• Comments for February 8, 2022

    Yesterday, equities were relatively weak. The Cumulative Tick displayed some strength while the 20DMF displayed weakness.



    This is more a sign of uncertainty than anything else. This can be shown in the Figures below: the positive Money Flow surge that we witnessed last week has stalled.





    Energy seems however to be the strongest sector in terms of Money Flow.



    The NQ100 Futures are directionless here,



    while the SP500 Futures displays weakness.



    The negative is coming from the 10Y rates that continue pushing higher, which forces investors to sell treasuries.





    The Fed tries to suppress rates by increasing its reverse repo activities, but this does not seem to have much impact for now.



    The New Highs New Lows indicator also displays a 50MA that is trending down. This indicates that more stocks participate to down moves. The positive point here is that we are seeing higher-lows, which is a sign that fear is receding. But is this really positive?



    Conclusions

    I'd prefer to witness a real wash-out that will help clean stops and test the most recent lows. The $SPX is now stuck between the 50 and the 200MA. This situation will probably be resolved in the coming days.

    The military build up in Ukraine and the bellicose position of the Russian President that he repeated in a long interview yesterday tells us that there could be a military conflict soon that will escalate into a financial and energy conflict that will mostly hit European countries. This is what prevents markets from moving higher.