An $SPX Sector Breakdown & Visual Of The Rubber-Band Effect

By Rob Hanna

Below are the nine S&P 500 sector ETFs and their performance for the 14 days heading into the December 24th market bottom, and then their performance for the 14 days since.

2019-01-16

As you can see, the sectors that were stretched the farthest to the downside have bounced the highest to the upside. The sectors that held up a little better during the selling have not had nearly the same bounce. This is typical of a market coming off a V-bottom. This does not mean the groups that have bounced the most to this point are the ones that are most capable of leading a new bull market. Those potential leaders are yet to be determined. It simply shows the rubber-band effect off the deeply oversold low.

Want research like this delivered directly to your inbox on a timely basis? Sign up for the Quantifiable Edges Email List.

Support 100% ad-free Biiwii.com by making a donation of your choice!

Or better yet, subscribe to NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas to get much more bang for your buck. Also keep up to date with actionable public content at NFTRH.com. Follow NFTRH & Biiwii via Twitter @BiiwiiNFTRH, StockTwits.

January Opex Week

By Rob Hanna

Opex week overall has typically been a bullish part of the month for the market. But over the last 20 years, January has been a major exception to this rule. The table below shows results of buying the Friday before options expiration week in January and then selling at the close of option expiration Friday, which is the 3rd Friday of the month.

2019-01-11-1

15 of the last 20 January opex weeks have closed down. And the average January opex week lost about 1%. The max run-up during the week was about 0.8%, while the average drawdown during the same period was about 3x that, at 2.2%. And the stats are all this poor despite last year posting the 2nd strongest up move on a January opex week over the 20-year sample. Here is a chart that shows how the edge has played out over time.

Continue reading January Opex Week

The Most Wonderful Week of the Year…2018 edition

By Rob Hanna

Over several time horizons op-ex week in December has been the most bullish week of the year for the SPX. The positive seasonality actually has persisted for up to 3 weeks. I’ve shown the study below in the blog many times since 2008. It looks back to 1984, which was the first year that SPX options traded. The table is updated again this year.

2018-12-14-1

The stats are extremely strong. This year I also decided to throw in the 5-day equity curve.

Continue reading The Most Wonderful Week of the Year…2018 edition

How Low Could the S&P 500 Go?

By NFTRH

Our target for the first half of 2019 is and has been the 2100 to 2200 area for the S&P 500. A friend asked…

I’ve been meaning to ask (and possibly) know the answer, 2100-2200 for H1 2019 is your ultimate bear market target or opening act?

Opening act. It could be the ultimate target because there is a lot of support at that area and a good solid bear phase could put the Fed on ice and impose some changes to Donald Trump’s bull in a China shop policy style.

So for now I see no reason to make dire proclamations beyond that key support level, as so much will depend on incoming information in 2019. At this point, even 2100-2200 is not technically in the bag because the US stock market clung to last ditch daily chart support, as per the marginally favored short-term NFTRH view. So all of we bear callers need to remember that as ugly as the charts are, support is not broken until it is… broken.

I was going to cover this in NFTRH 530‘s Opening Notes segment, but why not make it a public post and save NFTRH’s virtual ink for more immediate issues going on with the markets? Before we dial out to a couple of simple SPX charts showing the prospective downside targets, lets review the situation with a less than simple chart.

Continue reading How Low Could the S&P 500 Go?

When SPX Closes Higher on Bad Breadth

By Rob Hanna

While the SPX closes higher on Tuesday, NYSE breadth was weak – both from an % Up Issues and % Up Volume standpoint. This triggered the study below from the Quantifinder. I also discussed it in last night’s subscriber letter.

2018-11-28-1

Here we see numbers suggesting a substantial bearish edge over the next 1-4 days. Below is the full list of instances and their 4-day returns.

Continue reading When SPX Closes Higher on Bad Breadth

A New NFTRH Segment: Opening Notes – US Stock Market

By NFTRH

I decided a couple weeks ago add a regular segment where I just talk about some things I think I know about a given market or situation based on the previous week’s activity. This is before I get myself educated on the latest market data and information. I need the weekly work I do in NFTRH as much as anyone. Without it, I can be rudderless and prone to my own biases.

This is just one small, less mission-critical aspect of NFTRH (representing 2 of 52 on-point pages across the markets) and the funny thing is, I think it stands up to much of the premium stuff out there in its entirety for any given week. But then, I am biased and as such I think NFTRH is better than any other market report or newsletter that I know of out there.

So here’s what I thought I knew about the stock market before beginning NFTRH 523

Continue reading A New NFTRH Segment: Opening Notes – US Stock Market

A Look At How Fridays Create The Most Reliable Bounces

By Rob Hanna

Friday is generally not terribly reliable in being a day where the market bounces from a low. It is one of the least popular days for this to occur (along with Wednesday). But a potential positive about a Friday bounce is that when they do occur, they tend to be the most reliable moving forward. The below tables look at performance following a bounce from a 50-day low. The 1st table looks at performance 1 day later, and the 2nd table looks at performance 5 days later.

2018-10-14-1

Continue reading A Look At How Fridays Create The Most Reliable Bounces

Back to Back 50-day Lows and Extremely Low RSI(2) Readings

By Rob Hanna

Strongly oversold markets often contain a short-term upside edge. Of course oversold can always become more oversold. Wednesday took the SPX down to a 50-day closing low. Additionally, many short-term price oscillators, like the RSI(2) showed extremely low readings. Further selling on Thursday meant another 50-day low and even lower readings.

The study below appeared in the Quantifinder on Thursday afternoon. It looked at other times the SPX posted back-to-back 50-day lows and extremely low RSI(2) readings.Instances are a little lower than I typically like, but the numbers are incredibly bullish and seem worth noting. I am seeing several studies right now all suggesting a bounce is highly likely in the next few days. This study is just one such example.

Want research like this delivered directly to your inbox on a timely basis? Sign up for the Quantifiable Edges Email List.

Support 100% ad-free Biiwii.com by making a donation of your choice!

Or better yet, subscribe to NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas to get even more bang for your buck. You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar. Or follow via Twitter @BiiwiiNFTRH, StockTwits or RSS. Also check out the quality market writers at Biiwii.com.

SPX Near Monthly Highs While RUT Near Monthly Lows

By Rob Hanna

I have spoken a fair amount lately about the “split” market, and how that has historically been followed by declines. But not all kinds of splits are bad. Wednesday we saw the SPX rise while the RUT closed lower. That is not unusual on a 1-day basis. But it has now been several weeks in which they have been heading in opposite directions. RUT closed in the bottom 25% of its 20-day range on Wednesday while SPX closed in the top 25% of its 20-day range. The study below looks at other times where this occurred.

2018-09-20-1

Continue reading SPX Near Monthly Highs While RUT Near Monthly Lows

S&P 500 vs. Fund Flows – Divergence

By Callum Thomas

A curious divergence has opened up between the level of the S&P500 and the cumulative level of fund flows into US equity funds (mutual funds and ETFs).  The last time in recent history that we saw a similar type of divergence was in the wake of the 2015/16 twin corrections where fund flows tapered off and then after the election it was game on.  So the open question is whether this divergence in flows vs price will be followed by a similar type of ‘onwards and upwards’.  The counter argument might be that this is actually smart money flows… and a second correction is imminent.  Either way, it’s clear that investors are *not* throwing caution to the wind.

Continue reading S&P 500 vs. Fund Flows – Divergence

Control Top

By Tim Knight

Before I get started, I wanted to mention that I just received the full-color version of Silicon Valley Babble On, and it is just gorgeous. If you’re one of the well-to-do Slopers out there, you might want to spring for this luxury item, because it looks absolutely fantastic. It’s not cheap at 79.95, but here’s a link if you’re interested.

Now I’d like to share with you three charts of the S&P 500 cash index. I have deliberately left off the axis labels, so you’ll know neither the times nor the prices.

Continue reading Control Top