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Thread: coolhand's Account Talk

  1. #6565

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    Default Re: coolhand's Account Talk

    Yesterday saw both the smart and dumb money leaning bearish for Wednesday. They were right early on, but their bearishness was punished not long after with a significant rally.

    SPX.jpg
    DWCPF.jpg

    Price still has not tested the 50 dma, but it covered a lot of ground in approaching that key average today. Momentum on the S&P 500 turned positive. Breadth remains negative, but could flip positive in another day or 2 if the market can continue to move to the upside. The options are neutral for Thursday.

    The 50 dma should get tested soon. As I said yesterday, how that test goes may determine how the market trades in the months ahead. But I should point out that while there are those that want higher prices, there are those that do not. Those that do are still in charge (the bulls), though a more thorough retracement of recent losses is needed to confirm that control.

    I believe a bottom is in at this point. I remain long.

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  3. #6566

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    Default Re: coolhand's Account Talk

    The bounced continued Thursday. And 50 dma is now getting tested. Price closed right at that average on the DWCPF, but a little bit above it on the S&P 500. Not only that, but it closed near the highs of the day.

    So the market is at a key area of resistance now, but the action has been bullish, which bodes well moving forward.

    S&P 500.png
    DWCPF.png

    The options are neutral to bullish for Friday. Breadth flipped positive. Interestingly, NAAIM saw some bears go short in today's poll, but they are in the minority. Maybe we get some short-lived weakness soon, but I don't think we'll see anything of import.

    My feeling is that the market will continue to bias to the upside as it retraces losses from over a week ago, but a pullback here and there along the way is certainly not out of the question.

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  5. #6567

    Default Re: coolhand's Account Talk

    CH,

    I got to agree with your analysis. I think we will see a little downside from here before the next leg up. Fundamentals look good, it’s the technicals that we need to deal with.
    Allocations as of COB 14 Feb 2018: G:35%, C:25%, S:20%, I:20%
    Past Returns: 2017 +12.83%, 2016 +11%, 2015 -.12%, 2014 +6.88%, 2013 +22.39%

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  7. #6568

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    Default Re: coolhand's Account Talk

    The bulls had a great week, last week. The rally off the 200 dma has now hit 6 consecutive days. So far, the 50 dma is holding, but I'd be more comfortable if it would decisively clear that key average.

    S&P 500.png
    DWCPF.png

    You can see that price is is just above the 50 dma on both charts. Momentum is rising. Breadth is positive.

    NAAIM has gotten less bullish the past 2 weeks. I read this sentiment as neutral. TSP Talk got more bullish, which makes me uncomfortable. Bullishness has not been bearish for the most part, in a long while. The options are neutral to modestly bearish for Tuesday.

    I note that TRINQ closed at a very high level on Friday. That's supportive for the bulls heading into Tuesday.

    For next week, we may start getting some chop now that the 50 dma has been retaken. A pullback is not out of the question, though I am not looking for a deep one. Perhaps, it will be just enough to give the bears some hope. It's still a bull market, so I have to give the bull the benefit of the doubt.

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  9. #6569

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    Default Re: coolhand's Account Talk

    Today's pullback should not be a surprise. The market has recovered a lot of lost ground. The 50 dma is now a battle line, but one that the bulls should eventually win simply because it is a bull market.

    The options are leaning a bit bearish for Wednesday. Breadth is back to neutral. Price on the DWCPF and S&P 500 is below the 50 dma again.

    On balance, it was a healthy pullback and should help set-up the next push to the upside, though that may still be days away...or not. There may be more selling pressure to deal with, but patience is likely to be rewarded with another upside run sooner or later.

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  11. #6570

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    Default Re: coolhand's Account Talk

    Things were going along rather well for the bulls today until the Fed minutes got released. That brought out the sellers as the S&P 500 sold off from some decent gains up to that point to a moderate loss by the close. Small caps help up better, which was perhaps a bit odd and could mean that the selling will not last long.

    S&P 500.png
    DWCPF.png

    So the 50 dma remains a technical resistance area. The options are looking neutral heading into Thursday. Breadth turned negative, though it held up pretty well given the early strength. Upside momentum stalled.

    Sentiment may be starting to become more of an issue for the market, though it's still too early to really say. The problem with sentiment, and our TSP Talk survey is a good example, is that it really is too bullish, and has been for some time. When sentiment used to mean something, overly bullish readings tended to get punished, but that has not been the case for a long time. Is is changing? As I said, it's still too early to know, but if rates are really going to rise then market character will likely change along with it. Just something to watch for now.

    The bulls obviously need to retake the 50 dma. That's the area to watch right now.


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S&P 500 (C Fund)
S&P 500 INDEX,RTH (^GSPC)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)
Source: https://finance.google.com/finance