Thread: coolhand's Account Talk

By now, if you've been following me you know I'm largely bearish for the foreseeable future. And the market is pretty much acting as I've expected. Thursday's action was more of the same for the bulls.

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Fresh lows. Falling momentum. Oversold RSI.

The options have not posted this evening. NAAIM came in pretty bearish. In a normal market, I'd consider that bullish over the next few days, but not in the current market context. I anticipate more selling, short term bounces notwithstanding. Breadth is falling almost vertically as is the A-D Lines on the NYSE and Nasdaq. Some pundits believe once we have capitulation we should rally hard once more. I would not take that bet. If you've been listening to the X22 report, you'll know why.

I remain bearish.

Bearish..even notwithstanding short term bounce (several day santa rally?}...Wow...where do I/we look for things like breadth /A-D line / X22 report ??
thanx for what you do...EJJ

The selling action we are witnessing is not unexpected. I have been warning all year that this was coming. I just couldn't pinpoint a surgical timeline. No one can.

And I am convinced it's going to get much worse.

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What is interesting, is the controlled way this market is declining. I think that's by design. But it's declining nonetheless. The charts have not changed, they're just more bearish as price continues to fall.

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If you haven't figured out that something has changed, these charts should do it. Both the NYSE and Nasdaq show volume is overwhelmingly to the downside. Breadth is also falling like a rock. The red line is now almost vertical in its downward trajectory. Contrast that to the previous months/years.

The OEX is modestly bullish for Monday. The CBOE is very bearish, which is bullish in a normal market (we are not in a normal market). NAAIM got beared up late last week (do not ignore this). At this time, TSP Talk has not posted their sentiment, but I suspect it will not be bulled up like last week.

Be careful with sentiment right now. There is an agenda playing out that is not overly dependent on sentiment. I pay more attention to NAAIM than the other sentiment indicators because they are closer to the inside of what's happening. Just as they were very bullish for a very long time (and the market continued rising) they are now bearish, so I'd be following their lead once again.

My intermediate term system remains negative. The indicators are stretched to the downside and oversold, but they can and probably will get a lot more stretched and oversold. I believe we have an unwinding taking place. The rate hikes are designed to tank the market. Yes, they are designed to elicit what we are witnessing. This market is much, much higher than it was in 2008 and so it has the potential to fall a lot more (percentage wise) than it did back then.

For Monday, I'd normally be bullish based on sentiment and oversold indicators, but I think the overwhelming evidence of downside indicators is telling us that risk is still to the downside. Even if we do rally, it many not last the day as we've seen a number of times in the recent past. A Santa rally is not a given.

I remain bearish.

I hope everyone had a wonderful and safe Christmas. And I hope you have a prosperous New Year filled with blessings from our Lord Jesus Christ!

So, here's where we stand as we stand as we head into Wednesday. Monday's action picked up where last week left off as the markets plunged once more.

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The indicators continue to get stretched to the downside.


The options are neutral. Breadth continues to plunge deeper into bearish territory. TRIN and TRINQ are bullish for Wednesday.

Futures are up a bit this Christmas evening. That hasn't meant much of late as rallies are getting sold. I remain bearish even though we are overdue a bounce.

Yesterday, I said I remained bearish (with some bullish 1-day indicators) largely because rallies had been getting sold. There are various stories out there explaining why the markets rallied (and held their gains).

Most of those stories are pure BS (to put it bluntly).

After seeing a decline of historic proportions (despite the most seasonally positive time of year), the market finally turned back up and held gains with a historic rally (largest 1-day rally in the Dow ever). This action is not normal market behavior (how many times have you heard me say that?), but a battle between powerful forces. Today's reversal was a message from one force to another that they have control.

So, who has control? Check out this story and note the timestamp. It was released on Christmas day, 1 day before the rally.

https://www.bloomberg.com/news/artic...-c-dysfunction

The President stated his position that now was a great time to buy stocks (on the dip). This statement is not likely to be made if he didn't know ahead of time how the markets would react. In other words, he has control.

I would not bring this up except that now I have to temper my bearish expectations (for the moment) until I see where the market goes from here.

We could continue to look at this from purely a technical perspective, but where has that gotten most technicians of late? Very few saw this decline coming (at least not this deep) or believed it would last. Without some measure of understanding of the inside game being played, simply following sentiment and technical indicators may not be enough.

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We can see that price made up some significant ground on Wednesday, though hardly enough to get overly bullish beyond the short term (a few days maybe).

I note that TRIN and TRINQ closed very low, which is bearish for Thursday. The OEX is neutral and the CBOE is bearish. Breadth turned up, but remains negative (bearish). Volume was decidedly bullish.

Futures are pointing lower this evening, which leads me to believe the market may give something back. NAAIM reports on Thursday.

For now, I am going to be neutral until I see how NAAIM comes in. Today's reversal may have legs (short term weakness notwithstanding), but I tend to view this reversal as a selling opportunity for those who were caught in the decline. A 1-day rally is hardly evidence of a long term bottom, but we may have a bottom for more than a day or three. Let's see where NAAIM stands tomorrow.

Glad for today's Explosive Bear Market Counter Trend Rally.
This is from Charles Payne's Morning Commentary entitled. "It's 1987 All Over Again".
"I believe the current market swoon is the same as 1987 in the sense that much is being driven by market psychology that is swayed by an omnipotent and overwhelmingly negative media, and Wall Street elites, who are willing to take losses to derail parts of the White House agenda."

For me, I hope this is like October 13 2014 when after many days of losses I sold in the early market decline and then boarded a train to NYC and the S&P climbed all day and the rest of the month but I was out of IFTs.

Just a heads up. NAAIM came in pretty bearish today. That's not good news for the bulls. Countertrend rally may not happen.

I wonder how much of today's and tomorrow's (and possibly Monday's) selling is due to tax loss selling?

Originally Posted by hotwings

I wonder how much of today's and tomorrow's (and possibly Monday's) selling is due to tax loss selling?

When the pros are running for cover, the answer is usually much deeper. We don't necessarily know what that answer is (specifically), but do we need to with this kind of circumstantial evidence? Not to mention the historical significance of the volatility. No, there's a battle raging for sure.

Originally Posted by coolhand

No, there's a battle raging for sure.

Yes there is.
Stay thirsty my friend.

Looks like the Bulls fired off a Hypersonic ICBM to win at the end of day. What a close!