Market Breadth Data******************************

Saturday, January 30, 2016

$SPY Bounce Parameters

The first leg of this rebound shows similarities with August 2015:

There's heavy resistance at the 1942 - 1946 level which corresponds to a 270 degrees advance from the January '16 low and a 50% retracement of the January '15 down swing. The very same levels that stopped the upswing in August and September 2015. Monday is also a short term CIT date.

Friday, January 29, 2016

$JPY and the Plunge into Negative Interest Rates

The BOJ took the plunge into negative interest rates and the pair is advancing towards the top of the consolidation zone:

This, of course, is doing wonders for the e-mini where price and the trend oscillator had flat-lined for the last six days:

Tuesday, January 26, 2016

$SPY and Key Support/Resistance Levels

1882.6 was identified this week-end as the key level that needs to hold for the e-mini upswing to keep its momentum:

Monday, January 25, 2016

$IWM Monthly Trend Readings

The IWM monthly trend oscillator has dropped to levels not seen since 2003 and 2008:

Measured on a percentage basis, the height of the shaded areas in the price chart is equal.
In 2003 and in 2008 the consolidation lasted 10 months. In 2008 it was followed by another 40% drop lasting an additional six months. The current IWM correction is six months old.

Sunday, January 24, 2016

$SPY Key Levels to Watch

Key e-mini levels to watch next week:

1882.6 must hold for the upswing to remain in play.
Upside targets: 1946.5 & 1963.

Friday, January 22, 2016

$SPY Positive Divergence

The technical outlook for the e-mini has improved considerably:

The Trend oscillator is showing a strong positive divergence, a new up angle was triggered and price has climbed above the 50% retracement of the Jan 13 - 20 down-swing. First upside target is the 50% retracement of the Dec 30 - Jan 20 down-swing at 1946.

Tuesday, January 19, 2016

$USO and Bulls %

It is interesting to note that the Bulls % indicator, we mentioned yesterday, is closely correlated to oil prices:

You can always count on Wall Street to come up with an answer on their own.

Monday, January 18, 2016

Saturday, January 16, 2016

$SPY monthly Cross-Over

The SP500 is getting close to a moving average cross-over on the monthly chart:

but it's not quite there yet.

Wednesday, January 13, 2016

$SPY Daily Trend Update

As mentioned yesterday, the SPX needs to climb above 1990 in order to exhibit any sign of strength:

So far the pattern is of a bear flag variety.

Monday, January 11, 2016

$SPY Daily Trend Update

As one would expect, the sell-off during the first week of 2016 had a negative impact on the daily trend, and price on the next rebound needs to climb above 1990 for a show of strength:

The weekly and the monthly trends remain flat.

Friday, January 08, 2016

$QQQ Seven Day Losing Streak

The Qs streak of negative closes extended to a 7th day which is a rare event, as there have only been 8 uninterrupted declines lasting 7 days or longer:

Jan 30, 1990, followed by a 12-day 6.28% rally

Nov 12, 1997, followed by a 12-day 10.12% rally

May 18, 2006 (8-day losing streak); the swing bottom came in 3 days later, and the Qs bounced up for 6- days and a 3% gain.

June 13, 2006 (8-day losing streak) followed by a 2-day rebound and a gain of 3.75%. The market bottomed a month later.

Sept. 9, 2008, followed by a 2-day rebound, 2.7% gain.

Oct 10, 2008 (8-day streak) followed by a 1-day 12% rebound. The index bottomed a month later on Nov 20th.

July 2, 2010 (11-day losing streak) followed by a 8-day 7.3% rally

May 18, 2012 (9-day losing streak) followed by a 6-day 3.37% rally. The index bottomed three days later.

That’s a 6-day 6% bounce average.

There are certain similarities with August '15, so Monday is the odds favorite to mark a swing turning point.

We mentioned yesterday that 109 of the SP500 and 27 of the NDX 100 stocks were on a 6-day losing streak. After Friday, a few of them have stopped declining and may present a good swing buying opportunity once the indices follow suit: TWC, TSN, NWSA, GIS, EA, MSI, CHTR and VRSK.

$QQQ and January Pattern

It is worth noting that the Qs started January '15 in a similar fashion -- with 6 consecutive lower closes:

The Qs are back at Square One, currently testing the very same levels (dotted horizontal red line).
109 of the SP500 and 27 of the NDX100 stocks show a similar pattern of consecutive declines, a phenomenon that usually occurs only once or twice a year.

Thursday, January 07, 2016

$SPY Fear and Greed

The pendulum has swung all the way back into panic territory:

$DJIA Trivia

In the last 130 years of DJIA history, there have been 47 years with negative returns. During the same period, the month of January has been negative 45 times. 29 out of the 45 coincide with years with negative returns. Meaning that there's a better than 60% chance that if January 2016 ends in the minus column, the year will end with a loss as well.

The average monthly loss for January is 1.75%
The average yearly loss for the DJIA is 13.7% which translates into a downside target of about 15000:

It is interesting to note that Jan 7th is the projected CIT date according to the Calendar on the left.

Wednesday, January 06, 2016

$QQQ Price Targets and Trend

The futures are currently testing the Jan 4th low. A break below that level calls 104 into play:

Monday, January 04, 2016

$SPX Pattern and Trend

As many have pointed out, this was one of the worst first trading days of the year for the SPX. On the bright side, however, the index managed to pair the initial losses and find support where it should have, at the previous two swing lows. Doing so, it established a new pivot level and fired a new 1 x 1 up angle:

Going forward, there are two things to keep in mind:
1/ The low must hold or there is a long way south;
2/ 2040 is the midpoint of the latest swings and, in order to manifest any sign of strength, the index must trade above it.

Saturday, January 02, 2016

$SPY The Big Picture

The SP500 yearly trend remains up, the monthly and the weekly trends are flat, but the daily trend is up since the SPX made a higher high and a higher low in December ’15.

Despite the selloff during the last hours of the last trading day of the year, price is still above the 50% retracement of the last upswing, and thus remains in a strong position:

Market breadth, however, has been steadily declining since May '15 and is negatively diverging from price. Until this divergence gets resolved one must remain very vigilant:

Looking at the bigger picture, this is what we can expect in 2016:

Let’s start with the Presidential election (4 year) cycle.
The 4 year cycle is mostly bullish. There have been 10 bearish years and 22 bullish. The average gain for the bullish years is 16%, and the average decline for the bearish years is -13%.

Year 6 in the Decennial cycle also has a mixed track record:

Five out of thirteen were negative years, seven were positive, and one was break even. Four of the seven positive years occurred in the last 40 years. Looking at the graph, one can make a case for a pretty regular bullish/bearish 40 year cycle, except that 1936 gets in the way.

According to W.D. Gann, year 6 is a bull year in which the bull campaign which started in the fourth year ends in the fall. That’s mostly true, assuming it pertains to year 16 in the 20 year cycle (see below).

Looking at the 7 year cycle, the results are split evenly between bullish and bearish years. The nine bullish years produced and average gain of 20.4%, while the bearish years had an average 13% decline.

Year 16 in the twenty year cycle is mostly bullish:

The 30 year cycle is mostly flat (with the exception of 1986).

The 40 year cycle is strongly bullish (with the exception of 1896).

The 49 year cycle (7 x 7) is mixed: two bullish outcomes and one bearish.

The 60 year cycle is flat.

And the 100 year cycle is flat, although the 50 year cycle is bullish.

In summary, the cycle outlook for 2016 is mixed. There are certain calendar and seasonal periods that stand out, but we’ll discuss those in due time. As usual, we’ll continue to keep you appraised of our trend and swing analysis and market breadth and momentum studies and analytics and will do our best to keep you on the right side of the market.

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