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6/12/18
Thomas Thornton

Drift Off!

Today's equity market action is similar to recent days which feels like a combination of a drift higher but a lift off too.  It is not unexpected as I've been discussing and showing the later stages of DeMark Countdowns on nearly all of the US indexes.  The mega cap tech and consumer stocks continue to dominate and the recent Tesla short squeeze stopped me out.  That's the first loss shorting Tesla in five trades in the past year. Sticking  to disciplined sizing and hard stops keeps me in the game.  Just remember when shorts have covered any gap down will be like a vacuum lower absent the natural buyer.  I'll be back again soon with that one since the fundamental story is so atrocious. 

Bullish sentiment for the S&P is at 76% and has been a level where there have been some tops.  My estimation is that bullish sentiment will move into the 80% extreme level again.  

On the bottom of each Daily Note is the DeMark screens of upside and downside exhaustion signals and another sign that things are getting closer to a top is the increase in individual upside 13's on a daily time frame. 

Lastly, Paul Tudor Jones was on CNBC today and he said he could see higher yields and higher stock prices later in the year and that is the sound bite however he also said his exposure was very very low and that to me is a more telling sign.  I wished him well for his appearance today and he said he just didn't want to drop the pass!  He did a nice job and his new ETF JUST starts trading tomorrow. 

Notable:

  • US Markets - Sentiment continues in the elevated zone and should move to the extreme soon
  • Hedge Fund Telemetry Trade Ideas - stopped out of TSLA -10% and covered CAT +2%
  • Currencies - Setup 9's make or break time
  • Germany and Euro Banks
  • Vanguard Total World Market - Nearly exhausted
  • Some Major US Sectors - Just so you know the end is nearing
  • Gold Update
  • Tesla
  • Exxon
  • Bond Update -  
  • DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600 - SEEING A LOT MORE UPSIDE EXHAUSTION SIGNALS IN US

US Markets


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  76%


Weekly SPX has both an upside green Setup 9 and red Countdown exhaustion 13.  From 2016-2017 each exhaustion signal saw a short lived stalling with nominal downside.  This one might be a little different since it is occurring below the January high.


SPY daily did get the upside pink Combo exhaustion 13 and is on day 11 of 13 with the red Sequential Countdown


Nasdaq bullish sentiment is at 74%


QQQ is on day 3 of 13 with an upside Countdown and that has the possibility of getting wild if the overall indexes do not contain things.  


NYFANG Index on a daily time frame has both pink Combo and red Sequential upside exhaustion signals.   A price reaction is due within days


This is great news... for FANG insiders.


IWM Russell 2000 is on day 11 of 13 now and keep in mind the weekly triggered a week ago too


Dow Jones is on day 8 of 13 with an upside Countdown

 
Hedge Fund Telemetry Trade Ideas


Trade Ideas - Stopped on TSLA and Covered CAT.  Sticking with some of the shorts waiting for the index exhaustion signals to trigger.   I love that I started tracking this PNL on the low day of April.  Those that know what I was doing for Q1 know I was up nicely.  Oh well

 
Germany and Euro Banks


German 10 Year Yields continue to rise as a sign of risk on in Europe


DAX is on day 6 of 13 yet this opened up and faded during the day.  


European Banks still look dangerous

 
Currencies


US Dollar Index is at 73% and down from the recent peak of 94%


DXY US Dollar Index has a green Setup 9 so tomorrow will be very important to see if a new red Countdown starts on the downside or if there is a bounce


Euro bullish sentiment is at 27%


Euro spot same as USD - green Setup 9


British Pound bounce has stalled.  

 
Asian Markets


Nikkei bullish sentiment is at 80% and back in the extreme zone


Nikkei Index is on day 7 of 9 with an upside green Setup

 
Vanguard Total Stock Market


This ETF is the world and its on day 12 of 13 with a red Sequential upside Countdown and also had a pink Combo too.  This should reverse down in the coming days

 
Some Major US Sectors


Consumer Discretionary is on day 10 of 13 with red Sequential Countdown and also had a pink Combo too.  


Consumer Staples had a downside exhaustion in May and has now turned up.  I like this group on the long side


Healthcare has bounced but now has a green Setup on day 8 of 9.  I like HC but think a pullback to buy is worth waiting for


Financials bounced after the downside exhaustion 13 and I covered most of the short exposure in the sector with nice gains.  It seems to be stalling again and may make another lower high.  Not a great sign to see financials which is a huge part of the S&P well off January highs


Industrials is on day 10 of 13 with its Countdown.  


Tech is also on day 10 of 13 too


This weekly of XLK Tech ETF shows a green Setup 9 on the price and on the RSI below.  Note the RSI has not confirmed the strength.  Lower highs


Materials also on day 10 of 13

 
Gold Update


Gold bullish sentiment is at 17% and still chopping around under 25%


Gold futures still has a downside Countdown and I have no interest in buying this or shorting it for that matter

 
Tesla Update


I grabbed this chart of TSLA earlier and it is now over 350.  I am now stopped out and will look for another opportunity.  

 
Exxon


XOM has an upside Countdown 13 and the last one seemed to work out OK.  

 
Bonds


Bond bullish sentiment is at 45%


TLT Bond ETF is just stuck here today without much movement

 
DEMARK SCREENS - Daily, Weekly, Monthly Upside/Downside Exhaustion Signals

Daily/Weekly DeMark upside/downside exhaustion signals (Sequential) weekly updated on Monday's and monthly on the first day of the new month.  Price flips occur when a stock closes higher/lower than four previous closes and increases conviction of a price turn.

The upside 13's are sell signals and downside 13's are buy signals.  Price flip's are confirmation signals that increases potential for a price trend change. For example, if you are long a stock and there is an upside 13, you will want to take cautious action by selling down or out of a position.  If initiating a short sale with the upside 13's, we tend to start with a 1/2 size and add with the downside price flip.  The opposite is true for when there are downside 13's.  Take a 1/2 size position and add with the upside price flip.  The DeMark Indicators are designed to assist the user with buying into weakness and selling into strength to anticipate trend exhaustion. Selling into a rally and buying into a decline often afford the opportunity to exit a trade without too serious a loss if wrong.

S&P 1500 Universe:
DAILY UPSIDE 13:   AET, EPR, HRB, LYV, NNN, OII, PSA, RHI, TDS, VICR, WCG, WRB, XOM, AMSF, DPS, FB, FOSL, JNPR, MATX, MNRO, MRK, OSIS, PACW, SIG, SSD, THC
DAILY DOWNSIDE 13:   NONE

DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN:   ALGN, BJRI, BTU, CPLA, CTXS, CVLT, ERA, ETFC, EWBC, FCFS, FOR, MLI, NSP, RHT, RUTH, TXN
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP:   BMS, GIS

Updated: 6/11/18
WEEKLY UPSIDE 13:   ABT, AKAM, AMGN, KMPR, RMD, SYK
WEEKLY DOWNSIDE 13:   NONE

Updated: 6/4/18
MONTHLY UPSIDE 13:    BJRI, IDA, NSP, PFS, PVH, SCSC, SYY, TSCO, VDSI, VLO
MONTHLY DOWNSIDE 13:     CLW, LQDT

Euro Stoxx 600 Universe:

DAILY UPSIDE 13:   CHR DC, INF LN, SOBI SS
DAILY DOWNSIDE 13:  LHA GR, SGO FP

DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN:   BRBY LN, GTO NA, POM FP
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP:   BATS LN, CNHI IM

Updated: 6/11/18
WEEKLY UPSIDE 13:  EKTAB SS, HLMA LN
WEEKLY DOWNSIDE 13: HMB SS, MAP SM

Updated: 6/4/18
MONTHLY UPSIDE 13:     ADS GR, AMEAS FH, AV/ LN, BVS LN, DG FP, HELN SW, HLMA LN, ITRK LN, LEG GR, NESTE FH
MONTHLY DOWNSIDE 13:  NONE




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