4/20/20 MARKET CLOSE Update - Consolidated Analysis

This is my singular thread that encompasses all areas of review for the day in the market.

QUICK SUMMARY:


Today was very noteworthy:


  • Volatility was +13% (VIX) and +10% (VXX)

  • UUP has a very gnarly bullish setup forming and is very close to breaking out

  • Indexes down 1% give or take so surface price is saying 'nothing to see here'

  • Oil worst day ever recorded (negative futures pricing...wtaf?)

  • Semiconductors rejected at their compression point

  • HYG, XLF, DIA were dumped right out of the distribution boxes...AGAIN.

  • Biotechs, AMZN, and NFLX carried the positive momo but were solely alone today

  • Internals turned over hard down today across the board

  • Absolute Breadth turned back up towards more volatility coming


All this means to me that the indexes (cough...I mean the FAANGs and Biotech stocks) have a LOT of work to do tomorrow of today started to define a clearer intermediate to long term outlook. Tomorrow is a new day and damage can always be repaired, so never rule that out. But this was not a good day for bulls, even though price is not down that much. They are staring at some serious under the surface internal work to do tomorrow/Wednesday if they are going to get this back up and through the distribution boxes and MSLs that everything index is trying to overcome. And they need to take VIX back down and it doesn't look like that is going to be an easy task based on the charts below now.


But hey...there is always NFLX earnings tomorrow to save the market...and AMZN later this week.


All the 'nitty-gritty' details are below and we are at some serious inflection points, so take the time to dig through this as I made notes on every chart. Whichever we break here, there is plenty of money to be made...


SECTORS:

Takeaway: Bearish trending day. 'Oilpocalypse' obviously will have ramifications for some time.

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Reset to Zero (still no confirmed bullish momentum)

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Positive

Internals: Neutral (turning up towards zero line)

Block Volume: Turned Up (selling underneath is diminishing/no buying yet)

GEX: Positive

VIX/VXX Summary: Major day today for VIX. Basing is broken out from for both VIX and VXX. The $45 level for VXX is the first resistance and 52.50 is the second resistance. The momentum x-over is now bullish and look for the money and velocity to get to the zero line in short order. Not there yet, so don't go apeshit on VXX calls or something like that.


What I have seen is that first stab at the zero line can be fought. But once VXX internals (money flow and velocity in third frame) are over that zero line with momentum turned up the way that it is, can be a recipe for higher realized volatility. Since we are starting at the 38 level with this and we have only 2 major resistances and we have a coiling US dollar I suggested earlier today that equity bulls should be careful here risk-off moment(s).


There appears to be something lurking out there now. I have no idea what it is, but that rally we just saw, should have (still could technically) squashed volatility below 25. We never cam near 30. So if VIX/VXX are done with the downside and we are starting another leg up now - be careful being long the equities markets.


As for trading VIX, the best strategy is the BTFD strategy. Once the momentum gets underneath it, just BTFD until it is done with the mayhem. I am not 100% convinced we are starting with the mayhem until the internals for VXX have crossed the zero line with momentum in full on bullish mode. We seem to be getting close though....

INTERNALS


TRIN:

Takeaway: Closing readings were no surprise as there was steady attempted buying towards the latter part of the day. BTD crowd not easily giving up...


ADVANCERS/DECLINERS:

Takeaway: Bearish pacman for the most part. Some bright spots in IWM and obviously NFLX and AMZN are still bid as they are in parabolic advances now that will terminate and be retraced at some point in the future.


NYSE ADVANCERS/DECLINERS:

Takeaway: Firm rejection of the NYSE AD and a firm bearish momentum curve in place. Can always turn back up but will need some serious help to do so.


CUMULATIVE VOLUME:

Takeaway: Rejected again after a strong up day. Cannot build momentum and now firmly in a negative bearish momentum trend.


ABSOLUTE BREADTH:

Takeaway: Absolute breadth started the day near neutral and turned back up towards volatility. This is a weekly chart so seeing how this unfolds this week will be important for intermediate to long term view.


MCCLELLAN OSCILLATOR:

Takeaway: Rejected firmly in the sell zone again and bearish momentum trend in place. Not a bullish chart at the moment.


INTERNALS Summary: Internals are turning to negative momentum and bearish sell signals. Indexes are still hanging up at the top end of the ranges so one of them has to give. You can't have a continued advance without solid internals so indexes need internals to turn back up hard tomorrow or price could be in for trouble this week.

INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Still overall Bearish

Momentum: Bullish (exhaustion)

Internals: Positive

Block Volume: Positive

GEX: Negative (Friday's action rolled off and now very negative)

Put/Call Ratio: Neutral

SPY Summary: Price fighting for it's life with a negative GEX imbalance and all the momentum sucked out from Friday. Oil damage is pervasive. Internals are turning down underneath. Holding onto FAANGs as semiconductors fell down today too. Next few days are key.

QQQ: Chart with Detailed Levels

Market Structure: Neutral (but failure at MSL so far)

Momentum: Bullish Exhaustion

Internals: Positive (above zero line but stalling)

Block Volume: Neutral

GEX: Negative

Put/Call Ratio: Neutral to Bearish

QQQ Summary: Notable rejection at the MSL. I was not expecting that today. Oil related or is the index completely out of gas? Don't know the answer to that yet but it is a major change in GEX since Friday rolled off. Bearish internals forming but price hasn't dropped and FAANGs seem to be last hope. Semiconductors faltered today too. Next few days are key to intermediate term.

SOXX: Chart with Detailed Levels

Market Structure: Neutral (but rejected off MSL which is notable)

Momentum: Bullish Exhaustion

Internals: Positive (but dropping)

Block Volume: Negative

GEX: Neutral

SOXX Summary: MONITOR. This was at a serious inflection point as noted this weekend and today it failed hard rejection at the point of compression. Still in the distribution box so it is not a complete failure, but any continued weakness would be very bad for bulls case for continued market advance. Levels to watch are noted but really monitor for a hard drop out of the box, because that would be very bad. Bulls want to keep this in the box and turn up and over the MSL.

DIA: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish (x-over)

Internals: Positive (stalled)

Block Volume: Positive (barely)

GEX: Negative

DIA Summary: Dow Jones at this point has little margin for error with the rejection today. A drop out of the box would be hard to overcome. Momentum is setup for a crack and bearish drop, so be aware. Bulls want this back into the box tomorrow and to get up and through the box this week. If they fail price can drop quickly to 213 level.

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish (x-over)

Internals: Positive (but dropped today)

Block Volume: Positive

GEX: Negative

Put/Call Ratio: Neutral to Bearish

IWM Summary: Failure today at the distribution box...again. This just cannot get legs even though around noon sure looked like it was trying. This is a must watch for knock on effects from the collapse in oil markets today. However, buyers still trying to turn momentum up. Very important to watch the distribution box this week. Bulls want it up and out of there and bears can inflict big time pain if they break it.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Negative

XLF Summary: Banks rejected again right at the bottom of the distribution box and are risking a breakdown here if they cannot back into the box. GEX massively negative and tons of overhead resistance. This needs to hold 21.50-70 level or it is headed to 19.68 quickly. Oil didn't help the bull cause with derivatives exposure tied to banks books today...

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (but stalling)

Block Volume: Positive

GEX: HEAVY Negative

HYG Summary: This was very interesting today as it too was dumped hard right out of the distribution box AGAIN and this time has no support until 77.07. I doubt the Fed counted on a negative oil future price when it authorized the purchase of HYG (which has very heavy exposure to the oil explorer space)...seems like the road to hell here for them 'paved with good intentions'. People had said to me if the Fed buys it all is well...then sure enough you get negative oil price. JFC you can't make this stuff up...maybe nature is telling them to stop trying to f with gravity. I don't know but this needs price back in the distribution box or this is in trouble.

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Positive

Internals: Positive

Block Volume: Negative

GEX: Positive

TLT Summary: Price holding the upper support region but not much to note here. Price is still bullish and in a bullish trend but is in the upper ranges of resistance. Having said that we have negative oil futures today so I guess anything can happen. Still a BTD until it isn't.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Negative (but pushing hard for zero line)

Block Volume: HEAVY Positive

GEX: Positive

UUP Summary: Still in a MONITOR status. Major buying volume showed up today. Accumulation under the surface was quite substantive and had effects on the momentum and the internals. Price has yet to get moving, but the energy there in place under price is very substantive. Resistance is still 27.25 level and then bears last stand is 27.84. Through those two levels this could be very volatile. That portends to major volatility and risk-off. Seems like something is really lurking out there at the moment to these eyes.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Positive (but collapsing)

Block Volume: Positive

GEX: Positive

GLD Summary: Settled right at the near term resistance. This is still bullish chart and in a very bullish posture long term, but the internals are not lining up with price, so this could get hit if there is a bear raid on the indexes. It was a safe haven today, but with equities holding near highs, there is no margin selling. The test comes in a bear raid for GLD support levels...until then it can leak higher but watch the distribution zone.

SLV: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive (declining)

GEX: Positive

SLV Summary: Further proof that we have such option strangling of SLV...look at the GEX again all positive. This is such a candidate for skew adjusted GEX and we will be putting that in next week. This is still struggling with 14.50-15.50 level and will struggle with it until it doesn't. Better off watching reruns of something and putting an alert on for price on this one.

GDX: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Peaked and falling

Block Volume: Neutral

GEX: Positive

GDX Summary: Jumped back into the distribution area but I put some notes on the chart. If you are holding this now you need to be real careful. If it breaks up and through resistance zone great...if not, this could get hammered in a bear raid simply because of the setup. Be aware of the volatility in both directions with GDX that could potentially unfold.

THE END.

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