Thread: coolhand's Account Talk

I anticipated we would see a positive Monday based on Friday's closing indicators, but that was not to be. On the plus side, the damage is still very limited. However, the indicators tell me the downside may not be over.

S&P 500.png
DWCPF.png

The charts look okay for the most part, though momentum is falling. The OEX closed very bearish (that's smart money). The CBOE is neutral. TRIN closed very high, which is bullish for Tuesday, the TRINQ is neutral, so it's a mixed picture for this metric.

Breadth flipped negative and that's not a good sign for the bulls. The trend is still to the upside, but after several weeks of somewhat sideways action, are we peaking (or have peaked?). It's too soon to know, but the EFA is falling hard. Will we eventually follow?

I can't say I'm comfortable with the big picture, but I am in cash (G fund). Certainly, this market can turn right back up again and it very well might do just that (perhaps after a bit more downside). For now, the short term looks bearish to my eye.

Monday I was looking higher and the market went lower. Tuesday I was looking lower and it went higher. Not a big deal, but interesting action.

S&P 500.png
DWCPF.png

So momentum is trying to turn back up. Breadth went back to positive after going negative for 1 day. The OEX and CBOE are both neutral. My other indicators are largely neutral as well.

So, my short term bearish disposition is now neutral. My longer term sentiment is bearish. The S&P 500 still looks like a chart that wants to hit fresh all-time highs. Since breadth flipped again, the bulls have the advantage.

Hi CoolHand, I noticed that you use different (non-default) MACD settings for the SPX. Is the non-default better than default for the C fund? I had started looking at 5,9,9 setting but looking at it for all funds. Thanks!

Originally Posted by DreamboatAnnie

Hi CoolHand, I noticed that you use different (non-default) MACD settings for the SPX. Is the non-default better than default for the C fund? I had started looking at 5,9,9 setting but looking at it for all funds. Thanks!

It's been a long time since I set those parameters. I used to follow a number of Wall Street professionals back in the day and I would note how they created their charts and what parameters were used in the process. I'm sure that's where I got them. If I was a day trader (like many of them were), I'd be more discerning as those parameters are generally set around the time frame one is trading (slow, medium or fast settings). You can also have multiple charts of the same index with different settings on each so as not to be limited with one time line. I guess the bottom line is that it depends on personal preference, which is dependent on the time frame you plan to trade. I think the settings you want to use are probably fine.

After today's bearish action, I am beginning to suspect that the market "may" be in trouble. Yes, we were due some selling, but what I am seeing may indicate a bigger event (sell-off) might be triggered at some point.

S&P 500.png
DWCPF.png

The DWCPF fell under its rising 50 dma today, but price remains above the cloud, which keeps it bullish overall. Momentum has turned down. The S&P 500 is still trading above its 50 dma. It certainly remains a bullish chart.

EFA.png

What I am seeing on the EFA makes me a bit nervous. While it may not represent our domestic market, the EFA may be telling us something. With tariffs being levied more and more, the stock market could see a domino effect should some aspects of the global market begin to crack (many would argue those cracks have already been taking place). Price on the EFA has plunged over the past week and today it was on heavy volume. RSI is now oversold, which could mean a bounce is due, but price has also been trading under its 200 dma for most of the past 2.5 months or so. This is not a healthy picture and it is very much possible that a much bigger sell-off could be coming. A sell-off that might very well have global consequences.

The options are leaning a bit bullish this evening, but breadth has flipped negative again. TRIN and TRINQ closed on the high side, which favors a bounce.

For Thursday, I am looking for a bounce, but it may not amount to all that much. NAAIM reports late in the morning.

We got the bounced I was looking for on Thursday and it was admittedly more robust than I expected.

S&P 500.png
DWCPF.png

Looking at the charts, we can see the bulls and bears are battling for control as price swings up and down. Momentum is trying to turn back up.

NAAIM came in less bullish, but with little shorting in evidence. These guys are still holding a fairly bullish position, so remaining long is still the way the go. The options are neutral. TRINQ closed at a very high level, which is bullish for Friday, but TRIN is neutral, so that's not much help. Breadth flipped back to positive again, but still in a sideways pattern

I am looking lower for Friday, but this market is likely going to remain resilient, so best to hold a long position for now.

Tis the Summer...
Not a good time to be in the market if one is a trader...
Then again, not a bad time to be in the market if one is not a trader - nothing happens...

The danger is September/October. Those are very swingy months - and, they can be bad. But you have to ask: Why would the market dump? How much do we trade with Turkey? Me thinks issues with Europe, China, and Mexico will be resolved to a more fair balance. None of those regions/states really wants a protracted trade war - to include us. So, my money is a boom is coming!!! Everybody move to the market so I can Pump 'N Dump!!!

Hi Coolhand!

Originally Posted by Boghie

Tis the Summer...
Not a good time to be in the market if one is a trader...
Then again, not a bad time to be in the market if one is not a trader - nothing happens...

The danger is September/October. Those are very swingy months - and, they can be bad. But you have to ask: Why would the market dump? How much do we trade with Turkey? Me thinks issues with Europe, China, and Mexico will be resolved to a more fair balance. None of those regions/states really wants a protracted trade war - to include us. So, my money is a boom is coming!!! Everybody move to the market so I can Pump 'N Dump!!!

Hi Coolhand!

Hello Boghie. How's the transition to North Carolina going? You sound like you're adjusted.

The market managed to tack on moderate gains last weeks (unless you were in the I fund). But no new highs were hit. Maybe we'll see them this week given price is not far from the previous top.

S&P 500.png
DWCPF.png

My intermediate term system remains negative, but appears to be trying move in a more bullish direction. TRIN closed very high on Friday, which is bearish for Monday. TRINQ was neutral. Breadth hit another all-time high and may be starting another up leg after tracking sideways for weeks. That would be goods for the bulls if true.

The options are bullish for Monday. NAAIM is bullish overall (they've been largely bullish for quite some time now).

The indicators are leaning bullish for next week, so I am looking higher for now.

As expected, Monday started out the week to the upside. Tuesday may not be as bullish.

S&P 500.png
DWCPF.png

Price on both charts are very close to breaking out to the upside again. In the past, the DWCPF has seen price rejection at this point. The S&P is hitting resistance as well.

The options are solidly bearish for Tuesday. The problem for the bears, however, is that breadth is breaking higher. So, we could see some selling on Tuesday, but it may not last long or go particularly deep.

Yesterday, I said that the options were bearish and that suggested some selling on tap, but then I said that breadth was breaking out to the upside, which was not a good sign for the bears. And breadth often trumps many other signals. Tuesday saw breadth continue to soar and price followed; especially in the small cap space.

S&P 500.png
DWCPF.png

We can see that the DWCPF has finally broken to the upside and that even the S&P 500 managed to push higher as well; albeit modestly.

Breadth.png

The breadth chart shows how breadth is rising quickly once again. The bears can't get much going when the chart looks like this. Question is, how much longer can rally?

The options are modestly bearish for Wednesday. My intermediate term system is close to flipping positive.

I have no change to my weekly outlook. I am still leaning bullish.