The NQ8 MF still looks rather positive. NFLX published future earnings full of hope as its subscriber base continued to increase.
It was interesting to note that utilities were attracting good money. It is strange considering that the Fed will raise rates again in December.
Comparatively, REITs were rather negative and have displayed a negative Money flow pattern for many weeks.
Note below that VNQ is still attracting money. This is the type of unexplained discrepancy found in some sectors: the ETF that tracks the sector displays a positive EV pattern while the Money Flow calculated on each component of the ETF is negative.
The same situation exists with IWM: Money is moving into the ETF in the same way it is moving into SPY/QQQ, but the small caps Money flow shows real negativity. Blind index investing!
Oil and miners seem more negative than usual.
This could be linked to a strengthening of the US$/Euro.
We can indeed see below that both gold and the Euro broke their respective Total Effective Volume trend lines, while the US$ is just below it.
German interest rates suddenly weakened yesterday - probably in reaction to the Austrian elections. The trend is however still up as can be seen below. I expect stronger German rates as a reaction to the coming ECB decision on QE unwind.
Conclusions:
This market is still liquidity and hope driven. The NQ8 sector is still leading. The rest is probably inconsequential. However, buying strength does not make much sense: Q3 earnings started coming out and I believe that much more than common sense hope has been priced in already.
Shorting the small caps in strength still makes sense. The best to do that is to use 2018 well in the money puts. However, small caps will not break the markets: an accident on the NQ8 will.
