Sunday, January 21, 2018, 2315ET
Market Timing Charts, Analysis & Commentary for Issue #225
Timer Charts of S&P-500 Cash Index (SPX) + NASDAQ-100 Cash Index (NDX)
Most recent S&P-500 Cash Index (SPX): 2810.30 up +23.76 (up 0.85%) for the week ending on Friday, January 19, 2018, which closed about its +1.5 sigma.
SPX ALL TIME INTRADAY HIGH = 2810.33 (reached on Friday, Jan 19, 2018)
SPX ALL TIME CLOSING HIGH = 2810.30 (reached on Friday, Jan 19, 2018)
Current DAILY +2 Sigma SPX = 2824 with WEEKLY +2 Sigma = 2798
Current DAILY 0 Sigma (20 day MA) SPX = 2732 with WEEKLY 0 Sigma = 2613
Current DAILY -2 Sigma SPX = 2640 with WEEKLY -2 Sigma = 2428
NYSE McClellan Oscillator = -1 (-150 is start of the O/S area; around -275 to -300 area or lower, we go into the “launch-pad” mode, over +150, we are in O/B area)
NYSE Breadth Thrust = 51.9(40 is considered as oversold and 65 as overbought)
We continue to be overbought. And as Dennis Gartman, the storied analyst on Comedy Central (aka CNBC) nailed it so eloquently last Thursday, "market will continue to climb until it stops...." We want to have whatever Dennis is having for breakfast. LOL
Canaries [in the Coal Mine] Chart for DJ TRAN & RUT Indices
200-Day MA DJ TRAN = 9644 or 17.2% above DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1448 or 10.3% above RUT (max observed in last 7 yrs = 21.3%, min = -22.6%)
DJ Transportation Index (proxy for economic conditions 6 to 9 months hence) took a pause this past week, going nowhere fast.
Russell 2000 Small Caps Index (proxy for Risk ON/OFF) on the other hand recovered its momo but failed to put in a new ATH. RISK continues to be ON.
DeTrenders Charts for SPX, NDX, TRAN & RUT Indices
50-Day MA SPX = 2665 or 5.4% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2508 or 12% below SPX (max observed in last 7 yrs = 15.2%, min = -14%)
All of our EIGHT DeTrenders are in POSITIVE territory. The DeTrenders for DJ Tran & RUT will continue to be harbingers of future price behavior in broad indices.
WEEKLY Timing Model = on a BUY Signal since Friday 12/16/16 CLOSE at 2258
DAILY Timing Model = on a BUY Signal since Wednesday 1/3/18 CLOSE at 2713
Max SPX 52wk-highs reading last week = 164 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 11 (over 40-60, the local minima is in)
HA_SP1 closed near its +2 sigma channels
HA_Momo = +3.2 (reversals most likely occur above +10 or below -10)
Vol of the Vols Chart
VIX currently stands at 11.27, at about its +1 sigma (remember it's the VIX volatility pattern aka "its sigma channels" that matters, and not the level of VIX itself (this is per Dr. Robert Whaley, a great mentor and inventor of original VIX, now called VXO). VIX usually peaks around a test of its +4 sigma).
The vol story this past week was for Crude Oil and it closed below its zero sigma at 21.2.
5-day TRIN & TRINQ Charts
Both NYSE & NASDAQ 5-day TRINs are trading in NEUTRAL zone. No signal here.
Components of SPX above their respective 200day MA Chart
This scoring indicator was flat last week and closed at 79.6 as it continues to display early divergences with price (SPX).
SPX SKEW (Tail Risk) Chart
Last week SPX SKEW (Tail Risk) closed at ~132, or about its zero sigma (normal = 120-125, range 100-150).
Is all quiet on the Eastern & Mid-Western Fronts? Smart Money still says 'YES.'
How to interpret the value of SPX SKEW? (from CBOE white paper on SKEW)
3-month VIX Futures Spread(VX) Chart
This popular timing indicator, now long Feb, short May VIX Futures closed exactly where it was last week, at -1.8. Equity markets, as far as this indicator is concerned, continue to be slightly overbought.
HA_SP2 = 83.2 (Buy signal <= 25, Sell Signal >= 75)
This coveted timing indicator says we continue to be in overbought zone now (but we know from recent history that we can stay in OB until we don't).
US Treasury T-Notes & T-Bonds Yields Chart
During this past week, the Treasury Curve sold off pretty much across the board but the big mover was the Five Year.