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Friday September 8th, 2017

Summary

Market continues to trade sideways

Swing Trading signals both BULLISH

Oil has some resistance to capture

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After 85 trading days, the SPX 20 dma has slipped below its 50 dma for the 4th day in a row.

My swing trading signals have been BULLISH since 8/25 and 8/29 respectively. My proprietary Technicals Model was higher for the 8th day in a row, with a positive divergence at 9/1's peak vs. SPX. It was an odd previous bottom as the Model did not positively diverge as it usually does in advance. My statistically driven Volatility Model continues to decrease in volatility significantly, with recent trading below 1% of volatility since 1990.

8/29's SPX Hindenburg Omen ended up being a bottom reversal variety. Many HO in June and July leading up to the All Time High, then 5 more during the decline in mid August. None since then.

SPX has pulled back through several key support levels and now is wavering around the 2464 support/resistance line. With only 2 minor positive divergences on the SPX hourly chart at the lows on 9/5, a lower low is likely before sustained bullish activity, but is not required.

VIX generated its hourly MACD BUY signal Friday, though a negative divergence showed up on the ADX +DI. Drilling down to the 15-min chart, negative divergences formed at today's highs. Higher VIX is likely in the short term.

Market Internals, participation and breadth indicators, many of them in positive territory, yet are well off peaks from earlier in the year. SPX A-D line in an exception, making a new All Time High on 9/8, obviously above its 20 dma which is now ascending. SPX McClellan made its 7th positive reading in a row.

The Yield Curve is flattening which continues to support the notion of a weak economy. This as TLT:TIP shows deflation fears have been climbing since Spring.

Oil dumped Friday, and likely wont succeed a challenge of both its 200 dma and upper Bollinger Band for any significant time. Oil performed terribly during the tropical system in the Gulf which shuttered rigs (If Harvey couldn't boost prices an east coast Irma shouldn't help much either), and all Spring/Summer, last peaking at the beginning of the year. In an interesting development today, HYG:IEF made a lower low Friday, which only served to strengthen significant positive divergences in doing so. This suggests that Risk-On should return soon.

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Disclosure: I am/we are long SPY.