S&P 500 Next Week Expected Move ($44.5) | Broadening Top
Updated
Short Call - Took an initial short position in several stocks at the end of day Friday. Looking to add more exposure throughout the next several weeks. I don't expect a crash or a recession or anything until late 2021, just a swift and moderate correction at some point in the near future.
Larger move than we've had in many weeks - you can see this by the orange bars enveloping the prior two weeks orange bars.
It's been an exercise in patience these last few months. Finally think the time is ripe for a reversal.
Fear-Greed hit 98 on Thursday, the highest I've ever recorded.
Put-Call is extremely low.
Bulkowski CPI went bearish as of today.
Window Dressing and Santa Claus rally have concluded.
AAII survey elevated and complacent.
Ned Davis sentiment is extremely elevated.
We are in the 3rd standard deviation of the trend, which is where a contrarian investor like myself finds the opportunity.
Dow Transports (IYT) is struggling and severely underperforming.
VIX is no longer declining, I believe volatility should increase which is further supported by the expected moves.
Breadth is declining, signaled by Percent of stocks above 20,50,100 day moving averages
Looks like we have a broadening top formation. I have, in purple, marked the initial target for both outcomes. Broadening Tops have poor reliability, so my ABCDE count might be flipped due to my bearish bias. I've shown how both outcomes should look.
Last Weeks Expected Move: (Excellent week in my opinion)
First Five Days:
seekingalpha.com/article/4137279-first-5-days-of-january-indicator-myth
January Barometer:
yardeni.com/pub/janeffect.pdf
3rd Standard Deviation of Trend:
SKEW:
Breadth Declining:
VIX:
Bonds TLT Perking Up:
Transports:
Initial Claims:
- I recently lost my Investment Analyst job for what it's worth.
PMI: (Disappointing reading but expecting it to pick up)
Goodluck out there next week, please do your own due diligence and don't blindly follow me or anyone's investment suggestions. Everyone is different.
Best to all you traders and wishing you a tremendous 2020.
- RH
Larger move than we've had in many weeks - you can see this by the orange bars enveloping the prior two weeks orange bars.
It's been an exercise in patience these last few months. Finally think the time is ripe for a reversal.
Fear-Greed hit 98 on Thursday, the highest I've ever recorded.
Put-Call is extremely low.
Bulkowski CPI went bearish as of today.
Window Dressing and Santa Claus rally have concluded.
AAII survey elevated and complacent.
Ned Davis sentiment is extremely elevated.
We are in the 3rd standard deviation of the trend, which is where a contrarian investor like myself finds the opportunity.
Dow Transports (IYT) is struggling and severely underperforming.
VIX is no longer declining, I believe volatility should increase which is further supported by the expected moves.
Breadth is declining, signaled by Percent of stocks above 20,50,100 day moving averages
Looks like we have a broadening top formation. I have, in purple, marked the initial target for both outcomes. Broadening Tops have poor reliability, so my ABCDE count might be flipped due to my bearish bias. I've shown how both outcomes should look.
Last Weeks Expected Move: (Excellent week in my opinion)
First Five Days:
seekingalpha.com/article/4137279-first-5-days-of-january-indicator-myth
January Barometer:
yardeni.com/pub/janeffect.pdf
3rd Standard Deviation of Trend:
SKEW:
Breadth Declining:
VIX:
Bonds TLT Perking Up:
Transports:
Initial Claims:
- I recently lost my Investment Analyst job for what it's worth.
PMI: (Disappointing reading but expecting it to pick up)
Goodluck out there next week, please do your own due diligence and don't blindly follow me or anyone's investment suggestions. Everyone is different.
Best to all you traders and wishing you a tremendous 2020.
- RH
Note
Gap down premarket is bearish price action to start the week.
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