Free NFTRH 486 (Premium): Market's Going Forward

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Posted by NfTRH & BiiWii

on Sunday, 11 February 2018 16:31

Let’s not go into great detail about sentiment and internals indicators trying to ascertain something already fully in play. The stock market has finally cracked, making an A-B-C correction in micro time per a 30 minute chart. Sentiment is in play from the negative side, volatility is now intense and while we will gauge the macro regularly going forward, we also are in the realm of straight TA. So #486 is going to be a breeze for us this weekend as we get down mainly to more TA and less theory across various markets.

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Table of Contents

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Wrap Up (a basic summary based on conclusions from work done in this week’s report)

  • US Stock Market: So we had anticipated a bottom and a bounce. Last week the US market bottomed, bounced, dropped, bottomed and bounced again. SPX reversed on Friday from a logical point and this could get over bearish participants thinking “rut roh, why did I puke?” and starting to chase. I think this is the type of market where you buy a logical low and hope that a rally ensues or else don’t blindly chase the reactions.

  • There could well be another shoe to drop after a bounce plays out. Let’s watch sentiment and macro indicators to gauge the proceedings.

  • Market Internals: The few divergences we had, like those noted in the Semi sector manifested in a hum dinger of a correction. Now the market is finally in motion with herds running every which way. You can’t ask for better if you are like me. A market in a robo trend or melting up day after day is not fun. A market that is running on emotion and becoming volatile in both directions... is. When things smooth out we’ll again gauge internals.

  • 3 Amigos: Stocks vs. Gold got whacked from a point lower than the ultimate target allowed for by the monthly chart. Let’s keep open minds both ways here and go week to week. 10yr yields are essentially at target and 30yr dwells below target, all with Gross & Dalio plastered across the media as poster boyz of the new bond bear (that isn’t quite yet). The yield curve unsurprisingly steepened with the market disturbance but remains in a long-term flattening trend.

  • Amigos bottom line: no confirmations of trend changes yet.

  • Global Stock Markets: In some cases egregiously overbought and correcting, like

    the US. Also subject to bounce potentials like the US.

  • Commodities: USD-centric ‘Inflation trade’ still alive because USD is still bearish on its larger trends, despite bounce.

  • Precious Metals: Sector’s best ‘epic buy’ (ala Q4 2008) would be if the ‘inflation trade’ ends in global liquidation and the sector gets wiped out. But if stock markets are taking the 1st of more hits to come, this would be very supportive and if gold at least holds its own vs. commodities and silver leads gold, so much the better. Constructive here even if an inflationary phase grinds along.

  • Currencies: USD bearish but bouncing.

  • Sentiment: Sentiment got cleaned very well last week, to the point where a solid bounce across asset markets is not only possible, but likely. Friday’s reversal may have been the start. Let’s see how the pig comes out of the gate early this week. 

US Stock Market

SPX and its fellows made an A-B-C correction (i.e. short-term down-up-down whipsaw) in micro time last week. The SMA 200, per the SPX chart is generally the line in the sand that sparked Friday’s bullish reversal. SPX has 2 significant gaps, one as noted above in the mid-2800s and the other as noted in an update in the mid-2400s. 

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.....continue reading the entire analysis HERE


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