by Alpha | Feb 20, 2018 | RQLAB
Internals and Price, SPX, February 20th 2018
OI: PCRs are healthy, with next minus near PCR at 0.8 and average of PCRs at 2.3, both pointing higher. For this week, curve is basically flattening but curve into EOM is still pointing higher as it is the the curve into EOW1-0302. Considering these structures it is likely we have some consolidation with downward bias this week.
Current PCR is 2.270; short term razz is pointing lower too into end of this week, Friday, February 25th, but the same approach applies, and indexes should be ideally higher into EOW1-0302. I will try to price the supports for the consolidation, ut should not be deep, so I think trimming positions aggressively is not recommended.
FNG’s Cyclical analysis: Current structure is aligned with Open Interest, as we can see on cyclical chart attached, showing cycles are overbought enough as to allow a higher low into this Friday, but pointing higher into March 5th.
Daily Stoch is still pointing higher on SPX and price is holding the 8 and 55 DEMAs (link). Long term $BPSPX shows we are coming from extreme oversold levels and for what we can see such levels of oversoldness have not failed before, indicating —at least based on $BPSPX— that any projected B wave on SPX should at least retest the all time highs at 2870 area before reversing.
Volatility, I will quote Leov Valencia, the renowned expert in volatility from Gamma Optimizer: February 18th, We have a near term inversion that slowly is going back to normal and the far months have already come down a lot. So that is why I think we have at least a near term period of calm in our hands as the curve has been normalizing very nicely for the last couple of weeks.
Additionally, Ambiguity one of the main indicators he uses continues collapsing now at 0.12. This is why he thinks a massive move up is nearer than a crash event.
Moores’ 2C-P: Reading is at 21.9, low registered on 2/9/18 was 7.00. Values are too low yet as to consider them a threat to further upside on indexes.
Princely’s $ONE:VXO: Reviewing this chart I think a reading of 0.090 could provide some resistance, and above it we could consider a breakout is occuring.
Current reading at 0.070, so indexes still have room for more upside without a meaningful pullback.
EW analysis:
I will start with a hourly chart from Joel Withun, our trading partner; -462 extension on the attached hourly chart, is 2687.41; GFG extends from 2708.69 to 2689.82. Initially, these are the levels that should be broken in order to consider a major downturn is starting.
VIX stochastics has rested enough to allow the consolidation we are pricing this week, but price needs to break some levels to assume bearish parameters out of our most aggressive projections.
This is the micro chart I have been using since the bottom at 2529.5 (link) ideal extension at 2772.8 support at 2644.9, price is being rejected by 20 DEMA and an average between 2.00 and 2.618 extension at 2753.5, based on this micro price would need to break 2693.8 to consider a pullback to 2644.9 is on track.
Using other approaches (link) market needs to break 2697.3 to assume a major failure is under way; clearly above 2745.2; minimum target should be projected at 2793.2
All in all we can price a pullback for the week and we are sending you the levels to watch in order to assume our conjectures are trumping reality.
See you in Chat Room
SeekingOptions.com
by Carlos Narváez | Feb 6, 2018 | RQLAB
IWM/SPX/NDX
Moores’s 2C-P: Last time we registered a reading of 63 on 2C-P was on 8/8/17; by that time $TNA was hitting 48.60 or 47% under current levels. We would have to return to 3/24/17 in order to find a lower reading of 61 at 49.55 on TNA. Both readings, 63 and 61 marked significative bottoms.
D/U registered a record of selling pressure: 18.45; despite this $IWM is respecting previous 1.764 retrace (link).
Open Interest: there is not much coming from open interest, PCR. for this week is at 3.417, stable with both, short term and long term razzes pointing down. For next week EOW3, PCR is stable too at 2.442.
There is not recovery in sight from open interest. All calls we can derive from OI should be bearish.
FNG’s cyclical analysis: Show both markets, NDX and SPX are cyclically oversold enough as to hope for more downside from right here. But recovery should not be immediate and straightforward, secure highs are projected between February 19th or the 21st for SPX.
Projected recovery for NDX looks better, with highs projected between February 21st and February 23rd, before a sort of c wave hits the markets again, according to this analysis.
I see 2C-P in alignment with cyclical analysis, and while a additional low is projected into late February, traders should do well considering this pullback as a buying opportunity, buying enough time to weather a lower low that might materialize or not. We have not had a setup like this in a very long time.
According to Leov Valencia: the long gamma/short gamma threshold right now is at: 2758.32 below that level SPX options dealers will be short gamma on the aggregate and therefore they will be hedging in the same direction that the market!. So this 2758.32 is the level SPX has to recover in order to alleviate downside pressure.
EW Analysis.
From January 10th
… Regrettably in such a big wave count, the smallest variation could affect the projections by a range of 30 points, so I rather to post for you these two lines: first support at 2719.2 (link) and second support at 2705.5 (link). In order to start feeling uneasy one of these lines would have to break, and sorry if some our past updates have leaded you to believe we are ubber bulls, we are not, simply we rather to view the big picture and wait for market to tell us if our bearish/bullish approaches are right, maintaining a considerable exposure on the long side until reality prove us wrong, and at this moment in time, a 20% pullback is, to our eyes unlikely, so stop auto-threatening you while at least 2705.5 is not broken, it is not necessary.
Current
We identified this retrace on January 26th, before it ensued —and while at that moment and at this moment we could project an additional 5.38% pullback to 2587, at a minimum, (link) or additional 9.64% with max targets at 2479 (link)— we since the very first moment considered market should find a consistent bottom around the Wolverine line, 2759. For that reason we are not factoring more downside as reasonable probable, instead of that we are considering bull markets should hold and consolidate around the 8 EMA weekly and then go for new highs, ideally to 3238 or 3271, at those levels we should be seriously worried.
In order to start at seeing things that we did not factor on January 26th, when market was hitting fresh all time highs at 2879, market should break the lines we considered on January 10th: 2719.2-2705.5.
Support for NDX should be 6693 or 6624 (link), there is nothing broken on NDX yet, but NFLX is not a safe haven any more and should not be a candidate to repurchase on pullbacks. GOOGL, AMZN, BABA, MSFT, TSLA should be better candidates.
It is easy to project more downside while pullbacks are occurring, as it is is easy to project more upside while uptrend holds, but we are not here for entertainment but to make money, and money according to the big picture is on the long side of this market.
Have a nice week.
Seeking Options Team [RQLAB]
by Carlos Narváez | Jan 22, 2018 | RQLAB
One of the market leaders reports today after hours.
Looking at long term charts: ideal support zone should be 198.42-200.23 area, would be necessary a break under 177.27 to consider the path to 282.16 delayed, but not invalidated.
In other words, any pullback that holds 177.27 or overshoots this area is a buying opportunity based on our operation layout.
Now looking into the micro, which is not so dependable, ideally $NFLX should hold 212.54 at a minimum and 202.77 max, any break under 192.74 would be a clear indication that major supports will be seen but for as long as 212.54 and 202.77 hold it is reasonable to project 238.64 and 245.26.
by Carlos Narváez | Jan 10, 2018 | RQLAB
What is happening?
Market has hit a milestone at 2759.2, or our 1.382 retrace from the 2009 lows, this has been our approach and we have been right just by following this macro path, so when it stops from being accurate we will reconsider it, but at the moment, we must simply adjust our supports to try to understand what might happen next.
Regrettably in such a big wave count, the smallest variation could affect the projections by a range of 30 points, so I rather to post for you these two lines: first support at 2719.2 (link) and second support at 2705.5 (link). In order to start feeling uneasy one of these lines would have to break, and sorry if some our past updates have leaded you to believe we are ubber bulls, we are not, simply we rather to view the big picture and wait for market to tell us if our bearish/bullish approaches are right, maintaining a considerable exposure on the long side until reality prove us wrong, and at this moment in time, a 20% pullback is, to our eyes unlikely, so stop auto-threatening you while at least 2705.5 is not broken, it is not necessary.
For as long as these two lines are not broken consistently, I consider 3052 area is reasonable probable, with upper extensions for this projection to 3267.4.
Currently, the T-line is at 2727.5 (link) and the Wolverine line is at 2681 (link). Looking at Charts Below, the daily chart has -462 retrace at 2707.5 and the weekly chart has 50% candle at 2712.91, while we could overshoot our supports at 2705 this potential retrace could be short lived.
Looking at net dollar chart, TNA should close under 70.27 to indicate this long consolidation could lead us to a break down.
For NDX would be necessary a break below 6478 to indicate a top (link), and is on NDX where big bets should be placed, in our humble opinion, and our top pick should be, no other than FB for growth, this, while 182 holds; and of course, AAPL above 155 and MSFT above 84, for the dividend without forgetting GOOGL while 1044-1021 lines hold for growth on GOOGL and AMZN for 1555 for as long as 1172 holds.
Ideal extension for NDX should be 7305 before consolidation or pull back.
This is our approach and we should well reminding what we said on September 9th, 2017:
Here is a link to Joe Davis, Global Chief Economist & Head of Investment Strategy Group at Vanguard: Prepare for lower expected returns.
If market is going to be tough the next five years, but is being a good market today, let’s not build a top where it is not, and let’s not short while main supports are not broken, instead let’s take advantage of pullbacks to make money now that is relatively easy, because there will come the days when is going to be hard.
Have in mind that pullbacks during third waves have not be deep and market is within a 3rd wave from the 2009 lows.
by Carlos Narváez | Aug 31, 2017 | RQLAB
TNA
Under two of our interpretations, 53.98 should be seen, (link). No change from yesterday, invalidation should come on a break under 50.19.
GILD
We had previously analyzed GILD on August 7th,,and we liked it as safe haven, based on a debt approach
Long term debt around $26 B, total cash $36 B , total debt $28 B. Balance Sheet, Total Cash (mrq), 36.58B, Total Cash Per Share (mrq) 28.01. Total Debt (mrq), 28.68B, Total Debt/Equity (mrq) 124.20. Current Ratio (mrq), 5.00, Book Value Per Share (mrq) 15.64
Our EW analysis concluded: based on EW I would consider a break under 68.54 a failure and the comes and goes have to hold 61.79 where the .50 retrace is located on the big picture (link).
Considering the micro and the 68.54 we used as reference for wave 2, GILD should not stop until 99. Area or the 3.618 extension on the bullish scenario (link); immediate invalidation is a break under 73.89, unlikely to our humble eyes.
YY
Too bullish for a our taste, above 72.01, bearish bets should be reconsidered (link).
by Carlos Narváez | Aug 28, 2017 | RQLAB
GDX
We had been waiting for $GDX to take 24 so we can clean our projections… micro adjustments suggest $GDX should see 24.77 in bullish continuations.
This 24.77 should be considered secure at least and for as long GDX holds 23.51-23.63.
For the big picture, needs to continue advancing above 23.87
A breakdown below 22.75 at this moment will be extremely bearish for the metal complex. Ideal target should be 25.70, I have serious doubts we might see this target so will lower it down to an average of 25.35.
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