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Coolhand's Market Analysis

Smart Money Goes Bearish - Posted by Coolhand

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Quote Originally Posted by coolhand View Post
The bulls bounced the market on Thursday, but it wasn't without some degree of challenge from the bears.

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Price on the S&P remained above its 50 dma, but the retrace was limited given the extent of the selling. The market often bounces after some hard selling, but for right now it's only a bounce. Price on the DWCPF also bounced, but it did probe lower around mid-day. Momentum remains bearish.

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Cumulative breadth also bounced, but remains bearish for now.

NAAIM wasted no time getting bearish in this week's reading, which plunged hard. I expected to see a bearish reading, which was one of the reasons I went bearish without waiting for confirmation from this group of money managers.

For the moment, price on both charts is showing support is holding at the 50 dma on the S&P and horizontal support on the DWCPF. My personal feeling is that support will fail. I don't know that, but with a fresh bearish reading from NAAIM and lots of market concerning news floating around, I'm not sure the teflon is going to hold up. We could continue to see a push by the bulls to drive price back up, but it may not be successful. The pressure really didn't start the past few days, it started months ago on the DWCPF. The big money needs to time to get out of the way in as quiet a way as possible (they don't want to alarm you). Don't expect them to be holding the bag if this market decides to head South again.

It's too soon to consider getting bullish again, in my opinion. We are also in the weaker part of the yearly cycle (go away in May). I am going to watch from the sidelines for now. I remain bearish.

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  1. joblin20's Avatar
    I am curious if Friday was the final push.

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DWCPF (S Fund) (delayed)

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BND (F Fund) (delayed)

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