Rotation Report: Simple is simple

There has been a lot of noise made about various sentiment statistics showing a rush out of stocks.  Whether it be fund cash levels, small futures trader positioning or the NAAIM numbers, it sounds like many traders are trying to make contrary arguments.  It's the same dynamic, just the opposite of what we see at the start of new up trends.  Frank Zorrila wrote an awesome post to this point.

The developing intermediate term trend is lower, and we very possibly have just ended a corrective rally.  It's easy to over-think, but the risk is clearly to the downside.

For numerous reads on Fed announcement implications and major moves setting up in the markets, check out this week's Top Trading Links.

U.S. Stocks

One indicator worth pointing out on the S&P 500 is the ease of movement indicator.  The market is moving lower much more easily than it is higher.  The velocity of the recent drop is much worse than anything we saw during the Financial Crisis.  So that's interesting.

What do I make of it?  This is a dangerous market IF it rolls below short term trend support.

Short term trend support:   

The other day I shared this post explaining why this ascending triangle breakout was high risk.

Are you prepared for a major move higher in long term treasuries?  Maybe you should be.  There could be a monster bottom forming here.  It's no given and YES it's jumping the gun, but sometimes you have to jump the gun in scenario based planning.  The symmetry is excellent.

The Dollar Yen is set for a huge move.  A look at @BartsCharts great work there:

I've mentioned on twitter that I built a short position in semiconductors.  My main target area is the high 47s in ETF SMH.  46 also stands out.

Can Energy ETF XLE hold above the short term moving averages?  It doesn't appear so, but this is the best effort it's had in five months.

Other Markets:

China is rolling over after backtesting a key pivot level.

Greece has significantly outperformed the global markets since their markets re-opened.  This chart is a lesson about what happens after an investment vehicle goes from 'front page fear factory news' to working through the 'crisis' behind the scenes.

Gold is back above the 10 week moving average as that MA starts to flatten out.  If you've followed my work, you know I love the precious metal space as a trade and an investment.  I particularly like the gold miners.  

I still can't get over this data point from Wristly.  They surveyed Apple Watch users and asked what they're using more and less than expected.  70% of users are using the activity tracker more than expected!  People are getting hooked on fitness tracking.  There is still a ton of money to be made in this space, whether it's via Fitbit, Apple, chip stocks or whatever.  I wrote up more on it recently.

Thanks for reading.  Trade 'em well!