4/21/20 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 another noteworthy day in the markets:


  • Volatility was up again but hit first level resistance and consolidated +3.60% (VIX) and +8.36% (VXX)

  • UUP bullish setup getting even more pronounced and is very close to breaking out

  • Indexes down 2%-4% respectively but buyers STILL persisting with block volume (???)

  • Oil still a disaster...another very bad day for USO ETF and June contract

  • Semiconductors confirmed bearish pattern high probability after today

  • HYG, XLF, DIA were hit hard today

  • IWM was being bought a lot today on intra-day weakness (???)...outlier at the moment

  • NFLX was the lone ranger until after hours where future guidance wasn't really loved

  • Internals followed through to the downside today - not bullish

  • Absolute Breadth got even closer to a turn back up to which would confirm a more prolonged period of volatility coming soon...


Bears came to play today (as expected yesterday from our summary). VIX and VXX got moving and have hit their first resistance levels. This was also expected - and the reaction there is the tell going forward.


Most of the indexes were slammed during the day with QQQ and SOXX leading the way down which identifies that price leadership is switching gears from them previously leading up to them leading down (very bearish).


First levels of support for most of these index declines was in fact hit today, as was resistance for VIX/VXX. Along with some somewhat bullish P/C Rs (put/call ratios) for IWM and DIA today I suspect maybe an attempted bounce tomorrow?...but bounces are not guaranteed with VIX at 45. Be cognizant of the potential but they should be STRs.


It would appear that the bearish outcome is playing out and you will see through the charts just how powerful MSLs (market structure levels) are in 'setting' the overall support or resistance for MAJOR trends. Look at SOXX really hard...crazy how powerful these structures are and where price stops on a dime and turns!


Should we see a moderate retrace in VIX/VXX (if at all) the next few days, I would suggest using these opportunities to begin to take advantage of the bearish structure that appears to have taken back the momentum.


*One note tonight, devs are working on adding functionality to the GEX outputs and visuals so they are not available tonight but I do give you the reading for ref here. Will be back in tomorrow.

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Positive

Internals: Neutral (very close to the zero line now)

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

GEX: Positive


VIX/VXX Summary: We hit the first level of resistance for VIX and for VXX as noted above. It would not be surprising to see some pull back and support retesting. The first move is chased by retail and then sold into dealers from what I have seen typically. Then the next move is the 'move'. I noted this in my tweet last night that you want 3/3 readings:


1. Momentum to x-over in frame two and go Bullish - check

2. Money Flow and Velocity need to be > 0.00 reading in frame three - still waiting

3. Block buying needs to be neutral or > 0 - check


So for right now we are 2/3 but I suspect with price action tomorrow and next day we should see the setup for all 3 to be in alignment potentially (I will update twitter live feed as I see this come together for followers). When all three are in alignment, then you get major moves. Let's see what happens tomorrow but be on the lookout for something next few days because of the bullish setup in the $USD and the bullish setup in VIX.

INTERNALS


TRIN:

Takeaway: These are not the closing readings but were the readings at one point this afternoon. The reason I share this is that the bottom right hand reading for DIA is NASTY. I put the correlated A/D reading below. Think this is a preview of things to come...


ADVANCERS/DECLINERS:

Takeaway: This is the correlated A/D for the period measured earlier today with the 4.0 TRIN. Look at DIA...we literally have to code in non-binary algorithmic reactions to ensure that traditionally standard formulas don't end up being broken formulas for this market now. Like (negative) oil futures. If you are not paying attention, you have left whatever reality you were in and are now in a new one = REGIME CHANGE. Invest accordingly.


NYSE ADVANCERS/DECLINERS:

Takeaway: More bearish follow through and firmly in a bearish momentum trend. Did land at support. Only question now is will there be any bounce or does this just start cutting support. New lows are not that far away and yet the indexes are still pretty high comparatively...not very bullish.


CUMULATIVE VOLUME:

Takeaway: Broke the support and cut right through it. Now red line notes that as resistance. This is not bullish chart either. Look at the momentum = firmly bearish. Could bounce tomorrow but don't hold your breath.


ABSOLUTE BREADTH:

Takeaway: Absolute breadth pushed higher again which is now looking like the low Monday may be the low for the weekly candle. Bulls last hope is that this momentum reading keeps dropping rather than turning up this week (lower frame on the chart). If it turns up this week, that would be a nail in the coffin and confirm major volatility is on the way...probably the most important chart to monitor this week in the updates.


MCCLELLAN OSCILLATOR:

Takeaway: Neutral zone got cut through very easily. Momentum firmly bearish but don't read into this as an absolute. MCOS flops around a lot if you are noticing...eyeball more of the levels it is around as noted on the chart. We are looking to be sub zero now which is bearish until it is out of that area.


INTERNALS Summary: Internals confirmed all negative and are in bearish momentum trends. I would suspect based on this, unless there is a massive intervention of some kind, that these predict a sell-the-rip environment. Although even with the drop last day or two, we are still very orderly and could even bounce once more. But unless these readings dramatically improve, then it is STR.

INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Negative (*devs are adding features to the system today so no images*)

Put/Call Ratio: Neutral

SPY Summary: Serious rejection today from the distribution box. Did leave an FVG behind (bulls try to fill that now or later)? Finished near the lows with limited bounce follow through during the day. Index feels heavy and bulls need to get that back in this box this week. P/C ratio is neutral so no overwhelming put buying to fuel a bounce and negative GEX (pretty heavy too) so STR environment. Could see an attempted bounce for that FVG so keep your eyes open...with VIX 45 bounces can be just as vicious as drops. Take a look at the price levels on the chart and the notes...

QQQ: Chart with Detailed Levels

Market Structure: Bearish (what a difference two days makes...JFC)

Momentum: Bearish

Internals: Positive (but dropping hard now)

Block Volume: Negative

GEX: Negative (heavy)

Put/Call Ratio: Neutral

QQQ Summary: Notable follow through off the Monday rejection. Look at that MSL level...look where we rejected. No I didn't move it either. This 'macro levels' formula is truly insane at picking pivots. Having said that, there was an FVG gap that was left behind on the drop today, so I expect to see some attempt at filling it (either now soon or later). Index bounced right on support line today, but this is now a bearish formation. The 203 level is the key to pretty big drop now or soon...either way its coming.

SOXX: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (but dropping)

Block Volume: Negative

GEX: Negative


SOXX Summary: MONITOR. Been warning you for 3 days about this and it was down 5% intra-day at one point. This stopped right at the major support before a serious drops takes place. Also left behind an FVG above that needs to get filled. Could see a bounce attempt here tomorrow or not...AMD was down 11% at one point intra-day...so definitely a regime change has settled in for SOXX. Bounces should be sold hard unless the MSL is breached on the upside.

DIA: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish (x-over)

Internals: Positive (stalled)

Block Volume: Positive (barely)

GEX: Negative

Put/Call Ratio: Excessive Put Buying...bounce tomorrow?

DIA Summary: Dow Jones was so negative at one point it broke some stuff today - preview of things to come I believe. It still has some underlying block buying (Bulls trying to truly 'Die Hard' here I guess)...and a pretty excessive put buying reading (but keep in mind there is not a TON of options volume buying in this ETF so take the reading with a grain of salt). The setup is there for some attempted bounce, but anything that attempts to get back into the box is short unless you get a close back inside the box, then it is short term neutral-ish again.

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: Almost Bullish

IWM Summary: This looks like buyers want to get it back into the box...truly an outlier at the moment, but maybe not since it was so destroyed before. This is a MONITOR for the rest of the week now (but just to keep an eye on as it is so far under it's MSL that it would need divine intervention to get it back macro bullish).

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Negative


XLF Summary: Banks leading the way down again? Maybe. Next support is much lower. There could be another attempted bounce but there are no real FVGs above as price has moved pretty freely during the last two days without major gaps. So any upside attempts to get back in that box are sells unless that momentum reading turns back up.

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (but stalling)

Block Volume: Positive

GEX: HEAVY Negative


HYG Summary: Oil and exploration disasters are having a major impact on this as noted yesterday. Fed has put themselves into a 'no way out box' now being the primary backstop for this full of truly worthless debt vehicle. They (the Fed) cannot print demand and that is the missing ingredient for their thesis to work. Just ask the oil price - demand is a MF and law of nature. This is trading very technically right now and we'll see the reaction once we get to the 77.87 level and take it from there. But over time, I would not be surprised if this and other leveraged and/or derivative laden products are marked-to-market at surreal lower levels or closed altogether or go to zeros or just do things that you didn't think were possible.

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 broke through the upper resistance level today (as expected) and now is running into the trend line resistance. If we get some positive equity action maybe this oscillates around up here. Pull backs are BTD into the accumulation box (or above it) until something changes dramatically, and once over the trend line resistance, expect larger gaps up to magnet to those price levels notated. This is bear market long trade until it isn't.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Negative (but pushing VERY hard for zero line)

Block Volume: HEAVY Positive

GEX: Positive


UUP Summary: Still in a MONITOR status. Even more buying today pushing this even more into a coiled state. Price has yet to manifest the internals...and with the VIX where it is, I am more concerned about some sort of risk off event lurking under the surface. Add to that the oil fiasco, there is a shortage of $USD even more pronounced...eesh. This is a long until it isn't.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Positive (but collapsing!)

Block Volume: Positive

GEX: Positive


GLD Summary: Follow through to the downside as we have been suggesting for days now. Look for the green supports to find some bounce, but don't be eager to buy this until we see the momentum turn back positive. That was a pretty serious bull run last 6 weeks, don't expect a cheap pull back - if we get a bear raid this may be called again for margin clerk stuff like it did in the last vacuum move down. Be patient - still bullish long term.

SLV: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (declining RAPIDLY)

Block Volume: Positive (declining RAPIDLY)

GEX: Positive


SLV Summary: Full follow through to the downside today, BUT it was bought. That is a decent sign to me for SLV. Not a good sign is the collapsing internals and the full blown bearish momentum - steer clear of this until it washes out. We are not there yet.

GDX: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Peaked and falling

Block Volume: Neutral

GEX: Positive


GDX Summary: I know that there is a case to be made for this high level consolidation - I can see it too. But when you look at the bearish momentum frame 2 and the zero volume in frame 3 and the declining internals in frame 3...the setup is there for a hard drop here...just be careful if you are playing the high level consolidation. This is a widow maker trading vehicle...easily could drop 15%-20% in two or three days.

THE END.

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