• Comments for April 19, 2018

    At the close of yesterday, the 20DMF turned into a safe mode buy signal. This occurs when the OB/OS crossed above the +30 level while the Money Flow is still below the 0.11% level. This is basically a safe mode buy signal. Nothing long-term here.



    The whole market is still trading the NQ8 earnings hopes and selling the rest (except for the energy sector, whihc is shines brightly.)





    My problem is that I detect too many EV based negative charts these days:

    1. All the Index futures
    2. All major ETFs (Not shown here)
    3. The CTick
    4. The Small caps MF
    5. The defensive sectors
    6. The financial sector
    7. The market weighted average TEV

    I inserted these Figures below the conclusion, but they all display the same story.

    What I find stranger here is the divergence between the sinking 10 Years Treasuries and the relatively bullish gold pattern. It is as if the international situation was about to break into a major conflict or as if inflation was about to shoot up.





    The U$ displays a small bounce here, while the Euro is slightly bullish. Not sure which currency will lead, but my vote would be on the US$ which should follow the rates differentials.





    The gold/silver miners display a strong MF divergence here. Since I am short GDX, I hope that gold will move down from here, but this is not shown in the EV Figures for now.




    Conclusions:

    In the short term, the market (algos) is trading the boost of strong earnings on the NQ8 stocks.
    In the long term, the market expects higher rates and is basically getting out of equities, except for the NQ8 and energy.

    I would not short here as we are still in a bullish combination of good earnings/options expiration. However, most EV Figures display so much negativity that I would basically stay neutral until we are out of these two bullish influences.. or until the IWM/SPY ratio spikes higher.





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