November 13, 2018
Mark Newton CMT, Newton Advisors, LLC
Monday mid-day Video- Click the link directly Below
Trend bearish UNDER S&P 2764, and Bullish OVER.
Will be on Fast Money- CNBC today at 5:20pm EST-
Rally today has had a tough time gaining traction. We see the DJIA is negative, S&P is barely up +0.15% while the NASDAQ is still higher by 0.46%. and given the extent of the washout in NASDAQ lately, this isn’t much of a bounce. Breadth is largely flat today.. and Energy the biggest underperformer given Crude’s further washout today- with WTI down 6% and we see Energy lower by 2%. Also lower are Staples and Healthcare, while Financials are managing to gain nearly 0.75% and Industrials also positive by nearly the same amount. Yet Tech only able to muster 0.35% gains is an issue to those expecting an immediate snapback as this sector remains quite weak and difficult to call any sort of bottom until Tech can stabilize.
SPX- HOURLY Chart-
S&P on hourly charts shows the failed rally from earlier today and now a move back down to test recent lows from earlier. Overall, tough to be too positive just yet, but there are some signs that are worth mentioning that could bring about an upcoming bounce. Prices are now nearing the 50% level of the entire move from late October (which intersects 2709) while Demark counter-trend exhaustion is nearly complete on hourly charts. Additionally, we're seeing the first instance of positive momentum divergence on an hourly basis, so further declines into end of day and/or tomorrow likely will not lead momentum to new lows. While this isn't a buy signal per se, it is encouraging and bodes well to consider covering shorts near 2709-12.
Russell 2k vs SPX is right back down to former lows, an area of real importance and given the degree of momentum lift in the last month coinciding with an 8% lift in prices off the lows, it's likely that this can probably stabilize and turn back higher next week and rally into December. The so-called "Death cross" is happening in Russell 2000 with 50 crossing below the 200 day moving average, but these have been notoriously unreliable and aren't really all that predictive of bear markets.