Archive for the ‘Chart School’ Category

Neutral Day

Courtesy of Declan.

After yesterday’s gains there was no more gas in the tank to squeeze any more out of the market. Worryingly, the Russell 2000 finished near Monday’s lows in a relative loss to S&P and Nasdaq, suggesting bearish leadership will come from speculative Small Caps, and that further losses are likely.


The S&P recovered afternoon losses, but the Spinning Top candlestick of today suggests the advance is slowing, and what may be emerging is a ‘bear flag’. In the meantime, the index is caught in a no-mans land between resistance and support.


The Nasdaq is pegged by 5,038 resistance, and while it finished down slightly it did so with light volume. Shorts may attack with stops above 5,038, but it there is a push above 5,038 it could bring the Russell 2000 and S&P with them. However, there is a relative under performance of the index to the S&P.


On the flip side, the Nasdaq 100 has already signaled a ‘bear trap’ in what may be a lead marker for other indices.


The long weekend is upon us, so it’s going to be the post-Greek referendum which determines the fate of indices at stated levels.

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





The U.S. Dollar’s 2014-2015 Rally: Wave 3 in Action

 

The U.S. Dollar's 2014-2015 Rally: Wave 3 in Action 

[Excerpt from a free 14-page report shows you how the Elliott Wave Principle can "Boost Your Forex Success"]

By Elliott Wave International

I always say trading forex markets is like riding a bike — except that said bike has one flat tire and the ground beneath it is covered in ice.

So why are they so popular, you might ask? In fact, forex is the most liquid market on earth, where trillions of dollars change millions of hands every day.

The reason people are so willing to ride that bike — so to speak — is because if you can stay on, the rewards are often unmatched. The trick, of course, is staying on.

There's no such thing as a fool-proof strategy. Slips and scrapes are bound to happen. But as the title of Elliott Wave International's chief currency strategist Jim Martens' go-to guide reveals, there is definitely a way "The Elliott Wave Principle Can Boost Your Forex Success."

Here below, you can read an exclusive excerpt from Chapter 1:

Chapter 1: A Useful Trading Methodology

Of the many ways the Wave Principle can improve trading success, for me, points 1, 2, and 6 are the most important. I like to trade with the trend, and the Wave Principle allows me to identify that trend…

The setup waves — the waves we're trying to identify in order to prepare for the trading opportunities — are wave (2), wave (4), and wave (B)…

Let's concentrate on trading wave (3), since it is usually the strongest and longest wave, and its trend is clear. That means that we want to identify the wave (2) that will lead into a strong third wave.

Now, let's jump off the page and into the real world where you can see exactly how Jim used this one simple lesson to identify a major turning point in euro/dollar (EURUSD).

The time was mid-2014. The euro was orbiting a 2-and-1/2 year high against the U.S. dollar. But, as early as mid-May, Elliott wave patterns already showed…
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China’s Stock Market Rollercoaster Ride Continues

 

China's Stock Market Rollercoaster Ride Continues 

By Elliott Wave International

"Chao gu" is the Chinese term for speculating in stocks. Roughly translated, it means "stir-frying" shares. Lately, though, for millions of Chinese investors, it means getting fried.

Enter the "nerve-shredding," "whiplash-inducing," rollercoaster "tantrum" of China's stock market. After soaring to 7-year highs on June 12, both the Shanghai Composite and Shenzhen stock indexes collapsed in a respective 21% and 25% sell-off (as of June 30), frequently marked by wrenching intraday swings the likes of which haven't been seen in 20 years.

In the words of one June 28 news source (bold added):

"You have to have a very strong stomach to trade in China. You have to be prepared for days when you are up or down more than 5% and there is no clear fundamental explanation." (FinanceAsia)

In fact, not only isn't there a bearish fundamental explanation for the market rout, but those fundamentals widely seen as bullish for stocks have also failed to stem the slide. Take, for instance, these recent stock-boosting initiatives on the part of the People's Bank of China:

  • A .25% cut to both its 1-year lending and deposit rates
  • A decrease in banks' reserve requirements to loosen the lending spigot
  • The first-ever approval of local government pensions to buy stocks 

That China's stock market shrugged off these (and other) supposedly bullish catalysts hasn't gone unnoticed. In the words of one Chinese investor, these moves imply "the stock market is kidnapping the government." (The Globe & Mail, June 30)

Well, he's sort of right. The moves imply the government is not in control of the market. Actually, on June 5, our own Asian-Pacific Financial Forecast expressed this exact sentiment and wrote:

"China's current bull market is not a product of government stimulus or of investor ignorance or — as a prominent short-seller told CNBC this week — 'the largest pump-and-dump in history.' "(Bloomberg, 6/1/15).

So, what is it a product of? Well, our Asian-Pacific Financial Forecast provides this Elliott wave explanation:

"Actually, it's the initial wave within China's wave V up, which followed the end of


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Weak Bounce

Courtesy of Declan.

The bounce wasn’t particularly strong and volume was down on yesterday. Today’s action keeps resistance in play, and maintains the dominance of Monday’s sell off. The S&P tagged 2080 resistance, before reversing. Technicals remain net negative.


The Nasdaq was contained by 5038 resistance, confirming this level and delivering a net bearish turn in technicals.


The Russell 2000 was no different, although it is looking to defend support at its 50-day MA. However, the latter has offered inconsistent form in recent months and therefore unlikely to be of help to either side. As with the Nasdaq, the Russell 2000 is net bearish too.


The Dow may offer bulls the best opportunity. It had threatened a break from its trading range, coinciding with a loss of 200-day MA support. Instead, it has managed to dig in and offer a platform for a more sustainable rally.


The other index to present itself at its 200-day MA is the Semiconductor Index. It is dealing with a channel breakdown, but has experienced heavy losses which offer opportunity for a relief bounce (if not more).


NFP data tomorrow could be the catalyst to launch rallies in the Dow and Semiconductor Index. However, Greece and China overshadow everything, and with such doubts in the market bulls may find it hard to commit for the long haul.

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





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!

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




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

 




 
 
 

Zero Hedge

The Perversion of Capitalism: A Credit-Based Versus Capital-Based System

Courtesy of ZeroHedge. View original post here.

Submitted by Sprott Money.

Sprott Money first to announce state-of-the-art fully private (NON BANK) Cayman asset storage -->  http://www.321gold.com/info/053015_sprott.html

Click For Original Post

...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Did the IMF Just Open Pandora's Box? (Zero Hedge)

By now it should be clear to all that the only reason why Germany has been so steadfast in its negotiating stance with Greece is because it knows very well that if it concedes to a public debt reduction (as opposed to haircut on debt held mostly by private entities such as hedge funds which already happened in 2012), then the rest of the PIIGS will come pouring in: first Italy, then Spain, then Portugal, then Ireland.

Baker Hughes rig count rises for the first time in 29 weeks (Business Insider)

The number of US oil rigs in use just rose for the first...



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Phil's Favorites

Good On You, Greece--But Don't Waver Now (Part 2)

 

Good On You, Greece—–But Don’t Waver Now (Part 2)

Courtesy of 

Yesterday the embattled Greeks delivered still more body blows to the rotten regime of Keynesian central banking and the crony capitalist bailout state to which it is conjoined. By defaulting on its IMF loan, walking away from the troika bailout program and taking control of its insolvent domestic banking system, Alexis Tsipras and his band of political outlaws have shattered a giant illusion.

Namely, that the world’s debt serfs will endlessly and meekly acquiesce to whatever onerous, eleventh hour arrangements might be concocted b...



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Chart School

Neutral Day

Courtesy of Declan.

After yesterday's gains there was no more gas in the tank to squeeze any more out of the market. Worryingly, the Russell 2000 finished near Monday's lows in a relative loss to S&P and Nasdaq, suggesting bearish leadership will come from speculative Small Caps, and that further losses are likely. The S&P recovered afternoon losses, but the Spinning Top candlestick of today suggests the advance is slowing, and what may be emerging is a 'bear flag'. In the meantime, the index is caught in a no-mans land between resistance and support. ...

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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

Shanghai index creates historic reversal pattern like 2007

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

Much of the attention around the world seems to be revolving around a small country called Greece. What about the most populated country in the world (China), any key messages coming from there of late?

Well another Month, Quarter and Half a year are in the books. With this in mind I wanted to look at Monthly action of the hottest stock market in the world, the Shanghai Index. Above looks at the Shanghai index over the past 25-years. The 100%+ rally over the past year has pushed the Shanghai index up to its 23% Fibonacci ratio and a long-term resistance line, that has been in play for 25-years at (1) above.

As the Shanghai index was hitting this...



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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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