- The New High Newsletter
- Posts
- We've Run Dry! It's Time To Get Out of Here
We've Run Dry! It's Time To Get Out of Here
Rango is my favorite Johnny Depp movie. We are Rango now. Lost in the desert. But we can find our way out using markets. The prices have a message for us. Can you read it?
Bootleg Macro
October 22, 2023
The well ran dry 🌵. I feel like Rango lost in the desert 🏜️. We’re out of ideas 🪹 (empty nest). The market is that BEARISH 🐻. As we said last week, “It’s obvious 🤓 we flipped BEARISH 🐻 on 7/28/23 (check the Volatility Corner 📈 below). We’re living in a new reality.”
We gained more evidence this week. Small Caps 🧢 confirmed ($IWM, $IWN $IWO) are BEARISH 🐻. Nothing can save 🚑 us except a broad rally 🏎️. We have a broad collapse 🥀 brewing under the surface.
It wasn’t hyperbole to title last week’s edition Small Caps Hold The Keys to 2024. It’s 👻 spooky 🎃 season. The Marco indicators are turning into a house 🏚️ of horrors 🤡.
This is why there are 5 ⚄ total breakouts in the New Highs Newsletter. We are broadly BEARSH 🐻 for the first time since 11/12/21.
Stops 🚏 tight 🤏 and risk limited. Lets go.
Market Performance
Friday was uncomfortable. All indexes closed at lows. Not particularly constructive but it’s only 1 day, right?. How were the week returns? Yikes.
Indexes were BEAR 🐻 SLAPPED. S&P500 (.INX) was down 👇(-2.39). Dow Jones (.DJI) was down 👇 (-1.61%) for the week. The Nasdaq (.IXIC) was down 👇 (-3.16%).
Personally, I was short $XLC puts which was good but the better short was $XLY for the week. The ideal setup was being short and aggressive.
Ugly to have all 3 major indexes now negative rolling on a 5 month look back period.
The whole month-to-date (MTD) returns have been wiped out. 🏄🏿
Train 🚆 wreck for now in the DOW. The BEAR 🐻 signals are strong here.
It’s fall across the world. 🍂 You can see in the Nasdaq too.
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 the up and down…we are worse ⛈️ than last week⛈️ . We rejected essentially off the 10 week moving 🦥average.
The recent action was very BEARISH 🐻. A small 🔹 move on this chart is a massive 🦖 move in indexes. Hence why above you see negative 5-Day 🐆performance for all 3 US indexes.
This is a market for required investors only. Cash 💵 has yield and all prices are subject to change under bad conditions. You’re walking the plank 🏴☠️ into a sea 🌊 of sharks 🦈…don’t you think it’s better to keep lock 🔒 yourself away in a safe place 🦜?
Or get short and ride the BEARISHNESS 🐻 until it disappears. With an obviously small sample size, we can not use past with any believe in the future. But I’ll act with my own discretion to the signal. Which is buy high yielding secure assets, cash or government paper.
When blue is up, stocks go up. When blue is down, stocks go down.
Back in 2021…we experienced a similar move to what we get now. A rejection after a roll over at the top of this indicator.
Risk happens slowly then all at once. Be cautious.
MACRO INDICATOR:
Long-term, we are in a BEAR MARKET. Daily, we are in a BEAR MARKET
This indicator is showing we will flip to a MACRO SEASON BEAR MARKET next week if the price of VIX holds. 🫣🫣🫣🫣🫣🫣 - Not good.
MACRO SEASON: BULLISH Since 12/2/22🟢 (At risk of flipping next week)
MICRO WEATHER: BEARISH Since 7/27/23🛑
US Index ETF Review:
SPY
The speed of the whipsaw has the model giving mixed signals. Patience is required. The pain trade might be higher now in indexes.
Trend: BEARISH Since 9/27/23🛑
Trade Signal: Go LONG Since 10/10/23🟢
Future Price Path: Price to FALL Since 10/16/23🛑***
SPY volatility is falling, correlation is high. This can all reverse during the week and make surprising trend changes.
Being at the bottom of a range is usually a chance for a bounce but the angle of the trade range down. The range is making lower-highs.
DIA
Ignore the GO Long signal for this week. Patience is required. This is at the bottom of it’s range and generally BEARISH. Caution.
Trend: BEARISH Since 10/2/23🔴
Trade Signal: Go LONG Since 10/18/23🟢***
Future Price Path: FALL Since 9/21/23🔴
Falling volatility and rising correlation is a concern. We would want to see falling correlation with volatility to indicate price stabilization.
Similar diving trade range to SPY. Not a good look for now.
QQQ
Continued patience for all indexes, especially the QQQs. Here moves can change fortunes in an afternoon.
Trend BEARISH Since 9/29/23🔴
Trade Signal: Go LONG Since 10/9/23🟢
Future Price Path: FALL Since 10/16/23🔴***
Falling correlation and positive price correlation mean a falling price. We would like to see volatility reset in QQQs which if it breaksout again, then it could be very positive. There are NO signals of a breakout yet or positive price moves.
Bottom of trade range is a spot for a bounce. Maybe.
IWM
We said last week $168 was a big price for SMALL CAPS. We now must be patient and see if the bottom is coming.
Trend: BEARISH Since 9/29/23🔴
Trade Signal: Go Short Since 9/21/23🔴
Future Price Path: FALL Since 9/26/23🔴
Falling volatility and rising (from negative) price correlation is very, very bad for prices. Down we go it seems.
This is the worst trade range out of all the major index ETFs in the US.
Enjoying this?
& Invite a friend.
New Highs $5-$20:
ET - Oil & Gas Midstream
ET - Oil & Gas Midstream
Since we only have 1 stock, I’ll go much deeper into looking at the data of the stock. It seems this stock has a strong profile over the past few years. Strong upward momentum, the price has no issue going higher.
This stock is low volatility, highly stable up and to the right stock, for now.
I enjoy the general drift of this stock, which is has done for years now. With a yield around 8%, I like it for a hold during this rise in commodity prices.
ET has a flip to RISING BULL in it’s sentiment quick is happening quickly but is after it did fall considerably. This lends more support to the possible length of the bull move happening now.
Enjoying this?
& Invite a friend.
New Highs $20+:
TMV - Daily 20+ Year Treasury Bear 3x Shares
TBT - PowerShare UltraShort Lehman 20+ Year Treasury Pro shares 2x Shares
PFIX - Simply Interest Rate Hedge ETF
LABD - Direxion Daily S&P Biotech Bear 3x Shares
TMV - Daily 20+ Year Treasury Bear 3x Shares
TBT - PowerShare UltraShort Lehman 20+ Year Treasury Pro shares 2x Shares
PFIX - Simply Interest Rate Hedge ETF
LABD - Direxion Daily S&P Biotech Bear 3x Shares
Enjoying this?
& Invite a friend.
What service do we provide the reader? (Save You Time 🕰️🕰️🕰️)
The Price🏷️ of Loving ❤️Stocks📈
The biggest price we pay for a love of markets is the time 🕰️. Screen time. Sitting watching. No moving, no living, it’s silent and the same. Stop wasting time. Subscribe and get a finely designed list of company stocks to your inbox every Sunday morning ready for review.
If you spend more than 2 hours looking at charts a month, we can save you time and money. For FREE, you will get 100+ reviewed tickers sent your inbox. Get smarter about the markets without drowning in charts and wasting your life on screen time.
Take a break from the markets, let someone else send you curated, aggregated and finely designed breakouts. We see new action everyday. You don’t want to miss out on the next chance to join.
Enjoying this?
& Invite a friend.
Get Connected: Follow @BootlegMacro
We are at an inflection point in $IWM - Do we bounce or break lower?
Here is what I think:
$SPY $QQQ $IWM
— Bootleg Macro (@bootlegmacro)
11:30 PM • Oct 16, 2023
Model Builder Course:
I have a course. You build the tool you see me using in the videos. You get to build your own version of the same model you see me use in every video. I’m adding to it over time as well so you’ll get all updates I do to the course forever.
Thank you,
BootlegMacro