Weekly TimeCycles & OptionFlows highlights: Time for SANTA

The markets has taken a serious beating and is solidly oversold thus a temporary relief really in the upcoming time window a.k.a. "SANTA CLAUSE RALLY" seems possible.

SPYDER is oversold.

Hot Money is getting ready.

MOMO is Oversold.

...but the TLT seems to question SANTA ...!

...whereby the small caps are putting their shoes out for SANTA.

...as do the Corp. Bonds.

..as do the BANKS (which could be an amazing bounce trade.....)

Even the Gold/Silver ratio expects SANTA.

Gold is in a good seasonality anyway.

The Nature of the BEAR: no rules, just liquidations

Breadth sport EXtremes that usually lead to upcoming LOWS

Liquidity speaks for itsself!!

The following Breadth charts show some extreme levels that have led to upcoming, read LATER in time, lows.

...and then there is the Breadth chart for the European shares which looks even worse...

Sentiment shows 2 paths

A truely unique set up in the VIX_FV Indicator warns that sth unique is about to happen : UP or DOWN ...?

....and 2 path story in the VIX_OSC indicator seem to show the way.

ISE Options date is inconclusive.

...where the CBOE is in line with the 2 path theme.

Weekly TimeCycles & OptionFlows highlights: CROSSROADS

The Spyder started to correct and doesn't seem finished.

The Hot Money is out of the game.

The Banks have already taken a beating and could see some more.

The longer term Exhaustion chart shows that we are at a crossroads where Mr. Market has to decide whether he wants to rhyme with 2007, 2000 or whether the Central Banks can buy some more time.

Oil takes side for the bearish case after this beautiful last exhaustive move up (assuming no war in the Middle East).

The precious metals show 2 potential paths: One with more downside action and the other where we could see some neg. Divergence developping and thus more bullish price action.

Rare Pattern in the VIX_Fair_Value Indicator

How often do you find a situation where the market tends to go down and insurance gets cheaper ??

There is a word for it: COMPLACENCY!

....needless to say that this is not bullish....

Weekly Close below key Fib Ratio for the Spyder

Weekly TimeCycles & OptionFlows highlights

The Euro looks overbought, which is bearish for the risk trade...

The Spyder is Overbought....

...the Hot Money sits on the sidelines...

...because they sit on good unrealized profits and have begun to take some money off the table...

...which all jives with Gold topping out....

We don't know what will happen in Europe but the data shows some caution for the next week. View this against the backdrop of the disappearing liquidity and you will get more wild rides.

Maybe we can get a SANTA CLAUSE rally later in december after we have seem some kind of correction.

ISE and CBOE Options data sport low readings for a 20% in October

The data series are short and there is no significant amount of reference cases, where we came from some oversold extreme, entered into a quick & sharp rally and flipped with relatively low Indicator readings...... 2008 is all I found.....

Liquidity_Index reached a deterioration level as in 2008

The Liquidity drain has been as bad as in 2008 !! Pls compare 2008 to today and you will notice that the bear rally at this stage is normally propelled by lopsided breadth days (90% of all shares go up no selling a.k.a. buying panics!).

In 2008 we reached point (A) after a -210 tumble in the index, this time it is (A').

Will history rhyme? We don't know but we do expect lots of Vola.

Small Caps COULD develop a major Head & Shoulders

There is nothing more then a hunch at this point, but this could materialize and should be worth to monitor.

Picture Italy falling....banks stop lending to small caps.....recession.....small caps are also a good correlation proxy for High Yield Bonds...so this could become contagious

Bull or Bear kick off ??

Our VIX_OSC indicators a.k.a. our 'Workhorses' have not made up their mind with a light bias towards the bear case.

Weekly TimeCycles & OptionFlows highlights

The Hot Money had a good run and is taking money off the table.

The Spyder is solidly overbought....

...and the timing model hints at 2 scenarios, both with bearish views on November.

The QQQ's paint a similar picture where we could have a early run up next week in a broader bearish picture.

The Gold/Silver Ratio wants to rise, i.e. which is bearish for the RISK ON trade.

Gold seems here in sync with the risk trade and should see a break here with a potential early run up.

...SAME HERE

The a.m. contradicts to some extends the bearish look of the TLT which normally acts as safehaven......let's see.