Special Risk Capital Management LLC

Mixed Signals September 18, 2021

Sept. 17, 2021 – Just a quick comment: You can get a notice when postings have changed by clicking on the “follow” button (I believe that’s what it’s labeled is). I update some time over the weekend, so it could be any time from Friday evening through Sunday night.

So it looks like we’ve got a bunch of mixed signals and sentiment. Unrest in China, inflation fears, economy slowing, Covid continuation, concerns about higher corporate taxes (please !), domestic politics and lingering “funk” about Afghanistan. So lets try to break some of this down via the chart below.

A top to bottom view: Market Sentiment actually improved a little this week and remains positive overall. Money Flow is negative (not much buying on Up bars) and Volume Flow is pretty much neutral. Price Action is negative, just because we’ve had a bunch of down days the last (near) 2 weeks, but nothing terrible (yet). Prices remain in that upward sloping channel and above the 14896 support level. The volume spike on Friday was the predictable surge due to options expiring on the 3rd Friday of every month (plus futures too).

Now that options expiration is behind us, let’s see if we get some renewed buying interest next week . . . “Buy The Dips” as they have for years now. OK, the Covid scare was the exception, but that was not a surprise either. Over all the stocks in the broad S&P 1500 Index as shown below –

A split / “mixed” of Weak (50% to Strong & Neutral (50%), not really a surprise given the price action lately. The table below shows Short Term Sector Strength –

Technology and Financial sectors are about at the middle of the pack, hence a mixed view of what sector leadership is saying. I’m finding it hard to believe that oil & gas will remain dominate for very long and that’s propping up the US $ also. So it looks like the seasonal weak month of September is living up to its reputation. The good news is October is just a week + away. I’ve done little trading of late, my holdings are doing OK, at least for now. No need to get whipsawed until there is a better definition of a trend change. Staying steady for now.

Have a good week. ……….. Tom ……….