SentimenTrader Blog

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 ...


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 ...


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 ...


2020-01-15 | Jason Goepfert | Daily Report

More than 85% of S&P 500 stocks are above their 200-day moving averages, the most in 5 years; Over the past week, an average of about 22% of Nasdaq 100 stocks hit new highs and became overbought (RSI above 70); More and more stocks have operating earnings below where they were a year ago; Almost all Fidelity select managers are beating the return on cash

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2020-01-15 | Jason Goepfert | Lite

Asset managers at record exposureAsset managers are now holding a net long position of nearly 30% of the open interest in major equity index futures, the most ever. While history is limited, other times they held a large amount of the open interest didn’t pan out so well for their bets.The only dates that show a positive return over the next 1-2 months were the ones from last November. And to be fair, the jury is still out on those.Overall, the sample size is relatively limited in terms of ...


2020-01-14 | Jason Goepfert | Daily Report

Asset managers are holding a net long position of nearly 30% of open interest in equity index futures, a record high; Wall Street analysts are upgrading technicals (price targets) but not fundamentals (earnings estimates) to a near-record degree; The McClellan Summation for high-yield bonds has been high for almost a year; A lot of bonds are hitting new highs, too

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2020-01-14 | Jason Goepfert | Lite

A speculative recordOnce again last week, options traders became even more aggressive. It has reached record levels by some metrics. As a percentage of total volume, speculative call buying last week hit a level never seen in the past 20 yearsThat’s the most ever, eclipsing the prior peaks that happened to equate with notable peaks in the S&P 500.An argument could be made that for every buyer there is a seller. But these are customer orders. Even if a customer is buying a call as a stock ...


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