Just Like clockwork...

[12squared]

Small-Cap Breadth Momentum crossed below MA(4) guard rail yesterday. NYSE, &mid-caps approaching.

+Small-Cap Breadth Momentum 7Jul23-7Sep23.png

https://stockcharts.com/h-sc/ui?s=%21IT ... 5116119973
https://stockcharts.com/h-sc/ui?s=%21IT ... 2287198185
https://stockcharts.com/h-sc/ui?s=%21IT ... 7468455518
https://stockcharts.com/h-sc/ui?s=%21IT ... 3396451602

NYSE Bullish Percentage index diverging from $DWCPF today, is telling me to cut my losses.

+BPNYA 7Jul23-7Sep23 1148.png

[jatelle]

Strong day today from the indexes despite the hot data reports. Today was the highest volume of the last 11 sessions. Tomorrow (Friday) is TRIPLE WITCHING. Dealer Deltas are very well balanced heading into OpEx which could lead to some volatility as opposing positions are unwound simultaneously.

SPY is now several dollars back above the moving averages and now must attempt the Inside Week Breakout and fill the Bear Gap at 455.49. Bulls will want to fill it sooner than later and put in a higher high in our recent uptrend from the 433 bounce that kicked off during August OpEx.

If we reject harshly, we may need to retreat to re-test the Daily 50 SMA currently at 447.27.

.

[jatelle]

I know not everyone likes or understands this macro/quant flow stuff but this Cem Karsan is super smart and is very much worth a listen. He aptly remarks that "time is not a Bear's friend" and their window to breakdown this market is rapidly closing as we approach the end of the year. Seasonality wise we are entering a strong seasonal period for flow of liquidity into the market.

Cem Karsan Talks Volatility Trends & OpEx Flows
https://twitter.com/i/broadcasts/1ZkKzXZYrwdJv?t=6m14s

[jatelle]

This Bears have taken full advantage of this window to breakdown the market and have created yet another bear gap. However, the real test is coming up with the Daily 200 MA just below currently at 418 where there will be Demand with potential buyers lined up to buy it back and try to fill this latest bear gap at 438.43. Breaking and holding below this 200 MA will bring bigger downside.

[tnwhiskey]

This Bears have taken full advantage of this window and are trying to breakdown the market and have created yet another bear gap. However, the real test is coming up with the Daily 200MA average just below currently at 418 where there will be Demand with potential buyers lined up to buy it back and want to fill the bear gap at 455.49. Breaking and holding below this 200 MA will bring bigger downside.

What do you think the current area of support is? I'm not a chartist by any means but it doesn't look quite clear, especially when the 10, 20, 50, and 100 MAs have been broken. Maybe it will freefall to the 200MA and hang out there?

[jatelle]

This Bears have taken full advantage of this window and are trying to breakdown the market and have created yet another bear gap. However, the real test is coming up with the Daily 200MA average just below currently at 418 where there will be Demand with potential buyers lined up to buy it back and want to fill the bear gap at 455.49. Breaking and holding below this 200 MA will bring bigger downside.

What do you think the current area of support is? I'm not a chartist by any means but it doesn't look quite clear, especially when the 10, 20, 50, and 100 MAs have been broken. Maybe it will freefall to the 200MA and hang out there?

Yes, the Daily 200 EMA (currently at 426) and the Daily 200 SMA (currently at 418) are likely "line in the sand" pivots for a bull bounce. But I am paying special attention to the bear gaps - the latest one at 438.43 and then 455.49 (which the bulls tried but failed to fill on Sept 1). If the bulls bounce but cannot fill these bear gaps then this would indicate a much larger downside is forthcoming.