Author Archive for Chart School

Modest Selling

Courtesy of Declan

No surprise to see sellers step in and take profits with markets at or near all-time highs. The S&P remains at channel resistance with 2,553 still a stop level for potential shorts. Volume was light so there was no real conviction to the selling.
 


The Tech averages experienced regular selling without proximity to resistance or higher volume distribution. Technicals are in good shape with Tech indices outperforming Large Cap stocks.
 


The Russell 2000 experienced slightly bigger selling than the Nasdaq or S&P but there is still a long way to go before the first level of support is tested.
 


The Dow was the only index to experience higher volume distribution while experiencing the narrowest range on the day; a straight profit take.
 


For tomorrow, watch for additional profit taking on light volume – anything else (bar upside!) may prove worrying.





Weekly Market Recap Oct 08, 2017

Courtesy of Blain.

This was the third week in a row where we saw major indexes post 4 gains out of 5 for the week! While none of the gains individually were massive, when you have 3 weeks in a row of almost identical behavior you start to walk into a market where some of the indexes need a rest to consolidate some gains!  The S&P 500 gained 1.2% for the week while the NASDAQ jumped 1.5%.

While the jobs report Friday (more on that below) got most of the attention this week economically, Monday’s ISM Manufacturing report was booming with a reading of 60.8, representing the highest level for the report since 2004.  Expectations were for 58.1.  Meanwhile Wednesday’s ISM non manufacturing rose to 59.8, compared with 55.3 in the prior period and marked its highest level since 2005. A reading of 50 or greater indicates expansion.

The economy “lost” 33,000 jobs in September, marking the first decline since 2010. Yet the decline was entirely due to widespread workplace disruptions caused by hurricanes Irma and Harvey.    The storms disrupted major economic centers in Texas and Florida, where as many as 1.5 million people were temporarily unable to get to work; that’s the most in 20 years.  The industry hurt the most was the restaurant business. Employment fell by a whopping 105,000.  The unemployment rate, meanwhile, fell to 4.2% from 4.4% and hit the lowest level since December 2000. The jobless rate was not affected by the storms, the government said.

Wages rose 0.5%, or 12 cents, to $26.55 an hour, likely reflecting a hurricane-induced bump – many low paying jobs in hurricane hit areas are hourly and thus when those people don’t work, average wages for the country rise.

“The Fed and the markets will just ignore this report,” said Paul Ashworth of Capital Economics. “If past-storms, particularly Katrina, are any guide, employment will rebound markedly over the next few months.”

The Senate approved a budget bill on Thursday. Republicans passed tax cuts through what is known as budget reconciliation, which requires just a simple majority in the Senate.…
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Tech Averages Finish Positive

Courtesy of Declan

Friday was a lacklustre day and there was little outside of Tech averages of interest. The Nasdaq and Nasdaq 100 finished higher – holding their breakouts. Momentum and long-term holders have little reason to sell, but taking partial profits would be prudent.

Best of the action was reserved for the Nasdaq and Nasdaq 100; each finished at the highs of the day without doing much. The Nasdaq 100 holds its breakout along with the Nasdaq. What's key for these indices is that breakouts old.  Technicals are all bullish.
 

 


The S&P tagged upper channel resistance and Friday didn't make much progress beyond this. The pattern to Thursday suggests a Bearish Doji Harami which offers a chance for shorts to take a play with a stop above 2,553.

 


The Russell 2000 has stalled a little after substantial gains since August. The area where it stalled was a resistance area but the fact it has held these gains in tight action near highs suggests there is more to come for the coming week. Why technicals suggest 'short' this might be the better 'long' or swing trade. Technicals net 'bullish'.

 


For tomorrow; shorts can look to the S&P, longs may actually get some joy from the Russell 2000. Existing holders of the Nasdaq and Nasdaq 100 can probably stay holding their positions.

 

 

 

 

 

 





SP500 How much higher ?

Courtesy of Read the Ticker.

sp500-how-much-higherWho’s gonna pick a top, not us, but we can pick the next rocky zone?



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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…



..”Don’t trust your own opinion and back your judgment until the action of the market itself confirms your opinion”..



Jesse Livermore Trading Rule





..“If it’s obvious, it’s obviously wrong.”..



Joe Granville





Novice Traders trade 5 to 10 times too big. They are taking 5 to 10% risks on a trade they should be taking 1 to 2 percent risks.



Bruce Kovner





..“It’s not what you own that will send you bust but what you owe.”..



Anon





..“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











And the wait goes on (for the Nasdaq 100)…

Courtesy of Declan

The index which looked ready to the pop spent another day on the sidelines.  There is little room for maneuver for either side so if the Nasdaq 100 doesn't pop tomorrow it's hard to know when it will. Volume climbed in accumulation and the MACD triggered a new 'buy'.
 


The S&P came very close to tagging channel resistance and today's action came as close as to registering a channel hit. Technicals are healthy although a volume was a little light.
 

 


The Russell 2000 lost a little ground but this was to be expected given prior gains. Look for more of the same.
 


The one index is heading towards resistance is the relative relationship between Consumer Staples (XLP) and Consumer Discretionary (XLY). Profit takers take note, now is the time to take some money off the table.
 


For tomorrow, the index to watch is the Nasdaq 100 but the S&P may be one for which taking some money off the table looks the more prudent action.





RTT browsing latest..

Courtesy of Read the Ticker.

rtt-browsing-latestPlease review a collection of WWW browsing results.

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Dow Breakout and Russell Adds to Gains

Courtesy of Declan.

The Dow followed in the footsteps of other indices by mounting a breakout but it was the Russell 2000 which stole today’s limelight.




Starting with the Dow, it made a straight-forward break to new highs on higher volume accumulation. Technicals remain in good shape.






But it was also a day where there is an acceleration in the gains in the Russell 2000; this is a rally which has gone from the lows of 1,344 in August, to 1,509 at the start of October and doesn’t look like it will be stopping anytime soon. Historic extremes for this index don’t kick in until the Russell 2000 gets to 1,560.  Small Cap strength is important marker of economic strength and offers an opportunity for money rotation into Large Cap indices down the road (when bulls tire of chasing gains in the Russell 2000).





We are still watching for a breakout in the Nasdaq 100. Today came close to clearing 6,000 – a move likely to coincide with a new MACD trigger ‘buy’





Finally, the S&P remains on course to test channel resistance. Technicals remain firm.





For tomorrow, keep an eye on the Nasdaq 100. This is the index offering something for bulls.




You’ve now read my opinion, next read Douglas’ blog.




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Weekly Market Recap Oct 01, 2017

Courtesy of Blain.

This past week was almost a carbon copy of the prior week – 4 days of gains offset by 1 day of mild losses.  The bulls continue to own 2017.  Importantly, small caps saw a second strong week in a row after being the laggard of the year — so a healthy rotation continues throughout the market.  Even a “hawkish” speech by Janet Yellen on Tuesday could not slow down this train:

Investors shruged off comments from Federal Reserve Chairwoman Janet Yellen, who cautioned against moving too slowly on interest rates. Yellen said there is a risk that the labor market could become overheated, causing an inflation problem down the road.  In lengthy remarks, Yellen said she still thinks this year’s low inflation is “probably temporary” and that inflation will likely rise to reach the central bank’s 2% target “over the next few years.”

“The tone of her comments is cautiously hawkish,” said Ward McCarthy, chief financial economist at Jefferies & Co.   Market expectations for a rate increase in December, observed from the prices in Fed funds futures, moved up to 76%, according to CME Group’s FedWatch Tool.

Wednesday, small caps surged 1.9% to close at 1,484.81 — marking the biggest one-day percentage gain since March 1 as Republican leaders unveiled a plan to overhaul the U.S. tax code that looks to sharply reduce tax rates on businesses and many individuals.

“We shall wait and see how Trump’s plans evolve into legislation,” said Deutsche Bank’s strategist Jim Reid in a note on Thursday. “Our U.S. team’s early take is that they see a prospect of some reforms occurring at the corporate level (particularly for small corporates), but the potential for substantive reform of personal tax is much lower.”

The S&P 500 gained 0.7% over the week and 1.9% over the month, and 3.9% for the quarter.  This is the 8th consecutive quarter of gains!!  The NASDAQ rose 1.1% over the week and is up 1% over the month, while its quarterly gain is 5.8%.  The Russell 2000 climbed by 2.8% over the week and…
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Nasdaq Breakout

Courtesy of Declan.

It has been slow in coming but Friday delivered on the week’s promise. Friday offered a solid clean break of resistance on higher volume accumulation. It was a text book breakout accompanied by a MACD trigger ‘buy’.  The only concern bulls will have for the coming week is a ‘bull trap’ marked by a two-bar reversal.

The Nasdaq 100 did well but not enough to push the breakout. Volume registered as accumulation and there was a weak On-Balance-Volume ‘buy’ trigger. Next week could be when the Nasdaq 100 joins the Nasdaq beyond 6000.

Sleeper play-of-the-week went to the S&P. I wasn’t expecting much from the index but it delivered with good supporting technicals.  Momentum players can be looking for a move to projected channel resistance with no direct overhead resistance to contend with. The only disappointment is the sharp underperformance relative to other indices (on the plus side, when in the ascendancy it will benefit from money rotation into ‘safe’ Large Cap stocks).

The Russell 2000 did most of its hard work earlier in the week and it only managed small gains on Friday; going forward, any support test of the breakout will likely take a couple of weeks given how far it has moved from such support. Any tag of 1,450s should be bought with a stop on a loss of 1,450.  Relative performance remains good.

The Semiconductor Index recovered from what had the look of a ‘bull trap’ as Friday saw new highs. This is good news for both the Nasdaq and Nasdaq 100 with an additional breakout in resistance in the relative relationship against the Nasdaq 100. Signs look good for further gains.

Supporting Nasdaq breadth metric, the Nasdaq Summation Index, has offered a smooth ride higher but in the 500s it will now find itself approaching an area typically associated with reversals in the Nasdaq. However, with the Nasdaq having just broken resistance will this mean the risk of a ‘bull trap’ is now higher?


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Wyckoff Bitcoin – Update v3

Courtesy of Read the Ticker.

wyckoff-bitcoin--update-v3Bitcoin is still on the charge, who can stop it, lets review.



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Richard Wyckoff logic is perfect for block chain investing, as deals with pure supply and demand equation.











Disclosure: No ownership of bitcoin.



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Investing Quote…



…”Vibration is fundamental; nothing is exempt from this law; it is universal, therefore applicable to every class of phenomena on the globe.”…



William D Gann





..“By failing to prepare, you are preparing to fail”..



Benjamin Franklin





..”October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”..



Mark Twain





..“How many millionaires do you know who have become wealthy by investing in savings accounts?”..



Robert G Allen





The minute you get away from the fundamentals – whether it’s proper technique, work ethic, or mental preparation – the bottom can fall out of your game.



Basketball Legend Michael Jordan.











 
 
 

Phil's Favorites

How Many Hours Americans Need To Work To Pay Their Mortgage

Courtesy of Zero Hedge

When it comes to the cost of living in cities, a general rule of thumb is that housing prices are much higher in the country’s economic and population hubs, especially in the cities along the coasts.

As Visual Capitalist's Jeff Desjardins notes, particularly in recent years, prices have been pushed sky-high in places like New York City or San Francisco through a combination of limited supply of new homes, increasing demand, shifting demographics, and government regulations.

PUTTING IT INTO PERSPECTIVE

Today’s visualization from HowMuch.net applies a ...



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Zero Hedge

How Many Hours Americans Need To Work To Pay Their Mortgage

Courtesy of Zero Hedge

When it comes to the cost of living in cities, a general rule of thumb is that housing prices are much higher in the country’s economic and population hubs, especially in the cities along the coasts.

As Visual Capitalist's Jeff Desjardins notes, particularly in recent years, prices have been pushed sky-high in places like New York City or San Francisco through a combination of limited supply of new homes, increasing demand, shifting demographics, and government regulations.

PUTTING IT INTO PERSPECTIVE

Today’s visualization from HowMuch.net applies a ...



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Chart School

All Day Recovery

Courtesy of Declan.

It had looked bleak for markets at the open following a big gap down. However, this was just a temporary hit as markets came back right from the open.  It's also good news for bulls or long holders. The S&P shows this best.


The Dow Jones actually went as far as to test former upper channel resistance, now turned support.  Volume climbed in accumulation.

...

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Digital Currencies

The World's Largest ICO Is Imploding After Just 3 Months

Courtesy of Zero Hedge

Earlier this summer, Tezos smashed existing sales records in the white-hot IPO market after the company’s pitch to build a better blockchain for cryptocurrencies made it one of the buzziest ICOs in the world. As we noted at the time, the company capitalized on that buzz by courting VC firms and other institutional investors with a $50 million token pre-sale. After the company opened up selling to the broader public, demand soared as investors greedily bought up tokens in spite of glitches that threatened to derail the sale early on. By the end of its weeks-long token sale in July, Tezos had sold more than $230 million.

Now, Tezos is proving that authorities in the US and China were on to something when they decided to crack down on the ICO market, which has become a cesspool of...



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ValueWalk

FBN TOPS CNBC ACROSS ALL BUSINESS DAY PROGRAMMING AS DOW HITS HISTORIC 23,000 MILESTONE

By VWArticles. Originally published at ValueWalk.

FOX Business Network (FBN) topped CNBC in Business Day and Total Day viewers as the Dow hit the historic 23,000 mark on Tuesday, October 17th, according to Nielsen Media Research. FBN’s Business Day coverage saw a 33 percent advantage over rival CNBC with 226,000 total viewers compared to CNBC’s 170,000. Additionally, FBN’s Total Day coverage saw a 22 percent advantage with 199,000 total viewers compared to CNBC’s 163,000.

]]> Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

FBN had the four top rated news programs of the day,...



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Insider Scoop

For Chipotle, The Worst Is Over Soon Or Not Depending On Who You Ask

Courtesy of Benzinga.

Related CMG 10 Stocks Highlighted On Wednesday's PreMarket Prep Chipotle Concerns Mount As 2018 Estimates At ...

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Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!

...

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Biotech

Circadian rhythm Nobel: what they discovered and why it matters

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

 

Circadian rhythm Nobel: what they discovered and why it matters

Courtesy of Sally Ferguson, CQUniversity Australia

Today, the “beautiful mechanism” of the body clock, and the group of cells in our brain where it all happens, have shot to prominence. The 2017 Nobel Prize in Physiology or Medicine has been awarded to Jeffrey C. Hall, Michael Rosbash and Michael W. Young for their work on describing the molecular cogs and wheels inside our biological clock.

In the 18th century an astronomer by the name of Jean Jacques d'Ortuous de Ma...



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Members' Corner

Day of Last Dances

News today has been relentlessly terrible. A horrific mass murder happened last night in Las Vegas. (Our politician's abject failure to address gun control is beyond sickening.) And today, reports that Tom Petty died of a heart attack, followed by reports that Tom Petty is not dead, and now reports confirming that Tom Petty has passed away. 

...

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OpTrader

Swing trading portfolio - week of September 11th, 2017

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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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



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All About Trends

Mid-Day Update

Reminder: Harlan 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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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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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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