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On November 6, we noted in our Mid-Day Markets update that a comparison of the SPY and IWM showed a deterioration in the Russell 2000 small-cap ETF relative to the big-cap SPY. We said that as long as IWM was trading below its 20 DMA at 149.11, we would view it as vulnerable to downside continuation off of its Oct 9 all-time high at 150.58.
We were watching and continue to watch this SPY-IWM relationship closely, as, historically, in the later stages of a bull market, a divergence is very likely. In other words, as a bull market loses steam, small companies lose upside momentum relative to the “go to” mega-capitalized companies. (more…)
Back on October 27th, I did a post with a somewhat hesitant title Harsco May Reverse Off Resistance Trendline. Turns out there was no need to word things so cautiously……….I’ve marked with an arrow the date of the post. Bazinga!
The daily RSI 14 sell signal that I was looking at yesterday fixed at the close, and there are now fixed daily RSI 5 and RSI 14 sell signals on both SPX and ES, though the SPX RSI 5 sell signal may well reach target at the close today. SPX daily chart:
Today is profitable, but God in heaven it’s boring. The buy-the-dip crowd is committed to destroying the market utterly, and as usual the lows of the day were established at the opening bell. So let’s just say my heart’s not really in it.
As a comment cleaner, I’ll just throw out the symbol $HSI which is the Hang Seng Index. It’s near the pre-financial crisis highs of 2007, yet its long-term trendline is broken and it’s mushed right up against the underside of the same line. Just another data point to suggest that weakness lies ahead, although it’s quite apparent such a body of evidence is having trouble against the BTFD mob.
Since I don’t really play any musical instruments, I’ve always been fascinated by those who do. Many of the layers of a song are missed as we enjoy it, but the bass line to Billy Idol’s “Eyes Without a Face” is really cool, so I thought I’d seek out a guy playing just the bass part. I find this mesmerizing (and if nothing else, it’s cool background music while you do your trading):
My oft-mentioned idea to short CBL & Associates continues to go well. The analog is just a beauty, and I believe this stock isn’t going to stop crumbling until it challenges the depths set during the delicious, marvelous, sticky-sweet lows of the financial crisis.
It’s become a joke lately – – the market will sell off during the evening, sometimes gaining real momentum, and then – – voila! — it’s all gone. It’s happening again as I am typing this at 5:25 in the morning. I had woken up at 2:33 and glanced at my iPad and noticed the ES was down over 17 points. Nice! But I’ve grown cynical enough to accept it wouldn’t last. And, yep, as I stand here, it’s down less than 10. I guess the algos still have some work to do before it’s totally gone. Again.
I read a comment one guy posted that said the easiest trade in the world these days was to buy any opening-bell dip and sell at the end of the day. It’s almost like an ATM machine. Something tells me he’s on to something.