Thread: coolhand's Account Talk

I've been saying that it is probably not wise to fight this market and last week's action lent credence to my suspicions. The C and S funds both posted weekly gains, while the I fund back up a bit. It has appeared that the powers that be want this market elevated. Driving that perception is the current tax cut narrative, which if successful, could see this market launch much higher than current levels. But if that narrative falls apart, things could go the other way. It is my expectation that there will be at least some degree of success in transforming the current tax structure and tax cuts will be perceived as a solid foundation to corporate profitability, while driving (improving) the job market along with it.

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That gap higher on Friday sure does look bullish. There is no overhead resistance and we are approaching the more seasonally positive 6 month cycle.

NAAIM is neutral with no short bears. The options are neutral for Monday. TSP Talk is neutral. Overall, sentiment looks supportive for the bulls. Breadth remains bullish along with liquidity. I am leaning bullish for next week.

👍Much appreciated CH.

After popping to new highs on Friday, the market turned back around and fell rather hard on Monday. Enough so that we have to consider that the market may be getting ready to have some corrective action. But it's not an easy call to make.

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The S&P 500 was hit with its most intense selling pressure since the first part of September. The size of that up-leg begs for a more meaningful pullback.

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Both the S&P 500 and DWCPF saw RSI fall back under an overbought condition.

The market could use a pullback and so it would not be a surprise if more selling pressure presents itself. But sentiment is not supportive of a meaningful top. That means that while the short-term could produce more weakness, it may not last long. Breadth did fall hard on Monday, but not enough to go negative...yet. The options are rather neutral heading into Tuesday.

Overall, I'm on the fence after Monday's shot lower. The tax cut narrative could easily breath more life into this bull market if we get some positive news on that front. Futures are positive this evening, so a bounce looks to be in the works for Tuesday. The next couple of days could be telling.

Here?s why one chart watcher says the stock market is finally ready for a pullback - MarketWatch

No change from yesterday. The market bounced, but could not hold a sizable portion of intra-day gains. I still see no sure short-term outcome, though I am leaning a bit bearish. The options remain neutral heading into Wednesday. While I may be a bit bearish, I am not taking any short positions. I may however, raise some cash from my longs.

Originally Posted by Valkyrie

Here?s why one chart watcher says the stock market is finally ready for a pullback - MarketWatch

Aside from the particulars pointed out in the article regarding bearish indicators, the chartist cited in the article sees the same potential for some weakness that others are seeing. I'm seeing it too. I'm just not willing to go short as the set-up is not solid enough for me to put money on it.

Ms. Stockton can sometimes be too conservative looking for pullbacks but sometimes she is right. Hopefully she is right and this will present a good buying opportunity.

Originally Posted by pmaloney

Ms. Stockton can sometimes be too conservative looking for pullbacks but sometimes she is right. Hopefully she is right and this will present a good buying opportunity.

Sometimes being right describes all of us. Sometimes being wrong too. Ahh, that's the nature of the market. Hopefully, our wins far exceed our losses over time. I'm still not willing to get too bearish yet, but I can understand getting defensive.

Well, the market got hit with selling pressure again on Wednesday. It was significant, but the market recovered a sizable portion of intra-day losses too.

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Those longish shadows on today's candlesticks suggest a short-term bottom may be in. Short-term could be just a day or two. The options are decidedly bullish for Thursday. Breadth is a hair from going negative. TRINQ closed at a fairly high level and that suggests a reversal on Thursday.

So, my guess is we bounce again on Thursday. Will it be a dead cat bounce? Maybe. I don't want to bet on it, though it's tempting to be leaning bearish on Thursday bounce. NAAIM reports tomorrow. They got more defensive last week, so if they show more bullishness the downside may be limited. If they aren't, it may support playing the downside or getting more defensive if we get a bounce tomorrow. However, a big shift in bearishness may be bullish in the short-term. I've not seen that kind of signal in a long time from this group. Despite their reduced bullishness last week, they did not take short positions. That obviously means they have reservations about downside prospects, but also not willing to be all-in for the upside either. But that was last week, so we'll see how they are positioning for the days ahead with Thursday's read.

I was looking for a bounce on Thursday and we got one, though it was somewhat modest overall.

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Momentum remains negative on both charts. Volume has been picking up of late. RSI is no longer overbought.

Breadth went neutral today. NAAIM actually didn't change much, but some managers took short positions. There wasn't enough movement to get a good read, but they aren't bearish as a group, so the downside may still be at least somewhat contained. I would allow for a potential 1-3% drop at some point in any event. It may not last long if we get it. In fact, I'd view it as a buying opportunity.

The OEX is bearish for Friday (smart money), while the CBOE is neutral. TRINQ remains at a high level.

Overall, I think we give back some gains on Friday, but don't think any weakness will be particularly deep.

Coolhand,

Thanks for sharing your stock analysis with us. It's appreciated.