SentimenTrader Blog

2019-05-16 | Jason Goepfert | Lite

More momentum miscuesSigns of waning momentum are everywhere. One of the more impressive signs of intense underlying buying was in the Dow Industrials, where the McClellan Summation Index held above 1,000 for nearly three months, until now.Other times that extreme momentum finally ended over the past 20 years, it saw limited downside in the months ahead.Abandon shipLosses in the major averages over the past couple of weeks have been relatively mild as selloffs go. But investors have been ...


2019-05-15 | Jason Goepfert | Daily Report

Long-term breadth momentum in the Dow Industrials has rolled over, as its McClellan Summation Index finally drops below 1,000; Traders have pulled more than $20 billion from index, sector, and country ETFs over the past 2 weeks; Pre-market losses in the S&P 500 e-mini and large futures contracts have hit extremes; Overseas Summation Indexes are below zero; Smart Money Confidence is rising

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2019-05-15 | Jason Goepfert | Premium

Here's what's piquing my interest so far today.FlowsOn Tuesday, there were outflows among a large number and variety of equity funds. A bunch of them lost more than $25 million in assets on the day, led by the two most popular.That continues a trend for both SPY and QQQ. Across all of the major index, sector, and country ETFs that we follow, they've lost more than $20 billion in assets over the past two weeks.We can see from the chart above that when the flows get this heavily tilted to the ...

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2019-05-15 | Jason Goepfert | Lite

Testing momentumIn early January, stocks registered a Zweig Breath Thrust when Up Volume quickly swung from oversold to overbought. This week, the indicator hit an oversold level for the first time, testing momentum traders’ conviction.Other times that months passed between a thrust and the first oversold reading, upside momentum usually continued to win. The most impressive part of the signal was the low risk, with few of them seeing large declines at any point.Picking up ...


2019-05-14 | Jason Goepfert | Daily Report

Four months after the Zweig Breadth Thrust, up volume became oversold for the first time; According to BofAML, money managers have been hedging heavily; Optimism on the Qatar fund, QAT, is about as low as it ever gets; Optimism is low on the HYG high-yield fund too

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2019-05-14 | Jason Goepfert | Lite

Shock dayOver the past year, investors have grown accustomed to certain magnitudes of market movements, and Monday’s session was far outside the norm. More than 2.5 standard deviations from the norm, which could be considered a shocking day.When coming within a couple weeks of a multi-year high, these types of sessions have typically not morphed into something much more serious. There was only a roughly 35% probability of these shock days morphing into anything more sinister.About-faceThe ...


2019-05-14 | Jason Goepfert | Premium

Here's what's piquing my interest so far today. It's not midday, but I prefer to get these out early if there are large gaps.ReliefStocks are on track to rebound strongly following Monday's bad loss. The futures are looking to gap up at least 0.5%, following a day when they gapped down more than 1.75%, lost at least another 0.5% during the day, and close at a 30-day low.This kind of knee-jerk pre-market rebound has happened 10 other times.Gaps as large as Monday's are rare, so if we relax ...

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2019-05-13 | Jason Goepfert | Daily Report

The S&P 500's drop on Monday was more than 2.5 standard deviations from what investors have grown accustomed to, suggesting a "shock day" soon after a record high; The Nasdaq Composite went from a new high to 5% pullback; The Dow Industrials hit a 3-month low; The ISE call/put ratio shows few calls being bought; The VIX jumped 25% twice within one week

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2019-05-13 | Jason Goepfert | Lite

Summation finally weakensWe’ve discussed the McClellan Oscillator and Summation Indexes a lot in recent months, because they have been showing notable readings of momentum. That’s starting to ease with the long-term Summation Index, which dropped below 750 for the first time in months, ending its 2nd-longest streak above that level in 57 years.Like most other displays of extreme momentum, these didn’t roll over often, and when they did, the losses tended to be muted.Sentiment is curlingThe ...


2019-05-13 | Jason Goepfert | Premium

Markets are on edge after several bouts of political gamesmanship leading into the new week.The latest round, with China retaliating in the trade escalation, has furthered pressured U.S. equities.Most markets aren't open yet, but we can see the largest movers here.I'm not sure how much to read into historical behaviors, since markets are clearly being dominated by headlines right now. A single Tweet could easily erase or exacerbate any move, regardless of how traders typically react in ...

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