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The author Tom Wolfe passed away yesterday.  He was one of my favorite authors known best for Bonfire of the Vanities the classic book and film depicting a Wall Street bond salesman who had all the qualities of the 80's bond salesman.  The "Master of the Universe" ambitious, greedy, and unethical character he created is someone I've met a thousand times in my career.  His characters were outwardly ambitious but also they often suffered from feelings of extreme inadequacy or hugely inflated egos, sometimes alternating between both.  This type of Tom Wolfe character reminds me of Elon Musk.  Some call him a genius, a world changer and some call him a charlatan who can't keep a promise, or run a profitable business who is running a ponzi scheme.  Right now Elon is at the precarious position and on the brink.  He's bet everything on his Model 3, rushing it out to consumers ahead of proper testing, while taking in huge amounts of customer deposits to fund his ambitious goals as his balance sheet continues to be weighed down with huge debts.  This is the moment of truth if he can pull off his grand plans or if it all blows up.  

Tesla stock is down today back to where it was after Elon's disastrous earnings conference call.  There is a daily downside DeMark exhaustion while the risk level is set down at 233.  Tom Wolfe could have had a field day with this story.  All we can do is watch and see if this stock which is the epitome of the easy money QE period can avoid falling down to earth.  

I'm watching VWAP from the 8/4 US Employment report as support levels:  E Minis 2690, SPY 269.10, QQQ 167.10, IWM 158.25, DIA 246.00.  A break of these levels will bring out further selling pressure as it would trap traders who have been buying of late.  

Notable:

• US Markets - Sentiment stalling.  Risk of losing upside green Setup counts
  
• Hedge Fund Telemetry Trade Ideas
  
• European Markets - Stalling
  
• Currencies - Update
  
• Asian Markets - Nikkei on day 12 of 13 with upside Countdown
  
• Citi Economic Surprise Index - US and Eurozone more downside likely
  
• German and US 10 Year Yields - Moving up
  
• Everyone is "All In" - Add Harvard to the list
  
• Consumer Staples - Bottoming
  
• PPG New Long Idea
  
• Tesla - Downside exhaustion today and on the brink
  
• DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600
  

Here's a link to the Hedge Fund Telemetry market sentiment page with 40 charts of sentiment including equities, bonds, currencies, and commodities updated each day.   

SPX bullish sentiment is at 53% down from 57% the previous day

SPY is at risk of losing the green upside Setup and thus the red Countdown on the downside will remain.  Watch the VWAP level at 269 and the 50 day at 267.43

Nasdaq bullish sentiment is at  51% down from 53% the previous day

QQQ did lose the upside green Setup that was in progress as it is trading below 4 previous closes.  

The Dow could lose the upside green Setup tomorrow or if we drip a little lower today

IWM Russell faded hard yesterday and kept the wave 2/B since it did not close at a new high.  It has to stay over 158.68 today and close above 159.53 tomorrow to complete the upside green Setup 9

Trade Ideas - Making back some of the recent drawdown.   Today I added PPG and PG with 2.5% long positions.  Covered LULU with a small gain and was stopped out of MU with a 9.95% loss.

German DAX is trading below four previous closes.  Stall or fall?

Euro Stoxx 50 is stalling too as expected with the recent green Setup 9 and has an upside Countdown on day 9 of 13 still pending

US Dollar bullish sentiment is at 85% still in the extreme zone.  I had hoped for more of a pullback

DXY US Dollar pulled back but not enough to get the Wave 4 so it remains in Wave 3 for now.  It's on day 5 of 13 with an upside Countdown

Same story with the Euro as it's on day 5 of 13 with a downside Countdown

Gold sentiment is at 18% and certainly will be lower later today.  I said the other day I expected this under 10%

I gave Gold as a small long a shot recent and stopped out with a ~1% loss as I didn't like the setup with sentiment wasn't overdone and fading.  I'm glad I did as this now has a red Countdown on day 2 of 13.  

Nikkei is on day 12 of 13 with its upside Countdown.  It should trigger in the next day or two.  As you see the record of the indicator having success is pretty good

The weekly chart of the US still shows more potential downside  

The Eurozone looks oversold but it's on week 6 of 13 with a red downside Countdown.  

German 10 Year Yield is on day 5 of 13 and is nearly above the April highs

The US 10 Year YIeld is above the April highs and is on day 6 of 13 with its upside Countdown

Add Harvard to the list of investors that are now "All In" in the big mega cap tech names.  This isn't bullish as these are becoming very very crowded

XLP Consumer Staples ETF finally got the downside 13 exhaustion today.  When the last exhaustion triggered it was in the third wave down and I have said many times, be very careful with exhaustion signals in wave 3 as wave 4 is a shallow bounce followed by the fifth and final wave.  

The monthly ratio between XLP and SPX shows it on month 12 of 13 with the red Sequential Countdown with the Combo it triggered this month.  This is what you see at bottoms especially when the SPX is barely off the highs.  

PG made another downside exhaustion and has started to turn.  I like this on the long side

Clorox also looks like a washed out long idea as it has a downside exhaustion today in the fifth wave.  

PPG has a downside exhaustion and seems washed out.  I like it long

TSLA has a downside exhaustion signal today as support.  The risk level is at 223 so there is some room if this signal fails.  I am staying short for now

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