Coolhand's Market Analysis

The Comey probe was one of the bigger stories last week, although the UK vote is up there in importance too. In spite of anything the MSM says, Trump came out looking pretty good. Over in the UK, things got much more dicey. Now, I don't want to do a political analysis, but there is no question that politics ties in with Central Bank activity (and its innumerable rabbit holes). And that means it can and often does have a profound effect of the stock market (global). Friday's wild action is indicative of possible shifts beginning to occur in financial positioning (rotation). The DOW was up almost 90 points on Friday, but the Naz was down more than 110, while the S&P 500 and DWCPF closed relatively flat. The VIX traded in a wide range. While the tech leaders were hammered, energy and financials soared.

How all of this plays out I cannot be sure, but market character may be in the early stages of changing. It can take weeks and months for such a shift to become more evident.



Friday's candlestick shows the S&P 500 covering a fair amount of territory, but the index ultimately closed flat. Volume was elevated. Momentum is falling.



The DWCPF was up close to 1% on Friday and it was certainly looking like the S funders were in for a nice day, but someone threw a switch and the selling pressure kicked in, taking price well below Thursday's close, but settling for a small gain by the close.

The EFA has been in a short-term downtrend, but remains bullish overall.



The advance by the banking sector the past few days is interesting. Is a rate hike imminent? The rally would suggest so.

My intermediate term system remains positive. However, TRINQ closed at a very high level. Extreme readings are often reversed the next trading day, but Friday's action was not normal, so it's possible we see a continuation of selling pressure in technology.

Breadth is still looking bullish, as is liquidity. Sentiment is a bit bulled up, but so is NAAIM, which is smart money. The options show the OEX P/C neutral for Monday, but the CBOE P/C is bearish, which is dumb money, and that's bearish. However, the dumb money has not been as reliable an indicator as it once was, so I'd not be surprised with more downside pressure come Monday.

For the week, I am neutral. Battle lines appear to be getting drawn and that could spell volatility such as we saw on Friday.