State of the Union and the Markets

cash-burn volatility

State of the Union Affect the Markets?

CNBC is at it this morning, speculating on what the President will say and how it will affect the markets. If you like entertainment, I’d suggest a subscription to Netflix, otherwise, CNBC has no idea what the markets are going to do. Only price can tell us what institutions are doing.

NYSE and the Markets

The NYSE Composite is composed of 2000 stocks. We view this as a broad measure of market participation and have highlighted the “cycle” repeatedly. Coppock is turning at extreme levels, so it should be no surprise that we might see some give and take as the markets and this index go parabolic.

NYA-01-30-2018

A drawdown of (-5.65%) would come close to the 50ma. Considering the recent bullish fever, we would anticipate a bounce before reaching the 50ma. Before that can happen, we would need to see Junk Bonds lead us lower, in addition to breadth and sentiment deteriorate in a marked way. This could happen if earnings reports are seen as a disappointment. With tax reform and upward adjustments to all of the SPDR sectors that seems unlikely. Analysts have adjusted their numbers higher, not lower.

SPY and the Markets 

SPY blocks at 283.00 (+/-) represent support until lost. These institutional trades start at 283.30 and taper off near 283.10 (+/-). 282.70 area where blocks traded on the way to recent highs. We could overshoot these zones and head lower if this level is lost.

We would then assume a descending pattern is developing. Look for a bounce and then target 281.40 to 279.60.

spy blocks and the markets

SPY and the markets 2

We well discuss these and other concerns during the live session. We will see you at 9:20 AM.

Happy Tuesday,

Vinny



9th Week Higher Without a Pause for S&P500

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Vinny Gambini

Trade Fundamentals w/ Technical Analysis - CANSLIM method using high probability setups and Ichimoku Trend Analysis. Architect, Family Man and Father of three.