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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

SPY 675.37

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Nov 4 4:00 PM EST

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To: GROUND ZERO™ who wrote (91339)	4/2/2017 1:44:19 PM
From: Underexposed	1 Recommendation Recommended By Heywood40 Read Replies (1) of 218388

A statement like this means nothing to me THE BANKING INDEX LOOKING SUSPECT I have no idea what your suspicions are about... there is nothing actionable in such a statement. For that index, the break below the January low I classify as suspicious... right now we could still see it rally since it's now already a bit over done but the break below the January low can't be ignored or dismissed too quickly, it must be watched to see if any further weakness develops or if it can find the muster to recover... this is much better... you don't leave anything to my imagination and I cannot misinterpret your meaning. this chart you gave me relates the $VIX and $TNX to the $BKX in addition to some indicators. the $VIX shows no immediate problems... it has consistently run between 10-14...hardly a fear-factor like say just before the November election when it climbed to 20. So the VIX is not an indicator of pending doom right now. I'm not calling any top or bottom, I never do that except on a quick intra day basis for a possible day trade, with this chart I'm merely commenting on my observations which cannot be refuted... do you not see the January lows taken out??? I can see two candlesticks that went lower than the January low's in the Banking index. They did not close there and as I will show you further down... they signal a halt to further declines... at least in the short term... a double bottom in a decline is not bearish. So NO...I don't see a negative there... My friend, there are more and more market indices showing the same suspicious behavior, look at the DOW Transports, they also broke below the January lows... do you not see that??? No I don't see that, buddy. It is not in that chart. Look I am Canadian, I spend most of my time observing Canadian trends. But I am a chartist and give me a chart I can easily comment on it. But from that post of yours with a chart attached to it... I cannot magically think of a relationship between the Transportation sector and Banking sector when there is no reference to the Dow Transport index... that makes no sense to me. The fact that index dipped at the same time as the banking index could be coincidence or perhaps EVERY index dipped at that time...which I think is more likely. but simply to ignore and dismiss the obvious is a dangerous strategy... I don't see it as obvious at this point. OK so let us see what I think about the things that I think MAY be compared... the Banking Index $BKX and the 10 year Treasury Yields $TNX At least there you see something of a trend comparison.... the $TNX rises... the Banking Index seems to rise as well... right now both are going sideways. Here is an interesting P&F chart on the $TNX THIS IS OBVIOUS... the $TNX is approaching a rather solid support band from 23.25 - 23.50. There is NO weakness in this support... It has been tested 3 times this year alone and the same band served as a strong resistance back in 2015 being tested 4 times back then... this is not a trivial point. IF this line is broken and the TNX falls below and closes there... it will probably plummet down to 20 fairly quickly and that strong support will turn into a strong resistance again. Now let's address the $BKX and falling below January lows the top circle shows the BKX dropping far below the Lower Bollie... as normal it did not stay out there long... it stayed out there for 2 days before re-entering the Bollie fold in a nice positive slope... if it had fell further instead it would have been a Danger Will Danger moment.... then you see it TRY to go lower but it failed.... It formed a DOUBLE BOTTOM pattern (a real pattern :) ) which is bullish. Now the value of the index is doing what is natural... it is headed towards the 20day SMA. Once it reaches that dotted green line it will either blast through it OR (and more likely) rise and fall on either side of the 20day SMA for a while as the bollies get tight Look at the Slow Sto and MACD... they are rising... especially the Slow Sto... they would be falling further if things were getting worse. The BBWidth is cresting...at least mildly.... this indicates the fall is over for the time being. SO... it is not OBVIOUS to me that there will be a dramatic fall in the banking sector in the near future. Rather there is signs of a moderate recovery from that correction on March 20. Is it a slam dunk that the recovery will continue... Nopes.... but by monitoring the $TNX P&F chart for breach of that support possibility and the progress of the $BKX as it marches toward the 20day SMA will guide your decisions.

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