4/27/20 MARKET CLOSE Update - Consolidated Analysis

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

QUICK SUMMARY:


Ketchup Day - refers to when laggards in a move 'catch-up' to the prevailing trend (XLF/IWM/XHB/XRT in this case):


  • Volatility rolled sevens...VIX -7.35% and VXX -7.27%...so they crapped out

  • UUP was neutral but rejected at resistance again.

  • Indexes were higher on the day across the board but with notable QQQ higher low and the ketchup team (XLF/IWM/XRT/XHB) all coming up hard 3-6% moves...

  • Oil taken out back and shot again last night...showing you the real demand in the system = negative demand. Seems to be groundhog day for Oil every day.

  • Semiconductors were up today but could not get through the heaviest nest of resistance

  • HYG meh

  • DIA back into the box and trying to get back into the bullish channel again...

  • IWM was bid up overnight 3% so naturally the day session followed...

  • FAANGs were notably down today - this is new. Stay at home trade dead?

  • Internals were bullish and we got spikes in velocity and money but...

  • Absolute Breadth turned up very hard from the low...front running some more volatility coming or just flash in the pan?


I mentioned that if we busted the boxes with IWM, XLF, XHB, XRT over the weekend that they could move 5-10%. They did most of those % point moves today - all in a single session. The did give a little back at the close but nothing serious. Retail, homebuilders, banks, and small caps all won the day. I joked above that this is the rotation from the stay at home trade (FAANGs) to the going back out trade. Also the PPP launched today and lots of SMBs were given the lifeline that they needed to make some payrolls.


Since we have banks and small caps and retail and home builders cooking...back to normal right? Who cares. Price moved in the zones that we mentioned based on GEX and the FVG levels (magnets for squeezes). I don't think we can answer that question about 'back to normal' in a macro sense anytime soon anyways. What I think we can say is that everything is now in the neutral zones/areas where we have to make intermediate term decisions - and it took one session. That is volatility. It works both ways...volatility is not just a bearish concept.


Speaking of working both ways, absolute breadth popped hard today and VIX is still > 30 at close (33.29). My opinion, at the moment, is that we are now quite in a neutral position across the board with a much higher VIX at net neutral than we have had historically at positions such as this. The liquidity issues have been addressed in the very short term (FED went 'brrr'). Now we have to address the ugly stuff, the insolvency issues and the perceived 'return to normal' issue for the next 8 weeks. How does that work out?


No crystal ball here...but I suspect that it is not as simple as some are betting...the $USD is still an outlier problem here and the most important point I will make is that price action that is one-way for extended periods of time is noted to be 'terminating'. Escalator up, broken elevator down. This keeps happening now every time (Summer 2018/Spring 2019/Winter 2020) - its a doom loop now - huge drop occurs (Jan 2018/Dec 2019/March2020)...bigger and bigger FED response...zero price discovery on non-stop buying...music stops...total toilet flush...


I was hoping for price discovery here and some back and forth to fill gaps so we could see a sustainable bullish advance maybe. I am doubting seriously that is the case now. We have had no price discovery in weeks and continue to press for a termination higher (BTFD at all costs until no buyers left). I have no targets higher where this ends (not a call one should make), but I believe that when this latest liquidity stoked rally terminates it may be a reaper move you get afterwards...

SECTORS:

Sector Takeways: Winners today Small Caps, Banks, Retail, and Home Builders. Loser is oil...again. Commodities in general are considered worthless at the moment. Tech lagged heavy - noteworthy.

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Negative

Block Volume: Positive

GEX: Negative


VIX/VXX Summary: Mentioned above - VOLs rolled 7's today (crapped out). VIX bounced at support (last one before 25) and VXX did not find support and busted the accumulation box. It did fill the last FVG gap late in the day but no sustainable bounce after. The rest of the week should be interesting to watch. If we get flat/accumulation price action...into flat to positive indexes, you may see VOLs getting ready to move. If we see continued baby seal clubbings in VOLs each day, then you are not going to get much vol until early May (at earliest)...and that would only be if VIX stays above 25. The 30 level is now very much in play...

INTERNALS


TRIN:

Takeaway: Bearish across the board. Prices were up but distribution was happening - selling into the price rally(s) again.


ADVANCERS/DECLINERS:

Takeaway: All bulls. All day.


NYSE ADVANCERS/DECLINERS:

Takeaway: So far as of Monday, score is 1-0 bulls. Chewed right through first resistance level. 3 more to go and then they win the game. Do they have the momentum?


CUMULATIVE VOLUME:

Takeaway: Solid volume today but quite a bit of selling into that volume when analyzed under the hood. One resistance level above and then can challenge the MSL to get bullish long term again.


ABSOLUTE BREADTH:

Takeaway: MONITOR. Outlier today...bounced heavy off neutral and has lots of legs under it with the full reset. Have to see what tomorrow brings.


MCCLELLAN OSCILLATOR:

Takeaway: This is now back into sell and is just cruising on up into embedded. Definitely enough steam to get this into rare air this week if earnings are splendid...


INTERNALS Summary: Internals with the bulls today. Volume and velocity. Buyers not holding here though - they are selling to lock in some gains from lower level purchases, but still quite strong. Monday was definitely 1-0 bulls overall. Outliers are AB and TRIN. Round 2 tomorrow.

INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Positive

Put/Call Ratio: Neutral

SPY Summary: No sellers appeared today. Put/call neutral. GEX positive. Internals spiked up. Got some volume. Chewing into the upper resistances (still a few above). VIX spanked. Bulls on parade until they aren't.

QQQ: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Negative

Put/Call Ratio: Neutral/Bearish


QQQ Summary: Not a strong day for tech. FAANGs were very weak comparatively. One day wonder on this? Or a notable lower high? This and semis have been the full leadership this entire liquidity backed bounce, so we have to see what happens tomorrow (earnings start)...there was no volume to speak of today...gorpy upside on low volume.

SOXX: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive (spiked)

Block Volume: Negative

GEX: Negative

SOXX Summary: MONITOR. This didn't bust through the major nest of resistances, but there is some earnings tomorrow for the main stocks in the index. Worth monitoring to see what shakes out of the tree. Will it break up and out of the orange line or get whacked?

DIA: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive (spiked)

Block Volume: Negative

GEX: Neutral

Put/Call Ratio: Neutral/Bearish

DIA Summary: Dow Jones went along for the ride up with the Ketchup team. Trying to get back up into the bullish channel. Nothing of merit to note here other than the primary stocks of this index are on life support in the real world...

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Negative

Put/Call Ratio: Excessive Bullishness

IWM Summary: This can run to 130-134 and do nothing for the macro MSL. I will begin to look at this more seriously tomorrow and Wednesday...at this rate it could be at the resistance tomorrow. Have to see how this looks in time because right now it should magnet here to higher levels based on left behind FVGs.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Negative

XLF Summary: I think that the bank stocks were tired of me talking shit about them. $24-25 levels could be seen or this could get beat up trying to chew through the $23 level. All of the Ketchup team are in the same boat...higher or fizzle out?

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: HEAVY Negative

HYG Summary: There was nothing of note here today on HYG - finished relatively unch. Notes on the chart. Big picture fugly.

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Positive

TLT Summary: Price stopped at the resistance today and turned back down. Next test is the accumulation box. Nothing changed big picture and price can migrate to 160-165 level very easily and have no effect on the structure. Will monitor this next couple days.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Bullish

Block Volume: Positive

GEX: Positive

UUP Summary: Still in a MONITOR status. This got rejected at the 26.27 level yet again. Momentum turned down and it cooled off internally. Nothing major of note at all...just didn't break through resistance. Can easily head back into the accumulation box as well with no change to MSL macro picture. TLT was hit more today than $USD.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish (losing steam today)

Internals: Positive

Block Volume: Positive

GEX: Positive

GLD Summary: Gold visibly running out of steam now on this bullish trending move. Nothing would be a problem with a pull back at all as mentioned numerous times. Will it happen? It should/could here this week.

SLV: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Neutral

Internals: Neutral

Block Volume: Positive

GEX: Positive

SLV Summary: This was unch. Holding the line with no definitive edge in anything. Internals neutral, momentum neutral, price stuck in the same level for days...trending move one way or the other is coming soon.

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Positive

GDX Summary: GDX couldn't make a higher high today but probably still out there. The next move in GDX will trigger off of Silver based on what I am seeing right now. FOMC on Wednesday. Negative rates? Think that might be off the table with the equities at unch for the year (Nasdaq)...that is unless we are going fully metal printing jacket...

THE END.

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