilities by selling future revenue in BDO's. These and many other things will lead to interesting decisions that will need to be made.