Author Archive for Chart School

Three RTT Indicators

Courtesy of Read the Ticker.


three-rtt-indicatorsreadtheticker.com is primarily a Richard Wyckoff logic site, however through our research into Wyckoff logic the three indicators below make us very lazy in applying Richard Wyckoff logic.Why? Because if these indicators look handsome together then it most likely the Wyckoff logic is working very well.

These three indicators are NOT a trading system, but they do help with finding excellent well support accumulated stocks that show Mr Market is supporting them. Of course when indicators look ugly they will show stocks in a breakdown, thus less support by Mr Market.

RTT Steps

If the large market plays are accumulating the stock then they will control the range of BID and ASK and not let the stock get to volatile. On down swings they will halt the sell off by adding more demand, and on spikes up they well add supply to slow the advance so that can accumulate more stock float, and when the stock does advance it will do so in a very controlled tight range manner.

Stocks that have a good RTT Steps profile can be found via RTT Swing Scanner (PnF version)

RTTTrendPowerOBV

Volume weighted momentum oscillator. Buy at -15 is best, Zero Ok, +15 if stock is very strong but with care. Very good health trend indicator.

Stocks that have a good RTTTrendPowerOBV can be found via RTT Swing Scanner (both versions).

RTTOBV (Flat EMA 30 to 50)

Supports the RTTTrendPowerOBV. This tool is strongly influenced how price weighted by volume finishes with the close near either the high or low of the day. If close is high on the bar with good volume indicator moves up more so, if close low on the bar with good volume the indicator moves down more so. A good bullish market has more higher closes with good volume than not. That is healthy.A very weak market has lots of low closes on heavy volume. That is not health.

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Three indicators

Video on the subject

NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool
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Markets Remain Near and Above, Yesterday’s Highs

Courtesy of Declan.

Tech indices finished strong after they overcame the opening half hour of selling. The Fed statement was greeted favorably, although market breadth is not looking pretty. The Nasdaq still has a distance to travel to make back all of its losses, but has done well to hold up against Semiconductor weakness.





The Semiconductor Index is struggling to make inroads against past losses as the Nasdaq and Nasdaq 100 push respectable gains. I find it hard to see how this scenario can continue, but given the dominance of Google, Apple and Microsoft in the weightings, it’s easy to see how tech indices have diverged from Semis.




The S&P wasn’t able to take out yesterday’s high, but did enough to recover the morning loss. Tomorrow offers a chance to push a challenge of 2,132.




The Russell 2000 is right on former support, turned resistance. Shorts have their pick for tomorrow.




Markets need an air clearing storm of selling to reset the bull market counter. Market breadth suggests it’s coming soon, but price action continues to defy. Until then, ride the winners and don’t be afraid to take profits.



You’ve now read my opinion, next read Douglas’ and Jani’s.







Stock Index – China vs USA

Courtesy of Read the Ticker.


stock-index--china-vs-usaCorrelation is not causation. However when trillions are wiped out in the Chinese stock market sell off one wonders if it has international effects.Some would worry a little.



Leverage in markets is a funny thing, losses elsewhere tend to bring losses closer to home. The SSEC has fallen 50% rather quickly and the Chinese Govt is threatening BUYERS that the cant sell. Question: Who wants to put new money into a market when you get your name put into a Govt black book when you want to sell? No one who is sane! It takes NEW money to get NEW highs. So unless the POBC is going to provide all the NEW money then the SSEC is very unlikely to do well, of course stranger things have happened. ha!





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SSEC




Other market warnings have been posted by readtheticker.com blog: Market internals stink, NYSE margin divergence to price, Handsome gains in NYSE index may be over



NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net



Investing Quote…



..” If you cannot make money out of the leading active issues, you are not going to make money out of the stock market as a whole”..



Jesse Livermore Trading Rule





…”The four most dangerous words in investing are ‘This time it’s different’ “…



John Templeton





..“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.”..



Bernard Baruch





..“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”..



Bernard Baruch





..”it is better to have few stocks and to watch them carefully”…



Bernard Burach











Second Day of Gains

Courtesy of Declan.

Another round of buying swept through Large Cap indices, but other indices didn’t enjoy the same level of interest.



The S&P had the best of it. Since the middle of July it has enjoyed a strong advance relative to Small Caps and Technology indices, but it may be time for it to revert to mean. Technicals are a little scrappy, but are holding to the bearish side, but one more day of gains could swing it back in bulls favour.





The Nasdaq banked a small gain, but it’s up against the big red candlestick from last week. The ‘bull trap’ is still in play. Technicals are mixed here too.




The rally in Small Caps has come up against former trendline support turned resistance. Technicals are firmly in the bear camp, giving shorts an opportunity to attack the bounce.




The Nasdaq 100 bounced of the former channel trendline, building off the ‘bear trap’, but the last three days have seen very narrow trading. One sell off could erase it all and drop it back into trouble, but bulls hold the advantage.




Eyes will be on the Semiconductor Index. If bulls are going to build on weak strength in the Nasdaq and Nasdaq 100, then the Semiconductor Index will need to rally off lows.




For tomorrow, things get a little more tricky. The S&P is back inside the upper range of earlier congestion while the Russell 2000 is up against former support turned resistance. Tech indices are caught in the middle and could go either way.



You’ve now read my opinion, next read Douglas’ and Jani’s.







Relief Rally?

Courtesy of Declan.

Big gains and a strong reversal in the Russell 2000 puts a potential bottom in play.  The Russell 2000 started the day below the 200-day MA, but then rallied to claim a spike low and a close above this key moving average. Small Caps are a key driver in trend cycles. The ‘bull trap’ from June is still dominant. and a push above 1,280 looks a tall order. but reversing the breakdown of the rising trendline at 1,240 is a different proposition. If it fails at this, then a swift return below the 200-day MA, and then some, opens up. And the long awaited intermediate term decline begins.





The S&P gained over 1% with a second bounce off the 200-day MA. But, it’s a bounce which has come a little soon given the last test of the 200-day MA was earlier in the month. Supply kicks in on a move above 2,100, and the 50-day MA is also lurking around this price level to offer resistance. Technicals are net bearish. My hunch suggests the sellers are going to regain control, but bulls will be looking to press today’s advantage.




The Nasdaq closed the gap from Monday, but there is more work for bulls to do. The ‘bull trap’ above 5,200 is dominant, but today’ buying amounted to a successful defense of converged 20-day and 50-day MAs. However, a test of the 200-day MA is long overdue.




The Semiconductor Index had a tricky day. It gained against recent day’s losses, but it hasn’t really offered the makings of  strong bottom, at least not yet. This will make a recovery in the Nasdaq and Nasdaq 100 more difficult.




For tomorrow, assuming no shocks premarket, bulls have a chance to continue with the work they started today. Shorts covering will drive the early action, but as highs are approached, fresh buyers will emerge.



You’ve now read my opinion, next read Douglas’ and Jani’s.







Market internals stink

Courtesy of Read the Ticker.


market-internals-stinkThe number of stocks above or below the SMA 200 moving average is a great tool to confirm distribution.



Google, FaceBook and NetFlix scream higher while more boring and not well know companies sink below the SMA 200. Mr Market is doing a three card monty trick to hide the expected market direction. Can you pick which cup the bean is under?



The indicator below also confirms poor NYSE advance and decline data.



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SPY




NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net



Investing Quote…



…”I was brutal in self-analysis. He told his sons his conclusions: “Successful trading is always an emotional battle for the speculator, not an intelligent battle.”…He knew that his biggest enemy was his own emotions.”…



Jesse Livermore





..“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.”..



Bernard Baruch





In the short run, the market is a voting machine, but in the long run it is a weighing machine.



Benjamin Graham





…“To me, the ‘tape’ is the final arbiter of any investment decision. I have a cardinal rule: Never fight the tape!”…



Martin Zweig





..”Until an hour before the Devil fell, God thought him beautiful in Heaven”..



Arthur Miller, “The Crucible”

 [Contrarian Investing]

















Fifth Day of Selling

Courtesy of Declan.

Sellers in the S&P made it five days of downside in a row. On this last day it closed near the day’s lows, but also on its 200-day MA. If there was reason for a bounce, then tomorrow could be the day.  Technicals are all net negative.





The Dow took the selling harder. It undercut the July swing low having earlier lost its 200-day MA. Next up is the February swing low.




Small Caps finished at its 200-day MA, after it lost trendline support on Friday. Value players may get a bite of the cherry tomorrow as the index makes it first test of the 200-day MA since February.




The Nasdaq remains caught inside the range. It suffered a fairly clean slice of both 20-day and 50-day MAs, but the nearest support appears to be the July swing low, then the 200-day MA. If markets rally tomorrow, then look for a push to close today’s breakdown gap.




Tomorrow looks to be set nicely for bulls, even if the broader picture appears to favor an intermediate term correction. Indices trading at 200-day MAs are likely to offer the best opportunity, with the Russell 2000 perhaps the best of all.



You’ve now read my opinion, next read Douglas’ and Jani’s.







Broad Selling

Courtesy of Declan.

There was no doubt as to the nature of Friday’s action. A weak, end-of-week close adds to the negative tone, suggesting the damage is more long term. However, not all indices are in true bearish mode.

The S&P is stuck inside its range, and won’t be challenging range lows until 2,045 comes into play. The 200-day MA at 2,063 is an area to look for buyers, although the last test of this key moving average was in early July, which is a little too soon for a new test to hold again. Technicals are mixed, which fits with what is trading range action. Bears may win in the long term, but bulls may get some joy at the 200-day MA for a short term bounce play.

The Dow is not playing so well. It’s struggling with a potential break of the trading range, not something S&P traders will want to see succeed. The undercut of the 200-day MA with a new lower high looks quite damaging. Add a new distribution day, one of a recent sequence of three, piles on the bearish pressure. Net bearish technicals is the final icing on the cake. Bulls won’t regain control until 18,200 is breached to the upside, but a recovery above 17,625 would force shorts to cover and offer bulls something to work with over the next couple of days.

Damaging is the action in the Russell 2000. The index lost rising trendline support, but it will quickly find itself up against the 200-day MA; a test last (successfully) made in January. Technicals are net negative. The next major support test will be 1,100.

The Semiconductor Index took heavy losses, bringing it back to lows. A strong ‘sell’ trigger remains in play with the MACD.

The Nasdaq is working off a ‘bull trap’, but only has one supporting technical on a ‘sell’ trigger. It also has converged 20-day and 50-day MAs to lean on too. If buyers are able to step up…
continue reading





Selling Continues

Courtesy of Declan.

Bears keep the pressure the on with another around of selling. Markets remain range bound, particularly after July’s sell off and recovery, which confirmed market trading ranges.



The S&P finished at its 50-day MA on lighter volume selling. Beyond the 50-day MA next comes the 20-day MA, but neither MA has played as support in recent months.




The Nasdaq almost registered a bearish engulfing pattern, but held up better than other indices. Volume was lighter than yesterday’s. Although a support test remains some distance away.




Worst hit was the Russell 2000, which suffered nearly double the loss of other indices today. The rising trendline is looking like the next logical test for bulls.




The other hard hit index, Semiconductors, was actually able to recover some lost ground, but remains vulnerable to fresh losses. The index has shed 15% from high to low, but it does look like it will lose more with buyers likely reluctant to step in here.




Tomorrow could see more of the same as indices look to return to the low end of their range. Again, look to Small Caps to lead, although a successful test of trendline support would give some measure for optimism.



You’ve now read my opinion, next read Douglas’ and Jani’s.







‘Bull Trap’ in Nasdaq

Courtesy of Declan.

There was some spill over from yesterday’s after hours disappointment in Apple, but after a weak open, bulls were able to mount some challenge by close of business. However, today’s close was still below that of yesterday and registered as distribution. Hardest hit was the Semiconductor Index. It experienced a gap down, shedding 2.5%, as it continues to trend lower. Given the extent of the decline it’s hard to see how the Nasdaq and Nasdaq 100 can continue to trade near yearly highs.





The late recovery in the Nasdaq wasn’t enough to stop confirmation of the ‘bull trap’. The next challenge will be closing the breakdown gap. Technicals are all bullish, and only the performance of the index relative to the S&P is indicating potential weakness.




The S&P suffered a further loss as the rejection of 2,132 continues. However, the first support level to look for Thursday or Friday is the 50-day MA (assuming loses continue).




Finally, the Russell 2000 was able to recover some ground. It’s range bound, so future price action is likely to remain scrappy. A challenge of the ‘Bull Trap’ would offer some direction, but bears are probably feeling a little more confident.




Sellers will probably look to take things into a third day. Keep an eye on the Russell 2000. If this can push towards 1,278 it would offer buyers something to work with for other indices. In the meantime, all indices are back inside trading ranges, and are net neutral.  The broader direction has still to be determined, only the prior trend suggests markets will end this by pushing higher.



You’ve now read my opinion, next read Douglas’ and Jani’s.







 
 
 

Phil's Favorites

It's 1929 for Goldbugs

Courtesy of Joshua M. Brown

The Wall Street Journal documents some very dire facts about the utter capitulation and panic among gold “investors” we’re witnessing.

The last time gold hit a record, after controlling for inflation, was 1980. It has never been back in inflation-adjusted terms and, at Friday’s close, was 57% below its 1980 peak. The Dow Jones Industrial Average, also adjusted for inflation, last hit a record on May 19. At Friday’s close it was 3.7% off that level.

Gold-mining companies have suffered more. The NYSE Arca Gold Bugs Index, which contains big gold producers, finished Friday down 82% from its 2011 high, near a 13-y...



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Zero Hedge

Trump Tops Pre-Debate Polls, Slams Koch Conference Attendees As "Puppets"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Another weekend of glad-handing and Sunday talk-shows and still The Donald dominates the GOP Presidential nominee race. With all eyes firmly glued on this week's debate, Trump had a few choice words for those who attended the Koch brothers' biannual conference (which he was not invited to), tweeting "I wish good luck to all the Republican candidates that traveled to California to beg for money etc. from the Koch Brothers... Puppets?" ...



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ValueWalk

Fannie Mae Discovery Materials "Completely Discredit Government's Defense"

By valueplays. Originally published at ValueWalk.

Fannie Mae Discovery Materials “Completely Discredit Government’s Defense”

From the filing:

Materials produced in discovery in this case and included in the attached appendix undermine, and in some instances completely discredit, important components of the central narrative on which the Government’s defense in the D.C. Circuit action was based, and Plaintiffs should be accorded the opportunity to fully apprise the D.C. Circuit of that reality while briefing is still ongoing.

Plaintiffs will not recount here the relevance of every item in the appendix to the issues in dispute in the D.C. Circuit action, but the deposition transcript of former Fannie Mae / Federal National Mortgage Assctn Fnni Me (...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Greece's Stocks Tumble in First Day of Trading After Shutdown (Bloomberg)

Lenders led a record plunge in Greek equities as the Athens Stock Exchange reopened after a five-week shutdown, with restrictions in place due to capital controls.

China and Asia are on shaky ground (Business Insider)

Headwinds for the world's second-biggest economy intensified at the start of the third quarter, with manufacturing conditions in China deteriorating to their worst in two years in July and triggering ...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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OpTrader

Swing trading portfolio - week of August 3rd, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Kimble Charting Solutions

Consumption and Yields suggesting lower interest rates ahead!

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

This chart looks at the yield on the 30-year bond. Yields rallied strongly from the first of February to the first of July (up 30%). This strong rally in yields hit dual resistance at (1) above, which was the 38% retracement level and the bottom of a rising channel, which both came into play as resistance. Once yields hit resistance a month ago, yields have been falling and bond prices moving higher.

Now yields are attempting to break steep rising support at (2) above.

Below is a very cool chart of the Personal Consumption Expenditure index on a year over year basis, shared by ...



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Chart School

Three RTT Indicators

Courtesy of Read the Ticker.

readtheticker.com is primarily a Richard Wyckoff logic site, however through our research into Wyckoff logic the three indicators below make us very lazy in applying Richard Wyckoff logic.Why? Because if these indicators look handsome together then it most likely the Wyckoff logic is working very well.

These three indicators are NOT a trading system, but they do help with finding excellent well support accumulated stocks that show Mr Market is supporting them. Of course when indicators look ugly they will show stocks in a breakdown, thus less support by Mr Market.

RTT Steps

If the large market plays are accumulating the stock then they will control the range of BID and ASK and not let th...

more from Chart School

Sabrient

Sector Detector: Lackluster earnings reports put eager bulls back into waiting mode

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Corporate earnings reports have been mixed at best, interspersed with the occasional spectacular report -- primarily from mega-caps like Google (GOOGL), Facebook (FB), or Amazon (AMZN). Some of the bul...



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Digital Currencies

Gold Spikes Back Above $1100, Bitcoin Jumps

Courtesy of ZeroHedge. View original post here.

Gold is jumping after the overnight double flash-crash...testing back towards $1100...

Bitcoin is back up to pre-"Greece is Fixed" levels...

Charts: Bloomberg and Bitcoinwisdom

...

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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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