Systematic Trading Strategies and Next Level Trading Setups
The Market Regime for stocks remains bearish, but we saw an improvement in the Composite Breadth Model over the past week as the Thrust Models turned bullish. This puts the CBM close to a bullish signal for the second time in four months.
The battles for the 200-day remain in focus for several ETFs. The S&P 500 and some key industry group ETFs surged towards their falling 200-day SMAs. Follow through would trigger a breakout and potential long-term trend reversal, while failure to follow through and short-term reversals
2022 has been a tough market for trend-followers, but swing traders have been able to catch a few rides. Trend-followers are suffering because whipsaws are above average this year. A whipsaw occurs when an uptrend cannot extend after a bullish trend signal and the trade results in a loss.
Before looking at some trend-following stats,
Trend-Followers Get the Whip, while Swing Traders Catch the Ride (Free) Read More »
The perfect storm hit the stock market over the past month and gave way to a sizable counter-trend bounce from mid October to mid November. The positive forces included oversold conditions in late September and early October, positive seasonal patterns
The Market Regime for stocks remains bearish with the Composite Breadth Model at -5, yields spreads at elevated levels and the Fed balance sheet contracting. Even though SPY surged the last five weeks, the big picture items remain the same and I have yet to see enough strength to change these
There were some big moves over the last three days as the markets reacted to lower-than-expected inflation numbers. Stocks have been moving higher since mid October with many ETFs sporting double digit gains the last five weeks. Many of these big moves
Stocks surged this week with the S&P 500 SPDR (SPY) advancing over 5% and nearing its falling 200-day SMA. The big trend is still down because SPY recorded a 52-week low a month ago and a lower low
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The broad market environment remains bearish for stocks and not exactly bullish for stock alternatives. Most commodity, bond, currency and country ETFs are in downtrends. There are some isolated uptrends within these groups, but the vast majority of ETFs in the
The Market Regime for stocks remains bearish with the Composite Breadth Model at -5, yields spreads at elevated levels and the Fed balance sheet contracting. Stocks bounced off their October lows, but this bounce is deemed a counter-trend bounce within a bigger uptrend and there are signs
The Market Regime remains bearish, but there is a non-technical argument for a counter-trend bounce or perhaps a trading range in stocks. I say non-technical because this argument
The S&P 500 moved to a new low from June to October, but copper held up better with a higher low and broke short-term resistance with an outsized move this week. A breakout with an outsized move shows above-average strength and it looks like the downtrend in copper is reversing.
Copper Breaks with an Outsized Move (Free) Read More »
Stocks answered the Fed policy statement with a big sell off on Wednesday afternoon. All eleven sectors were down with the Consumer Discretionary SPDR (XLY) and Technology SPDR (XLK) leading the way lower by falling more than 3.5%. XLK represents tech, while XLY represents consumer spending,
The S&P 500 is in the midst of a modest oversold bounce within a bigger downtrend. The Composite Breadth Model remains bearish, yield spreads are elevated and the overall environment for stocks is bearish. Counter-trend bounces are part of the process and I have yet to see enough strength to suggest that
Almost everything is bouncing, but not everything is leading. Stocks forged a massive one day reversal on October 13th as SPY opened around 349 and closed near 366 for a 2.6% gain on the day. The move from open to close was +4.8%. Stocks followed through on this reversal day with further
The S&P 500 SPDR (SPY) is up around 7% the last two weeks and we are starting to see short-term overbought indications. Overbought, keep in mind, is a double-edged sword. Overbought suggests that the advance is getting over extended and the bigger downtrend could take over soon
The Composite Breadth Model remains bearish, yield spreads are elevated and the overall environment for stocks is bearish. SPY became quite oversold in late September and early October, and then turned choppy in October. The latest October swing is
It’s a bit of a mess out there, both fundamentally and technically. Technically, we have new lows in Chinese stock indexes after sharp declines on Monday, and the major US and European indexes are in downtrends. The major index ETFs here in the US became oversold in late September
The seasonal patterns for October and yearend are quite positive, but seasonality is just one aspect of broad market analysis and the weight of the evidence remains bearish.
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Stocks are attempting to firm here in October, but any firmness would be a consolidation within a bigger downtrend and any bounce would be considered a counter-trend bounce within a bigger downtrend.
The Composite Breadth Model remains bearish, yield spreads remain elevated and the overall environment for stocks remains bearish. Price action in the major index ETFs turned choppy and volatile the last few weeks, but this is considered noise within a larger downtrend. September and October
