5/1/20 MARKET CLOSE & WEEKEND Update - Consolidated Analysis

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

QUICK SUMMARY:


'Tremors':


  • Volatility pulsed up overnight and gave nothing back intra-day on Friday w/ VIX +8.90% and VXX +8.61%.

  • UUP seems to have found a local bottom with momentum resetting.

  • IWM was down over 5% at LOD but bounced by the end of the day to finish -3.75%...but very bad two days to finish the week.

  • SPY down -2.61% and finished with an ugly candle and uglier internals going into the weekend.

  • Oil pretty muted and looks to want to fill the upside FVG for (USO) @ $20.50 before next steps.

  • Semiconductors had a very ugly day on Friday and hit the bull bear pivot - bounced as expected there into the close but lost all momentum and is in trouble.

  • Tech lost the MSL and looks to be heading for a test of the bull bear pivot below to start with.

  • HYG hard rejection off the 50 EMA (somewhat surprising how hard this dropped Friday).

  • DIA hard rejection off the previous bullish trend channel on Friday and momentum is setup to be pretty bearish here and not many supports below.

  • FAANGs mixed bag of weakness with AMZN (-8.21%) throttled. All red all day here. These are all still in the upper end of their ranges for now.

  • Internals were torched today - bears followed through on Friday with even more 'umph' than Thursday.

  • Absolute Breadth finished the week with a piercing candle up into the volatility level.


I noted this as a 'Tremor' day above because in review of the chart frames across the board, there was a distinct break from Wednesday to Friday. Post FOMC there has been a switch to sell side blocks, money flows dropping hard, volume velocity dropping hard, GEX flipping negative in a most cases (not all but most) and hard price rejections as seriously important inflection levels.

VIX is stirring again and VXX looks to be close to the 3/3 mayhem setup I have described before. There are initial supports here for all the index charts approx. another 4-7% lower than where we are now. But under that...almost every chart has a very empty auction that didn't take place on the way up. This means it can suck down to fill FVGs left behind quickly. This is a side effect of the equity nirvana to doom loop pendulum that I mentioned on Thursday.


I am referring to this so far as 'tremors' because it is like a warning shot - not the real earthquake. Volatility needs to go from madness to mayhem in order for the quake (getting 3/3 setup in place). We are not there yet. But I will note that there was not the BTD effect Thursday or Friday even though there was the attempt (it was visible in both P/C ratios and TRIN). So BTD crowd is there still...and FAANGMs are still in the top end of their range. With their market weighting to the indexes, they truly need to roll over for earthquakes to start.


Having said that - semiconductors look very dangerous here. They dropped 11% high to low Thursday thru Friday all the way to bull bear pivot. A bounce should happen there (at least a little)...so if we DO NOT see this, that is bearish. Also, if there is an overnight gap on Sunday night session (not saying there will just saying IF there is) - it could be another break away gap like first Monday in March. Just something to watch for.


But no matter what...Thursday and Friday were a definitive shot across the bow for BTD crowd. Have to see what happens this week. Notes below per tracked index.

SECTORS:

Sector Takeways: There was no impact from BTD crowd Friday. They did try, but they did not succeed in any way at bounces. This is very notable and something to pay attention too early next week to see if it persists.

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish X-Over

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish X-Over

Internals: Negative

Block Volume: Positive

GEX: Positive


VIX/VXX Summary: VIX moved up into the next resistance again. VXX as well. Notable and very interesting is that neither was spike/collapse structure as we have seen. There was steady bidding of VIX and VXX underneath on Friday. This is what is pushing the Money Flow and Volume Velocity up towards the zero line. Momentum is bullish x-over for both. So realistically, these are very close to 3/3 reading. There is resistance overhead but the GEX is positive now and support is sitting underneath price. Next week should tell us a lot more about intermediate term here. Will update my twitter as I see things change in VOLs.

INTERNALS


TRIN:

Takeaway: BTD crowd tried but you can see that they were met with volume selling - this is new and notable. IWM has been the call buyer go-to all week so makes sense for it to close with a little bullish bent (up 1.25% from the lows).


ADVANCERS/DECLINERS:

Takeaway: Bearish pac-man pattern today eating up those recent prices.


NYSE ADVANCERS/DECLINERS:

Takeaway: Follow through down on Friday. Momentum had a bearish x-over and reading lost the bull bear pivot. Three days in advances lost in two fast days. This better attempt to turn back up quick and gain that bull bear pivot back or it is headed to test the support levels.


CUMULATIVE VOLUME:

Takeaway: Firm rejection at the resistance levels (just shy of the MSL) and now with a bearish x-over. Pretty notable selling volume on Friday. Will monitor this next week to see that first support level and how it holds.


ABSOLUTE BREADTH:


Takeaway: MONITOR. This was the fly in the bulls ointment. This had the second strongest weekly reading since the Feb 24-28 weekly session that broke down all the bull market MSLs. Firmly in the volatility regime level creating broad market volatility which we saw on Thur/Friday. Daily reading paused at the volatility level for the day, so we will see what Monday brings.


MCCLELLAN OSCILLATOR:

Takeaway: Huge two day move in the oscillator and the momentum still has plenty to the downside left. I expect this to break the neutral reading next week before maybe a bounce (only) buy shows up.


INTERNALS Summary: Bulls had the internals in complete control on Wednesday and absolutely got trashed on Thursday and Friday. There was serious internal damage done in 2 days (very quick) that still has plenty of momentum to the downside left. This week should be interesting coming up. We could easily see more downside first, then a soft bounce attempt across the board that is sold again.


INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral/Bearish


SPY Summary: Price dropped on Friday but the rejection from the bull bear pivot meant more than the price drop. Bears came to play with all buying attempts being sold into heavy. Feels like a regime change starting. 50 EMA proved to be support but now GEX negative, internals dropping, momentum = bearish trend, and block volume is now negative to the sell side. Bulls need to be careful here.

QQQ: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral


QQQ Summary: Gave back the MSL on Thursday and confirmed it on Friday. FAANGs still in the upper end of their price range, but if they go this could get moving swiftly to the downside. The 202.16 level is very important short term, but the more important level long term is the 185 level. That is where we may decide the long term direction of potentially the entire market (since tech was the leadership in this secular bull market).

SOXX: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: UGLY

Block Volume: Negative

GEX: Negative


SOXX Summary: MONITOR. Not much words for this - ugly Thursday and worse Friday. This found a little support at the bull bear pivot on Friday, but this is really sick inside all the sudden (and I mean in two days). MSL was lost. Trend line was lost. Momentum cracked hard and has plenty of room to the downside. Volume velocity and money flows are dropping very hard implying this is being DUMPED QUICKLY and that is confirmed by that big red block selling bar. Since this is thinly traded for options, it is somewhat immaterial to report the GEX. But this is pretty heavily traded ETF. This type of selling in a pretty subscribed to ETF is very notable. Next week should provide more clues. 185 level has to hold for bulls to keep narrative of new bull trend trying to form.

DIA: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral


DIA Summary: Dow Jones is in real tough spot. 231.77 needs to hold short term or this heads to 213.09 quickly. This has been in a distribution pattern for some time (3 weeks) and that broke down on Thursday and Friday. Could easily pick up steam with internals turning over, block volume negative, GEX negative, and momentum with a bearish x-over and lots of room to run.

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral/Bearish


IWM Summary: Now a confirmed termination candle and it cut right through the 50 EMA support. 123 level was initial support where it bounced. If that goes, then 117.23 is up next. Could see short term chop but may not since it did bounce 1.25% on Friday PM session which is a pretty decent bounce. The momentum is bearish now with lots of room to the downside, block volume VANISHED Friday to the buy side, P/C finished in neutral level (so no extreme bearishness to speak of), GEX negative and below a flip level. I expect 117.23 to provide some kind of support but if that goes, then 106.09 will act like a magnet. This week should shed more light on the intermediate term ahead.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Negative


XLF Summary: This is now confirmed rejected twice out of the 23.74 resistance level. 21.68 has to hold or this is headed to 19.68 swiftly. GEX now markedly negative. Momentum is bearish with plenty of downside real estate, internals turning over, but buyers still stepping in on Friday. I expect that to not happen and to flip to sell side blocks below 21.68 level.

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: HEAVY Negative


HYG Summary: What a candle on Friday?! That is serious rejection from the 50 EMA. Everything is bearish now (GEX, Blocks, Momentum, and MSL) but the internals are still above the zero line so we can get chop. 77.07 level has to hold or this is headed to 73.57 and then 71.39.

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Neutral

Block Volume: Neutral

GEX: Positive/Neutral


TLT Summary: Price was down heavy on Friday and then rebounded to close the session. Buyers stepped in and you can see that in the improvement in money flow, volume velocity, and buyers blocks. Momentum is still in bearish trend, but once that turns back up, this should resume back to the upside. I added the red trend line to give you a perspective of price projection.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Neutral

Block Volume: Positive

GEX: Positive


UUP Summary: Price weakness again early and all FVGs to the downside are now filled. Price bounced in PM session and finished green. Momentum is almost reset level and price still very much in the accumulation box. There was no extensive selling into the downside of the price range (accumulation box) present...we will see how this reacts next week. Setup is now full for this to turn up. If for some reason this loses the box, then it will test the MSL quickly. That probability does exist, even if in the very low percentile.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish (stalling)

Internals: Positive

Block Volume: Positive

GEX: Positive


GLD Summary: Gold has a couple clear options here it appears. They are drawn on the chart. One is that 155 level was it for pull back (which would be crazy but this is a bullish chart)...the other is called 'double symmetry' in that if you look at the orange line it is exactly 2x the blue correction distance thus far. That puts is exactly at the FVG level around 149 that was left behind. Isn't math interesting? Other than that, I have no edge here. Only outlier here from a normal correction is another margin call event. Just keep that in the back of your mind.

SLV: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Positive

GEX: Positive


SLV Summary: Silver kept leaking lower today and looks like it will keep heading lower. We will have to see the reaction at the lower FVG levels. Momentum is bearish. Internals are collapsing and volume is about to cross zero line. Don't 'hope' here..be prudent.

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Positive


GDX Summary: Nothing changed on my thoughts from Thursday with GDX. I know there was an upside day, but GDX really needs to hold 30.52 or 26.27 will happen in a flash. This is a dangerous setup here with bearish x-over on momentum and internal buyer block volume about to go sell side. 30 is big deal for GEX (see above) as below it negative strikes come into play and will flip this structure.


THE END.


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