Thursday, December 13, 2018

#Sentiment Review $SPX

Sentiment
The old American idiom of a day late and dollar short is an phrase easily applied to majority's ability to time (buy or sell) US stocks. The majority, influenced more by instinctual behavioral tendency of the individual to seek acceptance of an emotionally-driven crowd than act independently in the minority, views rising and falling stocks prices as bullish and bearish. This tendency that drives them chase when probabilities favor fading relegates the majority as the consistent bagholders of history's panics and trend changes.

Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”, John Templeton

Subscriber Comments

After a big slide in stocks and zero gains for 2018, I doubt many will be listening to the bullish, contrarian message provide by the sentiment model. But here it is. Bull% = 29.9% (chart). This is the lowest readings since 2015 when stocks bottomed after a protracted decline that engulfed 2015-2016. This favors the sentiment model turning bullish in 2019. And, no, I doubt many of the talking heads would embrace this interpretation of the tape right now, so don't expect the public to be big buyers.

How close to a major bottom are we? WASo answers that. Line 55, Column G in Matrix for subscribers.

Chart


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

#NaturalGas Review $UNG

Natural Gas Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Natural gas's overall trend, revealed by trends of price, leverage, and time, are defined and discussed in the The Matrix for subscribers.

Subscriber Comments

One more comment on natural gas. A social media chartist described NG as a breakdown of the pennant formation that will likely test the 50 ma. You can follow whom you like, but I caution against using any interpretation based on technical action derived from lines with angles and moving averages. I know this disagrees with important TA books that swear by trendlines, flag formation, and other setups with angles, but I doubt these experts have come to see markets described by the Matrix. Trends are fractal and multi-dimensional. They are not solely defined by TA done on the daily time frame. NG obeys reversals defined by supply and demand zones that no human can create. Will NG's failed pennant formation test the 50 ma? Only if reversals fail - not because a line with angle was broken. NG trades very close to significant bearish reversals. If they fail, lower reversals, not moving average lines will be tested. If they hold, bullish reversals will be challenged.

I will also add that professional continue to accumulate UNG as price consolidates (chart). Unless this accumulation is reversed by a lower low, it favors a breakout to higher highs. It's better to watch and say nothing, than make bold prediction based on useless TA tools.

Chart


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

#Gold Review $GLD

Gold Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Gold's overall trend, revealed by trends of price, leverage, and time, are defined and discussed in the The Matrix for subscribers.

Subscriber Comments

Gold, a world class market, is still as poorly trade as bitcoin. Bulls are excited about gold's rally from recent lows; they cite fundamentals such as a lower dollar, or rising inflation without looking at the market's tape. Why bother, most gold investors only care about opinions that support their position. This is a common problem that most investor/traders face.

Is gold in a bullish phase? NO! The Matrix is pretty clear on that subject. I will also add that the internals of the tape define professional distribution even as price rallies from the lows (chart). Gold's pro index is tracing out a lower low and lower highs as price rallies from the short term bottom. This bearish divergence is a warning to the bulls. Be careful, our opinions don't matter. Few understand how to read the tape long enough to survive the investing game.

Chart


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

#Silver Review $SLV

Silver Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Silver's overall trend, revealed by trends of price, leverage, and time, defined and are discussed in The Matrix for subscribers.

Subscriber Comments

I saw a couple of 'bullish' comments on silver crossing the trading desk as the Matrix updated in the cloud. If you're bullish silver, I'd advise not acting too decisively until the Matrix sends a clearer message. Silver bullish DI cup (green) has yet to turn it. If the market can't turn soon, DI natural oscillation towards a bearish setup will make it vulnerable. Silver is closer to triple bearish alignment than bullish.

Silver's Public and Pro Indices, important tools that reveals who control the trend, suggest a price trend dominated by professional selling and lackluster public buying. Divergences against price, setups that can persist for weeks to months, are easily forgotten but highly reliable. The pro index's bearish divergence against price is warning of future weakness. Combine this with a bearish DI (leverage) or alignment, watch out!

Silver Public & Pro Indices


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.