Advanced Investor Update – August 3rd

http://www.stocktiming.net/?p=3400

We should normally be in the throes of a terrible downside.  However, if the Fed pumps in enough money today, there is a positive divergence on the NYA Index that they could kick in. The total level of money that they have added in is so large, that the market will find it difficult to absorb it and gain a downside advantage.

Something to think about … “If the upside potential is worth the downside risk … do it … if not, don’t.”

FYI … Institutional Investors were in decreasing net Accumulation ounce again. Buying had a down tick and Selling had an up tick. (NOTE … The Aggressives were in decreasing Accumulation.) – – –  Institutional Selling showed another up tick in its selling trend while opposition to down movement was trying to come in.  These are dangerous and mixed up conditions so be careful.   An increase in Selling is a negative for the market, and a decrease is a positive for the market.

Older comments:  “A crash is not out of the question, and if you have any long positions, they must be hedged as the downside risks are just too great now.”   >  > > (As before, our other older comments have not changed:  “Don’t think of being long in the market without properly hedging a position.   Nobody knows when, but when this does finally end … it will end very badly.
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Special Chart 1:  The Stock Market’s Inflowing Liquidity had a down tick to Mid-Q1 positive territory. – – – As we have been commenting … “Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines … subtle, but concerning.”

Special Chart 2: The VIX closed at 13.37. This remains a DANGER possibility for the medium term. (Remember that the market moves opposite to the VIX.) The VIX is approaching a test of a Major Support line. – – – No change in past comments: “The fan resistance lines continue to move further out. This could be an escalating problem developing, so be very careful.

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Section 1,  Chart 1:   The Option’s Timing Indicator closed while showing small downside trending.  Note that the fast thick red line showed a downside tick to Negative territory while below the red and blue trend trend lines. (Increasing risks levels again.)  > > >  The Options Liquidity Inflow’s showed trend lines in a technical down trend in positive territory.  The fast red bar showed a lower strong positive tick.   The Momentum Gain/Loss Indicatorshowed a much lower, positive daily tick.    This is a high Danger condition on the short term, that is still maintaining its medium term up trending.   (The Options Timing chart showed that a new up condition initiated on February 18th.  … we are in a very high Danger area.)

Section 1, Chart 2:  The Stock Market’s Inflowing Liquidity had a down tick to Mid-Q1 positive territory. – – – As we have been commenting … “Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines … subtle, but concerning.”  – – –  The indicators at the top of the chart were negative with two indicators showing less deceleration.  (a Danger possibility .)

Section 1, Chart 3:  Institutional Investors were in decreasing net Accumulation ounce again. Buying had a down tick and Selling had an up tick. (NOTE … The Aggressives were in decreasing Accumulation.)

Section 1, Chart 4:   Institutional Selling showed another up tick in its selling trend while opposition to down movement was trying to come in.  These are dangerous and mixed up conditions so be careful.   An increase in Selling is a negative for the market, and a decrease is a positive for the market.  – – –  The top part of the chart showed a slower down tick to Lower-Q3 negative territory on the Fast Acceleration Rate.

Section 2 Super Accelerator Summary:  *** No change:  Note that all 3 Super Accelerator conditions remain in an up condition, but we do have some significant negatives developing which make this a very high risk condition.  (Hedge any long positions or move to cash.)   Older comments: “Risk levels are very high and investors should be in cash or if in the market, they should be hedged.”   and … “The NDX or the IWM could end up being a canary in a coal mine, so keep an eye on them.”    
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This is a quick overview of underlying conditions over the past 3 days (see the matrix below) : 0 Negative readings, 1 Lesser Negative reading, 1 Neutral Reading, 3 Positive readings, and 3 Lesser Positive readings.

Indicator

Condition and color wanted for an up condition.

Friday’s Close
July 29th.

Condition:
Monday’s Close
Aug. 1st.

Condition:
Tuesday’s Close
Aug. 2nd.

Condition:
1. Unweighted, Positive Sector Stocks above Equilibrium.

A majority of Unweighted Positive Strength stocks above the Equilibrium line.

Unweighted Positive Stocks showed that75.60% of the S&P stocks had Positive Strength.

Unweighted Positive Stocks showed that71.00% of the S&P stocks had Positive Strength.

Unweighted Positive Stocks showed that60.20% of the S&P stocks had Positive Strength.

2. A comparison of the number of Very Strong and Very Weak Feeder stocks. 

The # of Very Strong Feeder stocks higher than the the # of Very Weak Feeder stocks.

The number of Very Strong stocks versus the number of Very Weak stocks was:
99 vs 24

The number of Very Strong stocks versus the number of Very Weak stocks was:
90 vs 34 (Dropped.)

The number of Very Strong stocks versus the number of Very Weak stocks was:
40 vs 49 (Dropped again.)

3. New Highs Trender

Above 180 wanted.

275 (Above 180 wanted)

265 (Above 180 wanted)

184 (Above 49 wanted)

4. New Highs Raw Data

46 to 86 =s neutral.
100+ is a lesser positive;
150+ is the target.

327 reading

255 reading

103 reading

5. New Lows

At or Below 28 Wanted.

19  (At or Below 28.)

18  (At or Below 28.)

23  (At or Below 28.)

6. Institutional Buying & Selling Action

Accumulation

Institutional Investors were indecreasing net Accumulation again. Buying was still in a technical up trendthat could be tested very soon. Buying had an up tick and Selling had an up tick.  (NOTE … The Aggressives were indecreasingAccumulation but still accumulation.)

Institutional Investors were indecreasing net Accumulation again. Buying had a down tick and Selling had an up tick.  (NOTE … The Aggressives were in decreasingAccumulation due to less buying.)

Institutional Investors were indecreasing net Accumulation ounce again. Buying had a down tick and Selling had an up tick.  (NOTE … The Aggressives were indecreasingAccumulation.)

7. Long Term Liquidity Inflows

Expansion Territory

The Stock Market’s Inflowing Liquidity had an up tick in Upper-Q1 positive territory.

As we have been commenting … “Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines … subtle, but concerning.”

(This box color reflects where the Liquidity levels actually are, and not what their trending is doing.)

The Stock Market’s Inflowing Liquidity had a down tick in Upper-Q1 positive territory.

As we have been commenting … “Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines … subtle, but concerning.”

(This box color reflects where the Liquidity levels actually are, and not what their trending is doing.)

The Stock Market’s Inflowing Liquidity had a down tick to Mid-Q1 positive territory.

As we have been commenting … “Medium term, the Inflowing Liquidity has been challenging its up trend because of the direction of the fan lines … subtle, but concerning.”

(This box color reflects where the Liquidity levels actually are, and not what their trending is doing.)

8. Daily VIX Reading

The VIX is subject to its behavior analysis

The VIX closed at 11.87. This remains a DANGERpossibility for themedium term. (Remember that the market moves opposite to the VIX.)  The short term bias remains down on the VIX as it approaches a test on a Major Support line.

No change in past comments: “The fan resistance lines continue to move further out. This could be an escalating problem developing, so be very careful.

The VIX closed at 12.44. This remains a DANGERpossibility for themedium term. (Remember that the market moves opposite to the VIX.)  The VIX is approaching a test of a Major Support line.

No change in past comments: “The fan resistance lines continue to move further out. This could be an escalating problem developing, so be very careful.

The VIX closed at 13.37. This remains a DANGERpossibility for themedium term. (Remember that the market moves opposite to the VIX.)  The VIX is approaching a test of a Major Support line.

No change in past comments: “The fan resistance lines continue to move further out. This could be an escalating problem developing, so be very careful.

Color Codes:
positive A lesser positive
neutral
negative A lesser negative
     

> The Institutional Index, the SPY, the IWM, and the NDX./QQQ, were above their  horizontal resistance/support lines.   The NYA was below its thick black horizontal resistance line.

> The Banking Index … The Banking Index closed at 66.90 with the C-RSI at a Danger  level of +0.326 on a down tick.    The Accelerator had a down tick in positive territory while in a technical up trend.     The Timing Indicator had an up tick in positive territory while up trending.   The Banking Index was in a very high risk up condition that started March 1st.    Please note that risk levels are high and a Danger lurks, so please hedge any positions. 

> The Dollar closed at 95.064.  The RSI was at a negative level of 46.65.  We still need the RSI to rise above its upper (green) resistance line.  50 is a neutral reading on the RSI.   NOTE that the Dollar did test the 100.39 level and pulled back in December after making a double top … it could retest that level (100.31 to 100.51)  (Do remember that this remains a Dangerous condition where a blow out level with a sharp down move typically occurs after the up move finishes.)   – – Ref: U.S. Dollar symbol: USDX, or $USDX.   This is a potentiallyDangerous condition that has been technically trending sideways (in a large trading range) since early last year.

> 10 Year bond yields (TNX) closed at 15.37.  No Change: There is an upside bias “trying” to build on the 10 and 30 year bond yields while the short term bias has been down.  DO NOTE that the TNX has 3 resistance levels that it is dealing with and it was below all three levels.    Prior comments:  As we have been commenting: “we could see high volatility at this juncture“.    Older comments:   >>> Investing Philosophy to consider:  1. Don’t invest in stock or medium that you don’t understand.  2. Don’t invest in anything that is “interfered with” or “manipulated”.    The TNX and TYX fit the second category with the Fed’s interventions.

> 30 Year bond yields (TYX)   The TYX closed at 22.87.    No Change:  There is an upside bias “trying” to buildon the 10 and 30 year bond yields while the short term bias has been down.  Old Comments: Note that something else could be going on with yields many countries are showing price declines (deflation) compared to a year earlier.)  The danger for us is “if and when” the tide of deflation could become large enough to over power us. >> Older comments:  >>> Investing Philosophy to consider:  1. Don’t invest in stock or medium that you don’t understand.  2. Don’t invest in anything that is “interfered with” or “manipulated”.  The TNX and TYX fit the second category with the Fed’s interventions.