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Strategies & Market Trends : General market lab and commentary
SPY 659.00+1.0%Nov 21 4:00 PM EST
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From: Robohogs3/19/2016 12:33:00 AM
1 Recommendation

Recommended By
scaram(o)uche

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Overall mkt just massively overbought here. Next week is seasonally very weak as this past historically strong weak (and actually strong weak) pulls returns forward. Stocks above 50 day: all but bios. Not really kidding here. Overdone. CUMULATIVE breadth: highest since 2014. Probably ovetdone but says rally probably not likely to be more than partially reversed. Transports hitting trend lune after a million weeks up. XLU same.

Q1 earnings look awful which has TECHNICIAN Northie calling for big downturn. TECHNICIAN. Not fundy. He has become roaring bear again. That is my main issue with technicians. They try to make moral calls on value. Fact: Q1 gonna suck. Some f this decline in expectations is normal while some is not Fact: Q2-Q4 likely to have lower share counts, lower interest costs and better energy sector earnings. Fact: discount rates should be a bit lower. But I see no reason to return to 1800. IMHO the best outcome would be churning above 200 day to work off overbought and let rotation take over. It may take move below and back above but 200 day will keep moving lower by about 1/4 point a day at these levels until we reach the crashes. So a move to 2000 will still be close. 2017 is current MA.

I am very surprised by bio moves this last week. Fed signalled all clear on rates so bios should have led this rally. That bein said IBB put in a slightly higher low WITH higher RSI so confirmed improvement. We are sill within 4% though. XBI had a positive divergence to IBB getting nowhere near its lows and RSI confirmed. Feb 8-12 saw IBB hit 240s each day before closing above solidy on 12th. This week saw 3 days and now above. As for XBI, it had a nice reversal going green Thur from deep red. Its strong open kept it far from HOD though.

So, everyone knows bios go down if mkt goes down. Maybe we instead see rotation as folks literally were panicking. But I don't believe that. I will say some technical signals indicated to short bios midweek. So far, those trades not working.
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