Markets are very negative today, especially the NQ8 sector. The Negative EV pattern on FB detected on Friday clearly indicated an underlying issue. This pattern shows that some large players were selling the not yet published news.
Pascal
Markets are very negative today, especially the NQ8 sector. The Negative EV pattern on FB detected on Friday clearly indicated an underlying issue. This pattern shows that some large players were selling the not yet published news.
Pascal
I had been expecting some sort of shakeout before a reversal, but the market has been flat since the open. Hence, difficult to take a strong position here either with or against the trend as there is NO trend.
Is the market waiting for some announcement from China? Is no-news good-news or possibly bad news in the waiting?
Pascal
Today's opening gap does not attract money yet, to the contrary.
The OB/OS signal is near its oversold level and the MF does not seem to be willing to move higher.
Patience is required on the long side.
Pascal
The S&P500 already erased the gains of last Thursday.
The NQ8 is in a small downtrend, but the Money Flow looks volatile around the 0 level.
Basically wait and see for now.
Pascal
Market is really non-directional. Large players do not seem to buy today's bounce, while small caps display a negative Money Flow. Maybe some fear regarding bearish FOMC minutes tomorrow.
Large caps energy stocks (XLE) look bullish here.
Pascal
The NQ8 MF looks weak today, but on a longer term view, we seem to be in a tight range.
Pascal
After early weakness, the NQ8 sector has bounced but on a relatively weak Money Flow.
This indicates that investors are not ready to buy NQ8 weakness yet.
Pascal
I did not expect to see this type of selling today. We can also note that the price bounce does not seem to be attracting money.
My guess: inflation/rate hike fears next week.
Pascal
There is speculative buying around AAPL, which triggered a positive Money Flow on the NQ8.
For now, nobody really knows what AAPL will announce at the close. We could however get a relief rally tomorrow though.
Pascal
These two charts are where my head is at relative to the overall market. I see similarities of the current market to the October 31, 2007 market top. In both images, the Russel 2000 fails to confirm the last NASDAQ higher high. At the time in 2007, I thought July was the top, then Bernanke gave us a surprise 0.5% rate cut on September, 18. The market zoomed into a blow-off top, where I was surer of the top.
For my market read to be correct, a recession would logically need to be close by. This article by John Mauldin is a good read and it explores this possibility. http://www.mauldineconomics.com/fron...y-with-a-fever
In 2007, we had a very major market top (larger head and shoulders pattern) where the NASDAQ dropped 55.7% over the course of 17 months. Both 2007 and 2018 are showing head and shoulders patterns. The 2018 pattern looks smaller to me, possibly implying less than a "bone-cruncher" type bear market of 2007-2009, maybe only half as large.
Of course, every bearish call of the last few years have led to the market making new highs.
Mike Scott
Cloverdale, CA
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