7/9/20 MARKET CLOSE Update - Consolidated Analysis

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

PRIMARY MARKET REGIME CURRENTLY IN PLACE:


LIMBO (on the ropes...)

What this means: $3180 didn't get breached and $3110 held. So we keep waiting.


When could this technically flip regimes: Nirvana over 3180 with gusto. Doom is now 3120 and below. Very very tight range here...


Still waiting for clarity but today's visual concern in the market, the 20 yr bid, dollar strength, and failure to kick upside resistance aside by bulls is noteworthy...

TODAY'S ACTION:


VIX and VXX were up today +4.20% and VXX +1.57%

  • UUP was bought today +0.35%

  • TLT was really bought today +1.59%

  • SPY was sold today -0.57%

  • QQQ was bought today +0.84%

  • IWM was sold today -2.02%

  • SMH was really bought today +1.74%

  • FAANGs all Greennnn AGAIN

  • HYG was sold today -0.22%

  • XLF was really sold today -2.11%


J-ROME AND THE MANUCH AT THE CLOSE ZOOM CAM:


J-Rome and the Manuch left early. The intern is messing with some new approach to the printing press. Hope he doesn't mess it up next week...everyone is counting on him.

Ok, so where are we today based on the macro trends we are tracking:

  • COVID19 cases - See the deaths spike in Florida today? I suspect a natural lock down is coming - i.e. people simply not going outside b/c of fear. That is already starting to happen where I live. City is dead and its a major city...creepy feel outside.

  • US/China relations - quiet for today...

  • $USD - Green

  • Bonds (TLT) - Green

  • VOLS (especially 60+ days out) - Warming Up Again.

  • GEX levels - meh


Lets take a look at a few things here late in the week:


XLE - yikes...forming the vaunted middle finger pattern top...


XRT - struggling up here...


XHB - thought the home numbers are awesome?...what is this about today?


APT - COVID PPE in bullish trend...that's definitely good for everyone...not


This whole thing has been oscillating back and forth all week and I have been giving this the benefit of time to shake out. Walgreens was a shot across the bow this morning. Very grim outlook, more job cuts, and suspending share buybacks (which neutralized volatility)...ground started shaking right after that.


Bonds were very bid today and banks were very unbid today. Banks getting no break...not even bounce squeezes that we were used to. This could mean that there are really no buyers here. That is something to watch. I was surprised this morning by the action as I expected follow through but the only thing that could sustain anything was FAANGMs. The market here (look at the internals below) is literally a 10 stock index. If FAANGMs falter at all, this can crater. I have warned over and over and over that we go from equity nirvana to doom loop and that is it since 2018. This is the most insane nirvana cycle yet. I am not saying it is over, no way to know that at all because this much liquidity via the Fedsury that was front loaded in the past 60 days after March could continue to push prices higher...but...when this breaks, the higher we have gone the harder we are going to drop because of the low volume participation at these levels (small lots get consumed by large lots really quick to the downside).


So I am on the look out for a break now with the action last 4 days. We have been up in the $3170-3180 level 3 times now and rejected all 3. Bulls have to get this through $3200 now. They can no doubt get it done, but it is now very important that it happen soon. If it doesn't, earnings and guidance kick in and if they are fugly (high probability), deaths start skyrocketing (in motion already), and the FEDsury is scheduled to taper back the latter part of the month (which they are), then the cocktail is there for a rude awakening...or something worse.


Let's see what shakes out. Still a juke box until it isn't between 3110-3180.

SECTORS BROAD MARKET:

Sector Takeaways: 1 trick pony market...FAANGMs


SECTORS BONDS/GOV BONDS:

Sector Takeaways: Energy really eating shit here. Bonds ok.


SECTORS BONDS/SOME COUNTRIES:

Sector Takeaways: Gov bonds really hot today. Emerging all about China. That story over now?


SECTORS BONDS/SOME COUNTRIES:

Sector Takeaways: Dollar starting to look like it may come out of the grass..

VOLATILITY:


VIX: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Neutral

Internals: N/A

Block Volume: N/A


VXX: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Negative

VIX/VXX Summary:


This is really starting to coil. Internals are above zero. Blocks are starting to be gobbled up in broad daylight...stealth time has passed. Makes you wonder what is about to happen...over $37.50 this is going to $46. Over $46 is bad for equities. Under $31 is where bulls want VXX.

INTERNALS


TRIN:

Takeaway: Still buying...


ADVANCERS/DECLINERS:

Takeaway: All red except for FAANGMs.


200 DMA:

Takeaway: Fail.


NYSE ADVANCERS/DECLINERS:

Takeaway: Double fail.


CUMULATIVE VOLUME:

Takeaway: Triple fail.


ABSOLUTE BREADTH:

Takeaway: Ruh roh. Been very complacent...too complacent for this environment.


MCCLELLAN OSCILLATOR:

Takeaway: Weak...


INTERNALS Summary: Ground starting to shake a little...

Been oscillating back and forth all week and I have been giving this the benefit of time to shake out. I believe that earnings and projections are more important than anything DJT says or his tax returns. Walgreens was a shot across the bow this morning. Very grim outlook, more job cuts, and suspending share buybacks (which neutralized volatility)...ground started shaking right after that. We will see what happens.


INDEXES:


SPY: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bullish

Internals: Negative

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: SPY VOL Term Structure


SPY Summary: VOLS up, GEX negative, internals negative...no FVGs to magnet to...either going to new ATH here or the other way...range expansion coming.

QQQ: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Positive

Block Volume: Positive

GEX: Positive

Put/Call Ratio: Neutral

Volatility Metrics: QQQ Volatility Term Structure

QQQ Summary: Nothing bearish here except that it is so diverged from reality that a simple pull back may morph into more. Cautious here with volatility starting to rise.

SMH: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Negative

Block Volume: Negative

GEX: Positive

SMH Summary: Internals keep declining. Prices keep rising on low volume. Red targets notated on there below.

DIA: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Neutral

Internals: Negative

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: DIA Volatility Term Structure

DIA Summary: Looks so shaky...

IWM: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Negative

Put/Call Ratio: Neutral

Volatility Metrics: IWM Volatility Term Structure

IWM Summary: Still a steaming pile of shit. No change from me here.

BANKS & HIGH YIELD CREDIT:


XLF: Chart with Detailed Levels

Market Structure: Bearish

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Negative

XLF Summary: Feels like there may be no lifeline coming next week on earnings...have to wait and see but the lack of bounce is starting to get concerning in all seriousness. How bad is this situation with the banks? I am hearing rumors...that is all I will say.

HYG: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Negative

Block Volume: Negative

GEX: Negative

HYG Summary: The shale space is about to totally implode right now - another shutdown (which is in motion naturally now) will do oil and gas in and cause harm to this. I wish the FEDsury luck.

TREASURIES, $USD, and PRECIOUS METALS


TLT: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bullish

Internals: Bullish

Block Volume: Positive

GEX: Positive

TLT Summary: Boom.

UUP: Chart with Detailed Levels

Market Structure: Neutral

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Positive

UUP Summary: Boom brewing?

GLD: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Bullish

Block Volume: Bullish

GEX: Positive

GLD Summary: May be the end of this bull phase and start correcting. May not. It would make sense to take a breather here as GDX hitting $40, SLV hitting major resistance, and lots of FVGs below. This is not a bearish statement - I am bullish gold. Just think that this has had a good run and needs a breather. Don't unfollow me please...

SLV: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Neutral

Block Volume: Positive

GEX: Positive

SLV Summary: Follow through - 0/1. I will give it some rope but today is not what bulls want short term. Regardless getting back here is intermediate term bullish at worst. Let's see how the tree shakes.

GDX: Chart with Detailed Levels

Market Structure: Bullish

Momentum: Bearish

Internals: Positive

Block Volume: Positive

GEX: Positive

GDX Summary: This hit $40 which is a resistance level back to 2013. We will see if it matters. $43 is above if it doesn't matter and the FVGs are below if it does matter.

THE END

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