chrisbrecher

chrisbrecher

Funds that keep a portfolio of 50 percent bonds an 50 percent stocks are now too long the equities. Many times at the end of the month, these funds will have to rebalance. That could lead to big equity sell-offs.

chrisbrecher

I am really into the bond / stock relationship. Higher interest rates leads to an alternative to stocks, especially when stocks at all-time highs. The huge stock rally on Wednesday was helped by a big bond rally. Now the bonds have given up the entire rally. This could lead to bearish index futures patterns more likely to work.

chrisbrecher

With the DJT,RUT,NDX and DJIA at, or under their daily 50 SMA. I would expect the SPX do go down to at least the daily 50 SMA.

06:05

chrisbrecher

The spike in commodity prices heled tattoo the bond market. The bond market hates inflation. When bonds dive it usually hits the interest rate sensitive regional bank index. The bear flag that developed in the KRE on an hourly chart last night made me more confident to stay short overnight. I am now looking to cover KRE under the 48 level.

chrisbrecher

The agriculture ETF, the DBA, has surged this year. It was a GREAT tell that the CPI report would run hot.

chrisbrecher

After a protracted move up, many times the top is formed on a big intra-day price reversal. I call these "big red candlesticks". The key is to short these stocks on the break of bearish consolidation formations after the first sell-off.

chrisbrecher Updated 

For the first time in a least a year, I am seeing a bullish daily pattern developing in the Chinese stock market.

chrisbrecher

As posted 2 days ago, the Chinese market was forming a bullish triangle, for the first time in months. Today, it broke above it. This breakout could move their market much higher.

chrisbrecher

As seen, for months the price of the /NQ and the /ZB (the red line) have rallied together, until now. If the /ZB makes new lows, then I think the NQ will finally have an ugly leg down.

chrisbrecher

Many funds that hold 50 percent stocks and 50 percent bonds have to get their ratios back by the end of the month. With stocks outperforming bonds all month, funds held too much stock relative to bonds. They had to sell stock and buy bonds yesterday.

chrisbrecher

Right now, many indexes are breaking under the 20 SMA, while the /ES and /NQ remain above it. I deal in probabilities. If the other indexes continue to stay under the 20 SMA, then the probability is the the ES and NQ will break under them.

chrisbrecher

Bonds don't matter all the time with equities. But if the /ZB breaks down, it would show a solid divergence with stocks. That would provide a big headwind for the SPX to make all-time highs.

chrisbrecher Updated 

When an index has a few days of a sell-off, I look to buy AFTER the first "whoosh" and then the bullish consolidation. It worked in individual stocks like ADI as well.

chrisbrecher

After big sell-offs, my first area to look for longs is in the stocks that had a "whoosh" on the downside, followed by positive reversals. ADI fits those criteria.

chrisbrecher Updated 

Going back at least 50 years, big "Santa Claus rallies" stop around December 28th. That is where I will start to look for swing shorts.

chrisbrecher

Many times if a major indexes "kisses" the daily 20 SMA, other indexes follow. If the NDX plunges UNDER the 20, then I think the SPX will ,at the minimum, test the 20 SMA.

chrisbrecher

A Covid scare finally has lifted MRNA and hit the cruise ship stocks.

chrisbrecher

As seen in BA, an overbought RSI can stay overbought. For swing shorting, I like to wait until the stock crosses under the daily ATR trailing stop, even if it means missing the beginning of the move.