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Monday, October 7, 2019

Market Wrapup - Week ending 10/5/2019 - Is this a Bear Market?

I started this blog after Friday's close, and wanted to finish it over the weekend, but caught up in other things, including a bad android update, which rendered my cell phone unusable.

I expected to be away from my desk on Friday, but I got rained out at the last minute, so I was able to get a good read on the market, and I don't like what I see. Seems like ever since trading picked up - after the summer - we've seen the $VIX driven down (manipulated as usual), and shorts squeezed, before the market finally rolls over again.    

Friday we saw the gap fill on the $SPX, on a just ok jobs report - of all things - but this was an excuse to squeeze the short sellers, and this is typically the type of trading you see in a bear market. It's all a game, and one most retail short sellers consistently lose; if you trade the crash of 07 - 08, that puts you at a huge disadvantage.... 

Is this a Bear Market? The market has managed to hold up for the past 18 months, but the $NYSE topped out in early 2018. This is where the plunge protection team dropped the ball.

$NYSE - This is what your 401k looks like.  At best the broader market is a sideways range, and the $NYSE is seen back testing (bearish) the 50 day moving average, on a short capitulation Friday. That's looks like a bear market, regardless of that the TheFed, and the lying main stream media is reporting.

The DOW also back-tested the 50 day.  That's bearish, and you see futures down this morning.

As far as I could tell, Friday's rally was contained to the tech sector, and when I see traders bullish on stocks like Apple, trading into a super-bearish pattern, at a lower all time high, I just have to shake my head. When was the last time Apple did anything innovative, anyhow, but I guess with all the shitty IPO action, money has to go somewhere.

$APPL - this is the one to watch. I'm seeing a lot of bullish sentiment.... and that's a contrarian indicator. Maybe it throws over the top of the triangle, before crashing back to earth? Could even touch an all time high, as the bulls like to squeeze the retail short sellers out, before taking profits. We call that, "the ol' pump 'n' dump".

I called out Netflix a couple weeks ago, but it looks like that one can't find it's legs. Maybe it retest the lows, and consolidates into Thanksgiving. That's where you're likely to see a more sustainable short covering rally.

 TECL 3X Tech bull: Driven above the 50 day ma. Remember in Friday's update I was talking about leveraged ETF's being bought at the moving averages? We'll, is more than just dumb traders doing that, these funds are being used to manipulate entire sectors.

But amazingly we saw the same thing on the $DJUSTC chart!

$DJUSTC - they raised the bid above the 50 day ma....

Long term Tech  - remains over-bought, and in a massive bubble.

We only a saw a pullback on Energy, and the $RUT didn't rally at all, so maybe we're going to see one sector pumped and dumped at a time, or some sort of sector rotation?

We did see $TRAN rally 1%, but it doesn't look like we're off to the races...

Short term - I think, after all these big moves, the market needs to consolidate (lower), but it could hold up for a day or 2.

That's all the time I got.

Later, AA    


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