stantrader

stantrader

We see divergence in the RSI, CCI, and volume on the SPY. I think today's action was simply a retest of the high before trending lower into the Fed meeting. Most likely a retest to 208.

stantrader

Given the impressive surge since the election the markets have finally begun to relent. Many forecasters anticipate a pullback to 2150 before a larger move above 2214. I disagree. Given the price action going into the highs, there was a lot of indecision along the way (doji, shootingstar, hangman candlesticks = indecision). The optimism supporting the run up...

stantrader

We have arrived at an interesting intersection. Yesterday's (11/22) high was 2204.8 and today's high was 2204.07, which is what we closed at. Today's candlestick looks strong. However we are entering an interest crossroads where we are hitting the ceiling of a 1.5 year trend line, running into an extremely high PE ratio, an impending rate hike, higher interest...

stantrader

We have hit exhaustion. We finally made it to 2200, and we did it in parabolic form. Similar to the trajectory of a rocket. Today we closed above 2200, but not without a day of wrestling with a bear. We posted a hangman candlestick which usually concludes the end of a trend. Furthermore, volume was very light and below average. Every time we have posted a...

stantrader

It's important to keep in mind that when the market gets to extremes, like it is now (25x PE ratio, 27x Schiller PE ratio, 2x Price to sales ratio, 125% of total GDP,) it's easy to throw up your hands an join them. However, it's important to keep in mind that interest rates are increasing globally. That is very enticing for a money manager. Also, most sectors have...

stantrader

Although we had a huge UP day today, volume wasn't as robust. Although the trend is still higher, I wouldn't doubt that the institutions are cashing out. Given the last 3 days of bars (spinning top, hangman, spinning top), which usually show a trend reversal, today may have been the retail investors jumping in so they won't miss out.

stantrader

It's common for 'risk-on' assets to move together. The above chart shows the SPX with an overlay of the Emerging Market ETF (EEM). Also, below the chart is the correlation of the two. As we can see they are fairly correlated and they generally move together, just the magnitude of the movement is where they differ. In the last couple of days the emerging markets...

stantrader

For the last three trading days investors have been indecisive. Investors are wrestling with the prospects of a Trump presidency, and prices have been volatile but end flat because of it. It is concerning, as enclosed in the circle, that we basically have a 2 spinning tops and a hangman at the peak of an uptrend. These candlesticks clearly underscore the...

stantrader Updated 

My forecast remains intact given the last two trading days. The markets surged the day after the election. However, Thursday and Friday were quite volatile during the day but ended subdued. The 2 days did not continue the bullish trend, and showed a lot of indecision. This week was a whirlwind, and I expect the volatility to continue. Last Friday, the market...

stantrader

Short SPX given the break in the long-term trend established since Feb 2016. The long-term trend has broken. This run-up is simply a retest to the trend, before heading lower. 2 Primary reasons why: 1. The honeymoon phase with Trump will come to an end*; and, 2. The Fed will raise rates in December, adding headwinds to an overpriced market. *The Dow reached a...

stantrader

Given the recent outcome of the election volatility will pick up through the end of the year primarily due to 2 items: 1. Honeymoon ends with Trump's election 2. And the impending uncertainty surrounding the Fed rate hike.