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03/28/2024
Thomas Thornton

Today had a little of everything for everybody


Today started the day with equity futures up, but then the most watched CPI inflation number I can remember came in very hot while retail sales missed.  It was a very fast risk off moment with equity futures reversing to down 1%, gold whipped, while yields didn't move up that much at first.  The takeaway is the market we now have shows people's trigger fingers are very quick and impulsive.  As it turned out, yields continue to lift but so did stocks and the US indexes have gained over 1% today.  Remember last week when there was the narrative of higher rates were bad for stocks?  Neither do I since it was so long ago.  I still see a further upside with the US equity markets from Friday's low but I do believe there will be lower high ahead.  Stay nimble with the quick trigger fingers out there.

As you saw from an earlier email, we are doing a "State Of The Markets" webinar tomorrow at 10:30 am EST.  If you didn't sign up yet follow the link below to register:
https://attendee.gotowebinar.com/register/1477115095828018945

After registering, you will receive a confirmation email containing information about joining the webinar.   And if you can't make the time, there will be a replay link sent out tomorrow.  If you have any questions or things you want me to look at, please email me at info@hedgefundtelemetry.com.  If you have any friends, colleagues, or want to post the link on Twitter or LinkedIn to invite people, please do as it's an open webinar.

Notable:

  • Running Hot - Economist Cover alert
  • US Markets
  • European Markets
  • Asian Markets
  • Gold
  • Bonds

Running Hot

My friend Peter Atwater posted this Tweet today after the CPI inflation number came in hot today.  Economist Covers are legendary for calling tops and bottoms.  Peter writes Financial Insyghts and is one of the more thoughtful people you could follow on Twitter.  I also recommend subscribing to his newsletter.  His work on market behavior is second to none.  He's also one of the nice guys.  

 
US Markets


SPX bullish sentiment increased to 29% and up from 9% last Thursday's low.  My expectation is for sentiment to make a lower high, perhaps at 50%

 


SPX daily continues the bounce from Friday, despite a higher inflation number.  I've been comfortable playing this bounce from the recent downside DeMark green Setup 9 but how much longer will it last?  My call is a lower high is in our future

 


When you get volatility it's sometime necessary to look at shorter term time frames.  This 30 minute chart nearly hit the downside wave 5 target at 2506 and now is on wave 3 of 5 on the upside.

 


QQQ back over the 50 day due to the FANGS only dropping and holding the 50 day.  

 


INDU Dow Jones another one that bounced with the downside green Setup 9.  I'll have more tomorrow of what I expect and go into more of what Tom DeMark was talking about last Friday when he called "a bottom"

 
European Markets


European markets concern me and have for many months as they haven't traded like other global indexes.  They broke down and many indexes had downside green Setup 9's like the US but remember red Countdowns only can start after the green Setups thus these after a little stability should continue lower.  

 


UK FTSE 100 had a nice upside exhaustion red Countdown 13 and also couldn't bounce with the green Setup 9 and started a downside Countdown on day 4 of 13.

 


Everyone is watching currencies and the weekly chart of the Euro is on week 8/9 of a green Setup and red Sequential 12/13.  Perhaps next week.
  

 


This is the same chart but going back to 2007 and as you see the 9's and 13's have been pretty good at inflection points.  

 
Asian Markets


The Yen continues to rise (inverted) and that's not the plan of Japan's Kuroda and Abe.  

 
 
The Nikkei continues to drip lower due to the stronger Yen.  


The 30 minute chart of the Yen is getting extended on a shorter period and could strengthen in the next day  

 


Nikkei bullish sentiment is at 20% dowm from a recent high in January of 93%

 


Yen bullish sentiment is at 72% and hasn't moved in lock step as price.  A move over 90% is possible and I'd fade the Yen there

 
Gold Update


Gold bullish sentiment is at 73% and has done a decent job spotting highs when over 90%.  Since it held the recent lows at 60% the bullish sentiment stayed in the majority despite the pullback

 
 


Gold futures as I mentioned in the past couple daily notes, had to hold the 50 day and the bounce off the green Setup 9 worked well.  I sold my long on the last run up and don't have a position but if long set a stop under the 50 day.  

 


A little for everyone today in Gold with one of the largest swings in a short period of time gave shorts and longs an opportunity.  60 minute chart

 
Bonds
 

A hot CPI sent yields higher which was not unexpected.   I don't have any reading on the 10 year yield with the DeMark indicators.  It's drifted higher after breaking out above the risk level at 2.56.

 


Bond bullish sentiment is at 18% and no doubt will be lower this afternoon.  A move higher than 30% in bond sentiment would be a sign of a bond bounce

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

Daily/Weekly DeMark upside/downside exhaustion signals (Sequential) Weekly updated on Monday's.  Price flips occur when a stock closes higher/lower than four previous closes.    

S&P 1500 Universe: 

DAILY UPSIDE 13:   ABMD, IO
DAILY DOWNSIDE 13: CDR

DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN:    ABMD
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP:   AAT, ACC, AEP, AINV, CRUS, EQR, GDOT, MTSC, NI, PCG, TTEC, UTI, WIN

Updated: 2/5/18
WEEKLY UPSIDE 13:   ABMD, AON, AXE, BF/B, BIIB, BOFI, BR, CSCO, DGX, GD, LMT, MAR, RL, ROST, SGY, SPPI, STT, SYY, UFS, WAT, WSO
WEEKLY DOWNSIDE 13:   BELFB, EGOV, FSP, INT, RRC

Updated: 2/1/1
MONTHLY UPSIDE 13:     CHD, CLGX, CLX, CNMD, DVA, FICO, IDCC, MSCI, ORLY, PAYX, TFX, VMC, XYL
MONTHLY DOWNSIDE 13:    GPOR

Euro Stoxx 600 Universe: 

DAILY UPSIDE 13:   NONE
DAILY DOWNSIDE 13: MMB FP

DAILY UPSIDE WITH PRICE FLIP REVERSAL DOWN:    ITV LN
DAILY DOWNSIDE WITH PRICE FLIP REVERSAL UP:   SMWH LN

Updated: 2/5/18
WEEKLY UPSIDE 13:    ELM LN, JE/ LN, MC FP, TDC DC
WEEKLY DOWNSIDE 13:   AA/ LN, NG/ LN, SGC LN

Updated: 2/1/18
MONTHLY UPSIDE 13:    COFB BB, GAS SM, GKN LN, ING FP, KINVB SS, OML LN, VIS SM
MONTHLY DOWNSIDE 13:   NONE


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