Tales From The Tape 3/9/2022
Long S&P 500 (June Futures) Stop Below 4200. Target 4570.
Short Bonds (June) On Upticks. Tactical Stop > 156'20. Target 150'24 new daily low break and beyond.
Long CRWD if holds this week low. Target > 200
Short IBM with a stop at 132.
Stocks rallied. That is the basic gist. Bear market rally or not, the DAX was up more than 1000 points today at one point. You can't deny the underlying volatility nor the need to stay nimble and wait for good entry points. Today didn't require much overthinking though: It was very apparent by the afternoon that we were in a trend day and all you had to do was pick an entry with a tight trailing stop and ride it to glory. This will not be the case tomorrow.
The key question at hand is: was that the bottom? Allow me to put on my DeMARK hat for a minute. We have not qualified downside TDST breaks yet, which means things should generally be okay. Why? Well the weekly TDST level is holding. It would only really get bearish below this week's low.
The breadth indicator that I am looking at is the percent of NYSE stocks above their 200 day moving average. We are sitting on a DeMARK buy setup TDST level on that metric. However, daily counts are still looking to complete so I would expect a couple of more days of wild volatility.
One of the key variables we were looking for on any uptick was the improvement of breadth. If you recall the post I made about "the delta between breadth and price", I was looking for breadth to be the big signal that things were going to really be explosive for SPX regarding upside. The chart below (Thank you EMH) shows the current state of market breadth.
I'm not seeing anything too explosive to warrant a "pound the table" long setup. I am always aware though that a sneaky bull-run can come out of nowhere, especially when the market is down/volatile like it currently. I'm always leaning to the long side with regard to trading spu futures. I think my bias is well known. Nevertheless, I am light-footed due to the substantial volatility and moves. Did you see that since late February, the cumulative swings in the S&P futures contract was > 45%!? Insane.
In short, I will be trying long setups in the S&P while 4200 is holding.
Asana Inc. shares fall more than 19% in extended trading on Wednesday, after the collaboration software company reported its fourth-quarter results and announced its outlook. I think the gist here is don't trust high PE stocks in a growth bear market. Like ever. Stay away and move on. I also saw that cloud computing ETFs hit all time lows in some cases. There is no reason to get involved into this stuff yet.
MDLZ is showing an interesting setup. My proprietary trend model is flashing this 59-60 region as support, which is mutually exclusive of the trend line below.
CRWD is one of my favorite setups here. It reported today and the top line numbers were pretty good. My range model indicates that we qualified bear trend breaks once we traded above 200. I'm seeing this retrace as a good entry point. Keep stop loss tight at 153.55 (closing basis)
Also some nice DeMARK setups here on CRWD with a TD Sequential 13 and TDST upside break. This is a bullish retest of a confirmed upside break.
Z2 Eurodollars have broken down and should continue to trend lower.
I think the reason why ED's are slightly bid up was because of the decline in crude. The 61.8% retracement was the cash session low to the tick.
IBM looks like a big short to me. Short near today's close with a stop above 132.