Subscriber Update for Monday, September 12th

By: Marty Chenard | Tue, Sep 13, 2016
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Going by the patterns and nothing else, we have a bullish reversal pattern setting up for the long side ... possibly later in the morning today. Don't get too rambunctious as we are not out of the woods yet. Yes, the market is working on it and making progress but the job just isn't quite done yet.

What does the market have going for it? Low interest rates. An interest rate hike now would be a vote of confidence in our economy, but no hike is what is needed. The Royal Bank of Scotland says the markets are flashing stress alerts akin to the 2008 crisis. They told their clients to sell.

Sounds good and sounds awful at the same time. Caution is a good thing in spite of a bullish pattern trying to set up. (The Super Accelerators were in a early positive (up) condition that needs to be tested today.)

FYI ... Institutional Investors were showing a flip back to Accumulation that should be tested today. Buying had an up tick and Selling had a down tick. (The Aggressives were in low Distribution that still needs work to get out of a downtrend ... that test should occur today.) - - - Institutional Selling trend lines were in a low down trend with a smaller down tick so it could be challenged today. (Note that less selling is a positive and more selling is a negative.) Also look at the back and forth shifting going on because Institutional Investors have been undecided.

Older comments: "A crash is not out of the question, and if you have any long positions, they must be hedged as the downside risks are just too great now." > > > (As before, our other older comments have not changed: "Don't think of being long in the market without properly hedging a position. Nobody knows when, but when this does finally end ... it will end very badly.


Special Chart 1: The Stock Market's Inflowing Liquidity had an up tick to Mid-Q1 positive territory that was above an important support line that needs to hold while not making a lower/low just after the support line. - - - As we have been commenting ... "Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines ... subtle, but still of concern."

Special Chart 2: The VIX* closed at 15.16. This remains a DANGER possibility for the medium term. (Remember that the market moves opposite to the VIX.) The VIX is still engaged in a downside test of a Major Support line. - - - No change in past comments: "The fan resistance lines continue to move further out. This could be an escalating problem developing, so be very careful.


Section 1, Chart 1: The Option's Timing Indicator showed trend lines moving lower while in negative territory. The fast thick red line showed an up tick in negative territory that was below the red & blue trend lines and fairly close to it. (The thick red line above the red and blue trend lines usually means that a bottoming process is starting, and below could be serious trouble.)> > >  The Options Liquidity Inflow's showed trend lines that were moving Down with the trend lines slowing down in their rate of deceleration The daily red bar was a low negative. The Momentum Gain/Loss Indicator showed a slightly negative and lower daily tick. This is a high Danger condition on the short term, that is still maintaining its medium term up trending .  (The Options Timing chart showed that a new up condition initiated on February 18th. ... we are in a very high Danger area.)

Section 1, Chart 2: The Stock Market's Inflowing Liquidity had an up tick to Mid-Q1 positive territory that was above an important support line that needs to hold while not making a lower/low just after the support line. - - - As we have been commenting ... "Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines ... subtle, but still of concern." - - - The indicators at the top of the chart were mixed.

Section 1, Chart 3: Institutional Investors were showing a flip back to Accumulation that should be tested today. Buying had an up tick and Selling had a down tick. (The Aggressives were in low Distribution that still needs work to get out of a downtrend ... that test should occur today.)

Section 1, Chart 4: Institutional Selling trend lines were in a low down trend with a smaller down tick so it could be challenged today. (Note that less selling is a positive and more selling is a negative.) Also look at the back and forth shifting going on because Institutional Investors have been undecided. - - - The top part of the chart showed an up tick to Lower-Q2 territory that should be tested today.

Section 2 Super Accelerator Summary: *** The Super Accelerators were in a early positive (up) condition that needs to be tested today. This is a high risk condition. (Hedge any and all long positions if you are long or move to cash until the risk levels dissipate.) Older comments: "Risk levels are high and investors should be hedged or move to cash." and ... "The NDX or the IWM could end up being a canary in a coal mine, so keep an eye on them."


This is a quick overview of underlying conditions over the past 3 days (see the matrix below) : 3 Negative readings, 3 Lesser Negative readings, 0 Neutral Readings, 1 Positive readings, and 1 Lesser Positive readings.

Indicator Condition and color wanted for an up condition. Thursday's Close Sept. 8th. Condition: Friday's Close Sept. 9th. Condition: Monday's Close Sept. 12th. Condition:
1. Unweighted, Positive Sector Stocks above Equilibrium. A majority of Unweighted Positive Strength stocks above the Equilibrium line. Unweighted Positive Stocks showed that 63.80% of the S&P stocks had Positive Strength. Unweighted Positive Stocks showed that 27.60% of the S&P stocks had Positive Strength. Unweighted Positive Stocks showed that 39.80% of the S&P stocks had Positive Strength.
2. A comparison of the number of Very Strong and Very Weak Feeder stocks. The # of Very Strong Feeder stocks higher than the the # of Very Weak Feeder stocks. The number of Very Strong stocks versus the number of Very Weak stocks was: 55 vs 36 The number of Very Strong stocks versus the number of Very Weak stocks was: 5 vs 194 The number of Very Strong stocks versus the number of Very Weak stocks was: 25 vs 106
3. New Highs Trender Above 180 wanted. 208 (Above 180 wanted) 32 (Above 180 wanted) 75 (Above 180 wanted)
4. New Highs Raw Data 46 to 86 =s neutral.
100+ is a lesser positive;
150+ is the target.
185 reading 120 reading 20 reading
5. New Lows At or Below 28 Wanted. 6 (At or Below 28 Wanted.) 23 (At or Below 28 Wanted.) 32 (At or Below 28 Wanted.)
6. Institutional Buying & Selling Action Accumulation Institutional Investors were showing low Accumulation. Buying had an up tick and Selling had a up tick. (The Aggressives were in Accumulation that needs a little more work to get out of a downtrend.) Institutional Investors were showing low Distribution. Buying had a down tick and Selling had an up tick. (The Aggressives were in low Distribution that still needs work to get out of a downtrend.) Institutional Investors were showing a first day flip back to Accumulation that now has to be tested. Buying had an up tick and Selling had a down tick. (The Aggressives were in low Distribution that still needs work to get out of a downtrend ... that test should occur today.)
7. Long Term Liquidity Inflows Expansion Territory The Stock Market's Inflowing Liquidity had a down tick in Upper-Q1 positive territory that was above a support line. As we have been commenting ... "Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines ... subtle, but still of concern." (This box color reflects where the Liquidity levels actually are, and not what their trending is doing.) The Stock Market's Inflowing Liquidity had a down tick to Mid-Q2 positive territory that was above an important support line that needs to hold while not making a lower/low just after the support. As we have been commenting ... "Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines ... subtle, but still of concern." (This box color reflects where the Liquidity levels actually are, and not what their trending is doing.) The Stock Market's Inflowing Liquidity had an up tick in Mid-Q1 positive territory that was above an important support line that needs to hold while not making a lower/low just after the support line. As we have been commenting ... "Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines ... subtle, but still of concern." (This box color reflects where the Liquidity levels actually are, and not what their trending is doing.)
8. Daily VIX Reading The VIX is subject to its behavior analysis The VIX closed at 12.51. This remains a DANGER possibility for the medium term, and the short term remains a positive for the market. (Remember that the market moves opposite to the VIX.) The VIX is still engaged in a downside test of a Major Support line. No change in past comments: "The fan resistance lines continue to move further out. This could be an escalating problem developing, so be very careful. The VIX* closed at 17.50. This remains a DANGER possibility for the medium term.  (Remember that the market moves opposite to the VIX.) The VIX is still engaged in a downside test of a Major Support line. No change in past comments: "The fan resistance lines continue to move further out. This could be an escalating problem developing, so be very careful. The VIX* closed at 15.16. This remains a DANGER possibility for the medium term.  (Remember that the market moves opposite to the VIX.) The VIX is still engaged in a downside test of a Major Support line. No change in past comments: "The fan resistance lines continue to move further out. This could be an escalating problem developing, so be very careful.
Color Codes:
positive A lesser positive
neutral  
negative A lesser negative
* Note that the VIX has resistance closing points for today: VIX today ... over 24.3 would be awfully bad, and above 22.50 would be bad. Below 22.5 would have another chance of going lower or staying below 22.5.

> The Institutional Index, the SPY, the IWM and the NDX./QQQ, were above their horizontal resistance/support lines. The NYA was below its thick black horizontal resistance line.

> The Banking Index ... The Banking Index closed at 72.24 with the 30 day C-RSI at a positive level of +9.45. The Accelerator was in positive territory technically down trending but with a higher fast tick yesterday. The Timing Indicator was in positive territory with a Down tick again and showing a downside crossover. The Banking Index was in a very high risk up condition that started March 1st. Please note that risk levels are high and at a place where Danger lurks, so please hedge any positions or go to cash.

> The Dollar closed at 95.095. The RSI was at a Danger-Negative level of 47.82 We still need the RSI to rise above its upper (green) resistance line which is not an impossibility. 50 is a neutral reading on the RSI. NOTE that the Dollar did test the 100.39 level and pulled back in December after making a double top ... it could retest that level (100.31 to 100.51) (Do remember that this remains a Dangerous condition where a blow out level with a sharp down move typically occurs after the up move finishes.) - - Ref: U.S. Dollar symbol: USDX, or $USDX. This is a potentially Dangerous condition that has been technically trending in a large sideways range since early last year.

> 10 Year bond yields (TNX) closed at 16.72. No Change: There is an upside bias "trying" to build on the 10 and 30 year bond yields while the short term bias has been down. DO NOTE that the TNX has 3 resistance levels that it is dealing with and it was above the first level on Friday.Prior comments: As we have been commenting: "we could see high volatility at this juncture". Older comments: >>> Investing Philosophy to consider: 1. Don't invest in stock or medium that you don't understand. 2. Don't invest in anything that is "interfered with" or "manipulated". The TNX and TYX fit the second category with the Fed's interventions.

> 30 Year bond yields (TYX) The TYX closed at 23.95. No Change: There is an upside bias "trying" to build on the 10 and 30 year bond yields while the short term bias has been down. Old Comments: Note that something else could be going on with yields many countries are showing price declines (deflation) compared to a year earlier.) The danger for us is "if and when" the tide of deflation could become large enough to over power us. >> Older comments: >>> Investing Philosophy to consider: 1. Don't invest in stock or medium that you don't understand. 2. Don't invest in anything that is "interfered with" or "manipulated". The TNX and TYX fit the second category with the Fed's interventions.

 


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Marty Chenard

Author: Marty Chenard

Marty Chenard
StockTiming.com
Asheville, NC 28805
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Marty Chenard is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools and stock market models. As a result, he was out of the market two weeks before the 1987 Crash in the most recent Bear Market he faxed his Members in March 2000 telling them all to SELL. He is an advanced technical analyst and not an investment advisor, nor a securities broker.

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