Dollar Shenanigans Generated a Bear-Market Bounce?

The BOJ went front and center this week...if they continue the SP500 needs to break a key level to get the party started.

Author

Bootleg Macro
November 05, 2023

Did bulls 🐂 do enough to change the trend in the market? Was Friday 📆 and this weeks’ returns enough to become BULLISH 🐂 again 📈?

What about this past week’s move makes you think we’ve overcome the top we made in July 2023?

No. 🙅🏻‍♀️ But it’s a good step 🦶 👟 in the right direction.

We are back to prices not seen since the end of September. Which if we are being fair, was lower than the July. So this move is nice but it’s to not be trusted, for now.

Again…we are 🐻 OFFICIALLY in a BEAR MARKET since 10/27/23 🐻 - We told you last week about it.

But I do see BULLISH 🐂 behavior in the market 📈 still. In our Turbulence Indicator on the daily is showing this counter-trend BULLISH 🐂 move.

You can see our peak 🐻 in the summer at the end of JULY 2023. Things have changed.

Any possible counter-trend moves in stocks are an opportunity.

- Dustin

Market Performance

Strong 💪 close to the week. All indexes were up ☝️ for the week. Nasdaq (.IXIC) lead all indexes up 6.61% 💚 for the week. S&P500 (.INX) was up 5.85% 💚 for the week. A huge week for indexes considering the recent performance. Dow Jones (.DJI) up 5.07% 💚 for the week.

The market 📈 saw a interesting move in the dollar through the Japanese 🇯🇵 market. Their currency 💴 had a massively 💹 bad week, with I believe resulted in intervention.

If we continue to see FX intervention, we could see unusual moves in the US market driven by choices outside our control. This allows for a potential massive short-squeeze which we know results in a market event.

Indexes are reflecting the BULLS coming back into the market.

If .INX can’t close above 4400 this week, is it even really a bull move? That’s a big level.

Volatility Corner:

VIX / VVIX deteriorated Blue up is good, blue down is bad. The blue line has a HIGH CORRELATION to overall markets. You see we’ve peaked again and now are following the path of August 2021 into December of 2022…

The future is always uncertain but momentum in sentiment can trend in prices for months, quarters and years. This indicator shows the relative uncertainty in the market. We are not in a strong position to be making broad bets.

We are about to flip BEARISH on volatility. Interesting setup to end the week. Is it real?

Volatility’s vol is falling, with correlation rising.

VIX is at the bottom of it’s range. We need to respect volatility.

MACRO INDICATOR:

Long-term, we are in a BEAR MARKET. Daily, we are in a BEAR MARKET

  • MACRO SEASON: BEARISH Since 10/27/22🛑

  • MICRO WEATHER: BEARISH Since 7/27/23🛑

US Index ETF Review:

SPY

  • Trend: BEARISH Since 9/27/23🛑

  • Trade Signal: Go SHORT Since 10/24/23🛑

  • Future Price Path: Price to FALL Since 10/16/23🛑

DIA

  • Trend: BEARISH Since 10/2/23🔴

  • Trade Signal: Go SHORT Since 10/27/23🔴

  • Future Price Path: FALL Since 9/21/23🔴

QQQ

  • Trend BEARISH Since 9/29/23🔴

  • Trade Signal: Go SHORT Since 10/23/23🔴***

  • Future Price Path: FALL Since 10/16/23🔴

IWM

This move is interesting.

  • Trend: BEARISH Since 9/29/23🔴

  • Trade Signal: Go Short Since 9/21/23🔴

  • Future Price Path: RISE Since 11/2/23🟢***

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New Highs $5-$20:

  1. AEO

  2. CXW

  3. AROC

  4. NU

  5. AVPT

  6. UEC

  7. SWN

  8. KGC

AEO

A few strong stocks like this can make a world of difference at the end of the year.

CXW

This continues to rocket higher. Up over 20% over the past 3 weeks.

AROC

Absolute breakout week.

NU

This has been a nice move. A very nice breakout into November.

AVPT

Nice stock with low volatility.

UEC

I believe in the trend! This range broke out in the summer and we’ve been going higher ever since.

SWN

Recent events have changed the character of the trend. Yet an uptrend persists.

KGC

A very high correlation to BITCOIN. A positive correlation to the dollar too.

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New Highs $20+:

  1. GII

  2. FTI

  3. DECK

  4. RACE

  5. CBOE

  6. WMT

  7. PKG

  8. LOPE

  9. NEWR

  10. GDDY

  11. ANF

  12. LRN

GII

I don’t believe in this move. But it has to reverse trend sometime, right?

FTI

This is a nice trend but the volatility is higher than I prefer. I’ll watch this one.

DECK

A big move in the past 2 weeks, getting digested at a new high price.

RACE

Ferrarri with great performance on the year. Great performance recently.

CBOE

This stock shows a very nice upward semi-volatile trend.

WMT

Big stock with a nice move recently. It whips around but it’s up for the year.

PKG

This one is going higher.

LOPE

I’ll be patient with this one. What a week and month. All the good stuff just happened for the year.

NEWR

This is a nice steady move. I like this one especially with a falling dollar correlation. High bitcoin correlation too.

GDDY

Huge week. I’ll be patient and watch it.

ANF

The most sup-rising stock in 2023 for me. Retail. Really retail.

LRN

Big jump in recent price. There is a good chance it settles in a small price range for a while. Digesting the gains.

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