10/20/2014 6:14:27 AM
Good morning Traders,
As we do on Monday mornings, here's a data dump of some of our research.
When the market bounces for real, we would expect the barometer to bounce more. The two things we like to see to call a bottom here are the barometer crossing above the 5 day, and the Qs crossing above and holding the 9 day. That being said, we should be at a bottom here.
Supporting the bottom call, we are looking at bonds potentially turning lower here.
One of the most bullish things about this market is the amount of fear. Remember the old adage that 90% of options expire worthless? Well, all these PUTS will probably follow the same path...
The bounce in gold is anemic - and that has me bearish on the metal.
Another indictor leaning bullish:
This view of oil's leading indicator suggests that oil's about to go into a consolidation.
And our oil timer is so oversold that we need to see a bounce.
This measure of rsi between QQQ and TLT is moving towards a bottom.
And our seasonality for the Qs is pointing higher for the rest of the year.
And our QQQ Timer is about as extended to the downside as it has been over the past few years.
The relationship between the SPY and bonds is also reflecting the recent weakness. The question is, will it continue...
We've always monitored the action in SPY options versus SPX options, which are derived from the same vehicle, but show the difference between hedging and betting...
Tick highs act differently at key lows. This is part of our computer trading watch. We've seen some interesting anomalies over the past sell off. From our end, it looks like the big money that's long only has hid in large stocks. This is what caused the trin to spike as the market sold off - which is counter intuitive. This is a good strategy until it stops working - which is what happens in a larger, intermediate sell off. That would be the next stage, but we have to see a bounce first.
And last but not least, we're seeing the dollar move into a consolidation at these highs. I don't expect prices to sell off. It'll take a while to consolidate these highs.
On an administrative note, we've launched our newest trader, Ian Mitchell's 3 new trading services. Stocks, Forex and Futures. To learn more about those services, click here: http://www.stockbarometer.com/pagesIMUT/learnmore.aspx
We're excited to have Ian on our team with a diverse group of services to help you trade and profit from these markets.