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Friday December 29th, 2017

Summary

New ATH before open then a plunge.

Could be the vacuum underneath is opening as talked about.

May want to say clear of VIX Calls first thing.

Thus ends trading for 2017. Thank You for your comments, thoughts and donations!! Also Thank You for putting up with my failed health and understanding of missing a few posts here and there. I hope 2017 was a great year for you, and wish you the best for 2018!!

My complete blog post at http://navigatethemarketsto... is open to the public each weekend. If you like the post, you can sign up for a FREE subscription to view this analysis daily at the bottom my blog post! To concentrate my efforts on my development, posting to this blog will only be done twice weekly, each Wednesday and for the Weekend.

The market has definitely been weakening of late internally, despite rising prices. As of last 12/14 both of my Swing Trading indicators have gone BEARISH, however the favorite signal would have flipped to BULLISH several times in the 3rd week of December if not for developing weakness in the SPX prices.

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. It remains right at support, watch closely here!

SPX daily hit All Time Highs during pre-trading hours today before falling sharply during the day. 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. At the All Time Highs, SPX hourly shows negative divergences back to late November for many indicators, therefore I am expecting SPX to turn lower soon, which may have just begun.

My proprietary Technicals Model was higher for the 30th 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 12/27. My statistically driven Volatility Model is about as low as it has ever been since the data goes back to 1990!! Big move upcoming (been saying this for days now)?

VIX finished much higher, on a MACD BUY signal. No negative divergences on the hourly chart at today's highs so the bigger picture VIX should trend higher. However strong negative divergences formed across the board on the 15-min chart at today's highs, meaning a pullback, possibly sharp, may occur in the very short term.

Market Internals, participation and breadth indicators, were negative 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 12/28, obviously above its 20 dma which is rising. SPX McClellan has been negative for the 6th of the past 7 day in a row.

Economically, while most talking heads are yammering about the downward trend in 10Y-2Y (The Yield Curve is flattening to 2007 levels), 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. In fact, rising to these levels, matches up well with 2005, 1997 and 1995. Not bad years for stocks, eh?