Long Term Equities Update

It’s been a while since we’ve covered equities exclusively and as the month is coming to an end this is as good an opportunity to catch up. As you all know I have been dangling the ‘late stage bull market’ carrot for a few weeks now and quite frankly I don’t see any reason to change that outlook. I have been very adamant about expecting a final exhaustion spike higher and believe that is already in the works. Now before you start piling into puts be aware that we may be weeks, perhaps even months away from a downside event. So hold your horses and for now just enjoy the charts in preparation for where we heading most likely later this year. Enough weasel talk and disclaimers? Great – let’s get to the charts.

2015-02-27_zero

Actually it was the Zero chart that reminded me that a LT update may be in order. Over the past few sessions some of my subs and myself have been noticing strange signal patterns suggesting distribution. It’s very much possible but quite frankly I don’t see anything on the momo side that would suggest urgency. In short – nobody can predict when things will take a turn but we are a bit early in the game here still. So let’s review the evidence:

2015-02-27_SPX_LT

 

First the long term SPX with my trusted weekly stochastic. I almost never use this indicator – except on the weekly chart where it actually works pretty well! Right now we’re scraping 100 but in this bull market this means nothing. Most likely we’ll see an embedded signal (above the 80 mark) for a while before we head lower here. So no reason to be in a hurry – again we may be weeks or perhaps even months away.

2015-02-27_SPX_SPXA200R

SPX vs SPXA200R – the latter is the percentage of stocks in the SPX trading above their 200-day SMA. Now that one is looking bloody well divergent and eventually there will be a price to pay. But I don’t think that we’re due just yet (watch how the market will drop instantly after Mole’s statement).


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Bonus Chart!

022615pump

This one is courtesy of Chris Carolan over at spiralcalendar.com – one of the few other analysts I follow. Chris graciously permitted me to post this chart which I not only find absolutely compelling but also appears to be in line with what I’m presenting above. See the delay in the response on the S&P? Ponder on this one over the weekend.

Alright – I’m exhausted and am desperate for my Friday treat:

beer5

Not her you deviant! I’m talking about the Hefeweizen – which is waiting and that’s my cue. See you guys Monday!

Cheers,

Low Probability High Payoff Lottery Ticket

This is a quick update on our equities saga – finally the time has come to wield the iron as it’s hot. You recall that I suggested a bull/bear inflection point at the ES 2055 NLBL. We’re there now which bestows upon us the opportunity to grab what I call a low probability high payoff lottery ticket (LPHPLT – I loves me those acronyms):

2015-02-05_spoos_setup

The time is now – so go grab a handful but be advised that the odds of success are probably around 15% – 20% – if that. However if it for some reason drops from here then the payoff may be significant. Most likely however this thing is going to push higher over the coming days – the bulls seem to be running this tape.

Trigger and stop on the chart, so have at it but only play 1/2R or less – again, this is a bearish Hail Mary and most likely it’s going to fail. It’s literally a place and forget type of setup.With the VIX back at 17 a long put play may an option as well – but I would grab OTM strikes in this particular case but that’s me.

A little more context below for my intrepid subs:


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Bottom Line: We’re grabbing lottery tickets here but it seems like the bears have had it and the bulls are running the show now. If stopped out I’m planning to be long with a stop a respectable distance below 2055. I may get whipsawed yet again but that’s the price of admission to be trading here.

Cheers,

Rejection

After six years of pain the bears are used to rejection near inflection points. Which is why we keep seeing those bounces just when it looks like the tape is about to fall off the plate. But in the past few weeks I keep thinking the same thing over and over: How many stick saves are we going to see before this thing falls off the plate?

2015-02-02_spoos_update

However, that said – the bears are starting to wear our their welcome. Yes, medium and long term tops take a while to form, but there comes the point when it becomes clear that there’s not sufficient selling pressure to take this dog any lower. That time is approaching fast now – if you project forward a few days: Let’s assume we get two or three more closes near the diagonal I painted on the daily (left panel) and we’ve effectively produced a bullish defense line. Odds for a bounce higher will increase rapidly now every day we remain above 1980.

I’m still short here from ES 2040 and won’t touch those until we fall off the plate or I get stopped out at break/even. It’s make or break time for the bears – let’s see if they blow it once again.

2015-02-02_VIX

The VIX also at the line of scrimmage  - that 23/24 mark has been holding thus far and supports the notion that we are at a technical inflection point.

2015-02-02_USDCAD_setup

On the setup side I’m actually taking my cues from the short term panels in expectations of turning them into daily campaigns. Here’s the USD/CAD which currently looks like an experimental long until about 1.256 – I want to be short below that.

More futures and forex setups below the fold:


More charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don't waste time and sign up here. And if you are a Zero subscriber you get free access to all Gold posts, which gives you double the bang for your buck!

Please login or subscribe here to see the remainder of this post.

Cheers,




    Zero Indicator


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