Thread: tsptalk's Market Talk

More waffling between support and resistance in the bull flag for the S&P 500 (C-fund). The 50-day EMA has held as resistance for 8 days now - including today, and the 20-day EMA has been support that whole time. Something has to give.

The DWCPF (S-fund) is in that large bearish looking flag (red) but the green bull flag is starting to look more like an F-flag, which can move higher for a while, but they tend to breakdown. I'm liking this less today than I did a few days ago.




The I-fund is moving counter to the dollar so we probably need to see the dollar rollover action for the I fund to get traction.




I don't like the look's of the Transports this morning. Failing at resistance, and the resistance is thick. Down 2.5% today.

Today was supposed to be the bulls' turn in the up and down choppy flags.




The Transportation Index and the High Yield Corporate Bonds are down again after breaking down days ago - unlike the charts above which are holding up for some reason.

Could be early action lower and then turn around late into the close? If you are in the camp to want things to move higher, close lower and even open tomorrow down? Once CPI report comes out things reverse and big up day tomorrow? If your in the camp that want to see things move down, maybe turn around today and even close up, and perhaps start in green in the morning before the let down CPI number which could be a sell off day into the weekend?


Since we have had so many reversals during the trading sessions just hypotheticals lol

As I mentioned in my commentary recently, there were a lot of warning signs out there with the Transports and High Yield Corporate Bonds (HYG) crumbling several days days ago. We also had some bullish looking formations (bull flags) on the S&P 500 and small caps charts, so I thought maybe the market might continue to try to climb the wall of worry.

Then, when everyone anticipates a poor CPI inflation report, stocks fall into that report, we get the bad report, and stocks fall further after it? That's unusual.

It could be setting up an afternoon reversal, but Friday's are tough. Positive reversals on Friday can be explosive and then follow through on Monday, but getting that reversal before the weekend is the trick.

Being that we are in a bear market, and have been for months, and the news is bad, how much of that news is already priced in? The Fed is raising rates for a reason and we all knew that already. It will be tough but the series of 0.50% rate hikes should eventually control inflation to a point, but now the concern is, how much will that negatively impact the economy? The market is trying to put a number on that today.

This can reverse as quickly as it goes down, but right now, it's going down. Trouble in the credit markets.

Originally Posted by tsptalk

Being that we are in a bear market, and have been for months, and the news is bad, how much of that news is already priced in?

I don't think enough of it is being priced in. Buy the dip mentality still remains. The ways of 2020 no longer work.

The inflation number today came in hotter than expected and as long as oil prices are doing anything but going down, it's going to kill earnings next quarter. Sentiment has been stuck in a "buy" for two months now with nothing to show for it - another sign of a bear market.

The weekly chart may be pointing to the next destination - getting close.

LOL, I literally looked at this on my charts! That is spooky.

Anyway too early but definitely something to think about.

Two of the most recently beaten down, key charts are having big bounces today. The HYG and the Transports.

Good signs but in front of tomorrow's Fed meeting and rate hike, and being a quadruple witching expiration week, it's tough to trust anything.

Per www.cmegroup.com

Probability of a 0.75% rate hike tomorrow. 94%.

0.50% = 6% probability