4/14/20 MARKET CLOSE Update - QUANTITATIVE SUMMARY

Oh yeah? FAANG you.


Here is the run down as of the end of the day today:


Below the MSL (macro bearish overhead resistance) & waning momentum:

SPY

QQQ

SOXX

IWM

FB

AAPL

GOOG

HYG

JNK

BKLN

XLF

XBI

XLRE

XHB

XME

SLV


Approaching a Neutral MSL (means net neutral stance - some new additions today):

AMZN

NFLX

XLU (close enough to add)

QQQ

GDX (fell out from bullish)

XLV (close enough to add)


Above the MSL (macro bullish support underneath) & resetting momentum:

VIX

UUP

TLT

GLD



INTERNALS - all over the place readings today and even PC ratio (put call) was getting stupid with bulls strangling each other to buy calls. TRIN was all over check this out at close - why is QQQ like this and SPY and the others bearish?



Here is why - look at the holdings weight of the QQQ (we pull the underlying holdings and show their weighting in our system because we use the weighting as a component in our prop scoring procedure):

FAANGMs make up 47% of the QQQ in literally the top 10 holdings...absurd market weighting...


Now look at the SPY (this is just the first few holdings...if we showed more then it would be even more staggering).

FAANGMs are 6 of the top 8 and if we go further you get more tech and Semis.


So what's my point?

IF the market's major ETFs and INDEXES are primarily weighted in a handful of stocks (lets say 25 of them) then moving those 25 moves the ENTIRE market and will force the major players to move accordingly. What is effected by this movement:

  • VIX Read (which influences algo rules at most institutions)

  • GEX Playbooks

  • P/C Playbooks

  • Automated Buy Programs


This is why there is such a vast disparity between IWM/XLF and the SPY/QQQ. Historically you need financials to have a healthy market advance and really you need Small Caps too. Maybe we are entering a new nirvana and tech companies will become banks and small caps can go extinct?


OR


We need the rest of the market to catch up to the 'Titan 25' as we shall call them if this is going to perpetuate past OPEX.


OR


Market is not healthy at all and will not follow these 'Titan 25' stocks...and we have more to resolve to the downside


At least we have multiple options right?


Of Note:

  • VIX resets tomorrow (OPEX).

  • Read the Currencies post tonight - $USD looks like getting ready to make a move again

  • Also FED did note their overnight REPO is winding down...keep that in your mind too...they must feel that they have goosed liquidity enough but every time they try to tighten we get a market temper tantrum...we shall see.


More tomorrow - stay safe - cash is never trash.


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