5/4/20 MARKET CLOSE Update - Consolidated Analysis

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

QUICK SUMMARY:


Back-fill/Theta Burn Day:


  • Volatility cooled off after two days of up moves - VIX -3.28% and VXX -2.28%

  • UUP was up 50 bps today and starting to base for next leg of the its sequence it appears.

  • IWM green after two days of body shots selling action.

  • SPY was red most of the day but afternoon ramp led to green day.

  • Oil (USO) keeps heading up to fill the 20.50 FVG left behind in the drop.

  • Semiconductors reflexive bounce today as expected from 2 day beat down Th/Fri.

  • Tech weak out of the gate but finished +1.26%...thank the FAANGS yet again.

  • HYG still struggling and starting to look like the vaunted technical 'vomit' pattern.

  • DIA struggled as airlines were woodshedded.

  • FAANGs all green again - life is back to normal now for everyone. Thanks for playing.

  • Internals were mixed and weak.

  • Absolute Breadth included in that weak statement above.


Theta burn day for options makers. Down in the AM, up in the PM and outside of Biotech and FAANGMs everything else was fairly muted. After Thursday and Friday's action to the downside (which was quite poignant and left weekly imprints on the charts) a couple of days of backing and filling price action makes sense and also there was some FVGs left behind on smaller time frames that had to be addressed and were today.


Of note across the board is that block volume was on the sell side today into green price action. This is first time we have seen sell-side blocks in about 30 days for most Indexes.

Internals are soft. USD looks to be trying to find a bottom. TLT looks to be nearer to a short term momentum bottom. VIX/VXX seem to be settling and should do some backing and filling...so the next few days may be just like today. Hard to say...but we will have to wait and see.

SECTORS:

Sector Takeways: Weak AM session. Strong PM session led by the infamous biotechnology sector and their 'everyday is a new COVID-19 cure day' and the FAANGMs. High Yield notably weak led by Sr. Loans looking the worst.

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: Bullish

Internals: Neutral

Block Volume: Positive

GEX: Negative


VIX/VXX Summary: GEX back to negative and the resistance levels continue to be managing price action for now. Money flow and volume velocity in VXX are at the zero line again...have to see if they punch through this time or not. Momentum for both VIX and VXX is in a bullish intermediate trend. Support is below and neutral price action with a break over the zero line for money flow and velocity would be bullish. Have to see next few days.

INTERNALS


TRIN:

Takeaway: 2 bulls/2 bears and no edge. BTD crowd was there this afternoon again...they are a relentless bunch that is for sure. Like Bruce Willis from Die Hard.


ADVANCERS/DECLINERS:

Takeaway: AD was never really bearish today, even at the open. Even if you were a day trader today, it would have been difficult to get an edge...kind of shit action.


NYSE ADVANCERS/DECLINERS:

Takeaway: Did bounce this afternoon but still clearly under the bull bear pivot so momentum is down for now.


CUMULATIVE VOLUME:

Takeaway: Bounced off the first EMA support but the momentum = bearish trend and nothing really bullish about this picture.


ABSOLUTE BREADTH:

Takeaway: MONITOR. Makes sense that this is pulling back after that piercing move for 4 straight days last week. We will have to monitor next few days as momentum is now neutral.


MCCLELLAN OSCILLATOR:

Takeaway: I am beginning to think that the BTFD crowd trades on the 15 MIN McOs chart...they view every dip (no matter how short term) in this index as a lifetime buying opp. SMH. This is back over neutral again...after being negative in the morning.


INTERNALS Summary: As noted above in the summary, really nothing bullish here, but nothing really screaming bearish either. Seems like we can just chop around for a few after the moves we had on Thursday/Friday last week when bulls fumbled. This makes sense since there was price action left behind in those downdrafts...see how this fares as the week unfolds.


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: Nothing surprising by today's action. Negative session in the AM, positive session in the PM. Neutral close. Negative GEX, negative block volume, internals flat, and momentum = bearish trend. Bulls fumbled last week...nothing changed on that today.

QQQ: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral


QQQ Summary: FAANGs were very green today and they are 47%+ of the index. So the index was green. Not much else to it. MSL is bearish, GEX negative, internals flat, block volume negative, and momentum = bearish trend. Not a ton of bullish implications but as long as FAANGs go up we all eat cake.

SOXX: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative


SOXX Summary: MONITOR. This was due to bounce off the bull bear pivot so totally expected action here today. This is a constant monitor next few days as we watch the back and forth from the large right hook it took on Thursday and Friday to see if/how it continues.

DIA: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral/Bearish


DIA Summary: Dow Jones tried to rally in the PM and ended up flat. Call buying today in DIA - are you kidding? BTD'ers are fading Buffett now...the Fed has created some serious behavior patterns that they are going have to take some ownership for later down the road. GEX negative, PC bearish, block volume negative, momentum negative...so let's buys some calls right?! GTFOH.

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Excessive Bullishness/Bearish


IWM Summary: Due a bounce today but was pretty weak all things being equal...maybe it tries for some more upside tomorrow. Everyday call buying persists based on last weeks worth of action too - crazy pills. We did hit the first level of support, so we could juke around here for a few until it breaks. GEX negative, momentum negative, excessive call buying on every dip persists, block volume selling...all negative under the hood still after today.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Negative


XLF Summary: Found some support on the first green line area, but looking weak. Can try to fill some gaps left above but we will see next few days. Nothing new to see with Banks. They are still preparing for the end times (turning down loans, cutting off credit cards, not allowing home equity lines, cutting off small businesses...you know all that stuff you do when things are really looking optimistic...)

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: HEAVY Negative


HYG Summary: Got more bearish today in price and momentum...see if this gets some velocity to it anytime soon of if this keeps leaking lower...

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Positive/Neutral


TLT Summary: Looks to be searching for a local intermediate term bottom here in the next 2 days or so. Buyers always step in and buy in the accumulation box past 3 weeks.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Neutral

Internals: Neutral

Block Volume: Positive

GEX: Positive


UUP Summary: Seems to be setting a local bottom around here as we thought it would on Thursday and Friday. Up +.50% today and was strong in the PM session when equities were rallying. This seems to be an important key and could become even more important later this week ... tbd.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Positive


GLD Summary: Honey badger price action for Gold. Keeps holding the higher levels but blocks are about to hit the sell side and the internals look like they are fading. Momentum put in a confirmation move of a bearish intermediate term trend on a green day. I would be careful speculating any more substantive upside here...could be head fake before more correction.

SLV: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Neutral

GEX: Positive


SLV Summary: Weak and looking weaker under the hood. Hasn't broke yet though. Just seems married to that 14.00 level...

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Positive

Block Volume: Neutral

GEX: Positive


GDX Summary: Think this tries for that last high in price that it didn't get last week and it will come on weaker and weaker internals...I am still 100% cautious of this right now because of experience. As the Bull Bear pivot keeps curling underneath this...it will make this either a sharp upside move or sharp downside move. Since I have no edge, I will wait for the move before doing anything with this trade.

THE END.


Sign Up for Exclusive Trading Tips, Tools and More

DISCLAIMER: This site and all prepared documents are for information and illustrative purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation. This information is provided with the understanding that with respect to the material provided herein (i) voliswell.com is not acting in a fiduciary or advisory capacity under any contract with you, or any applicable law or regulation, (ii) that you will make your own independent decision with respect to any course of action in connection herewith, as to whether such course of action is appropriate or proper based on your own judgment and your specific circumstances and objectives, (iii) that you are capable of understanding and assessing the merits of a course of action and evaluating investment risks independently. voliswell.com does not purport to and does not, in any fashion, provide tax, accounting, actuarial, record keeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and the material presented herein. You may not rely on the material contained herein. voliswell.com shall not have any liability for any damages of any kind whatsoever relating to this material. No part of this website or it’s documentation may be reproduced in any manner, in whole or in part, without the written permission of voliswell.com except for your internal use. This material is being provided to you at no cost.

© 2020 VOLisWELL