As you can see, pressure has been released from the lows. The velocity of price has seen the biggest uptick it has since October last year. Once negative breadth signals and divergences meet a reversal, the reaction can be extreme.
The biggest question now is what to do about a market that is reaching overbought signals so quickly. Fly mentioned Exodus being overbought, after a long string of extreme negative readings. The $NYMO is set up for its highest close for the year. Again.
The answer here gets back to your overall underlying bias about whether this was a correction in the context of a bull, or the first extreme rally to sell in a bear. Either way, you’ll know soon enough what the outcome is, but operating under assumption buts you in very uncomfortable situations such as this, or as I was faced with last week on Monday, Tuesday and Friday. The good news is that the profits here have been insane, and I have some excess to work with should I decide to change my bias. I have no reason to do so yet.
You have to really ponder the crowd here too. Not this crowd, but everyone else. I saw bears engage early on last week, not bulls. I saw victory declared in their camp on Friday. The bulls were silenced.
What did they do into the weekend? Cover shorts? Take longs?
That being said, what do you do here? Chase the short up? Chase the long up?
This is why the traps were critical. Everyone gets screwed on the way up.
Markets can rally on extremes. As it does, the pace slows, individual stocks move without fear of the market and we trend.
OA
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Happy to say I’m not being screwed on the way up, thanks to your roadmap. If last week truly was the bottom for stocks, I’m riding this bitch till’ the wheels fall off.
What on earth is the $NYMO?
McClellan oscillator. I use it to find breadth extremes.
Interesting. thanks.
VTI long and strong…
Healthcare still in the shitter…VHT
Chinese burritos strong………VWO
All numbers / past 2 sessions actions point to frothy, but it seems we still have 2 large sentiment cycles left… the 1) oh shit I can’t miss out let me buy before it’s too late (i don’t think the past 2 days have been that) and 2) chest pounding exhaustion move higher day
my gartman is now starting to get interested, though still not buying
And another “signal” – business insider front page isn’t all caps “STOCKS RIP HIGHER IN HUGE MELT UP”…
Will be taking notes for sure in AHWOA…
What website or system do you use to to get all the graphs you post?
The Big Money that didn’t buy last week is pissed so they will make sure the market pulls back one more time before the door closes.
I think market continues to chase itself higher.
Hey, I said the same last week.
OA, did you add any long term investment port last week? (I assumed only short time trade) If so, which one was for investment? Thanks.
Tom,
Yes…I added to the four names I bought in august
Which were….. ? Thanks.
You don’t follow the blog?
LULU, FEYE, ZG, SPLK
Yoga pants and firewalls. With Checkpoint down and out I won’t touch that space.
FB for the win.
Hi Jeff,
IBB is a concern for me here . It going trade lower for the rest of the week ?
You said lower in the previous post.
I am Sorry jeff ..I couldn’t answer .. I had to step out quickly , I am thinking down .. I just looking at weekly chart .. i check at the all the indicators i know PMO, PPO ..Looks like move hasn’t begin yet .. damn I am banging my head here ..
You certainly write like someone who is, or has been, banging his head into the wall.
dude .. I am not just a follower i am here to learn .. Once i have my opinion then i look for Jeff .. Who else better than Jeff here ..
I bought biotech a week ago.
Add NQ into the opening weekness like yesterday?
I would.
don’t take the weakness in AAPL lightly as it’s the most important individual stock and it has the power to take down the whole market. So many big players have relied on this stock for the last few years to pad their portfolios and if it goes the market goes with it.
It’s barely holding support right now and the next few days will be key. As important a tell as anything else IMO.
I would defer to your opinion on all matters trading, Chief, especially because this is digging back to a time when I didn’t follow the market closely, but hasn’t $AAPL gone through times when it was a safe haven in risk averse environments (I.e. When times are tough, go hide in $AAPL because gold is stupid, when risk is back on you sell some Apple to add risk)? Not sure if that would be in play at all, just perusing the memory banks out loud. Apple’s performance in this chop may counter that thought during the 2015 Analogue as well.
Chief – look at Monthly charts of the following and explain how any of these charts point a bearish picture. Last month’s action was nothing more than an errant candle in the midst of an otherwise uninterrupted bull run.
ADBE
AMZN
CRM
FB
NFLX
GOOGL
PCLN
A few years ago AAPL one could make the argument that AAPL was the market – that is no longer the case. Innovation is happening in all corners of the planet now that industry and technology and merging.
AAPL becoming the GE of tech stocks?
Well, at least we know its possible for the market to move without AAPL participating (2012).
Thanks man
My qqq calls have returned from the grave and are green.
Nowhere near “insane profit levels” though.
I agree that AAPL is definitely NOT the market. I’ve learned over the years that the market is always bigger than one thing / person / company.
covered NQ +32.5
Check out AAPL weighting in the Nasdaq, it’s a beloved stock and will have a massive ripple effect from small time investors to large institutions. It may hang in there but keep an eye on it.
How did the s&p do the last time aapl corrected?
And why is it a given that aapl will fall further?
Didn’t someone take some WYNN calls last week? That seemed to be a nice play given Friday…
I did. I’m up 36k on 7k initial
Wow. Well done. I hate you. 🙂
I took WYNN calls, someone asked me why, lol
TSLA is the buy of the week below $240
Did you buy?
Maybe as a bounce off 200 day but other than that just a gambling vehicle. Musk says one word and it rockets or tumbles. Hard to peg any risk/reward.
Point & figure says this is the spot to buy TSLA 236’s
Bought HCLP.
Euro is coiling up. Any take on direction? My eyes are saying higher, but that fast spike in August seems enthusiastic
Strange day. $VIX down. But risk diverging down in indices. $TICK neutral. Risk laggards still lagging. Tough to get a read on this one, so not doing much yet. Making sure I have strong conviction before acting in this environment. I did open a small starter in $SGEN that I mentioned watching last week.
Long $NQ_F
IBB hourly aversion
picked up a 315 call in IBB expiring Friday. Let’s hear it for aversion. Still ong some LABU as well.
Motivated buyer back in MDBX
Rounded out OVTI NOV 29 calls to 100 contracts this AM…not sure what is going on but I like it!
Screw LABU…
In USO 15.0 Oct 9 calls since a bit after the open, strong volume and breaking out of consolidation. Could see a 2-3 day move here.
OA.. any thoughts on this Bio death spiral?