I don't knowww.
Majority of the day today we saw a melt up in the mega cap tech stocks. This haven trade is what essentially powered our last leg up in the market last year. stocks like AAPL, AMZN, NFLX, MSFT, and GOOG represent a huge percentage of the market. In NDX they represent somewhere around 40% of the market cap. In SPX, somewhere around 20%. Meaning that when these handful of names do well, the market comes with it. It's a "melt up." Lately they've been serving as a haven trade when bond yields are generally under 1% and cyclical, small cap, and value stocks are beaten into the dirt either fundamentally or technically. But here's the thing. The market will not roll over unless these names come with it. But, the other side of the coin is that the NDX as a whole is not looking healthy. When you have everyone crowded into one trade it creates divergences and imbalances within the broader market.
Today we broke up via a gap up out of the "bull flag" pattern we've printed the past week or two. But again, directly into the supply zone of about $314, and $3140. Again, we had a rejection, albeit slow motion, from this level today. On SPX it's looking like a triple top. On ES, this is our 4th venture into this zone. Today in my opinion was the make or break to get through this zone. And again, we were on horrible volume. Why? Because the only action was in AAPl, AMZN, NFLX, and the mega caps. All of which are starting to look overdone if anything only on the short term. This looks like another failed breakout attempt.
We had some action overnight when Navarro went on Fox and was "wildly taken out of context" when he said the trade deal was over. What i think he was saying was we're only going to have Phase 1. But the market, algo driven, took it literally. We had an over 50 point sell off until Trump had to come out personally on twitter and assuage the masses. We literally retraced completely within 30-45 mins. The thing is, futures were already up 12-15 points before that news came out. We started the pump as soon as we opened at 6 EST last night. Today's gap up was going to happen anyways, and it was hilarious watching the financial media try and pin a rationale to it.
So what was the rationale? In my opinion. And what it's starting to look like. Is the end of the quarter. It seems like some money may have been trapped at that island from a couple weeks ago and they're either trying to get back up there in some anemic attempt, or some funds and money managers are trying to pad their numbers to preserve gains from the past 3 months. For some prop trading firms, and some trading divisions, they get bonuses quarterly.
But, with that being said any pop into this $314 zone is getting faded. And that (obviously) could be two things. Funds cycling out and selling into strength to lock in gains for the quarter because they missed the memo after the fed meeting. Or funds starting to build short positions for an anticipated move downward. It's probably a little bit of both. What i do know for sure is participation is next to none. 67m shares, again.
Another thing that i keep seeing come up is end of quarter rebalancing and 401k's. I guess this quarter is the 3rnd largest 401k liquidation on record (I heard this on Bloomberg radio and can't find the article, so take it with a grain of salt). Also, mutual funds and pension funds are slated to have a record amount of money moving from stocks, to assets like bonds in order to lock in profits. Specifically mutual funds and pension funds prefer assets like bonds because they're long term growth investment vehicles. And the market's up 21%. This could be a non event and just the financial media showing "the bear case". But regardless it looks like major pension, mutual, and other funds have been net buyers of stocks since the pandemic started. We could start to see that cycle out.
www.cnbc.com/2020/06...he-stock-market.html
Technically we got rejected from a known supply area (what is now turning into resistance) and it's starting to look like a triple top (on SPX, SPY still has a small price divergence). But, we're still above the top trendline from the multi year mega phone pattern, which i think is significant. We're also way above $3100, which has proved to be important as well. BUT, we're still below that same trendline on ES. We're also below that trendline on my SPY intraday, but, don't give that much credence until SPY catches up with SPX again. At the end of the day we also broke support from today's open and started for the gap, even though the bulls put up a honorable defense. BUT, futures actually turned negative after the close and are only up by about $2.00 as i type this. That's weakness. Again, we're at the mercy of the overnight futures traders, Asia, and the EU until early tomorrow morning.
$312.10, weird seeing you again. Rejection and reversal about mid day. Looks like we started for the gap
1h on trend support
Almost looks like a large bull pennant when you zoom out huh?
SPX respecting that megaphone top trendline
Triple top on the hourly
This is not a bullish chart to me. This $3143 (or about) level has served as pretty serious resistance. We'd most likely need to gap over it to continue upwards
ES 1, 2, 3, 4 times. This looks like exhaustion
ES daily looks ugly as well
IWM looking notably weaker, not being able to get above it's opening high and bleed off into close
It needs to clear this $145 area in order to be bullish in my eyes
Consolidating for a move somewhere
RUT putting in a shooting star on the daily though..
And? RUT hourly
Lower highs, lower lows.. RTY
VIX hanging in there, literally. We pierced the .618 fib today and bounced off of mid term trendline
Let me show you something real quick - AAPL 5m
SPX 5m, look familiar?
Daily looking tired, especially with MFI and RSI divergences
NDX invalidating my rounded top pattern but also looking ugly on the daily, exhaustion move?
This was DJI's 4th test and rejection off of it's 200 period MA
XLF being bullied by it's 100 period MA. Really weak IMO
DJT actually not looking half bad though. Divergence
Silver giving 0 fucks about TA. Unless someone sees something i don't
Gold, breaking out.. Gold is something that definitely smokes you in your sleep with a pillow and suppressed .22 though so tread lightly. But if this is for real this is big news for Gold. It's been coiling up in this range for the past 2-3 months building energy
Bonds still neutral
In my opinion we saw a failed breakout on due to a melt up in the mega cap stocks. This resulted in a triple top on SPX. I feel like volatility will be muted until we get closer to the end of the month and we get into earnings early next month. A break below $300-$302 is technically significant. And a break/gap up above this $315/$3150 zone is technically significant if they can hold up. Target would only be 40 points away at $319/$3200.
As for my project i'm in the process of creating content. I'm open to ideas and recommendations. Feel free to reach out.
As always keep your head on a swivel and happy trading.
BTW i want to give a shoutout to @VolkerRules for bringing up the rebalancing conversation as well.
Majority of the day today we saw a melt up in the mega cap tech stocks. This haven trade is what essentially powered our last leg up in the market last year. stocks like AAPL, AMZN, NFLX, MSFT, and GOOG represent a huge percentage of the market. In NDX they represent somewhere around 40% of the market cap. In SPX, somewhere around 20%. Meaning that when these handful of names do well, the market comes with it. It's a "melt up." Lately they've been serving as a haven trade when bond yields are generally under 1% and cyclical, small cap, and value stocks are beaten into the dirt either fundamentally or technically. But here's the thing. The market will not roll over unless these names come with it. But, the other side of the coin is that the NDX as a whole is not looking healthy. When you have everyone crowded into one trade it creates divergences and imbalances within the broader market.
Today we broke up via a gap up out of the "bull flag" pattern we've printed the past week or two. But again, directly into the supply zone of about $314, and $3140. Again, we had a rejection, albeit slow motion, from this level today. On SPX it's looking like a triple top. On ES, this is our 4th venture into this zone. Today in my opinion was the make or break to get through this zone. And again, we were on horrible volume. Why? Because the only action was in AAPl, AMZN, NFLX, and the mega caps. All of which are starting to look overdone if anything only on the short term. This looks like another failed breakout attempt.
We had some action overnight when Navarro went on Fox and was "wildly taken out of context" when he said the trade deal was over. What i think he was saying was we're only going to have Phase 1. But the market, algo driven, took it literally. We had an over 50 point sell off until Trump had to come out personally on twitter and assuage the masses. We literally retraced completely within 30-45 mins. The thing is, futures were already up 12-15 points before that news came out. We started the pump as soon as we opened at 6 EST last night. Today's gap up was going to happen anyways, and it was hilarious watching the financial media try and pin a rationale to it.
So what was the rationale? In my opinion. And what it's starting to look like. Is the end of the quarter. It seems like some money may have been trapped at that island from a couple weeks ago and they're either trying to get back up there in some anemic attempt, or some funds and money managers are trying to pad their numbers to preserve gains from the past 3 months. For some prop trading firms, and some trading divisions, they get bonuses quarterly.
But, with that being said any pop into this $314 zone is getting faded. And that (obviously) could be two things. Funds cycling out and selling into strength to lock in gains for the quarter because they missed the memo after the fed meeting. Or funds starting to build short positions for an anticipated move downward. It's probably a little bit of both. What i do know for sure is participation is next to none. 67m shares, again.
Another thing that i keep seeing come up is end of quarter rebalancing and 401k's. I guess this quarter is the 3rnd largest 401k liquidation on record (I heard this on Bloomberg radio and can't find the article, so take it with a grain of salt). Also, mutual funds and pension funds are slated to have a record amount of money moving from stocks, to assets like bonds in order to lock in profits. Specifically mutual funds and pension funds prefer assets like bonds because they're long term growth investment vehicles. And the market's up 21%. This could be a non event and just the financial media showing "the bear case". But regardless it looks like major pension, mutual, and other funds have been net buyers of stocks since the pandemic started. We could start to see that cycle out.
www.cnbc.com/2020/06...he-stock-market.html
Technically we got rejected from a known supply area (what is now turning into resistance) and it's starting to look like a triple top (on SPX, SPY still has a small price divergence). But, we're still above the top trendline from the multi year mega phone pattern, which i think is significant. We're also way above $3100, which has proved to be important as well. BUT, we're still below that same trendline on ES. We're also below that trendline on my SPY intraday, but, don't give that much credence until SPY catches up with SPX again. At the end of the day we also broke support from today's open and started for the gap, even though the bulls put up a honorable defense. BUT, futures actually turned negative after the close and are only up by about $2.00 as i type this. That's weakness. Again, we're at the mercy of the overnight futures traders, Asia, and the EU until early tomorrow morning.
$312.10, weird seeing you again. Rejection and reversal about mid day. Looks like we started for the gap
1h on trend support
Almost looks like a large bull pennant when you zoom out huh?
SPX respecting that megaphone top trendline
Triple top on the hourly
This is not a bullish chart to me. This $3143 (or about) level has served as pretty serious resistance. We'd most likely need to gap over it to continue upwards
ES 1, 2, 3, 4 times. This looks like exhaustion
ES daily looks ugly as well
IWM looking notably weaker, not being able to get above it's opening high and bleed off into close
It needs to clear this $145 area in order to be bullish in my eyes
Consolidating for a move somewhere
RUT putting in a shooting star on the daily though..
And? RUT hourly
Lower highs, lower lows.. RTY
VIX hanging in there, literally. We pierced the .618 fib today and bounced off of mid term trendline
Let me show you something real quick - AAPL 5m
Daily looking tired, especially with MFI and RSI divergences
NDX invalidating my rounded top pattern but also looking ugly on the daily, exhaustion move?
This was DJI's 4th test and rejection off of it's 200 period MA
XLF being bullied by it's 100 period MA. Really weak IMO
DJT actually not looking half bad though. Divergence
Silver giving 0 fucks about TA. Unless someone sees something i don't
Gold, breaking out.. Gold is something that definitely smokes you in your sleep with a pillow and suppressed .22 though so tread lightly. But if this is for real this is big news for Gold. It's been coiling up in this range for the past 2-3 months building energy
Bonds still neutral
In my opinion we saw a failed breakout on due to a melt up in the mega cap stocks. This resulted in a triple top on SPX. I feel like volatility will be muted until we get closer to the end of the month and we get into earnings early next month. A break below $300-$302 is technically significant. And a break/gap up above this $315/$3150 zone is technically significant if they can hold up. Target would only be 40 points away at $319/$3200.
As for my project i'm in the process of creating content. I'm open to ideas and recommendations. Feel free to reach out.
As always keep your head on a swivel and happy trading.
BTW i want to give a shoutout to @VolkerRules for bringing up the rebalancing conversation as well.
Komentarz:
Just got done drawing up content and was looking around the market and saw this. Hopefully you're not long FSLY. This is almost the textbook beginning of a blow off top.
Komentarz:
EU said "Nah brah" and kicked us off a ledge. We bounced off the trend line from April. DXY showing strength as well. Currently fighting over.. you guessed it, $3100.
Komentarz:
Looking like we broke down out of the triangle. Target is support line at $305.87.
Komentarz:
Next target i have is $302 on the intraday. $304.31 and then $301.13 on the daily.
Komentarz:
Watch for the short cover rally that will likely start early as everyone tries to front run each other. We're down 75 points already. Not sure how much more gas bears have in the tank
Komentarz:
