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The Nafta renegotiation with Mexico and Canada is now a positive catalyst that is complete.  As much as I agree with modifications with a trade agreement from 1994 was necessary for refinements, the changes are not that significant.  As I've mentioned in the past, the markets have not discounted any negatives with tariff's but has celebrated any positive announcements even if the positives are not significant to earnings.  We have our bounce today and now it's been started to fade seen with internals like breadth opening strong but has now turned negative to flat.  The indexes remain strong as the most recent sectors that have been strong continue to be bought while the weaker sectors are sold.  Notably the Russell 2000 is nearly at a 6 week low.  Large financials and regional banks continue to weaken.  Even retail is flat and has been showing signs of weakness.  The market continues to chase green with speculative stocks and mega caps.

Tesla and Elon Musk settled with the SEC on his "funding secured" tweet.  Some people think the SEC went too light on him but the settlement he was offered but turned down was more lenient than what was settled upon.  Today's bounce has faded all day from the gap up and that is tell that large holders are selling vs shorts adding.  The SEC investigation was never a part of the short thesis (pre Tweet) and all of the negatives remain. 

As far as the markets, I have said for weeks that nominal new highs are possible with the recent upside daily DeMark Countdowns.  Upside Countdowns are near with energy, consumer discretionary and technology.  This has a been a very powerful late stage move but cracks are showing with breadth indicators, new highs/lows, percentage of stocks above various moving averages that are not confirming and continue lower.  I continue to manage risk tight and when wrong stop out and redeploy.  This is a concerning market that could face risks with low liquidity, low cash levels, low short interest.  Buy back activity has been strong although now on hold ahead of earnings while insiders have been selling stock at the highest levels of 2018. My big theme for October is the risk of earnings being guided down for the future and there have been several recent examples have seen substantial lower moves.  Stay nimble, use tight stops, and have a decent percentage of cash to deploy lower.  I may seem stubborn but I saw a similar setup last January too ahead of a quick 10% move lower.  

• US Markets -  Sentiment divergent, Nasdaq Summation Index, still a little more upside possible
  
• Hedge Fund Telemetry Trade Ideas - VOD, BA, GDX
  
• Retail is "All in" while insiders are selling to them
  
• Tesla Update - What a saga
  
• Sectors I'm watching today
  
• Microsoft Monthly
  
• PPO Monitor - Percentage Price Oscillator Force Ranked Sector Rotation
  
• Bloomberg Technical Pattern Recognition Screen
  
• Currency Update -
  
• European Market Update -
  
• Global Market Update -
  
• Asian Market Update -
  
• Crude Update -
  
• Gold Update -
  
• Bond Update  -
  
• DeMark Screens - Daily, Weekly, Monthly upside/downside exhaustion signals within the S&P 500 and Euro Stoxx 600 September Monthly data updated
  

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.  When the new website launches we will be adding new charts and historical sentiment data for Euro Stoxx 50, UK FTSE 100, German DAX, French Cac 40.  We will be adding Japanese Bonds, German Bunds, and a few more.  
SPX bullish sentiment is at 63% divergent from index price

SPX daily getting late on the recent call that nominal new highs were possible

S&P 100 on day 11 of 13 and getting late too

Expectations for earnings continue to be very high.  The theme of lowered guidance and missing expectations could see a real move lower

SPY vs TLT ratio on day 10 of 13 with an upside Countdown.  The recent signals only say slight slowdown.  Now it's nearing the wave 5 price objective

Nasdaq bullish sentiment is at 75% and divergent from index price action

NDX Index on day 9 of 13

Nasdaq Summation Index last week dropped and nearly is under zero.  This is a big divergence.  

IWM Russell 2000 at a 6 week low

Trade Ideas Sheet - Long and short US equity ideas including ETF's.  We will be overhauling the Trade Ideas Sheets for long only, short only, ETF's when the new website rolls out soon.  There will also be a clearer email distribution with changes.  
Trade Ideas Changes:  Stopped friday on GDX and VOD long (small gains).  Stopped today on BA
Stops on everything.  TSLA 320, , FEYE 16.00, FXI 41.95, NVDA 295 (raised stop),  QQQ 187.50 (raised stop), XLK 77, SPY 295, XLY 118, AXP 114,  WHR 120, XRT 53, IWM 172, XLV 95, BRK/B 225, DIA 275, XLI 81.50, IBB 123, AMD 35, ROST 100.50

Schwab cash balances are record lows

Insiders are selling aggressively

This stock has never been for the faint of heart.  I still see lower levels but remain with a stop of 320 to lock in a gain if it gets there

FAANG Custom Index still below August high (closing) and could have a green Setup 9 which has been pretty good at inflection points

XLK late in the move but could move a little more.

Transports still below recent highs

XLV nearly with another upside Countdown 13.  Seasonality gets tougher so we'll see if this can pullback in the coming days

XOP Energy late in the move

MSFT monthly shows the parabolic move and I simply can't and won't chase this.  If you're long congrats and don't get greedy

The PPO Monitor is a proprietary monitor developed to force rank Indexes, Sectors, and Stocks.  It ranks top down by strongest to weakest by percentage above/below the 50 day moving average.  Shorter term signals can be seen when the 10 and 20 day moving averages turn up (green) or down (red) which often are followed by the 50 day moving average.  This is useful to watch for historically overbought/oversold percentage above/below the 50 day moving average.  It is non correlated with the DeMark Indicators however we have found upside/downside exhaustion signals often occur when something rises to the top or drifts to the bottom of the monitor - increasing the timing aspect. We share this monitor with clients with Bloomberg Terminals.  An added feature is that each market/ETF can be expanded with each component force ranked in the same way.  A couple other features include price deviation from intraday VWAP (useful for intraday reversals) and new 20 day highs/lows on right side.  Please inquire if you would like to be permissioned to use the PPO Monitor.  

Today's highlights:  The recent stronger sectors continue to be bought and bottom weaker getting sold.  A lot are below the VWAP intraday too

S&P 500 Members/Absolute Price Performance and Relative Price Performance vs S&P 500 and Sector ETF's.  ETF's vs Index Sectors.  Pair Trades.  Long side  is first symbol, short side is second symbol.  

US Dollar bullish sentiment is at 40% and bouncing off recent low of 11%

US Dollar Index

Euro bullish sentiment is at 47%

Euro Spot

British Pound needs to bounce here

Canadian Dollar

Euro Stoxx 50 above 3450  gets interesting

German DAX similar to Euro Stoxx 50

Italy still looks very weak

Italian 10 year has upside potential to 4.05%

Big drop in Korean exports and this has been an early warning when it drops under 0

India Nifty 50

EEM Emerging Markets ETF stuck here and with China closed all week don't expect much

Brazil is trying to bottom but I do not have conviction to buy yet

Nikkei bullish sentiment is at 92% and is very extreme.  

Nikkei with some upside exhaustion signals

China / Hong Kong FXI ETF should not move much with China closed for the week

Crude bullish sentiment is at 94% and is very extreme

WTI Crude Futures getting late in the move but I still have a bullish bias.  Entry here not advised

Bloomberg Energy Index has some upside exhaustion signals

Gold bullish sentiment is at 18%

Gold drifting

GDX was stopped out with a very tight stop.  I'm still biased long here but want to see more work done on the upside

Bond bullish sentiment is at 58%

US 10 Year Yield

US 30 Year Yield

TLT on day 10 of 13

IEF on day 11 of 13

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