SP500 Back to check for support.Possible long liquidation break.
The TINA(There Is No Alternative) Trade is ending.
Bond's are set to become attractive again, Metals, and emerging markets as well. For the last 3 months there has been no place for global low risk money to go but the index. As that changes money should flow out of the SP500 to these alternatives, as well as likely re-balancing towards value probable.
From the bottom of my last /ES call we're bouncing off the 1.414 fib, and while on individual stocks I look for the 1.618 I find it very rare for a move with almost no retrace to be extremely rare in history. The RSI and RVI have been in sell territory for a good while now and T-Trade volume posting at the end of the day today had many very large (more than $1B) near VWAP sales indicating that MMs have been receiving shares to sell. This means that the supply of shares for sale is now larger than the demand to buy as we've been decreasing in volume on the way up. The 50W SMA is my target, but 316 is a solid mid-level target.
Bond's are set to become attractive again, Metals, and emerging markets as well. For the last 3 months there has been no place for global low risk money to go but the index. As that changes money should flow out of the SP500 to these alternatives, as well as likely re-balancing towards value probable.
From the bottom of my last /ES call we're bouncing off the 1.414 fib, and while on individual stocks I look for the 1.618 I find it very rare for a move with almost no retrace to be extremely rare in history. The RSI and RVI have been in sell territory for a good while now and T-Trade volume posting at the end of the day today had many very large (more than $1B) near VWAP sales indicating that MMs have been receiving shares to sell. This means that the supply of shares for sale is now larger than the demand to buy as we've been decreasing in volume on the way up. The 50W SMA is my target, but 316 is a solid mid-level target.
My outlook isn't different or shifted. I believe this analysis to be correct, now is the time to sell to exit on big gainers and shift into defensive value. There is actually a lot of value out there to be had. MMM, KHC, OXY, IVZ, K, M, and many others trading at much more reasonable P/Es are out there at good valuations and solid bottoms.
As mentioned before metals are attractive. Gold and silver despite recent gains have a lot of room for upside. Gold specifically generally has a seasonal boost in January. Personally, I prefer spot over mining but many of the mining ETFs are at quite reasonable points.
SPY or /ES shorts should be taken with plenty of time and tight stops. Eventually we should have a long liquidation break or correction. Trade well.