Since this marks "the fastest bear to bull market in history" i'm going to be posting my full commentary.
Full Retace. SPX and SPY new All Time Highs. New bull market. Every major news service with the "hits record" push notification and headline.
All the fun stuff.
SPX bulls out there popping champagne.
But we still have historically low volume, and mixed signals printing in the rest of the broader market.
But on the back of AMZN this morning we did it. We hit a new all time high in SPX, and then SPY. And with the participation of one of the other 10+% components of QQQ it is now in the process of breaking out.
All of this is mind bending to me. Literally all of it. Just the volume issue alone is enough for me to look sideways at this market. Today we traded 35m shares in SPY, to make a new ATH and retrace over 55% from the March lows. What? And to make it more ridiculous we did it today with DJI, IWM, and XLF all negative. That means the entire broader market was like "nah brah i don't feel like it, i'm going home" and refused to participate. And on top of that this marks two of my leading indicators (XLF and IWM) leading to the downside. XLF for the second day in a row. But, in all fairness IWM and DJI could have just been on a liquidity hunt today and we very well could see them decide to start participating in this "New bull market" later this week to help solidify what should turn into support if the bulls have their way.
Which brings me to another point. The incessant buying in SPY and QQQ is remarkable. It's like a mix of greed, fear, and complacency. And where there's complacency there's risk. But, honestly none of that matters. If we are going to be breaking out that's the facts and it is an exercise in futility in trying to fight the trend.
And on that note: the Q's have been making new highs the past week or two solely on the back of AAPL after it's earnings and subsequent stock split announcement. But today, AMZN (+4%) started to get involved and looks like it wants to break out on high volume, and with that we reached more new ATH's. If the other mega caps start getting involved in this move (GOOG had a 2.68% up day as well, but has not broken out yet) we're in for much higher prices in both QQQ, and SPY. That's just the reality of it. It's ridiculous that AMZN and AAPL themselves can control an entire market but this is the world we live in and the market we trade in. Obviously AMZN still needs another daily above the range to confirm and the rest need to actually breakout for any of this to stick but in all reality why would it stop right now? No negative news has been negative in the market's eyes and I think we're seeing this rotation in Q stocks because we are seeing no stimulus hit the economy. Instead of selling they may just be buying the "havens" and selling risk, like small caps and banks. The market may think these stocks are recession proof.
It's only Tuesday. So there's still a lot of trading left in the week and it's going to be interesting to see if the (entire) rest of the market decides to start participating as well.
Fed minutes tomorrow. Jobless claims Thursday.
But seriously take a second and take in what the hell is going on. Because it truly is unprecedented even in a time where that word is over used like "social distancing".
Today we gapped up on the market's reactions to strong retail earnings from HD and WMT. Who, by the way, gave a warning shot in guidance that without further stimulus consumer spending would take a hit. and what'd we do? Well, the obvious of course. They went for the new ATH. They've been here trying to get their shit together the better part of the week, it's about time they did. And they did. First we hit in SPX (this is all on the back of AMZN by the way), and then after SPX wicked, they said "nope not good enough" and took another shot to get SPY over the finish line. We missed it by .01 and as soon as that 5m candle closed there was a zap to the market and we had an impulsive move down that threatened to turn into a rout pretty quick but the knife catchers and buy the dippers were out with both hands and as soon as we filled the gap from last week (10 left) they bounced us off the daily 5 period EMA and from then on it was a low volume pump back to where we started, another V shape retrace. This is crazy to me. It's like the sellers just poof but if that's the sentiment that's the sentiment. But the selling was impulsive and it did look like it was a big money move in an environment where liquidity is thin and volume has been non existent. Slowly but surely they grinded us higher, on 5m candles that were consistently under 200k in volume (5m 100 period MA is now down to 367k) and multiple 5m candles under 100k in volume. No one's here. This is a skeleton crew right now. But they got us hugged against the level and in the "new all time high" zone and protected that area the rest of the day and even gave another shot (on the backs of QQQ) for SPY to hit a new ATH (which it did) and after that there was some consistent selling but the buyers protected the area professionally and retraced us to get us well above the new all time high zones.
Full Retace. SPX and SPY new All Time Highs. New bull market. Every major news service with the "hits record" push notification and headline.
All the fun stuff.
SPX bulls out there popping champagne.
But we still have historically low volume, and mixed signals printing in the rest of the broader market.
But on the back of AMZN this morning we did it. We hit a new all time high in SPX, and then SPY. And with the participation of one of the other 10+% components of QQQ it is now in the process of breaking out.
All of this is mind bending to me. Literally all of it. Just the volume issue alone is enough for me to look sideways at this market. Today we traded 35m shares in SPY, to make a new ATH and retrace over 55% from the March lows. What? And to make it more ridiculous we did it today with DJI, IWM, and XLF all negative. That means the entire broader market was like "nah brah i don't feel like it, i'm going home" and refused to participate. And on top of that this marks two of my leading indicators (XLF and IWM) leading to the downside. XLF for the second day in a row. But, in all fairness IWM and DJI could have just been on a liquidity hunt today and we very well could see them decide to start participating in this "New bull market" later this week to help solidify what should turn into support if the bulls have their way.
Which brings me to another point. The incessant buying in SPY and QQQ is remarkable. It's like a mix of greed, fear, and complacency. And where there's complacency there's risk. But, honestly none of that matters. If we are going to be breaking out that's the facts and it is an exercise in futility in trying to fight the trend.
And on that note: the Q's have been making new highs the past week or two solely on the back of AAPL after it's earnings and subsequent stock split announcement. But today, AMZN (+4%) started to get involved and looks like it wants to break out on high volume, and with that we reached more new ATH's. If the other mega caps start getting involved in this move (GOOG had a 2.68% up day as well, but has not broken out yet) we're in for much higher prices in both QQQ, and SPY. That's just the reality of it. It's ridiculous that AMZN and AAPL themselves can control an entire market but this is the world we live in and the market we trade in. Obviously AMZN still needs another daily above the range to confirm and the rest need to actually breakout for any of this to stick but in all reality why would it stop right now? No negative news has been negative in the market's eyes and I think we're seeing this rotation in Q stocks because we are seeing no stimulus hit the economy. Instead of selling they may just be buying the "havens" and selling risk, like small caps and banks. The market may think these stocks are recession proof.
It's only Tuesday. So there's still a lot of trading left in the week and it's going to be interesting to see if the (entire) rest of the market decides to start participating as well.
Fed minutes tomorrow. Jobless claims Thursday.
But seriously take a second and take in what the hell is going on. Because it truly is unprecedented even in a time where that word is over used like "social distancing".
Today we gapped up on the market's reactions to strong retail earnings from HD and WMT. Who, by the way, gave a warning shot in guidance that without further stimulus consumer spending would take a hit. and what'd we do? Well, the obvious of course. They went for the new ATH. They've been here trying to get their shit together the better part of the week, it's about time they did. And they did. First we hit in SPX (this is all on the back of AMZN by the way), and then after SPX wicked, they said "nope not good enough" and took another shot to get SPY over the finish line. We missed it by .01 and as soon as that 5m candle closed there was a zap to the market and we had an impulsive move down that threatened to turn into a rout pretty quick but the knife catchers and buy the dippers were out with both hands and as soon as we filled the gap from last week (10 left) they bounced us off the daily 5 period EMA and from then on it was a low volume pump back to where we started, another V shape retrace. This is crazy to me. It's like the sellers just poof but if that's the sentiment that's the sentiment. But the selling was impulsive and it did look like it was a big money move in an environment where liquidity is thin and volume has been non existent. Slowly but surely they grinded us higher, on 5m candles that were consistently under 200k in volume (5m 100 period MA is now down to 367k) and multiple 5m candles under 100k in volume. No one's here. This is a skeleton crew right now. But they got us hugged against the level and in the "new all time high" zone and protected that area the rest of the day and even gave another shot (on the backs of QQQ) for SPY to hit a new ATH (which it did) and after that there was some consistent selling but the buyers protected the area professionally and retraced us to get us well above the new all time high zones.
