SUSI WEEKLY UPDATE

There will be no weekly update this weekend.

SUSI WEEKLY UPDATE

We had 2 TCS (TimeCycles Spike) in the running for a potential turning points and given the action into this OPEX the probability is relatively high that the time window around FEB 20-22 could the next opportunity.

Also of interest is the development of another TCS cluster around March, but let's stay focused on FEB 20-22 first.



Pls also bear in mind that any sort of intermediate turn will trigger a chain of sell signals due to the fact that the latest bounce DID NOT let our SUSI Indicator reach new highs, which will automatically lead to neg. Divergences and by definition to SELL SIGNALS.



The next days will be telling.



Look at this also from the other side that by steamrolling a high probability sell opportunity Mr. Market signals STRENGTH and this has to be respected in case we see strong upside action next week.

Thermometer of Mr. Market's temperature is showing some fever....

A fairly reliable short term Indicator/ "Thermometer of Mr. Market's temperature" has been the 1day Moving Average of the Tick data (390 min) and his shorter 200min sibling...

Commitment of Traders report

Look at the commercial Traders and see that a) we have started a correction and b) we still have some way to go before we c) need to see a turn down in the green line to call the bottom....

... the Euro on the other side seems less clear with an extreme in the commercial position. Anyway we need to see a turn first before we can call the end of the EURO weakness....

The Euro also has the look of an Elliott Wave Impulse Wave down where we are in the middle or end of a Wave 3. Impulse Waves com in 5's meaning we could have more action to the downside before we can call the end of he Impulse.

Pls also bear in mind that commodity impulse waves tend to extend "5" waves (W.5 will be longer than W.3 and W.1).

Breadth update

No change here. The bears are still in control, but further upside could blur the picture. Pls note the downwards sloped cummulative lines and also the bear spikes on the bottom and the top of the graph (redish colors)

VIX_OSC update post OPEX

We are right back to the neutral zone. The next pivot will guide us in a way that a lower low in the VIX_OSC would mean that the bear will continue as opposed to a new high above the mid Jan high which would mean that the rally could have 'legs'.....

(pls also notice the light positive Divergence in the indicator over the last 2 weeks with a higher secondary low in the indicator vs. a lower low in the Price....)

Mr. Market gave us a hell of ride in this week's OPEX

As previously discussed the BIAS was clearly bearish going into this OPEX (Option Expiration) but Mr. Market treated us with a solid rally against the odds. As you can see from the above the initial positioning was already well advanced, i.o.W. there were already to many bearish bets (the blue line was already too far down..) in the market in order to let the bearish bias materialize.

Reading Sentiment is an artform not a science, meaning all you get are the odds and a probability that this set up plays out on average but this week was apparently the exception....

SMALL CAPS look vulnerable...according to the FMI

We've put our Flow analysis on a different platform in order to analyse longer time periods and more Tickers.

Our main indicator will be the FLOW MOMO Indicator (FMI) which is a Flow based momentum indicator.

Here we want to look for the direction of the FMI (:down) , the position of the FMI (:below Zero) and eventual FMI Divergences to Price (: negative divergence= see red arrow).

The FMI has been calculated on high frequency Volume datasets and then been sampled into DAILY Charts to allow for more historical comparisons.

Small Caps hit 3 out of 3 and that even after a bounce of the 50day Bollinger Bands.

Conclusion:

I'd be cautious the next weeks with a bearish bias (according to the FMI)

SUSI WEEKLY UPDATE

This still looks like a small upside correction in a larger downtrend, you ask why...

• Patterns look mostly like flags
• given the rally we had this so far does not qualify as a correction in term of time and price
• most models are still on sell
• a TCS Cluster around Feb 20 and later a bigger one in March allude to some Volatilty....
• OPEX next week, which makes the last updays (read ..cheap PUT Options) like easy prey for the hedgies with some downside action into Thursday

High Yield Bonds show relative weakness on a quite day...

Credit has been the backbone of the Market. So be alert when you see relative weakness in credit.

The Shorts are reloading for the OPEX...can they hold it??

Watch the BIAS into the OPEX as expressed by the Hedgies through the lens of Equity Options.

Mr. Market missed a great chance to bounce....

Volume seems low, so chances are there that the Bulls will try again tomorrow....

The week before OPEX....

Long term view of our VIX_OSC Indicator shows how deep the Indicator runs in a normal "run of the mill" correction (not even talking about a BEAR here)....

If History is any guide then we do NOT have reached the readings of a "normal" correction yet and this one week before the OPEX (Option Expiration) with a fairly bearish positioning in the Equity Options market (not shown here).

Conclusion:

We could see a bounce but bear in mind that we have a cluster of TCS's (TimeCycles) set up around the OPEX with a bearish Equity Options set up. Chances are we could see the VIX_OSC hit or cut through the target area....or we at least want to be open to that possibility.....

SUSI WEEKLY UPDATE

SUPPORT & RESISTANCE CLUSTER CHARTS:

XOI (OIL STOCKS)

DOW JONES

This is what we mean with "air pockets". Friday's close is the small black bar, which in both cases sits on the lower border of a major Cluster of Restistances. It means that the path of least resistance is down, now that Mr. Market has worked his way through the area.

Bouncing up will be hard work and reqiure lots of energy, while going down will be easy...

The Market has taken it on the chin in an impulsive fashion. The fairly high oversold readings and the action on Friday's last trading hour (big reversal) hint at another bounce attempt next week. The TCS's hint at a Feb 10 (+/-) time target. If the Market can rally further look for Feb 20.

We also see some clustering revolving around mid to late March. We believe that this bear campaign could have enough strength to go all the way up to there before doing the next WAVE B/2 - multi week(/months ?) kind of bounce. But let's look at next week's attempt first.....and then take it from there.

FLOW UPDATE: LIQUIDATION

The light blue lines speak for themselves.

BREADTH UPDATE: The return of the BEAR?

This is how bear campaigns usually start.

The Euro is sporting a beautiful A-B-C Pattern...which is a corrective Pattern

ABC Pattterns (see here for more explanation) is a corrective pattern that interludes btw impulse waves. In the Euro case one could see the possibility that this ABC, which corrects upwards could be followed by another Impulse down. The beauty here is that this situation should resolve one way or the other within the next couple of hours....