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Tuesday, October 15, 2019

Market Update 10/15/2019 - Bearish as hell!

 Note: I've added a legend (Tab/Page) to the home page - to help explain how to read the charts in the Public Charts area. I'll also update my short term, and long term outlook there.

Friday, I removed a bunch of charts, including Oil, and Energy, which seem to be going nowhere, and the $RUT, and whatever else I feel like I don't have time to chart. It's become too much like work updating 8 different sectors, and I just don't have the time.... This morning I though I might add a financial chart, on bank earnings, which is no-doubt what investors are watching, but no....
Maybe I'll add more charts this winter, when I have more time, or when an opportunity presents itself.      

Friday, we saw shorts sellers chased out, ahead of a 3 day weekend, of sorts. I figure, since it was a banking holiday, and school-age kids have Columbus day off, lot's of traders take the day off.  This didn't occur to me on Friday, but looking back, it helps to explain Friday's action, and yesterday's flat market.

$SPX - looking at the 15 min chart - located in the public charts area. This morning we're seeing a little snap-back rally, after Friday's run for the exits. That was also perfectly timed, moments before the China deal news was sold, I put an annotation on the chart calling it, "bearish as hell". Some would say this was a, "buy the rumor, sell the news", trade. Just looked like another excuse to squeeze the retail short sellers to me.  

See the pink line, where the bid was raised above the same level as it was in Sept? That's what I'm watching, since that was pure manipulation, on yet another short squeeze Friday.

Getting back to financials: I was watching the idiots on Fast Money, a week or two ago, and one of them (think it was Joe Tarrnova?), said they were looking for a higher (multi-year) high on the $XLF, of all things? As I've said before an ETF, and an index is 2 different things! 

An ETF, and an index is 2 different things:  

$DJUSFN (Dow Financials)   Financials are already trading at a multi-year high, so why would anyone be looking for a higher high on an ETF chart? 

$XLF - ETF charts don't provide you with accurate target's because they don't precisely track the underlying index. This would be like looking for higher highs on the $SPY, instead of the $SPX. Pure ignorance!

$SPY - The most highly traded $SPX ETF -
1. Made an all time high in Dec., unlike the $SPX
2. Came within $3 from an all time high, on Friday. 
3. Ended with a bearish hammer, at resistance. Obvious reversal.

Assuming you have you're own stockcharts account, it's easy enough to compare the high, pie, in the sky, $SPY, to the underlying index ($SPX).

What about the Technology sector, is it breaking out to new all time highs?
 $DJUSTC (Dow Tech) hasn't made a higher high since August, and if it does... that would be an even better sell target! 

This market is toxic, and it seems to me, it's the dumb money looking for higher highs.
Maybe the $SPX can test the 3000 level again, withing a few days, but I would be net short, not hoping for another false breakout.

$VIX 14.50 is the pivot - meaning that if we see a lower $VIX at today's open, followed by a $VIX reversal - back above the 14.50 level - that's where fear returns, and as the $VIX breaks back above the 200 week moving average (14.67), that could trigger program selling.

Of course timing is tricky, and I could be a week early - as I was when I started calling for a $EURO/GBP reversal back in early August - but some times you gotta stick to your guns.

I'll be charting the open as usual, but I may be away from my desk most the day.
Good Luck,

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