Showing posts with label Commentary. Show all posts
Showing posts with label Commentary. Show all posts

Wednesday, June 15, 2016

Wednesday, June 15, 2016 Morning Comments by Michael Blythe @FairValueTrader

Wednesday, June 15, 2016 Morning Comments by Michael Blythe @FairValueTraderSocialTwist Tell-a-Friend

Good morning. The ESU6 bid higher overnight which is typical after three days of (relatively) noticeable selling and typical going into FOMC day two. It feels like the market has reached a line in the sand area and bulls need to hold 2050 or otherwise give up their control from a more macro point of view.

Note: I attached three charts showing  equity performance based on different factors that are current. All three of these suggest a bullish bias and this did not include June Quad Witch stats which are also bullish. I have noticed that when various analogs and statistics scream a consistent direction and that direction fails, the results can be severe. Meaning that if bulls drop the ball on this one, they may not get it back for a while.

The ESU6 is only up a modest four handles at the moment and it seems that if buyers cannot take charge at the open then it will be another sell rallies kind of day, and perhaps even, sell each new low. After bears have pushed the benchmark futures lower nearly 65 handles in a week’s time, bull ought to be able to mount a 20 handle rally at this, and this has yet to happen.

Levels I will be watching to the upside are 2073-2075 (**) area that bulls need to take early. Above that 2081 (*) and 2088 (**) come into play as resistance. To the downside, 2067 (**), 2063 (*) and 2055 (**) come in as support followed by 2048 (**)

It’s FOMC Day of course with the announcement coming at 1:00 om CST. While the probabilities of a June hike are virtually non existent the market will be paying close attention to the language used in the statement.

Michael Blythe
Futures Strategist 
Hamzei Analytics, LLC

Sunday, January 31, 2010

Market Timing Charts Revisited -- as of Friday Close, January 29th, 2010

Market Timing Charts Revisited -- as of Friday Close, January 29th, 2010SocialTwist Tell-a-Friend
Fari Hamzei

Here is our Timer Chart with NYSE McClellan Oscillator closing the week at -286, 7thday in the row below the negative 150 oversold threshold.  We keep on reminding ourselves that a short/term bounce, albeit a dead cat bounce, should be near.  Notice NASDAQ Volume MO is also pretty nasty -- many names being punished despite of good [/quality] earnings.  Yet we have not seen a volume spike.  Even with a dead cat bounce, the selling should resume till we see capitulation.  Next stop for SPX should be its 200-bar moving average (which is a fast moving target here).  IOHO, maybe around 1020.  SELL THE RALLIES.

As far as vols are concerned, the ROC of Vols have slowed down but now lining up into a clean and rising +1 to +2 channel upward channels.

The % of SPX components over their respective 200 bar MovAvg chart needs no explanation.  KIDs are running for the hills.  Hearing IPO windows tightening up, private equity and VCs boyz are getting a bit nervous.  It is still early.

Our coveted SP1 MoMo Indicators getting a real Royal Flush.  Long Term [Modified] Breadth (SP1) looks worse than it did at October lows, while Short Term [Modified] Breadth (MoMo) does not.  This tells us a strong push down, after a dead cat bounce (should we be lucky to witness it), is a must somewhere here.  Next big news day, is this coming Friday Feb 5th (Jan Non-Farm Payroll at 0730 CT), could well turn out to be the Mother of All NFPs.  Small accounts should step aside and stay on sidelines.

Bottom Line:  Washington Policy Makers are dueling it out on weekend news programs. We were very happy to see Dr. Ben Bernanke finally was confirmed to serve another term at The Temple.  (This is a great read ).

Both intraday and long term Vols are rising and we are seeing some trending days.  This is day traders paradise.  We are in heavens.  Brokers and Sausage Makers are not so lucky.

Saturday, August 8, 2009

Updated SP1 - MoMo Chart

Updated SP1 - MoMo ChartSocialTwist Tell-a-Friend

Updated Analysis:
The Song Remains the Same

Thursday, July 23, 2009

Market Timing Commentary as of Thursday, July 23, 2009

Market Timing Commentary as of Thursday, July 23, 2009SocialTwist Tell-a-Friend
Fari Hamzei

Please Note: These charts are from the end of regular trading hours on Thursday, July 23, 2009.

MSFT, AMZN, AXP, COF, BRCM and JNPR all reported after the 4 pm NYC close today and they all missed, some by little, and MSFT & AXP, by not so little. All were taken to the woodshed for some much-neglected discipline. They are down, some heavy, in the after hours trading. We live and trade in a very frothy world, the management teams, were repeatedly reminded.

And for Reg. FD purposes, our Phoenix Traders went long JNPR Aug A-T-M Puts yesterday at about 2pm EDT. And, today at about 212 pm EDT, we doubled that position, very near the market high. After JNPR reported a double digit fall in revenues, a slide in margins and gave a disappointing outlook, I was asked on Twitter, why AAPL long calls on Tuesday and JNPR long puts today? My answer was simple: trading is all about market intel [something you won't find on CNBC]. We both laughed it out loud.

Let's go thru some charts. First my favorite, Sp1-MoMo chart. "Let's get really overbought" was name of the game today. After all, the venerable money manager Bill Miller of Legg Mason, wrote last night "the worst has passed" and "bargains abound in the US stock market" to his Legg Mason Value Trust fund.

NYSE Advance/Decline Line closed +2088 and SP1 back again above +2 sigma with MoMo at +45. Remember, as I mentioned in the last Friday video, posted further below, we could stay here and see these types of high readings both in relative (SP1) and absolute (MoM0) terms for some time. No guarantee we will just fall off the cliff here just because we are overbought. As always, I look for the requisite "catalyst" in geopolitics, Fed, White House, Wall Street, Pentagon, Big Oil, etc etc.

Next is our Wyckoff Chart. Notice we have moved 1,000 DJIA points in 9 trading days (spanning some 4 sigmas). Today, DJIA closed for the first time over 9,000, trading above last Jan 2nd high and came within 200 pts of Nov 4th Election Day price range.

In like fashion, DJ Trans moved some 4.5 sigmas: (Economy going forward will do well -- what commercial real estate problems, consumer credit, forget about it -- Washington will save 'em too -- and please, quit complaining about retail vacancy rates on Miracle Mile). And, RUT (risk-loving is back, its Index Futures at one point were up almost 4% today) and NAZZ Composite (closing higher 13-days in a row) all screamed in unison: Xmas is here early. Yeah, for sure !!

But not our beloved Vols. There were smarter of the bunch, and they stopped dropping in face of rapid ascend rate in the equities. VXN rode down the -2 sigma line, three days in a row last week, and as expected (as in last Friday video), it pulled backup, albeit, very very slowly until today. Both VXO & VXN closed higher today, as smart money started to buy some puts for downside protection. And Market Makers smelled it and adjusted those bid/asks, albeit by rapid-fire algo trades.

One fund rolled UP its SPY August downside protection at 92 strike into December 95 strike, for some 72,000,000 shares of SPY (S&P-500 ETF) it holds. Yes, 720K put contracts on SPY, a "jaw dropper," was one trade today that cleared at the ISE in NYC.

Last but not the least, here is our Timer Chart. With NYSE McClellan Oscillator (MO) at +226 and NAZZ at +144, with CI Indicators lit RED, SPX at +2 sigma, NDX above +2 sigma, we are short-term overbought again. Just look at Up/Down MO for NAZZ, it is almost +210. With Volume, being a coincident indicator, we should brace for a pullback.
Now with MSFT latest report, the TechLand recovery roadmap got a lot fuzzier. And with AXP and COF results showing consumer finances remaining in stress, the retail spending should remain below trend.

Now I said the same thing some eight weeks ago and nothing happened. We simply traded in a range. This time, it may be different. Tomorrow could be for the history books as the spin meisters will try to put a fresh new lipstick on this pit bull.

A Note of Thanks: We are immensely indebted to our learned colleague, Steven Sears, the Editor of The Striking Price Column at Barron's for his valuable & speedy research regarding the SPY trade today.

Friday, June 12, 2009

Market Commentary as of Friday, June 12, 2009

Market Commentary as of Friday, June 12, 2009SocialTwist Tell-a-Friend
Fari Hamzei

As you can see in the charts below, starting with the left hand side, the rising S&P-500 Cash Index has been accompanied with lower and lower directional momentum, and thus creating a "bearish divergence" with the SPX.

In the right hand side chart, we show two proprietary modified Breadth (Advance Decline) data subgraphs. The longer term sub-graph (SP1) shows a modified cum A/D line superimposed with its sigma channels. The lower subgraph, MoMo, is a short-term A/D Oscillator. Notice the long-term vs short-term are also in a very pronounced "bearish divergence" pattern.

THIS TECHNICAL ANOMALY WILL NOT LAST FOREVER. It will resolve itself sooner than later. What is currently unknown is that the proper catalyst for the upcoming reversal.

If you are LONG, watch your trades very closely. If you plan to STAY LONG, start looking for some portfolio insurance (O-T-M Index /ETF Puts).

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