sábado, 23 de enero de 2016

sábado, enero 23, 2016
 
The Big Short *Squeeze*


From my view, and previous comments, the oversold markets needed to be squeezed as too many investors were on one side of the boat.

The news backdrop hasn’t changed at all. Earnings and weakening economic data continue to meet lowered expectations.

Today Citigroup (C) stated Friday that long crude oil (and I assume energy stocks) was their investment of the year. Now who would fade that call? The bank was one of the arsonists to light the bulls’ oversold market attack.

Goldman Sachs earnings were much weaker than expected. Economic data this week continues to decline. Sure we had a bounce in PMI Manufacturing Index but the employment component remained negative; Existing Home Sales from December also experienced a large increase, but that was against a much weaker November report so it was a wash; the Oil Rig Count fell once again and Leading Indicators fell once again.

It doesn’t take much to stampede the herd as most bulls are waiting for more QE from the Fed, more central bank manipulation from the ECB, PBOC and BOJ. The thinking now is why get in their way.

My current thinking is the S&P 500 could rally 5-7% from Wednesday’s lows taking the index to between 1902 & 1956. Then we’ll see where things go. In the meantime, let the bulls have their way before trying to short.

Meanwhile from Davos the powers that be are concerned their input and control of markets and politicians was in danger.

Their all much worried about renegade populists like Trump and Sanders eroding their overwhelming influence.

One kingpin with a tin ear was Blackstone’s Billionaire and CEO Steve Schwartzman who was stunned to learn us commoners were pissed-off saying: “I find the whole thing astonishing and what’s remarkable is the amount of anger whether it’s on the Republican side or the Democratic side. Bernie Sanders, to me, is almost more stunning than some of what’s going on in the Republican side. How is this happening, why is that happening?” Easy for him to say from his perch high above us commoners.

So, stocks roared higher Friday allowing for the first weekly close higher in one month. For us it just means we’re not short-term oversold again.

Market sectors moving higher included: Just about everything.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

1-22-2016 3-01-31 PM

Volume was still elevated but the rally didn’t feature as much as during selling.

Breadth per the WSJ was positive. 

1-22-2016 3-02-02 PM
12-17-2015 9-04-44 PM Chart of the Day



1-22-2016 3-02-53 PM


Charts of the Day
  • SPY 5 MINUTE

    SPY 5 MINUTE


  • SPX DAILY

    SPX DAILY

  • SPX WEEKLY

    SPX WEEKLY

  • INDU DAILY

    INDU DAILY

  • INDU WEEKLY

    INDU WEEKLY

  • RUT WEEKLY

    RUT WEEKLY

  • NDX WEEKLY

    NDX WEEKLY

  • NYMO DAILY

    NYMO DAILY
    The NYMO is a market breadth indicator that is based on the difference between the number of advancing and declining issues on the NYSE. When readings are +60/-60 markets are extended short-term.

  • NYSI DAILY

    NYSI DAILY
    The McClellan Summation Index is a long-term version of the McClellan Oscillator. It is a market breadth indicator, and interpretation is similar to that of the McClellan Oscillator, except that it is more suited to major trends. I believe readings of +1000/-1000 reveal markets as much extended.

  • VIX WEEKLY

    VIX WEEKLY
    The VIX is a widely used measure of market risk and is often referred to as the "investor fear gauge". Our own interpretation has changed due to a variety of new factors including HFTs, new VIX linked ETPs and a multitude of new products to leverage trading and change or obscure prior VIX relevance.





























The rallies Thursday and Friday were not unexpected given how oversold conditions had become. I’ve posted above where I thought the upside might be which again is 5-7% off Wednesday’s lows.

It’s the Fed’s turn to initiate more help for bulls a la QE4 and so forth.

Let’s see what happens. 

0 comments:

Publicar un comentario