Mid Morning Note

Mid Morning September 13, 2023

Sep 13, 2023

Thomas Thornton

Quick Market Views

Stocks: It’s been a rather whippy market today. The 2023 leaders Mag 7 was up two days ago, down yesterday and up today. It’s not easy, even for the mega-cap long holders. Despite the index gains today breadth has been negative all day. NYSE is down 425 issues and Nasdaq is down 475 issues. The Mag 7 basket is up 0.85% (off highs) and the 493 other S&P stock basket is up 0.1%. Short baskets are making money today. The rolling 3 month period shows the GS short basket down nearly 6% (that’s a gain for the shorts) and the S&P up 2.4%. The markets are chopping lacking a clear direction. The VWAP levels from the CPI print for SPY 446.60 and QQQ 373.75 are still below the last prices. Breaking these levels could see further selling.

Bonds: Rates are now drifting lower after the CPI print, which is news as rates typically see larger moves. Across the curve 2’s are down 4bps, 10’s 3bps, and 30’s 2bps.

Commodities: Crude reversed off the earlier highs and is flat. Recall there are DeMark sell Countdown 13’s as shown on First Call earlier. Gold is flat, Silver is down 1% and Copper is up 0.3%.

Currencies: US Dollar Index is flat. Euro, Yen are weaker. Yuan is stronger today. Bitcoin is up 0.85%

Trade Ideas Sheet:


I am selling OIH Oil Service long with a 28% gain. (I will hold RIG long) See below.

I am covering half of the IYT Transports ETF short with a 4.5% gain.

Thoughts: Choppy sideways action with weak breadth is leaving a lot of people confused. I still like new longs C, ETSY and XLU.

This will be the last note for the day as I have a few projects and I am on Real Vision’s Market Briefing at the close today.

US Market Indexes and Sentiment

Here is a primer on how we use Daily Sentiment Index charts. Bond, currency, and commodity sentiment are posted on the website.

S&P bullish sentiment and Nasdaq bullish sentiment reversed lower yesterday

S&P bullish sentiment shows the potential for another lower high

Investors Intelligence sentiment: The bulls edged higher to 50.7%, after jumping to 49.3% a week ago. Before that, the final August reading of 43.1% showed the fewest bulls since late winter, when the S&P dipped below 3900. The recent bull counts are down from the final July count of 57.1%, which signaled danger. The bears, boosted their number to 22.5%, from 21.9% last issue. Late August saw as few as 18.6%. When they intersect it becomes a lower risk buying opportunity.

Here is a primer on the DeMark Setup and Sequential indicators.

S&P futures 60-minute time frame just chopping around today, holding 4500 as there is a lot of options congestion at that strike for Friday.

S&P 500 Index daily sideways between the 20 and 50 day moving averages.

Nasdaq 100 futures 60-minute time frame just chopping around today

Nasdaq 100 Index daily sideways in last 5 days

Trade Ideas Sheet

Pre changes.

OIH Oil Service ETF I am selling this long idea with a 28% gain. With Crude with a Sequential and Combo sell Countdown 13 and sentiment extreme I am taking this off and will look to buy back lower.

C Citi is a new long idea from yesterday.

F Ford is starting to work off the lows. I remain long. Somehow I believe they will settle with the UAW.

CVNA remains a short idea. With the massive new debt just issues with interest rates ranging from 11-14% they have to nail their quarterly numbers or else the debt holders with very strict covenants could take over the company.

Transports has been a short them from July and it’s worked well. There is a new DeMark Combo buy Countdown 13 today with the Sequential on day 11 of 13. I am covering half of my short with a 4.5% gain.

FDX remains a short idea and has drifted lower. 250 is support and there is a DeMark Sequential on day 6 of 13.

UPS has moved lower helping the Transports Index drop as it’s the largest weight in the index. There are new DeMark buy Countdown 13’s. I’m quite there buying it yet.

JETS ETS Airlines has moved lower after peaking in July after all of the airlines reported blow out earnings thanks to strong demand and they highlighted very low jet fuel costs. I was short DAL and was negative on airlines. I am not sure this is done going down as there can be more earnings guidance cuts coming.

DAL was a short idea in late June and July. There are some DeMark buy Countdown 13’s in downside wave 3 so if this bounces expect a lower high corrective wave 4 of 5.

AAL still has a downside Sequential in progress. They guided way down this morning.

I highlighted Jet Fuel increasing back in July and now it’s stalled at the highs. This is a significant increase.

Hedge Fund Telemetry ETF Percentage Price Oscillator Monitor

The PPO monitor (percentage price oscillator) force ranks ETFs by percentage above/below the 50-day moving average. For information on this monitor, please refer to this primer. This monitor is offered to Hedge Fund Telemetry subscribers who are on Bloomberg. Energy is weak today and I’m taking gains on OIH. Utilities XLU is moving higher off the bottom of the monitor now above the 10 and 20-day moving averages.

Index ETF and select factor performance

This ranks today’s performance with 5-day, 1-month, and 1-year rolling performance YTD. The Mag 7 is up again today doing the heavy lifting for indexes.

Goldman Sachs Most Shorted baskets vs. S&P Indexes

This monitor has the S&P indexes and the Goldman Sachs most shorted baskets. Short baskets are and have been making money in the last week vs S&P up small.

DeMark Observations

Within the S&P the DeMark Sequential and Combo Countdown 13s and 12/13s on daily and weekly periods. Please refer to this primer for information on how to use the DeMark Observations.  The extra letters at the end of the symbols are just a Bloomberg thing. Worth noting: Mixed action with both buy and sell Countdown 13’s and on deck 12’s.

Major ETFs among a 160+ ETF universe. 

Euro Stoxx 600

If you have any questions or comments, please email us. Data sources: Bloomberg, DeMark Analytics, Goldman Sachs, Street Account, Vital Knowledge, Daily Sentiment Index, and Erlanger Research