Thread: Bear Cave 2 (Bull Allowed)

Don’t Call Me Bearish… It’s Just Math
Jeff Clark | Nov 21, 2023 | Market Minute |

In other words, my forecast for 2024 is bearish. My year-end target for the S&P 500 is 4080. That’s about 10% below where the index closed on Friday.
https://www.jeffclarktrader.com/mark...its-just-math/


Cycles:

Stocks printed a new daily cycle high on Monday.

Monday was a day 16 for the daily equity cycle. The new high on day 16 shifts the odds towards a right translated daily cycle formation. Stock are now getting a bit stretched above the 10 day MA and may need to consolidate to allow the 10 day MA catch up to price.
Stocks are also stretched above the 10 week MA. And stocks are running into resistance at the August high. This is an area where we can see some profit taking after a nice 4 week run up.

In the short term I would advise some caution. But my intermediate view for stocks is bullish. Which is something that I detailed in the recent Weekend Report.

https://likesmoneycycletrading.blog/...e-take-profit/


SPX and IWM daily charts: Both remain on a buy signal, but IWM still unable to move above resistance at the 200 day MA.

IWM weekly: It remains below the 20, 50, and 200 week MA. Not what you want to see from the leader. We shall see how it plays out in the weeks ahead.

Bottom Line: The move up continues.....

The SPX, Fed rates and the inverted yield curve. It had better be different this time.

2000 market: The inverted yield curve turned up and the SPX went down.

2007 market: The inverted yield curve turned up and the SPX went down.

2023 market: The inverted yield curve turned up and the SPX went??? we shall see how it plays out.

Bottom Line: The SPX remains on a buy signal as we head into the craziest time I have every seen coming from our government. I just trade the signals.

Weekly SPX 2008:

Weekly IWM 2008 and 2023: In 2008 IWM bounced around the 200 week MA...... until it didn't. I'm not calling out anything right here. I use historical data in my LT trading, and I'm just pointing out what the historical data is showing me. Once the inverted yield curve turns back up the market comes under lots of pressure.


Instincts vs. Market Timing Strategy

Humans are born with basic instincts for survival. They need to protect themselves at all costs.


Devoid Of Emotions

Experienced market timers, in contrast, react more decisively.

They carefully follow a trading strategy that is completely devoid of emotions. They follow through on buy and sell signals with absolute precision.

They know that any one or more buy or sell signals may be wrong, but they realize that to trade profitably they must learn to trust their timing strategy and act on it. Only over time are substantial profits realized, and only by those market timers who stay the course.

Think Outside The Box

If you want to be a winning market timer, you must learn to identify your need to follow the masses, and teach yourself to avoid doing what your need for security compels you to do.

You must reprogram yourself to think outside the box. Rather than follow the masses, you must follow your timing strategy, which may be contrary to what most people would do.

Over time, and with extensive experience, you will develop the skills that will allow you to trade decisively.

Once you have reprogrammed your behaviors, you will not be tempted to follow the masses, but will instead recognize these feelings for what they are. Instincts for survival, which may work in the physical world, are likely to cause poor decisions and loss of capital in the financial world.

Rather than Following The Masses, you must learn to follow a timing plan, which is not affected by the emotions of the masses.

The more decisively you can follow the timing strategy, the more profits you'll realize.
https://www.fibtimer.com/subscribers...commentary.asp

USD/SPX daily:


Keep an eye on the dollar! Some traders will be watching closely. When the dollar moves up or down it can cause some sectors to rally and others to sell off. We shall see if the 200 day MA holds.


The Dollar & The 200 Day MA
Posted on November 21, 2023

The 200 day MA is a major dynamic support/resistance level for the dollar.


The Dollar formed a bullish reversal of support from the 200 day MA on Tuesday.


Tuesday was day 20, placing the dollar in the early part of its timing band for a DCL. The bullish reversal of support from he 200 day MA signals a new daily cycle. We will use a close above the 10 day MA to label day 20 as the DCL. The Dollar is currently in daily downtrend. The dollar will remain in its daily downtrend unless it closes above the upper daily cycle band.
https://likesmoneycycletrading.blog/...he-200-day-ma/

The trader below thinks the $USD 200 day MA will NOT hold and is getting ready to move much lower.... Maybe?

EEM and the $USD: Both are at their 200 day MAs. It's a chart worth watching as any big move for the dollar will cause some sectors huge moves too.... Up and down!

For the record: I DO NOT trade EEM.

Why the Weekend is Crucial to Traders
Imre Gams | Nov 22, 2023 | Market Minute | 3 min read

Most people look forward to the weekend.

It gives them an opportunity to rest and recharge before going back to work.

But for traders, it’s a little different. The weekend is where a trader should be the most productive.

That period between Friday evening and Monday morning is crucial. It’s a time to look at the markets while they’re closed.

When prices aren’t flying around, you can spot opportunities you normally wouldn’t. That’s why I love using the weekend to build my watchlist for the upcoming trading week.

One such opportunity I happened to spot this weekend was the iShares Emerging Markets ETF (EEM).But the dollar is setting up for a steep decline. That could be a big boost that will help EEM sustain a major rally.

This kind of fundamental analysis is great at supporting a longer-term investment thesis. But for a shorter-term trade, the price chart has to look good too.

And that’s what makes the current setup in EEM so enticing. EEM has just recently broken above its 20- and 50-period moving averages (MA). These MAs are ideal for measuring short- and intermediate-term trends.

Breaking above both MAs is a positive sign. It means there’s bullish momentum in the market. And given the larger chart pattern EEM is trading within, it also allows us to calculate a high-probability target.

Take a look…

https://www.jeffclarktrader.com/mark...al-to-traders/

IWM daily and the 200 day MA.


Beware the Complacency of Turkeys
Jeff Clark | Nov 23, 2023 |


On Monday, the Volatility Index (VIX) – the best tool for measuring fear in the marketplace – closed at 13.41.

That’s near its lowest level in about three years.

And this is happening despite a lackluster earnings season, rising interest rates, the global economy tumbling headfirst into a recession, and a new War in the Middle East.

And just like the frolicking turkeys in my backyard, investors are relaxed – maybe too relaxed.

Of course, that’s what happens when the stock market bounces hard for a few weeks.

That’s what happens when the financial television talking heads turn universally bullish. And when nearly everyone expects Santa to show up.

The talking heads in the financial media are suggesting there’s nothing to worry about.

They’re relaxed… comfortable… and completely unprepared for any sort of downside action.

But at this point, it may make more sense to cackle, flap our wings wildly, and scatter in all directions.

Otherwise, we might end up as coyote food.

Best regards and good trading,
https://www.jeffclarktrader.com/mark...-of-turkeys-4/

Hmmm..... closing his short fund. We shall see how this plays out. The trend remains up.....

Also, the yield curve and un-inversion... What Is the Un-Inversion Signaling?

"It tells you something when a famous short seller is closing his fund."

"Long funds often close near major bottoms for the assets they contain, while short sellers usually bail out near the top:
Short seller Jim Chanos to close hedge funds, return cash to investors:"

Kaplan

https://truecontrarian-sjk.blogspot.com/

Published: Nov. 17, 2023 at 5:49 p.m. ET
By Claudia AssisFollow

Legendary short seller Jim Chanos told the Wall Street Journal Friday that he is closing his hedge funds, saying that “the marketplace for what I do has changed.” Chanos expects to return most of his investors’ cash by Dec. 31, the newspaper reported.
https://www.marketwatch.com/story/sh...s-wsj-c52ac8fa

https://www.hussmanfunds.com/comment/mc230424/


We shall see....

"When the yield curve un-inverts, it is signaling that the recession is closer (within one year based on the past three recessions). While the inversion says trouble is coming in the medium term, the un-inversion says trouble is coming within a year. Again, this idea is consistent with the signaling from the bond markets, as recessions typically last a year or less. The recent un-inversion, therefore, is a signal that a recession may be closer than we think, not a signal we are in the clear."
"If you look at the past 30 years, however, you have to at least consider the possibility that the countdown has started. And that is something we need to be aware of."

$VIX daily: If you are a short-term trader in some sectors like me.... keep an eye on the $VIX. When the VIX moves into the 12's it's time to reduce or hedge. That's a opinion based on the ST data below.

SPX daily: The move up continues, but with a very low VIX and it's moving deeper into the current daily cycle.

Remains on a buy signal on the daily and weekly charts.

SPX weekly: Week 4 since moving above the 10 week MA.

Inverse panic
Chasing stocks and puking downside protection (skew down) has been the story over the past month. Low skew isn't necessarily telling you the market must reverse, but note previous occasions over the past months where skew has reset sharply lower has led to the SPX taking a pause/reversing lower.
https://themarketear.com/newsfeed

IWM weekly: I'll be watching, but for now IWM is still unable to move back above the 20, 50, 100, and 200 week MAs. Note the compression and resistance taking place. "Maybe" a big move be coming..... For now, the weekly remains above the 10 week MA and that's a buy signal for my system..... However, I sure don't like it!

SPX daily: Around day 20 since the DCL, and the SPX is stretched to far above the 20 day MA. The odds now favor a BT of the 20 day MA. We shall see how it plays out. I'm holding an SDS position in my ST trading account.

Bottom Line: The trend remains up!

SPX weekly: What's not to like, but one should expect some downward movement after this 4 week run.

$VIX daily:

"VIX slid to 12.45, its lowest point in 3 years and 10 months and signaling an unusually dangerous degree of complacency toward the possibility of a true U.S. equity bear market. IWM and QQQ have experienced their greatest divergence since 2000."

"VIX has slid from 23.08 on October 23, 2023 to 12.45 on November 24, 2023. Almost all investors are much more worried about missing out on additional upside than they are about the possibility of losing money. Especially since the Russell 2000 and many baskets of small- and mid-cap U.S. stocks are down more than 25% from their peaks from two years ago, investors should be far more concerned about losing money."

Kaplan

True Contrarian


Investors flood $40B into the market over 2 weeks:

Investors flood $40B into the market over 2 weeks: BofA

According to a new note from Bank of America Global Research (BAC), a large amount of money has flowed into the stock market recently, the biggest 2-week inflow since February of 2022. With inflation cooling and many believing the Federal Reserve is done with rate hikes, bullish sentiments have picked up. One bright spot leading the charge has been in the tech sector, with some of the Magnificent Seven leading large gains in the S&P 500 (^GSPC).

Buyers: