Sunday, January 6, 2019, 1415ET
Market Timing Charts, Analysis & Commentary for Issue #274
Timer Charts of S&P-500 Cash Index (SPX) + NASDAQ-100 Cash Index (NDX)
Most recent S&P-500 Cash Index (SPX): 2532 up +22 (up +0.87%) for the three trading days ending on Friday, January 4, 2019, which closed about its zero sigma.
DJIA ALL TIME INTRADAY HIGH = 26951 (reached on Wednesday, October 3, 2018)
DJ TRAN ALL TIME INTRADAY HIGH = 11623 (reached on Friday, September 14, 2018)
SPX ALL TIME INTRADAY HIGH = 2941 (reached on Friday, September 21, 2018)
NDX ALL TIME INTRADAY HIGH = 7700 (reached on Thursday, October 1, 2018)
RUT ALL TIME INTRADAY HIGH = 1742 (reached on Friday, August 31, 2018)
Current DAILY +2 Sigma SPX = 2717 with WEEKLY +2 Sigma = 3036
Current DAILY 0 Sigma SPX = 2539 with WEEKLY 0 Sigma = 2739
Current DAILY -2 Sigma SPX = 2361 with WEEKLY -2 Sigma = 2442
NYSE McClellan Oscillator = +208 (-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 = 54.2 (40 is considered as oversold and 65 as overbought)
Last Friday DEC NFP came in strong (+312K) & both NOV and OCT NFPs were revised up. Initially, this firmed up FED hand for 2019, and thus, futures sold off a tad from a decent overnight run-up, in the heels of AAPL warning the day before. But what reversed up the index market & fueled the strong run into 1300ET was the open discussion of current and last two Fed Chairs, which further confirmed the independence of Fed from short-term political jawbonings from both ends of Penn Ave in Washington + the reassuring by Chairman Powell, that FOMC will stay flexible and data dependant in 2019. Then, the animal spirits kicked in and SPX ended up at its 20-day MA (zero sig).
Canaries [in the Coal Mine] Chart for DJ TRAN & RUT Indices
200-Day MA DJ TRAN = 10,622 or 13.2% ABOVE DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1596 or 13.5% 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) by end of the week, went nowhere fast.
Russell 2000 Small Caps Index (proxy for Risk ON/OFF) improved a tad but RISK is still OFF for now.
DeTrenders Charts for SPX, NDX, TRAN & RUT Indices
50-Day MA SPX = 2645 or 4.3% ABOVE SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2742 or 7.7% ABOVE SPX (max observed in last 7 yrs = 15.2%, min = -14%)
All EIGHT out of EIGHT of our DeTrenders remain in the NEGATIVE territory. The DeTrenders for DJ Tran & RUT will continue to be harbingers of future price behavior in broad indices.
WEEKLY Timing Model = on a SELL Signal since Friday, November 16, 2018 CLOSE at 2736
DAILY Timing Model = on a BUY Signal since Wednesday, January 2, 2019 CLOSE at 2510
Max SPX 52wk-highs reading last week = N/A (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = N/A (over 40-60, the local minima is in)
HA_SP1 closed near its -0.5 sigma channels
HA_Momo = +2.8 (reversals most likely occur above +10 or below -10)
Vol of the Vols Chart
Spot VIX currently stands at 21.4, 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).
Pretty decent moves in VIX and its futures on Wednesday and Friday (and surprising docile on Thursday).
5-day TRIN & TRINQ Charts
Both NYSE & NASDAQ 5-day TRINs are now in NEUTRAL zones.
Components of SPX above their respective 200day MA Chart
This scoring indicator rallied to 21.6% area. This index is still hanging out in the OVERSOLD territory for now.
SPX SKEW (Tail Risk) Chart
On Friday, SPX SKEW (Tail Risk) closed near 111.4, still about its zero sigma (normal = 120-125, range 100-150).
All quiet on the Eastern & Mid-Western Fronts, again? YES, our beloved @Capt_Tiko thinks so.....
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, (long JAN19, & short APR19 VIX Futures) closed at +1.5 which says SPX is still OVERSOLD.
HA_SP2 = 59.7 (Buy signal <= 25, Sell Signal >= 75)
Our coveted SP2 prop indicator is now hovering slightly ABOVE the NEUTRAL zone.
US Treasury T-Notes & T-Bonds Yields Chart
The YTMs sank hard on Thursday and then rose a tad on Friday. Maury is still very upset as he hates adjusting his vig downward (much like gas stations when crude oil drops)!!!