Author Archive for Chart School

Good and Bad Accumulations

Courtesy of Read the Ticker.

good-and-bad-accumulationsNot all ‘Causes’ or accumulations (or distributions) warrant a trade, some are good and some are not, it is the readers job to determine which are more Mr Hyde or Mr Jekyll.



The Law of Cause and Effect

In order for there to be an effect (change in price), there needs to be a cause. The effect will be in direct proportion to that cause. Best price moves occur when there has been enough time to allow for a period of accumulation or distribution (or in other words a cause).






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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…



..”Thus, I affirm, every class of phenomena, whether in nature or in the stock market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause.”..



William D Gann





..”Money can’t buy you happiness but it does bring you a more pleasant form of misery”..



Spike Milligan





..”The key to making money in stocks is not to get scared out of them”



Peter Lynch





..”Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway”..



Warren Buffett





..“Bull markets are born on pessimism, grow on scepticism, mature on optimism and die of euphoria.”..



John Templeton











S&P Drops Below 50-day MA

Courtesy of Declan.

The good work from yesterday was undone with today’s selling.  The S&P posted a clear break of the 50-day MA on modest volume and will next be heading to test support of the declining channel – which at the moment looks more like a ‘bull flag’.  Technicals for the index are net bearish, but are close to a recovery. It might look worrying, but the index could benefit in the long run.






This selling was not limited to the S&P. Despite finishing on the 50-day MA after four days of gains, it wasn’t able to break through. Instead, another 1%+ loss was delivered.  The Russell 2000 is in consolidation triangle, within which is a ‘bear flag’. The 200-day MA is the next target.





The Semiconductor Index was more decisive in its action as it made a clear cut break from its tentative rising channel. The index gave up nearly 2% on today’s sell-off, and this could have implications for the Nasdaq and Nasdaq 100.





The Nasdaq is coming back to the former ‘bear trap’ but hasn’t yet challenged. The 50-day MA is available to lend support, which also might encourage buyers. Selling volume was lighter, which may represent an easing in profit-taking, especially given support has held.





While today’s selling was worrying it’s still got a good chance of encouraging buyers to step in given the proximity of 50-day MAs (Nasdaq, Dow Jones) and support (Nasdaq and Nasdaq 100).  Shorts might look for expansion of selling in the S&P given it’s not near support and the risk:reward is better.




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




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Russell 2000 at 50-day MA as Indices Mount Morning Recovery

Courtesy of Declan.

It was a good day for indices as early weakness gave way to sustained buying into the close. There was early morning weakness to set the tone but it didn’t last. The one index to rebuff this was the Russell 2000.  After yesterday’s respectable finish the index went on to rally back to its 50-day MA. The gains in the Russell 2000 were enough to trigger a ‘buy’ in the relative performance against the Nasdaq and MACD trigger ‘buy’. Momentum buyers won’t join the fun until 1,393 is breached, so another 20 points of gains could be on the cards before supply becomes a problem.






The S&P experienced a spike low as morning selling pushed the index well below its 50-day MA. However, it was able to recover to finish above the 50-day MA, but not before technicals turned net bearish. Can it break out of the 6-week channel consolidation?





The Nasdaq started the day near resistance, finished the day near the same resistance, but managed a picture perfect tag of its 50-day MA over the course of the morning. The stage is set for a challenge of 5,936 resistance, but it will need buyers to get there. Technicals suggest further gains are favoured, so it will be up to the market to deliver.





For tomorrow, look for today’s afternoon buying to continue into the morning. Should buyers come in to drive such an advance, then next will be to look for resistance breakouts.  At that point, momentum players could become a factor and trigger actions of short covering.  This trifecta of buying could deliver big gains.




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




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Buyers Tried To Revive Russell 2000

Courtesy of Declan.

There wasn’t the reaction two days of narrow trading had presented into Monday’s open, but the Russell 2000 made a good attempt at trying to rally.  However, it tagged the 50-day MA, then headed back to its starting point.  The only change on the day was the MACD trigger ‘buy’.  With two spike highs in less than a week the next move to look for is a challenge on the ‘bear trap’.






The S&P posted a third successive doji with the 50-day MA holding as support. Volume has steadily dropped, which runs the risk of seeing prices head lower in the absence of buyers (not necessarily active selling). There is a squeeze coming up with channel resistance converging with the fast rising 50-day MA.





The Nasdaq had a similar day to the S&P, instead, it has the support of the 20-day MA to lean on. Key resistance at 5,930 is the line to cross to generate a breakout – and the 20-day MA is putting the squeeze on.





For tomorrow, look for breakouts in the Nasdaq (for longs), or a drift below the 50-day MA in the S&P and Russell 2000 (for shorts).




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




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Weekly Market Recap Apr 9, 2017

Courtesy of Blain.

2 items of interest before we begin:

  • We will be emailing out a quick reader survey this week; this will be the first time it will be sent in email format and the first reader survey since we’ve changed to our weekly format.  Please take a moment to grade the content of our weekly content, thanks!
  • For those interested in forex trading, ForexBrokers.com (sister site to us here at StockTrader.com and StockBrokers.com) has published its first annual forex broker review. There were 20 international fx brokers included and a total of 5,236 data points assessed.

It was another week of “modest moves” in a year that thus far has been completely full of them.  The lack of volatility in 2017 has been both striking and at times record breaking.  (last week we noted the daily S&P change of 0.3% was the lowest since the late 1960s!).  For the week,  the S&P 500 shed 0.3% and the NASDAQ 0.6%.  Wednesday was the one day of significant volatility as solid early gains due to the ADP private sector employment data (+263K jobs created) was offset by selling following the release of the Federal Reserve minutes.  Futures slid Friday on the Syrian strike but recovered much of that before markets opened in the U.S. Friday.   No war of words at the Trump-Xi summit this week as both leaders projected everything as hunky dory.

This week’s review of some significant economic indicators:

  • Monday, ISM manufacturing for March fell to 57.2 from 57.7, though the employment index hit a six year high. A reading of 50 indicates economic expansion.
  • Tuesday, the February U.S. trade deficit shrank almost 10% to $43.6 billion , aided by an increase in exports to a 26-month high and a plunge in imports of automobiles and cellphones.
  • Wednesday, ISM non manufacturing for March fell to 55.2 from 57.6.
  • Friday, government data said employment was a big miss at just 98,000 jobs created (expectations were about 180,000 gained); but some analysts blamed weather.  Whatever the case reading too much into any 1 data point


continue reading





Quiet Friday

Courtesy of Declan.

Very little to say about Friday’s action; tight intraday spread on low volume was not going to send the world alight. The only index to post a modest gain was the Semiconductor Index.

The Semiconductor Index rallied from a minor support level marked by the big-one day loss in March (with a low of 986), but the rally was made away from channel support and never challenged the 20-day MA.

The Nasdaq 100 is lingering near its 20-day MA with resistance at 5,440 just over 20 points away.  Gains in the Semiconductor Index didn’t make their way to the Nasdaq 100, but it wouldn’t take much to repeat another breakout as was mounted last week.

The S&P is setting up a swing trade. A second narrow trade range offers a chance for a breakout/breakdown on a loss of Friday’s high and low. The presence of the 50-day MA suggests a rally is favoured, but don’t discount the alternative (as the counter move is likely to prove stronger if the index breaks below the 50-day MA).

The Russell 2000 is hanging on to its 50-day MA after the index retained Thursday’s gain. Technicals are poor, with the MACD trigger perhaps the best opportunity for a recovery. If the Nasdaq (Nasdaq 100) is able to breakout then Value buyers may begin fishing for opportunities in the Russell 2000 and component stocks.

Longer term, the Transport index is again feeling the pressure as it loses ground against the Dow Jones Industrial action.  As a weekly chart it’s a slow burner, but the relationship is a long way from the highs of 2014 and this is not a good sign.

Closer to home, breadth metrics are on the rise for the NYSE, which should see higher prices in the near term (again, favouring the long side of the market).

Momentum traders keep an eye on the Nasdaq 100, Value traders on the Russell…
continue reading





Alphabet Inc suffers distribution

Courtesy of Read the Ticker.

alphabet-inc-suffers-distributionThere is something going on at GOOGLE.



Large down swings on high volume over the last 6 months. Kinda get the feeling the month end earnings report (April 27 2017) may have a few negative surprises. We have seen the stories that advertisers are unhappy with the shot gun approach used by google to apply advertising dollars. Some one is unloading!.



A high volume downswing can be bullish if the damage to the trend is not too bad and are infrequent, but when you see 5 down swings where the volume is greater than the up swing, you just have to conclude prices are being held up by the market makers to allow some big whale to sell at very good average prices.



Our readtheticker.com customised OBV tool (RTTOBV-Trend (Daily)) shows the trend has changed for the price volume pressure as it shows divergence. Warning, and suggest to investors be careful out there!



It is true however the Wyckoff law of Effort vs Results would suggest with all this volume on the down swing and it has yet to do serious price damage it can be considered bullish. This is true, however it still is not a great sign, while other stocks can be considered as they show better price and volume action health.



The point is the next high volume swing, maybe a feather that breaks the trend.





Click for popup. Clear your browser cache if image is not showing.

GOOG




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





…“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”…



Martin Zweig (The inspiration behind a number of Martin Zweig’s methods came, from Jesse Livermore).





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



Bernard Burach





..”If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks”..



John (Jack) Bogle





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



Joe Granville











Markets Take Late Hit

Courtesy of Declan.

Sellers swoop in afternoon trading to whip nascent demand built after a positive open.  The sell off was attributed to an indecisive Federal Reserve, but profit taking can occur at any time when an extended series of small gains is undone by one big day of selling.  Volume rose in confirmed distribution.




The index most vulnerable heading into today was also the one to suffer most at the hands of sellers. The Russell 2000 suffered a big hit as it dropped over 1%, moving away from its 20-day and 50-day MAs. The ‘bear trap’ hasn’t been negated, but it’s under pressure.





The Nasdaq came back off resistance without registering an attempted breakout. The potential MACD trigger ‘buy’ failed, although other technicals are still okay.





The S&P experienced a bearish engulfing pattern as it turned away from nearby resistance. It too registered distribution and technicals are weakening. Further selling is looking probable here.





Interestingly, the Nasdaq 100 did attempt a breakout, but it was pulled back below resistance – leaving a spike high. Its first test is the 20-day MA, then the 50-day MA. With the failure of the MACD to trigger a ‘buy’ it’s now a question in looking for bearish triggers, such as a possible ‘sell’ in On-Balance-Volume.





In the space of one day markets have gone from a probable breakout to at-risk of further profit taking. There is still plenty of support to work, and another sideways period as experienced during the latter part of 2016 is probably more likely, but as markets look to find support there may be an opportunity for shorts to take advantage with a quick trade.




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




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Readying for the Breakout

Courtesy of Declan.

Today’s action was more subtle with indices regaining some of the Monday’s lost ground, yet not enough to challenge prior highs.




Best of the action was the Nasdaq 100. It’s well placed to break above 5,450 and free itself from resistance. The MACD is very close to a trigger ‘buy’ with good relative performance against improving Russell 2000.






The Russell 2000 didn’t post a gain but it did hang on to 20-day/50-day MA support. While it hasn’t kicked on, it has managed a MACD trigger ‘buy’





The S&P posted a small gain but also generated a fresh relative ‘buy’ trigger (against the Russell 2000). While momentum buyers look to the Nasdaq and Nasdaq 100, value buyers can look to the S&P. A gain here could be the start of a bullish breakout from a ‘flag’ consolidation.  The 50-day MA can be used for a trailing stop.





The Nasdaq defended its 20-day MA – yet didn’t quite do enough for a new MACD trigger ‘buy’ – will it do so tomorrow? Watch it too for a MACD trigger ‘buy’ on what has been strong relative performance throughout 2017.





The spanner in the works remains the Semiconductor Index. It’s struggling a little without truly tilting in favour of one side or the other. The 20-day MA is playing as support with the 50-day MA nearby to lend a hand if needed. Technicals are weak, and today’s inverse hammer looks bearish.  Should this undercut the 20-day MA then breakouts for the Nasdaq and Nasdaq 100 are unlikely to hold – if such breakouts should occur.





For tomorrow, watch Nasdaq, Nasdaq 100 and Semiconductor Index for leads. Those late to the game may yet be able to pick up value in the S&P if there are breakouts higher.




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




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Small Caps Suffer Profit Taking

Courtesy of Declan.

It was inevitable after a series of gains that sellers were going to make an appearance and today was the day that happened. The Russell 2000 took the brunt of the selling as it shed over 1% on a reversal off resistance. This brought the index back to converged 20-day and 50-day MAs, which may be enough to stem the loss, particularly as other indices were able to recover into today’s close.






The S&P was able to recover its losses, finishing with a doji after rebounding off the 50-day MA. Volume climbed in what would have been considered distribution had it not finished the way it did.





The Nasdaq was caught between the S&P and Russell 2000 in how it finished. It didn’t get past resistance but remains close enough to mount a challenge tomorrow.





The Nasdaq 100 is in a similar state as the Nasdaq. The 20-day MA is squeezing the index against resistance, forcing market participants to pick a side. Watch for leadership tomorrow.





Tomorrow is an easier play for longs; play resistance breaks and watch for the ‘bull trap’. Aggressive players may want to go ‘short’ given indices are trading below resistance, but should they do then a break of resistance becomes the short cover. The whipsaw risk is probably higher for shorts than bulls as buyers are required to push beyond resistance, but markets can fall simply on the absence of buyers (no active selling required).




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




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









 
 
 

Zero Hedge

UC Davis Rolls Out "Morning After Pill" Vending Machines - "It Encourages Responsibility"

Courtesy of ZeroHedge. View original post here.

The University of California at Davis has a revolutionary solution for all their binge-drinking students who find it difficult to control their primal urges after a night of frat-hopping...the 'Plan B' vending machine.  For $30 a box students can now flush that pesky, potentially-fertilized egg without the hassle of having to walk all the way to a pharmacy. 

Of course, the female students on campus seem to love the idea, saying..."It's like useful"....yeah, totally, and stuff.

"It's ea...



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ValueWalk

The First (and Last?) Competitive Advantage

By VWArticles. Originally published at ValueWalk.

Farnam Street Q1 letter to investors

Also see

2017 Hedge Fund Letters Hedge Fund Letters: 2016

The First (and Last?) Competitive Advantage

“Capitalism is a pretty brutal place.”

– Charlie Munger

]]> Get The Full Series in PDF

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



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Phil's Favorites

Weekend Reading: Trumponomics - End Of 100 Days

Courtesy of Lance Roberts, Real Investment Advice

On election night, my friend Jessica and I were standing in the studios of Fox News in Houston as the ready to provide “color commentary” as the Presidential election proceeded. The newsroom was highly electric with reporters rushing back and forth grabbing the latest data as it poured in.

In between interviews on what a “Trump” election could mean for the country, Jessica and I stood glued to the monitors watching the results as they were reported. While we were both very hopeful that Trump could win the election, but deep down I don’t think we actually believed it. The odds of Trump winning enough of the “swing” states to gain the sufficient number of electoral votes seemed astronomical. Yet, as each of those states began to fall in Trumps...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

The US economy just grew at its slowest pace in 3 years (Business Insider)

The US economy grew by 0.7% in the first quarter, weaker than expected, according to an advance estimate of gross domestic product from the Department of Commerce released on Friday.

Oil's April Rollercoaster Takes It Back to $50 on Supply Dilemma (Bloomberg)

Futures are down 2.4 percent this month in New York after slipping 6.3 percent in March. What’s worrying investors is expanding U.S. crude production, which threatens...



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Kimble Charting Solutions

Gold Miners; Largest outflows in history could be bullish, says Joe Friday

Courtesy of Chris Kimble.

Could historical outflows present an opportunity? Yesterday Sentimentrader.com reported that outflows from Gold Miners ETF’s GDX and GDXJ topped $800 million on 4/26, the largest single day outflows in history. 

Below looks at Gold Miners ETF GDX, reflecting where these large outflows took place.

CLICK ON CHART TO ENLARGE

The long-term trend since...



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Chart School

Semiconductors Tick Along

Courtesy of Declan.

It was another quiet day for indices but the Semiconductor index was able to add over 1% on the day. This also helped post gains to the Nasdaq 100, although there was a relative gain for the Semiconductor Index against the latter index.


The Nasdaq 100 registered an accumulation day despite its underperformance against Small Caps. The index remains well placed to make a move to upper channel resistance.

...

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Digital Currencies

Bitcoin Spikes To Record Highs

Courtesy of ZeroHedge. View original post here.

US dollar prices for virtual currencies are soaring. Both Bitcoin ($1343 highs) and Ethereum (as we described previously) are at new record highs as China regulators/exchanges appear to have 'stabilized', fears over the so-called 'hard fork' have abated, and hopes for an ETF have been revived by an SEC review.

Back above the price of gold and at record highs, Bitcoin rallied notably overnight after China's largest bitcoin exchanges introduced a flat 0.2% fee on eac...



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OpTrader

Swing trading portfolio - week of April 24th, 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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Members' Corner

Should I buy that stock?

Courtesy of Phil Stasukaitis (pstas)

I was asked by my local investment club to do a presentation on "how to buy a stock?" As I pondered the question, I began by noting all the elements that I monitor regularly and which come in to play as part of my decision process. As the group is comprised novices to experts, I tried to gear my discussion to cover both basics and more advanced concepts.

Four Part Discussion

  1. Macro Economic Indicators
  2. Market Indexes
  3. Fundamental Analysis
  4. Technical Analysis

1. Macro Economic Indicators

We'll start with reviewing some basic concepts and measurements that have direct effects on the stock market. 

A. Gross Domestic Product (GDP)

...

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Mapping The Market

Bombing - Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democr...



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Biotech

CAR-T & CRISPR - the Future is Now

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

PSW Members....it has been a while since my last post, but since many have all been on the board following the chat, it is time for a scientific lesson in a few of the companies we are long.  In addition, another revolution is coming in the medical field, and it will be touched upon as well.

CAR-T - stands for Chimeric antigen receptors (CARs) and the T is for T-cell.  

From the picture above, T-cells are one cell type of our immune system that fight off infection as well as they are one player at keeping rogue cells from becoming cancerous. Unfortunately, cancer somehow evades the immune system and so it begins.

CAR-T came along in the late1980s via a brilliant scientist, Zelig Eshhar...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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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FeedTheBull - Top Stock market and Finance Sites



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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