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Thread: coolhand's Account Talk

  1. #7993

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    Default Re: coolhand's Account Talk

    Once again, the market closed mixed on the trading day. Mixed closes seem to be getting almost routine.

    But this time, instead of the DWCPF leading the S&P, it was the other way around. The S&P closed almost 1% higher, while the DWCPF closed about 1% lower.

    SPX.png
    DWCPF.png

    Price on the S&P closed at another all-time high. Price on the DWCPF gave up come recent gains.

    NYAD.png

    Cumulative breadth ticked a bit higher and remains bullish.

    Well, is market character about to change? We are winding down the year (and quarter) so it's possible that portfolios are shifting.

    Be that as it may, it isn't bearish at face value. Overall, the indicators remain up and I remain bullish.

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  3. #7994

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    Default Re: coolhand's Account Talk

    The last trading week of the year is seeing what appears to be profit taking and tax shifting as we wind down 2020.

    SPX.png
    DWCPF.png

    Both the S&P and DWCPF were lower today. Notably, the S&P was hitting fresh all-time highs early in the trading session, but could not hold those gains. The DWCPF went lower quicker than the S&P. It was more like a bear ambush within minutes of the open. Still, the technical damage is limited to this point. The S&P doesn't have any technical damage to speak of, but the DWCPF shows momentum going negative, which is obviously bearish. However, RSI has finally fallen out of overbought territory after spending more than 5 weeks in that area. The question is, how much more selling might we see? I suspect we might get another couple of days worth and then things may change next week, but I'll know more when we get a fresh NAAIM reading.

    NYAD.png

    Cumulative breadth took a hit, but is still technically bullish.

    Despite the selling pressure, there is nothing particularly abnormal as far as market action goes. Especially as we wind the down the year and quarter. It's also not a surprise given how far the indexes have gone; especially the DWCPF.

    It is too soon to get bearish on the action as it may be short term. NAAIM will tell us more about risk in another couple of days. For now, I remain bullish.

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  5. #7995

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    Default Re: coolhand's Account Talk

    The market bounced back on Wednesday with both the S&P and DWCPF closing with gains.

    SPX.png
    DWCPF.png

    It's nothing to write home about, but at least it breaks the string of losses on the DWCPF. Volume remains low, which is understandable at this time of the year.

    NYAD.png

    Breadth recovered nicely and is sporting a fresh all-time high.

    We get a fresh NAAIM reading tomorrow. As always that reading will help frame expectations heading into next week.

    I remain bullish.

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  7. #7996

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    Default Re: coolhand's Account Talk

    For the 2nd week in a row, NAAIM has come in a bit less bullish. The reading is still bullish overall, however. So, they are tempering bullish expectations, but not by a ton. It could be profit taking and then waiting to see how the new year shapes up in January. It could be tax positioning too. It could be both or something else. But the bottom line is that the signal is still bullish, just less so.

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  9. #7997

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    Default Re: coolhand's Account Talk

    What NAAIM number (or range) is the breaking point from bullish to bearish? Other than the March/April 2020 timeframe, the NAAIM has not been below 50 in the past two years. After 5 weeks above 100, I see the drop to 89 and then 82 as a somewhat significant shift in position, no?

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  11. #7998

    Default Re: coolhand's Account Talk

    Quote Originally Posted by flalaw97 View Post
    What NAAIM number (or range) is the breaking point from bullish to bearish? Other than the March/April 2020 timeframe, the NAAIM has not been below 50 in the past two years. After 5 weeks above 100, I see the drop to 89 and then 82 as a somewhat significant shift in position, no?

    CH can probably expound on it...but I view NAAIM as a sentiment, put into statistical form, of risk managers. Here is a chart showing the past 2 years NAAIM. https://www.naaim.org/programs/naaim-exposure-index/

    and here is a link to a page explaining NAAIM that I read up on a few years ago (shortly after I knew NAAIM existed). https://seekingalpha.com/article/399...sh-individuals
    Last edited by Mcqlives; 12-31-2020 at 12:05 PM. Reason: seekingalpha link

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  13. #7999

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    Default Re: coolhand's Account Talk

    Quote Originally Posted by flalaw97 View Post
    What NAAIM number (or range) is the breaking point from bullish to bearish? Other than the March/April 2020 timeframe, the NAAIM has not been below 50 in the past two years. After 5 weeks above 100, I see the drop to 89 and then 82 as a somewhat significant shift in position, no?
    It's important to understand that when observing the NAAIM info that the site does not explain exactly what the numbers mean (how high they can go, or how low, etc.). From experience, I see a reading of 60 as neutral (give or take). Anything above that number gets progressively more bullish and lower gets more bearish. Using this guideline has worked well for me.

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  15. #8000

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    Default Re: coolhand's Account Talk

    Last week saw somewhat of a reversal of fortune between the S&P and the DWCPF. For the week, the S&P was up more than 1%, while the DWCPF was down more than 1%. What do we make of that? I can't read much into it given that last week was the last trading week of year and the quarter. Now we start a new year and a new quarter.

    Friday's action was modestly negative for both indexes, but the yearly gains were impressive; especially for the DWCPF, which was up more than 31%.

    SPX.png
    DWCPF.png

    Price on the S&P closed out the year at a fresh all-time high, while the price on the DWCPF is off of its all-time high, but that by all that much. Both charts remain bullish, but the S&P has an improved technical aspect. I can't read too much into that either so I'll have to wait to see how market character shapes up as we move through January.

    NYAD.png

    Cumulative breadth remains bullish as we head into the new year.

    NAAIM is bullish (moderately) for the new week. TSP Talk came in neutral.

    As January goes, so goes the year is an often quoted axiom among traders. I remain bullish as we head into the new trading year.

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  17. #8001

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    Default Re: coolhand's Account Talk

    Quote Originally Posted by coolhand View Post
    Last week saw somewhat of a reversal of fortune between the S&P and the DWCPF. For the week, the S&P was up more than 1%, while the DWCPF was down more than 1%. What do we make of that? I can't read much into it given that last week was the last trading week of year and the quarter. Now we start a new year and a new quarter.

    Friday's action was modestly negative for both indexes, but the yearly gains were impressive; especially for the DWCPF, which was up more than 31%.

    As January goes, so goes the year is an often quoted axiom among traders. I remain bullish as we head into the new trading year.
    Interesting for January 2020 the "F" fund was a positive 0.38 while the "C, S & I" funds were negative 0.02, 0.35 & 0.89 respectively. Of course the "C, S & I" funds tanked in February and March. But all funds ended up positive by the end of the year.
    May the force be with us.


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  19. #8002

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    Default Re: coolhand's Account Talk

    So, the first trading day of the year starts us out on a negative note. That's not a good sign at face value and could be a problem if there is follow through.

    SPX.png
    DWCPF.png

    The S&P gave up most of it's past week gains, but it did close well off the lows of the day. But that candlestick isn't pretty. The DWCPF continued to give up gains, now closing negative for 5 out of the past 6 trading days. Momentum is falling on the DWCPF.

    NYAD.png

    Cumulative breadth remains bullish, but it was negative today and is no longer ascending at the rate it did for all of November into early December.

    We did see NAAIM rein in their bullishness to some extent the past 2 weeks. It is important to remember though, that they were still positioned in a moderately bullish stance. However, they can change their sentiment whenever they want as they are certainly not held to the sentiment they reported on any given Thursday. As I said last week, they may have tempered their bullishness because they are waiting to see if anything changes as we end one year and start another. And something "may" be changing.

    Futures are positive right now (Monday evening), but that doesn't mean much of anything other than perhaps there is no panic selling. Still, I think it would be prudent to reduce risk for the time being until the market makes a bolder statement one way or the other.

    I am going from bullish to neutral.

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  21. #8003

    Default Re: coolhand's Account Talk

    From the futures we have more bold statements ahead.

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  23. #8004

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    Default Re: coolhand's Account Talk

    So, after Monday's first trading day of the year loss, the market follows up with a bounce on the 2nd day. While it was a decent bounce, it didn't retrace all of Monday's losses on the S&P. The DWCPF retraced almost all of its losses.

    SPX.png
    DWCPF.png

    We can see from the charts that the uptrend has at least stalled (short to mid-term) for now, but the charts still remain bullish. Technical damage is still limited.

    NYAD.png

    Cumulative breadth remains bullish.

    This market isn't exactly easy to figure out right now. A lot of potentially market moving events are in play this month. Some are not visible yet. Today's bounce calls into question how this month is going to go. And it may stay that way (or not) for the time being.

    I am going to remain neutral. I'd like to see what NAAIM does later this week once they've had time to assess the first week's trading activity.

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coolhand's Account Talk
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