Wednesday December 20th, 2017

Dec. 21, 2017 2:01 AM ET
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Contributor Since 2017

$SPX $SPY #swingtrading #trading #money #buisness #401k #retirement #stocks #investing #technicalanalysis #elliottwave #finance #markets 


  • VIX low still higher than in July.
  • Both swing signals BEARISH.
  • Strong neg div on my model.

The market has definitely been weakening of late internally, despite rising prices. As of last Thursday both of my Swing Trading indicators have gone BEARISH, however the favorite would have flipped to BULLISH again today if not for developing weakness in the SPX.

HYG:IEF formed negative divergences across the board with its peak on 10/25. It has already rolled over losing all major moving averages along at the bottom Bollinger Band. After another go at a run higher, this ratio was just below support again. Today is the second day in a row of a gap higher with little intraday movement, testing the waters above resistance.

SPX daily hit All Time Highs Monday. Negative divergences remain across the board since at least March 2017, and countless Hindenburg Omens have occurred since this summer. Still feel its likely that the next top will be a SIGNIFICANT TOP. SPX hourly shows negative divergences back to late November for many indicators, therefore I am expecting SPX to turn lower soon.

My proprietary Technicals Model was higher for the 24th day in a row, with a positive divergence at 9/1's peak vs. SPX, foretelling of this bullish run. On 11/30 it fell just short of making a Technicals Thrust. The Cumulative version of the Technicals Model made a new All Time High 12/20. My statistically driven Volatility Model is retracting.

VIX finished lower, on a MACD BUY signal, with positive divergences across the board supporting higher VIX. VIX 15 minute chart shows positive divergences on all indicators at today's lows, therefore a short term uptrend in VIX is expected.

Market Internals, participation and breadth indicators were mixed today. Many of these are in positive territory, yet are well off peaks from earlier in the year. SPX A-D line made a new All Time High on 12/18, obviously above its 20 dma which is rising. SPX McClellan has been negative for the 4th day in a row.

While most talking heads are yammering about the downward trend in 10Y-2Y (The Yield Curve is flattening), my work dating back to 1990 using the slope of linear regression at all maturity levels shows since 2010 the yield curve has been rising (Bullish Economy) and is well off the levels that showed a recession in 2000 and 2007.

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