I’ll post a more in depth technical update this weekend in the Weekly Market Brief, but as you head into the weekend keep the chart below in mind when you see all these new highs and breakout headlines.
Yes we made new highs and had a big OPEX rally, but that was not a surprise, it was already in the cards as I posted the Friday before:
$NYMO close last night, would be lower intraday today. First oversold readings of 2019.
Next week is OPEX.
March OPEX is generally one of the most bullish OPEX weeks of the year, no guarantees of course. pic.twitter.com/1xpCFrqSam
— Sven Henrich (@NorthmanTrader) March 8, 2019
What’s missing here is what was required to get the breakout: 4 unfilled gaps on $SPX, an absolute $VIX crushing to 12 and for what? For this?
Small caps, banks, $DJIA all negative over the past 10 days. No breakouts. No Sir. It’s tech and a smidgen of $SPX and it took a full point of additional $VIX compression over the past Monday 10 days ago. And you know where I stand on the $VIX (see $VIX launch).
Never mind all the negative divergences on the breakout. I’ve pointed to some on my twitter feed, I’ll discuss them further this weekend.
It often pays to look behind the curtain. This rally is not as strong as it’s advertised to be.
This is its basis:
So far in 2019 stock markets have priced in dovish central banks, non existent trade deals and tons of buybacks while ignoring all weakening growth and earnings data.
— Sven Henrich (@NorthmanTrader) March 15, 2019
Have a good weekend.
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Categories: Market Analysis