Archive for the ‘Chart School’ Category

Distribution Selling Returns

Courtesy of Declan.

After the late recovery last week, sellers again made markets their home. Sizable losses were accompanied with higher volume distribution, although volume was down on earlier panic.  Another pass at August lows looks likely.



The S&P is again heading to the 10% 200-day MA envelope. Relative performance is shifting away from Large Caps to more speculative indices, which is bullish in a rising market, but in a falling market suggests a lack of sanctuary.





The Nasdaq is also in the early stages of a retest of the August low. Technicals are weak, although stochastics crept above the bullish mid-line, but not enough to suggest bulls have an opportunity.  It may take another run at oversold stochastics to wash this one out.




However, Nasdaq market breadth is getting close to a bottom, if not having reached one already. Only the 2011 had a more oversold low.






The Russell 2000 is also moving down to its low of last week. Of the indices, it’s enjoying the best relative performance, and indications of a bottom may appear in this index first. But for now, it’s a wait and see.




Indices look set for another run at the August lows, so further downside looks favored. But let the markets decide.  Market breadth suggests a trade-worthy bottom is close, and value buyers would be doing well to shop around.



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







RTT browsing latest..

Courtesy of Read the Ticker.


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

Date Found: Friday, 24 July 2015, 03:08:15 PM

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Comment: The Guerrilla Economist on Greece, China, Petrodollar…http://youtu.be/31bYU7v0jbc

Date Found: Friday, 24 July 2015, 04:11:54 PM

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Comment: For the first time since records began, hedge funds are net short gold futures, according to CFTC data…RTT: The smack down effect is minimal. The shake out has born little fruit, lower prices have created massive demand for physical, lower prices will destroy anti gold intent making gold ugly.

Date Found: Saturday, 25 July 2015, 12:33:13 AM

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Comment: Packman eater. Funny, yet the west does not get it!

Date Found: Saturday, 25 July 2015, 09:45:11 PM

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Comment: Who wins? Gold standard vs petro dollar. NOT the middle class. Why debt and inflation strangles living standards. Just look at the price of a house over 20yrs.

Date Found: Saturday, 25 July 2015, 09:55:05 PM

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Comment: Isolated to the Energy sector is the corporate bond crash…it is believe me, yeah right…contagion is a bit*h!

Date Found: Monday, 27 July 2015, 04:01:47 AM

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Comment: Leaked FED staff forecasts, 10 yr interest at 4% in 2017, with FED balance sheet at $5 trillion, yeah that will happen! Well not by natural forces anyway! The FED will print baby print!

Date Found: Monday, 27 July 2015, 02:18:18 PM

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Comment: BAD BREADTH = DISTRIBUTION, that means Mr Market holds up well the guts is being sold off.

Date Found: Monday, 27 July 2015, 02:24:52 PM

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Comment: SSEC china index, who will put new money to…
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Modest Losses

Courtesy of Declan.

Bears took it upon themselves to press their advantage into the close of business. Selling volume was light and lacked the conviction that had accompanied the rout of the previous week.



The S&P is caught in a no-mans land, with a retest of 1,867 likely needed at some stage to rebuild confidence on bulls.





The Nasdaq has so far honored resistance at 4,825. Little else to say other than that.




The Nasdaq 100 did likewise, but hasn’t done enough to confirm bears are in control.




Small Caps closed with an inside day and a small doji. As with other indices it’s caught in a bit of a no-mans land, but it is enjoying a relative strength gain against Large Caps and Tech indices.




The Semiconductor Index continues to stage its V-Recovery, having experienced the worst of the selling in recent months.




For tomorrow, look for bears to turn the screw, although I suspect buyers will step up in numbers well before we get to last week’s spike lows.



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







The Fat Pitch: Weekly Market Summary

 

Weekly Market Summary

Courtesy of  

Summary: Waterfall events like the current one tend to most often reverberate into the weeks ahead. Indices will often jump 10% or more higher and also attempt to retest the lows.  Volatility will likely remain elevated for several months. But the fall in equity prices, which has knocked investor sentiment to its knees, opens up an attractive risk/reward opportunity for investors. Further weakness, which is quite possible, is an opportunity to accumulate with an eye toward year-end. However, a quick, uncorrected rally in the next week or two would likely fail.

* * *

Equities ended the week higher: SPY and DJIA rose 1% and NDX rose over 3%. Outside the US, Europe gained 1% and EEM gained 3%. The biggest mover was oil, which gained 12%.

The last two weeks have been remarkable. On August 17, SPY closed less than 1% from its all-time closing high. A week later it had lost 11%. And then three days later it had regained half of those loses, jumping 6%.

A drop that much, that quickly, is very rare. According to David Bianco, it has happened only 9 times in the more than 20,000 trading days in the past 80 years. All of these occurrences were precipitated by (perceived or real) political or economic crises.
 

That was the case now as well. Since the Chinese Yuan depreciation began through the low in equities on Monday, 92% of the fall in SPY occurred overnight. Cash hours were nearly flat. The fall in equities had very little to do with domestic earnings or economic reports. It was a reaction to events overseas.

Our view has been that the Yuan depreciation (just 3% to date) is unlikely to have a long lasting affect on the US stock market or its fundamentals. Exports to China account for less than 1% of US GDP. Only 2% of revenues for S&P companies is directly derived from China (data from Barrons).
 

Moreover, the current situation is nothing like the Asian financial crisis in 1997. We detailed this last week with the conclusion that even that…
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Rally Stalls Out

Courtesy of Declan.

After all the volatility during the week, Friday’s action was a little reprieve. Markets sit a point where shorts will fancy their chances, although further upside should not be viewed as surprising given the level of volatility markets experienced last week. If there is an indication bears are going to come back with a vengeance, it’s that buying volume has been well down on prior selling.



The Nasdaq finished on former trading range support, turned resistance. Watch for a short squeeze from this level, up to the 200-day MA.





The Nasdaq 100 may have given an indication of what to expect on Monday as it started to edge more into the prior trading range. It’s about 50 points away from its 200-day MA.




The S&P is caught in the middle of nowhere, neither close to support or resistance. Traders may look to trade a break of Friday’s tight intraday range.




Small Caps had the best of Friday’s action. The 20-day MA is the nearest resistance level with the CCI on a fresh ‘buy’ signal.




Monday will be for watching how the intraday range established on Friday breaks. Tech indices are the most likely to reward shorts.



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







Gann Angles advise which stocks should be in your portfolio

Courtesy of Read the Ticker.


gann-angles-advise-which-stocks-should-be-in-your-portfolioGann Angles are great for stock selection, the momentum trader, and judging corrections.



Here is a winning stock, Gann Angle 4×1 is holding the trend of PriceLine. Amazing trend!



Other stocks in this 7 year bull market like AAPL and SBUX have had great Gann angle supporting trends.



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PCLN




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…



…“Stocks create their own field of action and power; power to attract and repel,which principle explains why certain stocks at times lead the market and ‘turn dead’ at other times”…



William D Gann





..“Don’t try to buy at the bottom and sell at the top. It can’t be done except by liars.”..



Bernard Baruch





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



Spike Milligan





..“Investing should be like watching paint dry or watching grass grow. If you want excitement…go to Las Vegas.”…



Paul Samuelson





..“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











Shorts Rally – But For How Long?

Courtesy of Declan.

A second day of gains keeps pressure on shorts in squeezing them out of their positions, but is also looking to sucker shorts into trying to second guess when this rally will end.



The S&P is heading fast towards 2,044. Given the speed at which it has enjoyed this advance it will be there by Tuesday! In reality, it will likely slow before it gets there. When markets do head lower it will be important they do so slowly to sow further doubt into shorts.





The Nasdaq will be testing resistance tomorrow, and is close to coming up against its 200-day MA.  Those who bought the low will be very happy.




The Russell 2000 enjoyed a perfect bounce off the 10% envelope around its 200-day MA. Supply is not likely to be hit until it gets to 1,189.  Unlike other indices it hasn’t enjoyed the same degree of gains, but this will likely help it in the long term.




Of the indices, the Nasdaq 100 has already reached supply. It’s the index most likely to test its 200-day MA first. This will give an idea as to whether this rally marks a key low, or is just part of a big bear rally.




The Semiconductor Index has also put in the groundwork for a rally. It’s early days, but this index has been one of the hardest hit since May, down almost 28% from May highs.




While markets post gains, the question on trader’s lips is whether these gains are real, or just shorts covering.



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







Gann Angles on the Dow Jones Industrials – Post Aug 2015 Dump

Courtesy of Read the Ticker.


gann-angles-on-the-dow-jones-industrials--post-aug-2015-dumpDow Jones sunk like a led balloon, some fund managers have hot undies now, as margin calls come in. This market will take some time to clear the bad bets. More lows likely, a bounce sure!



Previous posting here on Dow Jones Gann Angles.







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INDU




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 believe that anyone who is intelligent, conscientious, and willing to put in the necessary time can be successful on Wall Street.  As long as they realize the market is a business like any other business, they have a good chance to prosper.”…



Jesse Livermore





Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.



Nobel Laureate for Economics Paul Samuelson





..“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





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



Spike Milligan





..The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell”..



John Templeton











August 24 – A True Market Washout?

Courtesy of Dana Lyons

It doesn’t happen too often, but occasionally we witness a true stock market “washout.” That is, a selloff marked by extremely one-sided (to the downside) trading action. Such days are exhibited by market participants that just want out at any price. The result is a day in which all market statistics are overwhelming skewed negatively. Such was the case yesterday, August 24.

Here are but a few examples from the New York Stock Exchange:

image

Yesterday saw the 4th lowest % of NYSE Advancing Issues – 4.1% – since 1965. Each of the other 13 occurrences with less than 6% Advancing Issues saw the market form at least a short-term bottom within a day – except for one: the fall of 2008. That selloff, while not much longer in duration, did suffer extensive damage in subsequent days.

image

Yesterday saw just 2.38% of the volume on the NYSE go into Advancing Issues. Since 1965, there have been just 20 days with less than 6% Advancing Volume. Again, the market bottomed almost instantly (if temporarily, at times) following most such readings.

image

New 52-Week Lows Minus New Highs accounted for 40% of all issues on the NYSE. Readings that high have only occurred 15 times since 1970. This series was especially accurate in identifying intermediate-term market lows.

One reason why, perhaps, is that the market was already extremely washed out coming into most of these day. The S&P 500 was a median of 30% off of its 52-week high during these occasions. That makes the current case unique as the index is just 11% off its high. This is not unprecedented, however. In May 1973, the S&P 500 was off 11% from its 52-week high. Instead of putting in an intermediate-term bottom, the market would eventually go on to accelerate its cyclical selloff, suffering a steep drawdown in the longer-term. The parallels to the current case should not be totally discounted.

Based on history, such washed out readings like we saw today should signal a coming end to the initial part of this decline in the next day or two. However, considering the selloff began with the major averages near their 52-week highs, a resumption in downside pressure would not be a surprise following whatever type of bounce materializes over the next few days or weeks.

*   *   *

More from Dana Lyons, JLFMI and My401kPro.





The Raging Fire Within

Courtesy of Tim Knight from Slope of Hope

I've been trading the stock market for nearly thirty years, virtually non-stop. Today (that is, Monday, August 24) easily ranks in the top five strangest, craziest days in the thousands upon thousands of trading days I've ever witnessed. I felt like I was entering a cage of gorillas that had just ingested a large quantity of PCP. It felt dangerous and really, really unpredictable.

As I mentioned on my lengthy Saturday post:

I expect (and, again, hope – – because, God forgive me, I'm actually long five ETFs in size right now) we get a meaningful relief rally, carrying us up to the psychologically-important 17,000 level. At that point, please don’t be anywhere between me and my keyboard, because I am going to be shorting anything with a ticker symbol in size.

Well, God most certainly did not forgive me. If this permabear's time machine was working, he'd go back to Thursday morning, warn the slightly-younger Tim to not cover a single position, and further warn him not to buy a single thing.

Instead, I waited sleeplessly through Sunday night and early Monday morning for the opening bell to see how big a chunk of flesh those longs would take out of my 55 (much smaller) short positions. Well, the "tax" was quite hefty. Hedging as I did wiped out half of the profits I would have had otherwise, just as covering wiped out half my profits the prior Friday. I had relinquished tens of thousands of dollars of extra profit just to be – – well – – "safe."

0824-es

I think we can all agree that approximately nobody anticipated the Dow falling 1,000 points right from the start of Monday morning. Frankly, the kind of "lift" I am seeing at the moment I am typing this (with the ES up 42 points) is more along the lines of what I thought would happen.

But the past few days have generated countless stories of triumph or woe, because in a market this volatile, you are going to have some accidental millionaires, and you're going to have some people absolutely wiped out, never to enter the markets again.  Keep in mind the VIX was at 10 – 10!!!!!! – only…
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Zero Hedge

Circling The Drain....

Courtesy of ZeroHedge. View original post here.

Submitted by dazzak.

CIRCLING THE DRAIN:

So last weeks turmoil is seemingly not over yet…..Was it simply a storm in a teacup brought on by another one of those market tantrums that erupt every now and again to keep everyone on their toes and eventually evaporate? Or was it a significant tremor giving pre warning of a major earthquake to follow?

WAX ON WAX OFF;

Historically September and October are not very good months for stocks and there are fundamental arguments for both sides.

The fact is that there is a lot more to worry about than to be confident of. 

There are clearly real concerns both internally and externally that the China's growth rate is running at closer to 5% than 7%, Brazil and Russia are in recession,&...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Americans' confidence in the economy has plunged to an 11-month low (Business Insider)

Americans' confidence in the economy continues to slide.

Who Crashed China's Stock Market? (The Atlantic)

China’s stock markets continue to stumble, despite the massive stimulus that the government has unleashed to prop them up. The Shanghai benchmark index fell by 1.23 percent Tuesday, after closing down slightly Monday. The index has fallen by nearly 40 percent from its mid-June peak.

...



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Phil's Favorites

6 reasons the FOMC is unlikely to move in September

 

6 reasons the FOMC is unlikely to move in September

Courtesy of Sober Look

The majority of economists still expect the Federal Reserve to begin the long-awaited liftoff next month.



However is this dovish FOMC truly prepared to "pull the trigger" this time? Here are some reasons the central bank is likely to delay the first hike.

1. While the Fed officially talks about not being focused on the currency markets, the recent dollar rally should give them some food for thought. The global "currency wars" have sent the trade-weighted US dollar to the highest levels in over a decade. This will conti...



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Chart School

Distribution Selling Returns

Courtesy of Declan.

After the late recovery last week, sellers again made markets their home. Sizable losses were accompanied with higher volume distribution, although volume was down on earlier panic.  Another pass at August lows looks likely.

The S&P is again heading to the 10% 200-day MA envelope. Relative performance is shifting away from Large Caps to more speculative indices, which is bullish in a rising market, but in a falling market suggests a lack of sanctuary.


The Nasdaq is also in the early stages of a retest of the August low. Technicals are weak, although stochastics crept above the bullish mid-line, but not enough to suggest ...

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

Nikkei (Japan) topped last 5 times it was here, its back again!

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

Could a price zone that started impacting the Nikkei 30-years ago still impact it again today? Well it looks like it is!

The Nikkei found the 21,000 level, line (1), to be support several times between 1987 and 1992. Once this support broke it then switched from a support to a resistance level.

As you can see several times from 1992 to 2000 the Nikkei ran into this resistance zone and failed to solidly break above it, leading to a top numerous times. The last time it hit this resistance zone was back in 2000. After failing to break above resistance then, it ...



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OpTrader

Swing trading portfolio - week of August 31st, 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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Sabrient

Sector Detector: Finally, market capitulation gives bulls a real test of conviction, plus perhaps a buying opportunity

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

Courtesy of Sabrient Systems and Gradient Analytics

The dark veil around China is creating a little too much uncertainty for investors, with the usual fear mongers piling on and sending the vast buy-the-dip crowd running for the sidelines until the smoke clears. Furthermore, Sabrient’s fundamentals-based SectorCast rankings have been flashing near-term defensive signals. The end result is a long overdue capitulation event that has left no market segment unscathed in its mass carnage. The historically long technical consolidation finally came to the point of having to break one way or the other, and it decided to break hard to the downside, actually testing the lows from last ...



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ValueWalk

Some Hedge Funds "Hedged" During Stock Market Sell Off, Others Not As Risk Focused

By Mark Melin. Originally published at ValueWalk.

With the VIX index jumping 120 percent on a weekly basis, the most in its history, and with the index measuring volatility or "fear" up near 47 percent on the day, one might think professional investors might be concerned. While the sell off did surprise some, certain hedge fund managers have started to dip their toes in the water to buy stocks they have on their accumulation list, while other algorithmic strategies are actually prospering in this volatile but generally consistently trending market.

Stock market sell off surprises some while others were prepared and are hedged prospering

While so...



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Digital Currencies

Bitcoin Battered After "Governance Coup"

Courtesy of ZeroHedge. View original post here.

Naysyers are warning that the recent plunge in Bitcoin prices - from almost $318 at its peak during the Greek crisis, to $221 yesterday - is due to growing power struggle over the future of the cryptocurrency that is dividing its lead developers. On Saturday, a rival version of the current software was released by two bitcoin big guns. As Reuters reports, Bitcoin XT would increase the block size to 8 megabytes enabling more transactions to be processed every second. Those who oppose Bitcoin XT say the bigger block size jeopardizes the vision of a decentralized payments system that bitcoin is built on with some believing ...



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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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