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Social networking stocks have been exceptionally strong however there are signs of social anxiety with weakness in Twitter and Facebook which make up 25% of the SOCL Social Network ETF.  TWTR, FB, and SOCL all have upside DeMark exhaustion signals and should reverse lower.  The NDX has been the strongest index in the US (with FB being a top 5 attribute) and the index is on day 10 of 13 with the latest upside Countdown.  FANG and FAANG custom indexes today have triggered upside red Sequential 13's exhaustion signals.  In the past, these custom indexes have worked well with the DeMark indicators.  Coincidentally Jim Cramer is on CNBC hyping FANG stocks with "Don't Fight The FANG" today.  It reminds me of back in September 2007, when Jim Cramer's "Four Horsemen of Tech" were just great companies that were buys despite the market jitters.  All four of them dropped on average 55% in the next 18 months.  I would not rule out the FANGS to drop 30% or more.

The big event this week is Friday's bank stock earnings and a friend who is a smart financials trader Phil Dauber said on his note today:

• Financials earnings start this week. Group underperforming on relative and absolute bases this yr on curve concerns. Play is to be long into the first wave of #s and sell the rally. In-line should get a pop, assuming no neg guidance/change outlook. Second wave of reportings dicier, since much of the 'reaction' will have played out with first #s. Watch for lateral moves---does the good or bad # impact lot of peers or stay kinda isolated? Expect small cap banks to have less upside, since fundamentals ( NIM) are more important and more problematic; additionally, this cohort has been outperforming.  (by the way, Phil is a free agent and I think would make a great pick up at a sellside or buyside firm.... let me know if you want to connect)

• US Markets - Sentiment increasing again near recent highs
  
• Hedge Fund Telemetry Trade Ideas - No changes
  
• Yesterday's winners are today's losers.  Recall my note yesterday "Bottom Feeders"
  
• FANG's and Social Anxiety
  
• Consumer Discretionary and Energy - Getting closer to another upside exhaustion signal
  
• Japan and India
  
• Gold Update - Needs to continue the up move pronto
  
• Pepsi or Coke - Both worked well on the long side for us
  
• LULU - About to do a downward dog
  
• Seagate Technology - Could be a short idea soon
  
• Bond Update - Positioning continues to be MEGA SHORT and a short squeeze could help our long bond trade
  
• DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 1500 and Euro Stoxx 600 - SEEING A LOT OF UPSIDE EXHAUSTION 13'S IN THE US
  

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 67% and inching back to the recent high at 76%

SPX Index is now knocking on 2800 in which there will be many calls for a breakout.  The current count on the green Setup is on day 7 of 9 and this should complete baring any dip under 2750 in the coming two days.  At this point I am expecting this to stall.  There is a potential upside DeMark Trend Factor target at 2838 as an alternate scenario.

SPX weekly shows the sideways chop.  If a new upside closing price occurs then the current wave sequence will revert back to wave 5.  If this breaks under 2594 then the 2412 wave 3 price objective will come very much into play

SPX Commitment of Traders report from last week showed a large drop in bullish positioning.  

Nasdaq bullish sentiment is at 65%

QQQ is on day 11 of 13 with the recent upside Countdown.  

Dow continues sideways and is on day 7 of 9 with a green Setup 9 count.  This still seems like a sideways market.  

IWM Russell 2000 has been strong until today and has not make a new closing high

Trade Ideas -

FAANG FB, AAPL, AMZN, NFLX, GOOGL has made a new upside red Sequential 13 exhaustion.  

FANG the original ex AAPL also has a red 13 - and has made a lower high

FANG + Index had upside exhaustion in June and might be making a new lower high

SOCL Social Media ETF weekly has also made a lower high with a 20% downside wave 3 price objective lower

FDN Internet ETF also has a red 13 Sequential upside exhaution

FB has another upside exhaustion in play.  

GOOGL has a choppy chart too.  If a new upside closing high happens then the wave count will revert back to wave 5.  A break of 1100 will likely open up further downside

AMZN is on day 11 of 13 with its latest upside Countdown

Yesterday's note was titled "Bottom Feeders" as the recent weakest sectors bounced strong but today they are among the largest losers today.  Transports stopped at the 50 day.

KRE Regional Banks also stopped at the 50 day and failed

XLF Financials ditto

XLY Consumer Discretionary has a secondary upside Countdown on day 8 of 13

Energy is on day 11 of 13 with its Countdown

Nikkei was up but closed on the low of the day.  I would get constructive IF this can clear the 50 day to the upside

Nifty 50 is making a drift like move up and could reach the wave 5 upside price objective at 11,120

Gold bullish sentiment is at 24% and needs to push higher in order not to fail again

Gold positioning for speculators ticked up a little and this positioning sets up for a long trade.  

Gold Futures must get over 1261 pronto

Pepsi is up 4% today after earnings and I'm regretting not being long.  Even though the 13-13 long trade worked well my view was to buy the wave 2 dip (which was 1 day).  Now there is an upside wave 3 price objective at 117.84

KO is one I stayed long and is now up 7.5% from the 6/14 entry.  At the time I said Warren Buffett would make 10% in KO rather than another 10% in AAPL.  AAPL is flat...

Lululemon on a daily is on day 11 of 13.  This has ignored several other daily upside exhaustion signals in the past 6 months but the next one might work because...

The weekly has an upside red 13 exhaustion and the last 2 times the drop was 30% each

STX was a short idea back in April when I shorted it on the 12 of 13 and it dropped on earnings.  Now we have the 13 and this might be one I'm going to add as a short idea on the Trade Ideas Sheet

Bond bullish sentiment is at 72% and stalling

US 10 Year Yield still has a downside red Countdown on day 9 of 13

Speculators are set up VERY VERY short the 10 year and that could spark a real short squeeze.  

TLT ETF still a long idea

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