SentimenTrader Blog - Page 2


2020-01-22 | Jason Goepfert | Lite

More record speculationTwo weeks ago, options traders pressed their bets, pushing speculative activity to a record high.And they just keep pressing.Last week, call buying to open as a percentage of all NYSE volume hit a record that had been set just the prior week. Even more telling, traders are not willing to cap their potential gain by selling calls to open, either. The number of contracts being bought to open versus sold to open is skyrocketing, All of this is not being offset by hedging ...

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2020-01-21 | Jason Goepfert | Daily Report

The options market is once again showing a record level of speculation, with skyrocketing volume in buying calls to open; Indexes are hitting new highs and the percentage of issues on both the NYSE and Nasdaq hitting highs is surging as well, now more than 11% of the total; Stocks in XLU and QQQ are awfully overbought; The president is tweeting about stocks a lot

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2020-01-21 | Jason Goepfert | Lite

Extreme, and protractedOn December 26, a bout of enthusiasm pushed 56% of our core indicators into an optimistic extreme, which was the most in 15 years. We just surpassed that, with 57% of them hitting an extreme on Thursday. For the past month, there has been an extreme number of indicators showing optimism and few showing pessimism (mostly fund flows). That has pushed the 20-day average spread between the extremes to one of the widest levels since we began tracking them 20 years ago.There ...

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2020-01-19 | Troy Bombardia | Premium

Here's what I'm looking at:Housing StartsThe latest reading for Housing Starts surged to 1.608 million. While bears are quick to point out that much of this surge is due to warm weather, the more important point is that the housing sector is still improving. Housing is a key leading sector of the U.S. economy:This has pushed the year-over-year change in Housing Starts above 40%, a level that's typically reached after a slump in the economy or economic recession:2012: after housing made a ...

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2020-01-17 | Jason Goepfert | Daily Report

Over the past 20 days, indicators showing optimism have exceeded those showing pessimism by a near-record degree; It's happening in the Smart Money / Dumb Money spread, too, but over a 50-day period; The S&P 500 is above its daily, weekly, and monthly Bollinger Bands; Hedgers are still shorting platinum, buying natural gas

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2020-01-17 | Jason Goepfert | Lite

No sudden movementStocks are enjoying a preternaturally long stretch of calm, with no big moves for more than 3 months. Troy has been noting this trend for a while, and it keeps going. This is now the 17th-longest streak since 1928.Periods of extreme calm tend to precede at least some future volatility, and we can see that in the risk/reward skew in the table. Risk was as high or higher than reward up to three months later.The S&P’s median return was below average across all time frames ...

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2020-01-16 | Jason Goepfert | Daily Report

The S&P 500 hasn't moved more than 1% in a single session for more than 3 months; Equity funds continue to see massive outflows, with bonds seeing inflows; The SPY fund's assets have been shrinking even while it's rallying; The 50-day average spread between Smart and Dumb Money is nearing a record; A lot of utilities are above their Bollinger Band

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2020-01-16 | Troy Bombardia | Premium

Here's what I'm looking at:Trade war dataWith the U.S. and China having signed a trade deal, it'll be interesting to see if manufacturing and trade-related economic data will turnaround in 2020. Thusfar it has not. The Cass Freight Index (Expenditures), which measures North American freight expenditures, has fallen more than -6% over the past year:This may seem alarming, because this typically happened in an earnings recession or economic recession. However, it isn't a clear bearish sign ...

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2020-01-16 | Troy Bombardia | Public

The MACD indicator (Moving Average Convergence Divergence) is a momentum and trend following indicator that demonstrates the strength of the market's momentum. But unlike other guides online, I won't just show you how to use this indicator in a generic way and how well it "works" (only showing you the successful trades while sweeping the failures under the rug). Instead, you'll discover in this post:What is MACD and how is it calculatedHow traders use this indicatorSkepticism towards MACDHow ...

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2020-01-16 | Jason Goepfert | Lite

5-year high in bull marketsMore than 85% of stocks in the S&P 500 have managed to close above their 200-day moving averages, the most in five years. This ends the longest such streak in 30 years.When stocks are coming out of a prolonged downtrend, this is an excellent buy signal. When it triggers with stocks at or near new highs, it’s more of an exhaustion signal in the medium-term, but still a good sign long-term.Deteriorating fundamentalsWe saw last week that there is a 15-year high in ...

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