Archive for the ‘Chart School’ Category

Greece Strikes Back (or was it China?)

Courtesy of Declan.

A doubly whammy of weakness from Asian and European sessions left bulls with little room to stretch their legs. Not surprisingly, there were few willingly to make a commitment so bears had the market to themselves.  The good news is that today’s decisive selling pushes markets out of their stiffing ranges.

The S&P dropped below 2080, and is knocking on the door of 2040. Technicals are again net negative. The 200-day MA at 2053, just above the 2040 level, may play a role in tomorrow’s action.


While the Dow has already indicated a break from the March/July range.



The Nasdaq gapped out of its bearish rising wedge. Lots of room down to the 200-day MA available. Shorts may look to attack rallies back to 5038.


While the Semiconductor Index suffered another big hit. It’s trading down at its 200-MA having crashed out of its range.


The reversal in the Russell 2000 has left behind a ‘bull trap’, although this has dropped it back inside the prior range, and favoring a move back to 1,210.


Tomorrow doesn’t look to offer bulls much despite the heavy selling. It might be a time for a consolidation, although it may only turn out to be only a pause in the decline. A meaningful decline is long overdue, but is it happening now?

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





Greek Trade

Courtesy of Read the Ticker.

greek-tradeIs this the only trade this week while Europe and Greece debt issues play out.

Long $USD

UPDATE: If the market prices in a GREXIT then that makes the Eurozone more healthy, so it seems, which is good for the Euro. DXY down, then EURO up.  The week will be a wild one, it can change on a dime!

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DXY




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DXY



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…

..”Every movement in the market is the result of a natural law and of a Cause which exists long before the Effect takes place and can be determined years in advance. The future is but a repetition of the past, as the Bible plainly states”..

William D Gann


..”Money couldn’t buy friends, but you got a better class of enemy”..

Spike Milligan


..“One must search through a maze of complex and contradictory details to get to the significant facts … Then he must be able to operate coldly, clearly, and skilfully on the basis of those facts.” The challenge for the successful speculator is “how to disentangle the cold hard facts from the rather warm feelings of the people dealing with the facts.” Moreover, “if you get all the facts, your judgment can be right; if you don’t get all the facts, it can’t be right”…

Bernard Baruch


Unless you can watch your stock holding decline by 50 per cent without becoming panic stricken, you should not be in the stock market.

Warren Buffett


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

Peter Lynch








Volatility Is Set To Increase

Urban made a great call on the VIX on Tuesday, June 23. Here's a screenshot of the chart from Yahoo:

….So what do you do the next time you see the VIX closing below its lower Bollinger Band?

Volatility Is Set To Increase

Courtesy of Urban Carmel, The Fat Pitch

Summary: On Tuesday, VIX closed below its lower Bollinger Band for the first time in a year. In the past, this has very often led to at least a 5-10% increase in VIX in the weeks ahead. But the affect on SPY has been mixed; just over half of instances were followed by a decline of at least 1% in the week ahead.  

* * *

VIX measures the market's expectations for volatility over the next month. A low VIX implies that expectations are for little volatility looking ahead. Today's VIX is near 12, one of the lowest levels in the past year. Given the small daily and weekly movements in the SPY over the past several months, it is not surprising that VIX is low.

Bollinger Bands measure the movement of price around its mean. Using the most common set up, a movement outside of the upper or lower Bollinger Band is equal to 2 standard deviations from a 20-day moving average. Price should only fall outside of the upper or lower Bollinger Band only about 5% of the time so when this occurs, it is noteworthy.

On Tuesday, VIX closed below its lower Bollinger Band for the first time in more than a year. In the past 5 years, this happened only 15 times.

What happens next?

VIX itself has a strong tendency to rise in the days and weeks ahead. In 14 of the 15 instances, VIX increased by at least 5% and it increased by more than 10% in more than half of all instances.

Normally, SPY moves opposite to VIX; so an increase in VIX would typically lead to a decline in SPY. But that's not always the case and in the 15 cases where VIX closed below its lower Bollinger Band, SPY fell more than 1% only about 60% of the time.…
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Further Selling, But Breakouts in Tech and Small Caps Hold

Courtesy of Declan.

More losses, but breakouts in Tech and Small Caps hold for another day. However, there is no more wiggle room for these breakouts, Large Caps are already under pressure. The S&P is inside its range and technicals have started to waiver with a ‘sell’ trigger between +DI and -DI.


The Dow is also under pressure, with additional technical weakness in On-Balance-Volume, ADX, and Momentum. The trading range is intact and bears can’t call a victory until a loss of 17,625.


The Russell 2000 tagged breakout support, but managed to finish with a bullish ‘hammer’. If there is a concern, it’s that the hammer didn’t occur on oversold momentum. But until 1,278 breaks, bulls hold the edge.


The Nasdaq had a more bearish finish to today, but it did hold on to 5,096 support.


Friday is an interesting day. A weak end-of-week finish is on the cards unless bulls mount an attack.

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





Sellers Pressure, Nasdaq 100 Shorting Opportunity

Courtesy of Declan.

Again, too-and-fro the markets continue their dance. Despite the selling, there was no handing of control over to bears. The S&P ducked below 2120, but key resistance is at 2,134. Technicals kept their net bullish technical strength


Nasdaq losses didn’t drop to challenge 5,096, but tomorrow is a chance to deliver on this. Buyers can be patient enough to wait for this before committing.


The Russell 2000 is another index working on a retest of the breakout. Support at 1,278 is open for a retest tomorrow.


The Nasdaq 100 was a little different. It hadn’t cleared resistance and today’s selling leaves it more open to an attack by shorts as resistance is confirmed at 4,550.


For tomorrow, bulls can look for a retest of breakout support in the Russell 2000 and Nasdaq. Shorts can look to the Nasdaq 100 for their opportunity.

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





Introducing The Macro-Liquidity Ratio Indicator

 

Introducing The Macro-Liquidity Ratio Indicator

Courtesy of Lee Adler of the Wall Street Examiner

We have a new black box.

The Composite Liquidity Indicator edged to a new high this week, just barely above the range of the past 6 months. Even with that 6 month pause, the trend is in much the same longer term path it has been on since 2012. It still has a small margin above its 39 week moving average, and is more than double that spread above its 28 week moving average.

Perhaps the most amazing visual is the degree to which the S&P 500 correlates with this line. Strikingly, each time since 2013 that the SPX has dropped to the 39 week moving average of macro-liquidity, the decline has reversed. Since 2012, each time the SPX has hit the Macroliquidity line, the rally has stalled. Pure coincidence, or are we on to something?

Macroliquidity Composite - Click to enlarge

Macro-liquidity Composite – Click to enlarge

Since 2012 the ratio of the Macro-liquidity Composite to the S&P 500 has ranged from approximately 1150 to 1250. When that range has been exceeded, it was either a short term buy when the ratio was at or above 1250 or a short term sell when it was around 1150. I have created a chart to illustrate this. Even though I do not know why the correlation has been as strong as it has been, in theory it should work, and in practice it has been working. As long as it continues to, I’ll keep it as another arrow in the quiver. I don’t expect it to be a magic bullet or permanent black box. It might stop working tomorrow, but for now, it is at least interesting.

Macroliquidity Ratio- Click to enlarge

Macro-liquidity Ratio- Click to enlarge

Click to view chart.

Try the Fed Money and Liquidity Pro risk-free for 90 days (regular order form says 30 days, but I am so confident that you will want to continue the service, I'll make the guarantee for the full 90 day subscription term if you order now). Start your risk free subscription now and get instant access.

 




STTG Market Recap June 23, 2015

Courtesy of Blain.

Tonight’s Market Recap is sponsored by SimplerStocks – Simpler Stocks’ new report gives you instant access to the complete truth about the state of our economy.

Volatility-468x60-b

Indexes gyrated around unchanged all session as traders awaited more clarity on the Greece situation.   The S&P 500 gained 0.06% and the NASDAQ 0.12%.  Data showed existing home sales jumped 5.1 percent in May to a 5-1/2 year high.   U.S. durable goods data for May showed a decline of 1.8 percent, a greater decline than expected. The core figure of non-defense capital goods orders excluding aircraft rose 0.4 percent, reversing a 0.3 percent decline in April.

Greece’s State Minister Nikos Pappas said on Tuesday in a Reuters report he was confident parliament would back a deal the crisis-hit country hopes to strike with its lenders even though dissenters have criticized concessions offered by Greece.  Separately, Reuters reported that Athens negotiator Euclid Tsakalotos said he believes they are closer to a deal than ever. When asked about the June 30 payment deadline to the International Monetary Fund, he said the deal will enable them to fulfill obligations.  The anti-austerity Greek government presented new budget proposals on Monday, raising hopes that Athens will be able to secure a cash-for-reforms deal with its international creditors.

Not much change from comments yesterday of course – remains difficult to be short as whatever day Greece is “solved” you can get a reaction like you saw in Germany yesterday.

spx

nasdaq

The NYSE McClellan Oscillator has remained positive the past few session – a feather in the cap for bulls.

NYMO

Tesla Motors (TSLA) had a nice bounce off its 10 day moving average.    The high-end electric car maker jumped after it re-assured Wall Street it remains on track to demo its more affordable Model 3 next year and begin production in 2017, according to a report in Investor’s Business Daily.

tsla

Here are some individual charts courtesy of MarketSmith:

Netflix (NFLX) announced a 7:1 split.  It is payable on July 14 to stock owners of record at the July 2 close. Trading at the post-split price will start July 15.  We mentioned the share increase authorization a few weeks back which is generally a precursor to a split.  The shares are up 3% in after hours.

nflx

Facebook (FB) had its second strong day in a row.  Nice volume spike today to boot.

fb

Amazon (AMZN) is trying to reach old highs.

amzn





Honors Shared

Courtesy of Declan.

Today was a big non-event. There was probably hope for more from the Greece story, but a stay of execution keeps things ticking over for another couple of days. The S&P was kept pegged below 2,135, but maintains its trendline breakout.


The Nasdaq closed near the day’s highs, and consequently near all-time highs too. Technicals are all net bullish.


The Russell 2000 also kept its gains, and is well above support of 1,278.


As a final note, the Dow returned net bullish in technical strength.


Tomorrow is another day. Traders can look to swing trade today’s narrow range; short loss of lows, buy break of highs – stop on flip side.

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





Low Volume Gains

Courtesy of Declan.

After Friday’s options expiration it was left to bulls to pick up the pieces of Friday’s distribution selling. Large Caps were able to erase Friday’s losses. In doing so, the S&P regained its net bullish technical picture.


The Nasdaq banked most of its gain by the open, but it did enough to leave a decent amount of wiggle room to breakout support.


The Russell 2000 was another to kick on from Friday. Again, as with Large Caps and Tech indices, the bulk of gains were banked prior to market open.


Greece will again govern the headlines, but with limited technical resistance there isn’t much to stop further gains. Will this move into blowoff territory?

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





STTG Market Recap June 22, 2015

Courtesy of Blain.

We said last week a few times it is a difficult time to be short the market even if the indexes are not doing much because at first hint of a Greek agreement the market should bounce.   And with the deadline fast approaching and the usual “kick the can approach” (i.e. fix nothing  long term but extend deadlines etc) that has been in place for years bears betting against more can kicking risk their market future.  There was not even a Greek settlement today but just some vague hopes for one and that alone pushed up U.S. markets – and had certain European markets up 3%.   The S&P 500 gained 0.61% and the NASDAQ 0.72%; almost all these gains came premarket.   Of course if some bad news comes out in the next few days all this can be reversed short term!

Eurogroup President Jeroen Dijsselbloem said Greece’s new proposals are a “welcome step” but not enough to solidify a deal today. Over the weekend, Greece’s Prime Minister Alexis Tsipras showed new willingness to make concessions that would unlock aid needed to avoid a default.  The cash-strapped country faces a 1.5 billion euro ($1.7 billion) payment to the International Monetary Fund (IMF) at the end of the month. If no deal is reached, many speculate Athens will need to impose capital controls to avoid a banking crisis as savers withdraw their bank deposits.

The S&P 500 is still fighting with the top end of a months long range, while the NASDAQ appears to be in the early stages of a breakout; even if Friday’s action was not the most friendly.  That’s the situation when you are dealing with a news driven market – especially one that is reacting to European news.

spx

nasdaq

The Russell 2000 actually might have already broken out and been the first of the indexes to go.

rut

Today’s action is also an illustration on why it was too late to try to short the German market.  Greece and Germany are joined at the hip.

dax

Facebook (FB) was a winner today as its price target was raised to $120 from $92 at Piper Jaffray.  Facebook’s video advertising platform is gaining ground on Google’s (GOOG) YouTube, according to Reuters.

fb

Biotech was up big today – what else is new?

ibb

Short selling firm Citron put
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Zero Hedge

When The PBOC Went All-In: China Stocks See Biggest Intraday Swing In 23 Years

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Having thrown the kitchen sink at their collapsing ponzi-scheme of a market in the past two days, only to see stocks open and crash once again overnight, it appears The PBOC went full intervention-tard in the middle of the morning session. With CHINEXT down over 7% and Shnghai down over 4%, the manipulation was rooted in CSI-300 futures as while cash markets saw margin calls and liquidation, futures were surging. By the close China's 'Nasdaq' had ripped 13% off its lows and the broad market's intrday swing was the largest since 1992... The PBOC's got your back.

...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Beggar Thy Neighbor? Greece's Battered Banks Beget Balkan Jitters (Zero Hedge)

Back in April, we noted that central banks in Bulgaria, Cyprus, Albania, Romania, Serbia, Turkey and the Former Yugoslav Republic of Macedonia had all effectively moved to quarantine Greece, as it became increasingly apparent that negotiations between Athens and the troika were set to deteriorate ahead of a €750 million payment due to the IMF on May 12. 

...



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Phil's Favorites

Mr. "Lie When It's Serious" Juncker, Lectures Greece On the Truth; Coordinated Meddling

Courtesy of Mish.

Irony of the Day

In a bitter 40 minute lecture, European Commission president, Jean-Claude Juncker, lectures Greece on the "truth".

Other than being a pompous buffoon, Jean-Claude Juncker is most famous for his statement "When it becomes serious, you have to lie".

I believe it's safe to say that things are serious.

Coordinated Meddling

Please consider Eurozone Leaders Take Coordinated Gamble with Response to Athens
By publicly insisting that Greece’s referendum on Sunday is a choice about the country’s future in the eurozone, Europe’s leader...



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Chart School

Greece Strikes Back (or was it China?)

Courtesy of Declan.

A doubly whammy of weakness from Asian and European sessions left bulls with little room to stretch their legs. Not surprisingly, there were few willingly to make a commitment so bears had the market to themselves.  The good news is that today's decisive selling pushes markets out of their stiffing ranges. The S&P dropped below 2080, and is knocking on the door of 2040. Technicals are again net negative. The 200-day MA at 2053, just above the 2040 level, may play a role in tomorrow's action. While the Dow has already indicated a break from the March/July range. ...

more from Chart School

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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Kimble Charting Solutions

King Dollar could be creating unhealthy bearish pattern!

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

The current news addiction of late revolves around Greece, closely followed by how the Euro will react this situation.

Taking a step back from the Greece noise, I wanted to take a look at the price action of the US$ over the past few months.

The US$ looks to have broken support and kissed the underside of old support as new resistance at (1), creating a third lower high. These lower highs could be the top of a bearish descending triangle pattern. (See Descending Pattern below)

...



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OpTrader

Swing trading portfolio - week of June 29th., 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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Digital Currencies

BitGold Now Available in US! Why BitGold?

Courtesy of Mish.

BitGold USA

Effective today, BitGold Announces Platform Launch in the United States.

BitGold, a platform for savings and payments in gold, is pleased to announce the launch of the BitGold platform for residents of the US and US territories. As of today, US residents can sign up on the BitGold platform and buy, sell, or redeem gold using BitGold’s Aurum payment and settlement technology. US residents will also have access to the BitGold mobile app and a prepaid card when these features launch over the coming weeks. Send and receive gold payment features are not initially available in the US.

About BitGold

...



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Sabrient

Sector Detector: Bulls under the gun to muster troops, while bears lie in wait

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

Courtesy of Sabrient Systems and Gradient Analytics

Two weeks ago, bulls seemed ready to push stocks higher as long-standing support reliably kicked in. But with just one full week to go before the Independence Day holiday week arrives, we will see if bulls can muster some reinforcements and make another run at the May highs. Small caps and NASDAQ are already there, but it is questionable whether those segments can drag along the broader market. To be sure, there is plenty of potential fuel floating around in the form of a friendly Fed and abundant global liquidity seeking the safety and strength of US stocks and bonds. While the technical picture has glimmers of strength, summer bears lie in wait.

In this weekly ...



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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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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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