In a recent post, I said that NAAIM had backed off on their shorts, but remained bearish. I said that this suggested to me that the downside was likely limited. But I also said the upside may be limited too given that they were not flipping bullish. We can see that so far the action is pretty much what I was expecting as price dances sideways.
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Momentum is still pointing higher, but it will start to level off if the sideways action continues.
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Breadth remains bearish.
April begins tomorrow. Things are going to get very interesting over the next 2 weeks or so. There are events unfolding that could increase volatility. While I suggested that an upside bias might begin and that a bottom was suggested, I am not entirely sold on that possibility. That's why I'm neutral as is NAAIM. Anything can happen in this environment as there are many external factors in play.
I remain neutral.
New month, new quarter, and price immediately goes lower.
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There remains a lot of volume in the market. Momentum is beginning to roll over. I think there is a good chance the market tests the lows.
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Breadth obviously remains bearish.
NAAIM reports tomorrow. I am going to be looking for an increase in short positions. That will tell me whether downside risk has increased.
I am shifting neutral to modestly bearish until I see that NAAIM reading.
Kudos to Nnuut!
FWIW, CH, if you haven't watched the Pivot Point video tonight, it is worth a watch. I believe it very closely matches your (and others) prognostications. I'm curious what your (And others) opinion are on it.
Sorry I'm throwing this into your thread but I don't think many get into the other parts of the site to see the video's Nnuut posts on a daily basis....and this one needs to be watched just for the information. Even if you disagree with him the information is valuable.
It is interesting.
I'm tempted to stick with Fauci's line, essentially 'we don't select the timeline, the virus selects the timeline' thing.
But, if the virus has seasonal characteristics, there's a miracle cocktail that mitigates, etc., that scenario becomes pretty viable.
There's a big difference of opinion regarding the depth of the next plunge- s&p 2050, 1820, or anywhere in between.
There is a massive infusion and no one knows the extent of economic damage. What moderates my optimism is that, historically speaking, all the market has done to this point is to have blown off excess and is just now at "reasonable" historic P/E levels with one major caveat- that P/E is looking backwards. Regards.
'
I like the P/E tie in...and the open-ended inference to it looking backwards which begs the question "how far back?". Setting the stage for another open ended question... we have huge amounts of money going out from state governments into social programs. The biggest one right now is unemployment. The State of Illinois yesterday announced it will be unable to maintain unemployment payouts (did not specify an insolvency time) and will be seeking relief from the fed's.
Ask yourself this....what if the federal government says no?
Depends on how much other countries decide to debase by. It's all relative. The dollar at $100 on $DXY is deflationary.
I'd be more concerned about the Euro than the US Dollar. Euro is only .03 from a major support line and they just announced this:
https://www.bloomberg.com/news/artic...rops-qe-limitsEuro-area sovereign bonds surged after the European Central Bank gave itself unlimited room to buy the debt.
The overall reading from NAAIM today is that they remain bearish. Of particular note that is that they have increased short positions. Not as much as I've seen before, so they are not shorting with both hands. Still, this adds credence to the speculation that the market will likely retest its lows.
S&P500 (C Fund) (delayed) (Stockcharts.com Real-time) |
DWCPF (S Fund) (delayed) (Stockcharts.com Real-time) |
EFA (I Fund) (delayed) (Stockcharts.com Real-time) |
BND (F Fund) (delayed) (Stockcharts.com Real-time) |
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