Market Thoughts

Lets just say that the bear case has been growing at a rapid pace for the last month. I will give you APR margin data when it comes out sometime in less than 10 days or so- but for now- that remains a serious LT issue. I have roughly 40-50 sentiment/ breadth charts I walk through each week and there is ONLY one that is bullish… the AD line. Now the Short-term indicators are not saying sell, just the longer-term ones. So we may be in a process of forming something, but I don’t want to get ahead of myself.

First lets talk breadth.

Here is New Highs as a percent.

Like the summation, things could get nasty. In the past, this could be a first of a second larger divergence.

Now I bring a chart of historic cycle data to point out that the two LT bull markets above are the two longest bull markets since 1909. Or I would be careful of that bet again (Nautilus Capital Research chart)

Ok so you see that this is one of the longer bulls. I would not bet all my money on the fact that this is a 2/13 event. Or in other words, the last two bull runs were the longest two in history, and I am skeptical that that can happen for a 3rd time.

Now back to breadth. Here is the cumulative advancing – declining VOLUME (like the AD line but based on Volume). The data is natural logged for practicality.

This would be an issue…

Here is Advancing – Declining Issues.

Yes, we made new highs ant that is not bearish. However, the mojo of the move is losing its mojo.

So here breadth is fading as well.

Same data as the last chart- shown differently.

The ISEE (sentiment) shows MASSIVE divergence.

I did not expect that, but it is what it is…

The market should not have sold off that weak of sentiment, but it did. May be telling, but patience here.

Here is a LT chart of E-Mini.

I don’t like that. We should have had buyers on previous high.

IWM/Russell:

That is not bullish. If there was stupid event news I would not trust this, but given that there is not, I am watching all of this very closely.

XLF. Guess what no triple bottoms or tops 😉

I only put these longer-term charts up to show that there is a *potential* for something to happen here.

Remember the obvious is obviously wrong… So how about the triple top and the IHS patterns…. (only retail traders BET on those) both ended up failing 😉

Bottom line: there is a bear case, or at least one of the better bear cases in months. Just food for thought. I am not doing much- waiting. I am not calling for P3 and I am not trying to get permabears all fired up. I am simply doing what I do every day- reading the tape. So careful buying the dip, this is not looking healthy.

Cheers,

-Volar