5/5/20 MARKET CLOSE Update - Consolidated Analysis

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

QUICK SUMMARY:


Material Divergences Appearing:


  • Volatility down huge (-11.0% at one point) intra-day but bounced hard late session - VIX -6.56% and VXX -3.68%

  • UUP strength continued today and had all parts of the puzzle ramp hard underneath with price up +0.19%

  • IWM up +0.80% but down over 2% from the HOD - ugly session.

  • SPY was up 2.5% at one point and finished up +1.09% for the day - close was ugly.

  • Oil (USO) blew through the 20.50 FVG with nothing of resistance until 29.93 level now.

  • Semiconductors up as expected but finished almost -2% off the high of day and sold hard into the close.

  • Tech was strong again - shocker - but the MSL was resistance again - finished up +1.13% on the day.

  • HYG we noted the vomit pattern forming and J. Powell is a follower (bet you didn't know that did you) so they had to announce they are buying more high yield so we got a void on the vomit pattern for today anyways and closed +0.87%.

  • DIA looked good early - looked bad late - finished the day +0.45%.

  • FAANGs all green again except for NFLX.

  • Internals were mixed and mostly weak again.

  • Money Flow, Volume Velocity, and Blocks all went more negative today into the early price strength - notable.

  • Absolute Breadth was down again but bounced off support and turned back up.


A few important divergences that are prevalent across the board today that stood out and need to be the only topic of conversation:


  1. There was notable deterioration in the Money Flows and Volume Velocity across the board in risk assets even when price was up today

  2. There was notable increase in the Sell Side Blocks activity across the board in risk assets even with price was up today

  3. There was notable increase in the Money Flow and Volume Velocity for the VXX and for UUP today

  4. There was notable bouncing in VIX and VXX that we have not seen at any point in this decline on heavy vol targeting periods (which are evident to anyone with two eyes and a pulse).

  5. Momentum across the board remained bearish (or picked up steam) into the price strength today - this we have not seen the last few weeks. Price has pulled up momentum when appearing to be ready to drop.


These are all interesting phenomenon to witness considering how much we were up early in the session and these are all quite different results that are divergent from the pattern that we have seen the last two weeks. So the engines of the price structures are starting to fade while price continues to increase on lower and lower volume.


This may or may not prove meaningful in the days ahead...but typically this proves to be meaningful in most cases.


SECTORS:

Sector Takeways: Mostly a bullish day but this finished much lower than it started. Financials, Energy Exploration, and Consumer Staples were the losers. We are expanding the sectors features in the app this week, so more on that as we go.

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: As mentioned above, VIX found support today and bounced off the LOD and so did VXX. This has not been the case for bearish trending days in VIX and could be notable. Having said that, we still have a negative GEX in VXX, the money flows and velocity are still below (but close) to the zero line. So positive developments into VOLs today, but we need to see some follow through before there is anything of substance here to sink our teeth into.

INTERNALS


TRIN:

Takeaway: 3/4 bearish and IWM pretty close. There was volume selling into today's price strength as you will see with the Cumulative Volume below.


ADVANCERS/DECLINERS:

Takeaway: Bullish for the most part but finished much more bearish than it had been most of the day.


NYSE ADVANCERS/DECLINERS:

Takeaway: Hit the exact resistance level above and then closed right on the bull bear pivot line...that is notable...


CUMULATIVE VOLUME:

Takeaway: Selling into the strength today clearly and in a bearish momentum trend for now.


ABSOLUTE BREADTH:

Takeaway: MONITOR. Was down harder in the AM session and then bounced. Seems to be in a declining wedge for now (notated on the chart) and also momentum x-over to short term bearish for now...see what happens with this tomorrow. The last two hours almost turned this candle green for the day after being quite negative at noon...


MCCLELLAN OSCILLATOR:

Takeaway: From the sell zone to neutral all in one day...manic. That is all you can say about the McOs. Back to the neutral level. More tomorrow.


INTERNALS Summary: TRIN and Cum Vol show clear selling into the price strength that was well into the session. Advance decline was meh and Absolute Breadth was strong after the LOD. Having said that, making any real assessments on this are premature. We really need to see how this shakes out tomorrow and maybe even Thursday before this picks a definitive direction. These are looking weak though...and in bearish momentum trends for now.

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: Strong in the AM session, weak in the PM session. Money Flow and Velocity are dropping harder than before and price has failed to make another high. Index feels heavy here imo. GEX is slightly negative but more importantly is that blocks are starting to show up on the sell side and that is a new development from the last 30-45 days. Will be monitoring this next few days in more depth for clues.

QQQ: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral


QQQ Summary: Failed at the MSL again today after looking very strong in the AM session. GEX finished negative (by a hair) but still above the flip. Velocity dropping quicker than money flow now and seeing a little sell side block action. After today I would definitely classify this as feeling pretty heavy too...the more continued attempts to push forward that fail begin to take a toll on price action...especially when the internals are faltering.

SOXX: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: Negative


SOXX Summary: MONITOR. This filled the FVG above that was left behind on Thursday and Friday (overnight session in between) last week. Once it filled, it dropped pretty hard (-2% from the HOD into the close). We will monitor again tomorrow, but selling is steady now, momentum is bearish, and money and velocity are rapidly approaching the zero line.

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 still struggling around at the higher levels of price action with faltering internals. Money Flow and Velocity are down even more today on another green day, selling is picking up, and momentum is confirmed negative on a green day. Also an index that is feeling heavy here. We will keep it on the monitor next few days to see if price keeps bifurcating from internals.

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: No change from yesterday. Price up but got hit pretty good from the HOD and then Money Flow, Velocity, GEX, and sell side blocks all got more negative today. Price is diverged from internals substantively. Have to keep monitoring to see if they start to converge again (or if internals change their tune).

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Negative


XLF Summary: Barely inched out and unchanged/flat close. GEX negative, internals negative, but buyers blocks keeping this propped up for now. Have to keep monitoring for some sort of change here.

HYG: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Positive

Block Volume: Negative

GEX: HEAVY Negative


HYG Summary: FED announced more high yield bond programs. Bounce today - will it matter? Probably not. GEX still really negative, internals are flattening, blocks are slightly sell side, and momentum is confirmed bearish trend for now. Price still holding flat for the interim. But we are not seeing people rushing in on large volume...that was only the USD today that saw that action. I think that is the opposite of what the Fed is trying to accomplish no?

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: No change in TLT today from the last week. Keeps sideways consolidation with more substantive support right where noted on the chart. Momentum is still bearish which has been pulling down price action but money and velocity are flattening. Still don't think this is a buy yet, but shaping up to be bought again soon.

UUP: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Neutral (almost bullish again)

Block Volume: Heavy Positive

GEX: Positive


UUP Summary: Price moved a little today, but look at the volume bar (highlighted) and then look at the block bar (big green one) and then look at the turn up in the velocity and money flows (which had been dropping). Major buying today in UUP under the surface. We will see if price begins to catch up in the coming days to the accumulation that took place today.

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish/Neutral

Internals: Positive

Block Volume: Positive

GEX: Positive


GLD Summary: Gold starting to look real heavy here now. Velocity is dropping harder, blocks are no longer on the buy side, money flow is flattening, and momentum is still technically bearish. We have been looking for pull back/consolidation which has not really happened but we may start to see that soon unless price starts to move ASAP.

SLV: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Neutral

GEX: Positive


SLV Summary: Nothing new here at all. Everything mostly negative. 14.00 is resistance. Next.

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Neutral

Internals: Positive

Block Volume: Negative

GEX: Positive


GDX Summary: Got the higher high. Now what happens? This is looking really tired and heavy too imo. I wouldn't get greedy here. If you are a long term holder, grab some puts as insurance maybe.

THE END.


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