• 19 days Could Crypto Overtake Traditional Investment?
  • 24 days Americans Still Quitting Jobs At Record Pace
  • 26 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 29 days Is The Dollar Too Strong?
  • 29 days Big Tech Disappoints Investors on Earnings Calls
  • 30 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 32 days China Is Quietly Trying To Distance Itself From Russia
  • 32 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 36 days Crypto Investors Won Big In 2021
  • 36 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 37 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 39 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 40 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 43 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 44 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 44 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 46 days Are NFTs About To Take Over Gaming?
  • 47 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 50 days What’s Causing Inflation In The United States?
  • 51 days Intel Joins Russian Exodus as Chip Shortage Digs In
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Stock Barometer

Stock Barometer

Stock Barometer

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend. Our goal is to…

Contact Author

  1. Home
  2. Markets
  3. Other

Oil, Money Flow and The Market

10/23/2014 6:10:32 AM

Good morning Traders,

As we look to evaluate the health of this bounce, our studies on money flow come into focus. Initially, we would look at this indicator:

S&P500 and Cumulative Money Flows Chart

And while that looks bullish still, digging a little deeper for the ex etf data:

S&P500 and Cumulative Money Flows ex ETFs Chart

This has us a little cautious.

Moving to oil:

USO versus Oil Inventories Chart

As you can see, oil inventories CONTINUE to build. If supply and demand were the only components of price action, that'd make trading oil easier. At this point that's the case. But we'll be looking to buy some calls for the bounce when it initiates. Our last oil option trade did very well...

One of our oil indicators positioned the previous trade very well.

Oil Volatility Chart

And moving to the stock market, we must first look at bonds. Even if bonds are a bubble, and they sell off, that'll be bullish for stocks - at least initially.

Bond Timing Indicator Chart

So we have the fuel for the stock market to rally. Did we correct enough on Wednesday to negate the retest? This simple view of advancing stocks in the Nasdaq suggests a bullish market (prices stable with internals correcting).

NASDAQ Advancing Stocks Chart

The third component, sentiment, is getting a little bearish on a weekly basis looking at the AAII data and some option data. We may need a deeper correction to set the continued bull in motion.

Regards,

 

Back to homepage

Leave a comment

Leave a comment