It’s early in the session, but just like Tuesday, we are divergent into weakness.
Here’s a quick snippet of our divergence discussion earlier in the week:
Breadth: $NYMO, PPT, $ADV-DEC, or any other metrics you use will likely avoid the values they hit in late August. If these indicators are significantly higher than their August levels, and the market has traded lower, get long.
Foreign markets: I typically will use $EEM, $FXI, or perhaps even $SSEC, $HSI, $NIKK, $DAX, $FTSE, $CAC, etc to see if the $SPY sees a little more excess than the others. Notice that the $EEM and $FXI are not following the $SPY into the same depth of their late August extremes…yet. If this persists, get long.
Biotech: With the volumes we saw today, 7 days of straight selling, and the trending action on stocktwits for some of the destruction in the space…I doubt the $IBB will follow the market down any further. If we see today’s low taken out later this week, and the $IBB doesn’t follow, get long.
Market Darlings: The relative strength names finally got sold today ($FB, $GOOG, $AMZN, etc). That usually happens near the end of a correction. Again, if these stocks do not follow the market into more downside, get long.
$USD/JPY held it’s opening low, trending off that opening purge.
$EEM and $FXI are higher over yesterday.
$IBB has not taken out its opening lows, while the market is hitting new lows here on the day.
$FB, $AMZN, $NFLX, $GOOGL are well above opening lows. Higher lows on the day with lower lows in the market.
$GS – unch.
Breadth: still too early to tell, but fewer stocks correlate to the SPY here at the moment.
Again it’s early, but note the action.
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Short TWTR. Buy Oils. Enjoy unlimited win.
haha. buying oil has been the worst trade. that $46 resistance level has been an impossible break and hold
Just posted on the other blog post – Yen going up, but indexes not following like before –
Never mind – it fixed itself…
USD/JPY?
nvm
Thinking we probably stay somewhere around here, then with jobs tomorrow, we can get a gap down reversal.
Cool! Thanks!
100+ point drop in NQ from overnight high…quite the flush
SO much better this way though. I would have gotten bearish if we gapped up and rallied today.
I love how they blew thru yesterday’s lows in Russell only to reverse higher – fuckery at its finest
Like before, much easier to make defined risk entries from lower levels rather than above
OA, I’ve been using EPAM as a guage of mkt strength. It gives a pretty reliable heads-up, but I’m learning to look at your indicators as well. I am very impressed by your work and your generosity in sharing. Thanks for laying it out so clearly! Do you watch all of these every day in check-list fashion?
Yes, walls of monitors in here. I watch all these things tick for tick to find out who’s telling and who’s lying.
US/JPY has re-tested and held.
Into GS @ 173
One divergence I’ve noticed starting yesterday TVIX and UVIX are not moving up and down inter day with the same panic mode/force as during last week. That might suggest a little bullish confidence creeping back into things.
make that UVXY
Wow, helluva day. I managed to close out my SDS for a nice profit and added to MET / AFL / WMT. Old as balls man stocks but I like stocks with lots of cash flow and dividends.
Grabbed some UGAZ at $5.7. Playing the double bottom at $2.44
$2.44 for /NG that is
Short leash on that natgas. NOAA winter temp predictions are weighing on nat gas.