2019.01 #0 Long term forecast. Does Volume Lead Prices? A look at three major topics for the year ahead - china trade talks, Fed reserve policy, and Mueller investigation. A look at three analogs (1998 LTCM crisis as most likely, 2010-2011 corrections, and 1970s) using $NYUPV/$NYDNV as a volume measure and $SKEW from 1994-2018. Concl - no major bear market likely.
2019.01 #1 Still strong bearish sentiment similar to Mar-Apr retest lows pointing to higher prices ahead. Volume indicator strong. AAPL guidance may be EPS warning.
2019.01 #2 Smart money aka SPX ETF indicator lagging sentiment, likely B-wave indicator pointing to weakness/retest later in year. Tech Indic Comp at extreme levels seen at 50% rally off Feb 2016 lows, may pt to SPX 2850.
2019.01 #3 Possible setup for a V-bottom rally to continue with overall sentiment dropping to neutral. Use of Hedge Ratio compared to 2015 and 2016 retests of lows shows more rally ahead. Options OI still bullish.
2019.01 #4 Overall sentiment remains near neutral. Tech Indic $SKEW and $NYUPV/$NYDNV support more rally, no bear market in sight.
2019.02 #1 DJIA over 25k increases poss of V-bottom rally like Oct-Dec 2014, if so initial leg could extend to SPX 2725-2825 with final target of 2800-2900. Sentiment levels now below neutral, but in Dec 2014 reached SELL before larger decline.
2019.02 #2 SPX may consolidate between 2700-50 for a week or two. If bearish sentiment declines a 3-5% decline is possible, but DM/SM ETF indicators may indicate less pullback.
2019.02 #3 SPX at 2776 in mid range of 2725-2825 range for impulse wave of 2014 type V-bottom rally. Bearish sentiment nearing levels of Dec 2014 which was followed by 38% rally retrace, ST top may be days away with ST target 2800-25.
2019.02 #4 SPX nearing 2800 with ST sentiment indicating pullback to low 2700s. INT outlook several months before top.
2019.03 #1 "New" VIX call indicator issues SELL end of Feb w/SPX at 2804. SPX options OI shows weakness possible next two wks to mid, low 2700s.
2019.03 #2 SPX pullback underway at 2750, but sentiment indicators only neutral, so no bottom yet. May see bounce before further downside.
2019.03 #3 SPX soars above 2800 as Feds Powell interview on 60 min convinces public all is well. Int rates continue to fall with HUI moving up, inverse to bonds. SPX bearish sentiment very low, VIX put indicator shows SELL.
2019.03 #4 Dovish FOMC causes SPX to spike higher to 2850 then fall sharply to 2800. Strong move down in int rates. Apr TLT shows strong call resist at 125 (TNX 2.45%), so int rates may move up into mid Apr.
2019.03 #5 SPX moves upward to 2830s moving sentiment to neutral, but no sign of pullback. Int rates should reverse soon as TLT spikes over 126 and TNX below 2.4%.
2019.04 #1 Bonds may have completed a blowoff top. SPX sentiment & VIX put low volume indicating 1-2 wk volatility compression and similar top to June 2018 before 100 pt drop. Options OI show SPX 2910-20 possible.
2019.04 #2 Bonds & gold fall as inflation (PPI) rises. Sharp rise in VIX put buying may lead to SELL next week. SPX sentiment supporting pullback aka June 2018. Pullback into mid May may mean summer rally to SPX 3040.
2019.04 #3 Low overall bearish sentiment and esp low hedging could br pointing to more volatile decline ahead. SPX & NDX ETF sentiment not indicating INT top.
2019.04 #4 Continued low bearish sentiment and hedging show risk of pullback, but not INT top. Likely a rounded top that may extend into mid-2020. A look at how buybacks support EPS.
2019.05 #1 Correction may be starting, extreme lows in ST Indicator may pt to increase in volatility ahead. HUI bearish sentiment supports ST rally. Hedge ratio remains low. SPX may drop below 2900.
2019.05 #2 Correction underway, some increase in bearishness esp DM/SM optn indicator, means likely May opt exp rally, but low hedging and ST indicator pt to more downside afterward.
2019.05 #3 Same crowd that was calling for DJIA 30K a few weeks ago is now looking for the SPX to crash in Aug down to 24-2500, while overall pattern for SPX is still following fractal from Oct 2014 V-bottom indicating a 38% retrace then higher. Sharp increase in bearishness supports a rally soon after more volatility.
2019.05 #4 Bottom forming around SPX 2800, but expect more volatility implied by ST indicator.
2019.06 #1 Bearish sentiment has risen sharply w/recent decline, esp optns indicators. Expect bottom by EOW w/sharp rally into June exp to about SPX 2900.
2019.06 #2 Got expt sharp rally. Using LT sentiment from 2014 v-bottom shows weaker current sentiment, unlikely to repeat 50%+ rally from 2018 lows before sharp downturn.
2019.06 #3 Declining bearish sentiment indicates rally running out of steam with limited upside, but no imminent downturn expt. Starting graphics upgrade.
2019.06 #4 High vol optn exp may be warning of problems ahead resulting from distribution, Similar to Sept 2018 lead to slightly Oct, then downturn. Opt OI resistance at SPX 2950. Intro to data mining software.
2019.06 #5 Sharp decline in options sentiment is similar to Dec 2017 while ETF sentiment only moderate lower. Conclusion - minor pullback ahead followed by higher highs. Use data mining to look at Smart Beta P/C.
2019.07 #1 Very low bearish sentiment and high SPX call OI at 3000 and above with little put support until 2900 indicates risk of 3-5% pullback.
2019.07 #2 SPX powers over 3000 with bearish sentiment dropping to extremes of Apr 2019 top.
2019.07 #3 SPX drops 2% but bearish sentiment remains extremely low with more downside likely.
2019.07 #4 SPX back above 3000, but "new" VIX call indicator at SELL level, so expect significant pickup in volatility with 2-3% pullback likely.
2019.08 #1 Sharp drop for SPX following FOMC "sell the news" with volatility measures showing tradeable rally several weeks away. Bottom likely 2899 or lower,
2019.08 #2 Current likely to mirror Jan 2015 with move to new highs by EOY. Sharp rise in bearish sentiment indicates bottom likely in SPX low 2800s with several weeks more of volatility.
2019.08 #3 Bearish sentiment nearing levels of May selloff, but several weeks of bottoming likely. Intro to data mining crash indicator, now showing positive bias.
2019.08 #4 High bearish sentiment is setup for a year end rally, but low volatility measures indicate that volatility may not be over yet.
2019.09 #1 SPX saw strong bounce last two weeks off Aug lows, but high SPX put/call matching Dec 2018 indicates rally has more upside. Overall sentiment neutral. May see retrace of 50% before more rally.
2019.09 #2 A sharp drop in bearish sentiment during the week is warning of another ST pullback on possible "sell the news" after FOMC as possible setup for year end rally.
2019.09 #3 Bearish sentiment remains relatively low. Aka, March 2015 a sharp 50% retracement of rally since Aug lows will likely setup a rally of several months into May 2016 type high.
2019.09 #4 Analog to 2015 may be in jeopardy as SPX refuses to fall while level of call buying around 3000 is getting ridiculous. Sharp drop in hedge ratio warning of pickup in volatility,
2019.10 #1 Trump tweets and concern over the upcoming trade talks temporarily caused the SPX to drop 100 pts over two days before showing a strong rebound. Expected volatility finally did show up, but sentiment still too low to support a sustained rally. Expecting range 2825-2925 for a while.
2019.10 #2 SPX breaks out over 2950 and may have begun year end rally earlier than expected, upside target 3100-50. Bearish sentiment at lower levels than May and Aug 2019 pullbacks, but similar to June 2018 before rally to Oct top. A look at some indicator spreads using the datamining software.
2019.10 #3 Sharp drop in bearish sentiment may be predicting a pause/small pullback as SPX approaches 3000. Options OI indicates possible range 2950-3000. Addl vars for datamining using spread to CPCRev for SKEW, VIX calls & puts.
2019.10 #4 Risk rising for mini flash crash or SPX down 100+ pts in 2-3 days, likely to be setup for year end rally, Hedge ratio shows current low risk of volatility spike. Dataming shows low VIX P/C as positive for higher SPX.
2019.11 #1 A look at sentiment using 2x EMAs shows INT top not close but SPX 100 pt drop possible.
2019.11 #2 Bearish sentiment now approaching low extremes seen at May and July tops, but options sentiment showing moderate hedging to prevent immediate downturn. Datamining shows Crash Indic mildly neg & VIX options neutral.
2019.11 #3 Small SPX pullback (<1%) saw jump over neutral for options DM/SM and hedge ratio that may extend rally, but other sentiment indicators at low extremes. VIX options approaching -1 SD.
2019.11 #4 As SPX remains over 3100, overall bearish sentiment remains at low extremes where sudden downdrafts can occur, while options hedging has now dropped to neutral. Higher prices still likely.
2019.11 #5 Overall sentiment extremely low while options DM/SM & hedge ratio above neutral. Still expecting some type of pullback before run to top, Datamining a new var as SPX puts/ETF calls spread as options OI indicator.
2019.12 #1 Finally saw "mini flash crash" expected since late Oct, this should be a setup for the final run to the top. If match to early Mar 2015 (May top in 10 wks), using a 2x time frame this pts to a possible top around May 2020. Sentiment little changed for week as rebound was as swift as decline.
2019.12 #2 China trade agreement settled with SPX pushing over expt highs of 3100-50, still remain cautiously bullish. Sentiment similar to early Jan 2018. VIX puts shows too much betting on lower VIX while calls remain neutral.
2019.12 #3 Now turning cautiously bearish with Fri SPX close 3221, after bullish since Dec 2018 at 2350 as risk > reward. Factors are Dec opt exp high vol at 2x avg same as Sept 2018 plus extreme in Rydex bear/bull etf ratio and extreme lows in bearish sentiment.
2019.12 #4 SPX keeps chugging higher w/Fri close at 3240 and record lows in many bearish sentiment indicators. Crash indicator not at SELL, but as low as several temp pullbacks.
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