Archive for the ‘Chart School’ Category

Russell 2000 and Semiconductor New Highs / S&P Breaks

Courtesy of Declan.

The S&P broke higher to confirm a ‘bear trap’ and also closed at a new all-time high. Volume climbed to register an accumulation day but there were further losses in relative performance and continued losses in the MACD.






The Nasdaq posted a gap-driven 1% gain to bring it ever closer to channel resistance. It hasn’t yet tagged resistance but it looks well placed to do so by the end of the week. Technical are all bullish.





The Russell 2000 drove a 1% gain (which looks better than it ordinarily might have looked). Technicals are net bullish with a MACD trigger ‘buy’ to support the earlier +DI/-DI ‘buy’ trigger. It’s looking better for a move to challenge former support-turned-resistance; a move which if it was to play out would take until Spring 2018 to reach. 





The runaway Semiconductor Index returned to its winning ways with new all-time highs.  There really hasn’t been many trading opportunities besides the September breakout. Today’s gap higher may rank as a tradable play but given what has come before it remains vulnerable to a big profit take move.





Tomorrow will again be about consolidation. However, with the majority of markets at new all-time highs there is no room for shorts to hide and those who haven’t covered will have to very soon. Aside from existing longs I don’t see too much in the way of short term opportunities.




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




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Russell 2000 Clears Resistance

Courtesy of Declan.

The Russell 2000 followed through higher with a break of resistance and a bullish cross of mid-line stochastics. The ‘bear trap’ follow through is for new all-time highs. Watch for a MACD trigger ‘buy’ to support the ‘bull flag’ break.






The Nasdaq finished with a narrow doji which is also a swing trade opportunity. Trade a break of today’s high/low with a stop on the flip side.





The S&P is looking at a ‘bear trap’ and a chance to push itself out of its former channel for a second time.  Volume was a little light and technicals are weak and weakening but price action is the dominant and lead bullish factor.





For tomorrow, the S&P is perhaps the index to watch. The Russell 2000 has already made its move and now it’s the turn of the S&P to follow.  Any indecision in pre-market opens up the swing trade play in the Nasdaq as coiling action plays well for both sides.




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





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









Weekly Market Recap Nov 19, 2017

Courtesy of Blain.

Monday, Tuesday, and Friday saw the now usual “no volatility” days – while bears finally saw some action on Wednesday, bulls came right back Thursday with even bigger gains.  So while we have been cautious on the market for 3 weeks now all that has meant is consolidation in the market (granted the Russell 2000 has taken some hits).  For the week the S&P 500 fell 0.3% while the NASDAQ gained 0.5%. Economic news was light (we cover retail sales below), and earnings are coming to their tail end so we are in a bit of a news vacuum as negotiations about the tax reform bills will take the reigns.

Retail sales slowed in October, rising only 0.2%, after a sharp gain in the prior month.

Sales rose a revised 1.9% in September, up from the prior estimate of a 1.6% gain, boosted by post-hurricane spending. Excluding autos, sales rose 0.1% after a 1.2% gain in September. Economists were expecting a 0.2% gain. Sales excluding autos and gasoline climbed 0.3% after being up 0.6% in the prior month.

The housing sector has been incredibly strong in this leg of the rally.

Here is the 5 day weekly “intraday” chart of the S&P 500 .. via Jill Mislinski.

Thanksgiving is usually a feel good week in the market, as shown by Bespoke.

Since 1945, the S&P 500 has seen an average gain of 0.64% during Thanksgiving week, and in years where the S&P 500 was already up over 10% YTD, Thanksgiving week was even stronger with an average gain of 0.76%.  Under both scenarios, the S&P 500 has also been in the black during this period 75% of the time. 

The week ahead…

Cluck Cluck! Janet Yellen has a speech Tuesday, and minutes from the prior Federal Reserve meeting will be released Wednesday.  Markets will be closed Thursday and only open part of the day Friday.   Items such as durable goods and existing home sales will be released, but most people on Wall Street will be too busy shopping on Amazon and making Jeff…
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Russell 2000 Makes It Back to ‘Bull Flag’ Resistance Leaving ‘Bear Trap’ Behind

Courtesy of Declan.

Over the course of Thursday and Friday the Russell 2000 reversed what had looked like a runaway breakdown into a counter rally and potential breakout. Now it’s the time for shorts, FOMO longs and existing longs to pressure resistance. Action over the last two days of the week was particularly tasty particularly if you are looking for an extension of the August-October rally. Better still, there isn’t a whole lot of competition from other indices for trading opportunities. Long risk measured from a stop below 1,454.






The S&P is up against channel resistance as Friday’s action held to the upper range of Thursday’s intraday spread. The index will have an opportunity to confirm the ‘bear trap’ on Monday as any gain will push it above channel resistance. Technicals are mixed with the MACD trigger ‘sell’ competing with a strong – if fading – On-Balance-Volume accumulation trend.  There is also a significant relative performance loss against Small Caps. 





The Nasdaq is caught in the middle. Good relative performance, decent technicals but trading neither at support nor resistance. The prior trend suggests this will make it to channel resistance so longs have little reason to sell.





Tech breadth is attempting a swing low but not from an oversold position.  However a rally from here has plenty of room for upside before it becomes overbought.





For Monday, look to the Russell 2000 to break resistance and perhaps for the S&P too.




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.









The Junkie Market, i.e., Lots Of Highs & Lows, Is Back

Courtesy of Dana Lyons

The past few days have seen a reversal from substantial net New lows to substantial net New highs – a condition that has preceded poor performance in the past.

We’ve posted several pieces in the past regarding what we’ve termed “Junkie Markets” – junctures characterized by a substantial number of both New 52-Week Highs and New 52-Week Lows.

Such conditions represent a key component of various and notorious market warning signals, such as the Hindenburg Omen and others. As the ominous sounding names would imply, the historical stock market performance following such signals has been poor. We have found the same to be true with respect to our “Junkie Markets”. Today’s Chart Of The Day deals with a new variation of the Junkie Market.

Specifically, we have seen an unusual development over the past 2 days. On Wednesday, the number of net New Lows on the NYSE, i.e., New Lows minus New Highs, exceeded 2% of all exchange issues, a fairly large amount. The very next day, yesterday, conditions completely reversed as we saw net New NYSE Highs, i.e. New Highs minus New Lows, actually account for more than 2% of all issues. If you think that sounds strange, you’re correct. It is just the 15th such occurrence since the start of our data in 1970.

image

Here are the dates of these reversals:

  • 3/25/1970
  • 4/14/1972
  • 7/11/1974
  • 10/20/1977
  • 1/2/2001
  • 4/22/2004
  • 5/11/2004
  • 4/18/2006
  • 6/28/2007
  • 7/19/2007
  • 9/19/2008
  • 5/30/2013
  • 10/10/2013
  • 1/15/2015
  • 11/16/2017

What would cause such a phenomenon? Well, the only thing we can offer is that a Junkie Market, i.e., one with lots of New Highs and Lows, is really the only type of market in which such a reversal is even possible. Thus, it should not be surprising that the S&P 500’s aggregate performance going forward following these precedents has been less than stellar (incidentally, aggregate performance is similar following the 19 occasions of the opposite reversals, i.e., >2% Net New Highs to >2% Net New Lows).

image

With median returns negative from


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Chart Crimes

 

Chart Crimes

Courotesy of 

Stretching a linear axis vertically to prove a point. Don’t do this.

Some things should be shown as a level, not a percent change. The ten-year yield going from 2% to 2.1% is not a 5% change, it’s a ten basis point move. The same holds for the VIX. Don’t do this.

So many things wrong with this one. This chart provides zero information. Comparing dollars across multiple decades have to be real, not nominal, and this should be shown as a percent change, year-over-year works.

Using the lowest point in a cycle to support your narrative is not a good look…

…Neither is choosing the high point.

Showing the percent change on an asset whose interest or dividend is a big percent of the total return is a big no no. The price of BND is only up 6% over the last decade, but the total return is 48%.

Do not use monthly candle stick charts in the middle of the month, or weekly candle sticks in the middle of the week. This is what you would have seen on October 15, 1987…

…The real thing looks a little different.

“I’m expecting this to resolve in an explosive fashion, one way or the other.” Technical analysis on economic charts. Just don’t.

Comparing lines that have absolutely nothing to do with each other is a chart crime. This gem comes from Joe Weisenthal 

This is hardly an exhaustive list. Chart manufacturers have endless ways to fool you. Stay woke.





Gold Gains As Stocks Slide, Yield Curve Crashes, & Dollar Dumps

Courtesy of ZeroHedge. View original post here.

Economic Data continues to surprise to the upside (compared to what had been terrible expectations)…is this as good as it gets?

But credit, the yield curve, and now stocks are not loving it…

Small Caps were the only major index green today…

The Dow and S&P 500- fell for the 2nd week in a row – something they haven't done for 3 months…Small Caps best on the week (followed by Nasdaq thanks to yesterday's panic buy)…

Futures show the crazy moves this week better..

VIX was slammed late on today in a desperat ebid to get the S&P green on the week…

But while stocks rebounded briefly, FX carry wasn't…

And nor was the bond market…

Big week for tax-related stocks…

SFIX went public today at $15…

While US HY bond prices ended the week higher (thanks to yesterday's melt up)…but still remains well below its 200DMA…

US HY spreads rose for the 4th week in a row…

European HY Fund assets crashed to their lowest since June 2016…

Treasuries were mixed on the week with the front-end higher in yield and back-end lower….

The US Treasury yield curve crashed almost 10bps this week – the biggest flattening since Dec 2016 to its flattest since Nov 2007

Note that is the flattest 2s10s since Oct 2007… The last 3 times it was this flat, the US economy was in recession…

The Dollar Index had its worst week in over 2 months, dropping to 1-month lows… (this is also the first consective weekly decline in the dollar index since July)

Yen and Euro strength weighed the most on the dollar this week… (AUD and CAD were weaker as oil slipped)

USDJPY was clubbed like a baby seal this week (worst in 2 months) – (today was USDJPY's worst drop since May). It seems 114.000 to 112.00 is the corridor…

Gold had its best week in over a month, surging back above its 50DMA towards the $1300 level…

GOLD

Bitcoin had another big week – getting as close to $8000 as possible… (up 45% from its lows last weekend)…

Finally, we note that in the weeks since MbS launched his 'corruption' crackdown in Saudi Arabia, only one asset has really shone…





When does this all end – Update2

Courtesy of Read the Ticker.

when-does-this-all-end--update2To buy or not to buy: The US 10 year versus high yielding utility stocks.

Previous Post: When does this all end – Update

The US 10 year yield is at 2.34%

And compared to utility dividend stocks …

American Water Works (Dow Jones Utility: AWK) dividend @ 1.87%
NI Source (Dow Jones Utility: NI) dividend @ 2.58%
American Electric Power (Dow Jones Utility: AEP) dividend @ 3.25%

The question is, which asset class do you trust to provide a return for 10 years? Of course your ability to judge future inflation expectations (see TIP for iShares TIPS Bond ETF) and how extended the price trend is over time for each class.

Recently the Dow Utility Index has shown 3 thrusts higher in to new ground, the Dow Jones Utility index is now struggling to get higher as each thrust suffers a loss of power. These thrusts are simply a push higher into new ground to allow the big accounts to sell into, as this move high creates the BIDs to meet the large accounts ASKs. The big boys need the uniformed to buy at highs so they can sell to them.

Higher interest rates will either demand the Dow Jones Utility (DJU or RTT:!UTIL) pay a higher dividend, or create a slump in trend the Dow Jones Utility. The massive bullish stock market trend from March 2009 is extreme, and a leading bearish signal will be the Dow Jones Utility as it reflects the crazy prices paid for yield. Do you get the feeling we are near the turn?

UTIL 3 tops

Longer term trend

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

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

Investing Quote…

..”If we wish to avert failure in speculation we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. Faraday said: `There is nothing in the Universe but mathematical points of force.”…

William D Gann

..“The main purpose of


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S&P ‘Bull Trap’ Becomes A ‘Bear Trap’

Courtesy of Declan

As this rally has often done, just as you expect a reversal to start, bulls come in (hard) to bid up the market. The S&P had the clearest switch as it moved from a 'bull trap' to a 'bear trap'. If it can post a break of 2,597 it will have little to stop it; in such a scenario watch for a fresh MACD 'buy' which would confirm recent losses as a pullback 'buy' opportunity. Stops on a loss of 2,557.
 


More impressive was the recovery in the Russell 2000. I'm not sure it has done enough to consume what will be plentiful supply all the way to 1,515.  Despite the 1.5% gain there wasn't a significant improvement in technicals. There will not have been many longs to have taken a punt on the drift below the 50-day MA so much will depend on the strength of the short squeeze -  today was a good start.
 


The Nasdaq didn't disappoint. It was the safest long trade and despite the morning gap it was able to post additional gains. Upper channel resistance remains the upside target. Today's volume registers as confirmed accumulation.
 

The Dow Jones only managed a weak bounce but the telegraphed 'buy' at support should have survived a stop test.
 


Today's action was a useful start. Key to tomorrow will be closing in the upper part of today's intraday range – irrespective of how much ground it gives up over the course of the day.





Bears Turn The Screw

Courtesy of Declan

The Russell 2000 was again under pressure as it shed another 0.5%. The Russell 2000 now trades below its 50-day MA despite recovering some of today's intraday losses. It looks like controlled selling with an artificial prop to prevent a rout. The 200-day MA is the next port of call but a 1% loss of more will bring sellers in fast. Technicals are weak but not oversold.
 

The S&P looks to have confirmed a 'bull trap' with a return inside the prior rising channel. Such action typically results in a move back to rising channel support.  First port of call will be the 50-day MA.
 


The Nasdaq is holding up better than either Small and Large Caps with relative performance ahead of the curve although it has a MACD trigger 'sell' to work off.
 


The aggressive long in the Dow Jones isn't looking so great. It's still hanging on to support but after a day like yesterday it really should have closed higher. With the S&P already back inside its former rising channel I would be looking for the Dow Jones Index to do the same.
 


For tomorrow, look for an acceleration of selling in the Russell 2000, a drop inside the former channel for the Dow Jones and drip losses in the S&P. If premarket suggest bulls are going to be in control (e.g. a gap higher) then the Nasdaq may be the better index to trade. However, if the S&P can gain enough to bring itself to challenge the 'bull trap' then it will also be a good long trade (in essence, switching from a current 'bull trap' to a 'bear trap').
 





 
 
 

Phil's Favorites

Rebuilding the Caribbean will be pricey, but some are vying to finance its recovery

 

Rebuilding the Caribbean will be pricey, but some are vying to finance its recovery

Courtesy of Masao AshtineUniversity of the West Indies, Mona Campus

If Caribbean governments can’t afford to rebuild their islands, maybe big tech firms can?

November 20 marked the end of the Atlantic hurricane season, but for the Caribbean, it’s only the beginning of a painful recovery process.

In early September, Hurricane Irma largely destroyed Barbuda and several neighboring Lesser Antilles islands. Two weeks later, Maria took a final fatal...



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Zero Hedge

Bahamas Prime Minister Blasts US Cable News

Courtesy of ZeroHedge. View original post here.

Over the weekend, Bahamas Prime Minister Dr Hubert Minnis addressed the Third Annual Press Club Awards Banquet, where he blamed the collapse of journalism standards on 24-hour cable news shows in the United States. He said, the declining of standards “would not have been allowed in previous times” and urged local journalist not to be  “champions of any political party, business, group or interest in a country”.

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Digital Currencies

Bitcoin: An Unknowable Bubble?

Courtesy of ZeroHedge. View original post here.

"Whatever [Bitcoin] is, I missed it... It looks and smells like all the bubbles I have seen throughout history." - billionaire investor Jim Rogers

Authored by Constantin Gurdgiev via True Economics blog,

There is a much-discussed in the crypto-sphere chart making rounds these days, plotting Bitcoin price dynamics against the historical bubbles of the past:

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Insider Scoop

8 Stocks To Watch For November 22, 2017

Courtesy of Benzinga.

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Chart School

Russell 2000 and Semiconductor New Highs / S&P Breaks

Courtesy of Declan.

The S&P broke higher to confirm a 'bear trap' and also closed at a new all-time high. Volume climbed to register an accumulation day but there were further losses in relative performance and continued losses in the MACD.


The Nasdaq posted a gap-driven 1% gain to bring it ever closer to channel resistance. It hasn't yet tagged resistance but it looks well placed to do so by the end of the week. Technical are all bullish.

...

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Biotech

The two obstacles that are holding back Alzheimer's research

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

 

The two obstacles that are holding back Alzheimer's research

Courtesy of Todd GoldeUniversity of Florida

Family members often become primary caregivers for loved ones with Alzheimer’s disease. tonkid/Shutterstock.com

Thirty years ago, scientists began to unlock the mysteries regarding the cause of Alzheimer’...



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ValueWalk

Robert Mugabe Under House Arrest, Military Takes Control Of Zimbabwe

By Andjela Radmilac. Originally published at ValueWalk.

Zimbabwe’s head of state, 93-year-old Robert Mugabe, has been placed under house arrest after what seems to be a military coup took place in the nation’s capital.

By U.S. Navy photo by Mass Communication Specialist 2nd Class Jesse B. Awalt/Released [Public domain], via Wikimedia CommonsRobert Mugabe is safe

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Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



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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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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.

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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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