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Today’s Market: Buy Stocks, Sell Bonds

Jim Perez

Stock Market Today: The Level 3 Data Quant Report’s selling pressure exhaustion hits new highs. These off-the-chart measurements indicate a buy signal for SPY, DIA, IWM, DVY and a sell signal for long government bonds TLT.
The battle over the 200 EMA of the SPY at $138.03 was won by the bears but the bulls are overdue for a bounce back to $138.00. Our measurements of selling pressure exhaustion signals this should happen very soon.
Level 3 Data is Buying & Selling Pressure for Stocks and ETFs. “Identifying buying and selling pressure is like looking at a stock in the third dimension” says Dr. Juan Gutierrez, PhD, lead researcher and co-founder of Level 3 Data. “Clearly the most powerful aspect of our data is its ability to measure price exhaustion that signals a change in the direction of the trend.”
Thursday November 15th: “Smart Money is Buying” Yesterday I posted that smart money is buying and despite the weak jobs report we are buyers of dips. The battle of the 200 EMA of the SPY at $138.00 has been won by the bears and when the bounce happens the $137.50 to $138.00 levels will be strong resistance.
SPX Standard & Poor’s 500 Index: The SPX high of the day was 1360.55 – 1.51 points higher than our first bolded resistance level. The SPX low of the day was 1348.31 – 1.69 points lower than our first bolded support level.
Thursday was a two sided trading day with volatility returning. The high was tested 3 times and the low was tested twice. See the November 15 pivot points and commentary below:
Key resistance level for S&P 500 (SPX) today November 16th –1361.10, 1363.77, 1370.78
Key support level for S&P 500 (SPX) today November 16th – 1348.06, 1343.84, 1341.23
Today’s SPX pivot points November 16th:

UP 1358.10 1359.44 1361.10 1363.77 1370.78
DOWN 1362.5 1348.06 1345.83 1343.84 1341.23

Level 3 Data Quant Report Buy Signal 11/08: SPY, DIA, QQQ, IWM and DVY. Sell Signal TLT. All buy signals remain in effect until you are notified otherwise.
The following commentary has been here for a few weeks. “The most likely trading scenario is that we have seen the highs of the year of $148.11 and that we should rebound off our current levels back into the $142 range then print a lower high less than $145.00, trade sideways and down to $140, break through to print a lower low in the $138.00 level.” It has played out exactly as anticipated. We are now at $136 and it is time to bounce back into the $141 level.

SPY – S&P 500 ETF: Level 3 Data Quant Report Buy Signal 11/08: SPY at $138.04 with an exit target at the 0-line of $141.79. The new exit target is $140.15. This buy signal indicates Selling Pressure Exhaustion. The market action has sold off hard the past few days. The SPY had two small bounces from the exhaustion signal but they have not held. The bulls did not hold $137.50 and this important level will act as the first level of resistance going back up. The first step is to gain $137.50 then punch back to the 0-line at $140.15.

Level3Data Chart 1

TLT – Long Term Bonds: L3D Quant Report Sell Signal 11/08: TLT at $125.84 with an exit target at the 0-line of $123.09. The new target is $124.22. The TLT is a mirror image of the SPY. The TLT closed 11/14 at $126.73. This sell signal indicates Buying Pressure Exhaustion. We are back into a condition of Buying Pressure Exhaustion and price being overbought. The TLT bears must now push the price back below the 0-line at $124.22 which is now acting as support.

Level3Data Chart 2