Sunday, January 29, 2017

Jan 29 - Eyeing SPY short through end of Feb and re-entering XBI long


Eyeing a hedge of a SPY/ IWM short through end of Feb when we historically get some weakness.  From a seasonality and sentiment standpoint, feels like the market needs to rest a bit.

Per Almanac Trader, we see an early Feb peak typically then some movement downwards on average of 3% until the end of Feb.  This chart dovetails pretty well into the inflated bullish sentiment right now.  Long term I am still bullish but getting the sense retail investors are starting to feel more comfortable which is a warning sign.

Per Callum Thomas, there is a moderate negative divergence between price and sentiment.  This isn't an actionable signal in itself but a warning to be on the lookout for a sell off.

 VIX spread is very large and more pronounced than the sentiment/ SPX price poll
We have negative divergence in RSI but this can go on for a while

 IWM at the top of its range.
 JWN I ended up selling at breakeven on Thurs but still eyeing this one as a long
 Same w M
 NTNX also sold on Thurs and would like it to stall out a bit before thinking about going long again.  Twice it failed to break out cleanly so I am a bit wary of this one.
 XBI looks good and I may hop back on this one tomorrow but again a bit wary of the overall indexes being so overbought but QQQ is still holding strong.


1 comment:

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