Also, weird signals throughout the market today.
This morning we had a curious dislocation in the markets with IWM , and DJI leading in the premarket. Usually when i see this it is indicative of a healthy, thriving economy, and market. Or at least the projection of such. Which is odd, because we had so much doom and gloom last week. This is also indicative of higher prices incoming. But, banks were not participating either, and bonds grinded even higher again today. Mixed signals.
So, did everyone go home for the weekend, and all the sudden showed up to the market again today? Maybe. The facts are we closed above $300/$3000 Friday which was a point for the bulls. But we closed below the 200 period MA, that was a point for the bears. And we also had a marked sentiment change to about a week and a half ago and bulls were getting essentially plowed through.
The bulls are trying to bounce us from $3000/$300, that's obvious. The question is how high, how far, and how fast. What this really felt like today was a squeeze. It was for me at least, but at the same time i stated Friday i was completely prepared for this. You can see it coming from a mile away. But, is it just a squeeze, or a trend change? Well, considering was dismal and as soon as any came back into the market we moved lower and the bulls struggled basically that last hour to fight the downward , and finally, in the last 2 mins of trading made a new high. That's anemic to me. It's window dressing. Speaking of window dressing, the monthly close. Don't forget about that. On Friday it looked UGLY. In my opinion this is just a low effort "well, we gave it a shot" try by the bulls in an obvious spot. That and we (barely) closed above the range we created late last week. Meaning if you shorted late last week you likely are seeing red or had to cover. But, the tape wasn't really showing a lot of that from what i could see. This also could be the buy the dip crowd trying to stage a college effort bounce, or people trying to front run the macro numbers we have coming this week and next. To me it feels, and smells like a bull trap. (famous last words).
There was no question IWM was leading today. From last night's open to this morning it was leading in percentage gains by a pretty wide margin. This is curious to me. Because IWM is one of my leading indicators and the technicality of this is that we're , and we're headed higher. But the macro is telling me the opposite. IWM and XLF led the last leg up by a large margin and if you jumped in it paid. But XLF is stuck in the mud, it basicaly gapped up and stayed flat all day. DJT was on the bull side today too. This shows a pretty wide breadth of stocks all wanting to go higher. Oh yea, VIX just printed a on the daily as well.
This is while the meme stocks got whacked today. FSLY was down about 11% at one point, and ZM down over 5%. The stay at home stocks were getting smoked. Which is again curious, as "ThE vIrUs Is CoMiNg BaCk". Did anyone hear any virus news today? No? Me neither.
DJI was also showing last night but honestly i'm going to chalk up DJI's strength today to BA's 14% gain. Rising tides lift all boats. But again RTY ( IWM ) was up almost off the bat, meaining this is actual money positioning for something.
Also don't forget
A.) short week - The market's are closed Friday for America's bday.
B.) LOTS of econ data out this week. Non farm payrolls. Chicago PMI. Consumer confidence, etc.
So this may be front running for the gigantic beats we've been seeing in some of these projections. Remember last non farm payrolls? We gapped up like 80 points. We already had one today we housing data. Which, after two months of 0 activity it had a 44% jump. I mean, that should have been expected. But i digress.
Technically there are a couple things to pay attention to. Some of them , others .
On the intraday we basically have a , which is generally a reversal sign. And also, if this squeeze is proper we have to get above the high from the last squeeze from Thur of last week. And if we do, and hold that area we're going higher. Upward targets are still $305.87, Friday's open at $306.16, and most importantly the top of gap at $307.31. All of that could happen in the first hour of trading tomorrow. If we get past that, we're headed back to $310, and possibly going for the gap fill at $312. Remember, gaps are like magnets. And now we have (more) of them above and below.
5m showing a gap fill, and low liquidity hunt (covered that Friday, how you didn't get caught) under $300 and eventually the bulls taking it and running with it but on absolutely terrible . Only real was the last 10 mins of the day to save from a close. Above $300, above $302. If you're a day trader this would have been a textbook gap fill trade.
And here's where it get's interesting on the 1h. Any way you cut this this is a . There's room to the upside but not much. BUT, since i've been trading and in a raging bull market these played out less often than they should on the larger indexes
Daily regaining $304.31, but again. Showing horrible . We only traded just under 79m shares (less than last weeks short squeeze) and 7m of that was in the last 10 minutes of the bulls trying to print a super bully closing print
Look at this. SPX 5m. We traded directly to $3000, even breaking it for a split second, and bounced directly off of it. In these low markets you can do things like these. That was the target, they hit it, and reversed for a 50 point gain. If you caught that bottom you just got paid.
Same with IWM . They went to fill the gap. Wicked down near it, and traded away. That's a home run trade if you caught it. Also note how back they wanted that $141.38 number
Just realized that sick little short squeeze on IWM too. Look at how nice that was, only to be gapped up in the morning. Also note we reversed as soon as we went for the gap. If we get rejected again tomorrow that's not going to bode well
Leading. With a close above last Thursday's open
on the VIX . Not a good sign for bears, and a welcome one for bulls. Also keep in mind this thing has been coiling up for about a week or two. The next move is going to most likely be outsized
XLF , looks awesome of the screener (+1%), terrible on the chart
DJT effectively with a bounce off of it's 100 period MA and regaining it's 13 period . That's a start
NDX showing a bounce off of resistance, but still under it's much coveted 13 period
DJI showing a retest of the broken triangle
Silver just, still doing nothing. The didn't play out. So this is what i have for now, a megaphone. Silver looks like it's not getting any attention but when it does it's going to move
Gold with a gap fill and trading away,
This makes me ever suspiscious if we bounce. This is a realtively large move with bonds. Now, it could be that "record inflow" from portfolio rebalancing but at the same time we're almost back up to the upper bound of the range, and that generally signals uncertainty in equitites.
Mixed signals. Half point up. Half point down. I honestly feel like this is going to be a half assed try at a bounce before we head back to retest $300. We were oversold on ES on every timeframe into the 2h and this very well could be just a counter trend rally. But with that being said we now have a decent amount of gaps up above us, and if the econ data comes in better than expected that might act as a slingshot to go fill them. Regardless, another week ripe for shenanigans either way.
That's why i always say keep your head on a swivel. Happy trading everyone.
This is not trading advice. This is my own personal opinion based on your own peronal TA. You are responsible for your own trades.
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1 to 1 on econ data today.