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Archive for the ‘Chart School’ Category

Gann Angles on the Dow Jones Industrials – Update

Courtesy of Read the Ticker.

gann-angles-on-the-dow-jones-industrials--updateA trend lines requires 2 points to draw, and Gann Angle only requires 1 point, a huge difference. Something  is going to break soon!

Previous Post here

Why?

Simply that Gann Angle is not determined by price pivot points at the last price end, where as a trend line is. That is the beauty!

Price is still holding true to the blue 2×1 Gann Angle. This angle is the demand line, this is why we need to pay  attention to it.

As stated before .."As you can see price is now entering a pinch zone, it will bust out either way."… soon the fun will start.

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



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…

..”Nothing new ever occurs in the business of speculating or investing in securities and commodities.”..

Jesse Livernore Trading Rule


..”Stock market bubbles don’t grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception”..

George Soros








World Markets Weekend Update

Courtesy of Doug Short.

Only two of the eight indexes on my world market watch, list posted a weekly gain. The top performing Shanghai Composite rose 2.04%, with Hong Kong’s Hang Seng as a distant second at 0.46%. The losses of the other six indexes ranged from -1.05% to -2.84%, with the average of the eight at -1.10%, the worst since the -1.21% at the end of January.

Here is an overlay of the eight for a sense of their comparative performance so far in 2015.

Here is a table of the 2015 data performance, sorted from high to low, along with the interim highs for the eight indexes. Seven of eight indexes are in the green, with Germany’s DAXK up over 20%. At the bottom of the list, India’s SENSEX is fractionally in the red, the US’s S&P 500 is up a tiny 0.10%.

A Closer Look at the Last Four Weeks

The tables below provide a concise overview of performance comparisons over the past four weeks (through year’s end) for these eight major indexes. I’ve also included the average for each week so that we can evaluate the performance of a specific index relative to the overall mean and better understand weekly volatility. The colors for each index name help us visualize the comparative performance over time.

The chart below illustrates the comparative performance of World Markets since March 9, 2009. The start date is arbitrary: The S&P 500, CAC 40 and BSE SENSEX hit their lows on March 9th, the Nikkei 225 on March 10th, the DAX on March 6th, the FTSE on March 3rd, the Shanghai Composite on November 4, 2008, and the Hang Seng even earlier on October 27, 2008. However, by aligning on the same day and measuring the percent change, we get a better sense of the relative performance than if we align the lows.

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A Longer Look Back

Here is the same chart starting from the turn of 21st century. The relative over-performance of the emerging markets (Shanghai, Mumbai SENSEX and Hang Seng) up to their 2007 peaks is evident, and the SENSEX remains by far the top performer. The Shanghai, in contrast, formed a perfect Eiffel Tower from late 2006 to late 2009.…
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Q4 GDP Third Estimate Remains Unchanged at 2.2%

Courtesy of Doug Short.

The Third Estimate for Q4 GDP, to one decimal, came in at 2.2 percent, unchanged from the Second Estimate. Today’s number was a minor disappointment for most economic forecasts, which were looking for a somewhat higher Third Estimate. For example, both Investing.com and Briefing.com had forecast of 2.4 percent.

Here is an excerpt from the Bureau of Economic Analysis news release:

Real gross domestic product — the value of the production of goods and services in the United States, adjusted for price changes — increased at an annual rate of 2.2 percent in the fourth quarter of 2014, according to the “third” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 5.0 percent.

The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was also 2.2 percent. While increases in exports and in personal consumption expenditures (PCE) were larger than previously estimated and the change in private inventories was smaller, GDP growth is unrevised, and the general picture of the economy for the fourth quarter remains the same (see “Revisions” on page 3).

The increase in real GDP in the fourth quarter reflected positive contributions from PCE, nonresidential fixed investment, exports, state and local government spending, and residential fixed investment that were partly offset by negative contributions from federal government spending and private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP growth in the fourth quarter primarily reflected an upturn in imports, a downturn in federal government spending, a deceleration in nonresidential fixed investment, and a larger decrease in private inventory investment that were partly offset by accelerations in PCE and in state and local government spending. [Full Release]

Here is a look at GDP since Q2 1947 together with the real (inflation-adjusted) S&P Composite. The start date is when the BEA began reporting GDP on a quarterly basis. Prior to 1947, GDP was reported annually. To be more precise, what the lower half of the chart shows is the percent change from the preceding period in Real (inflation-adjusted) Gross Domestic Product. I’ve also included…
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Median Household Income Up Slightly in February

Courtesy of Doug Short.

Summary: The Sentier Research monthly median household income data series is now available for February. The nominal median household income was up $178 month-over-month and up $1,409 year-over-year. That’s a 0.3% MoM gain and 2.7% YoY. Adjusted for inflation, the numbers were up $60 MoM and $1447 YoY. The real numbers equate to a 0.1% monthly increase and a 2.7% yearly increase.

In real dollar terms, the median annual income is 4.5% lower ($2,580) than its interim high in January 2008 but well off its low in August 2011.

Background on Sentier Research

The traditional source of household income data is the Census Bureau, which publishes annual household income data in mid-September for the previous year.

Sentier Research, an organization that focuses on income and demographics, offers a more up-to-date glimpse of household incomes by accessing the Census Bureau data and publishing monthly updates. Sentier Research has now released its most recent update, data through November (available here). The numbers in their report differ from the Census Bureau’s in three key respects:

  1. It is a monthly rather than annual series, which gives a more granular view of trends.
  2. Their numbers are more current. The Census Bureau’s 2012 data will remain its latest until September 18, 2014.
  3. Sentier Research uses the more familiar Consumer Price Index (CPI) for the inflation adjustment. The Census Bureau uses the little-known CPI-U-RS (RS stands for “research series”) as the deflator for their annual data. For more on that topic, see this commentary.

Monthly Median Household Income Since 2000

The first chart below is an overlay of the nominal values and real monthly values chained in November 2014 dollars. The red line illustrates the history of nominal median household, and the blue line shows the real (inflation-adjusted value). I’ve added callouts to show specific nominal and real monthly values for January 2000 start date and the peak and post-peak troughs.


Click for a larger image

In the latest press release, Sentier Research spokesman Gordon Green summarizes the recent data:

Even though there was not a statistically significant increase in median income between January and February, there has been a general upward trend in


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Michigan Consumer Sentiment at 93.0, An Improvement from the March Preliminary

Courtesy of Doug Short.

The University of Michigan final Consumer Sentiment for March came in at 93.0, up from the 91.2 March preliminary reading but down from the final reading of 95.4 in February and the 98.1 level in January. Investing.com had forecast 92.0 for the March final.

See the chart below for a long-term perspective on this widely watched indicator. I’ve highlighted recessions and included real GDP to help evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.

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To put today’s report into the larger historical context since its beginning in 1978, consumer sentiment is now 9 percent above the average reading (arithmetic mean) and 11 percent above the geometric mean. The current index level is at the 70th percentile of the 447 monthly data points in this series.

The Michigan average since its inception is 85.2. During non-recessionary years the average is 87.4. The average during the five recessions is 69.3. So the latest sentiment number puts us 23.7 points above the average recession mindset and 5.5 points above the non-recession average.

Note that this indicator is somewhat volatile with a 3.1 point absolute average monthly change. The latest data point was a 2.4 point change. For a visual sense of the volatility, here is a chart with the monthly data and a three-month moving average.

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For the sake of comparison, here is a chart of the Conference Board’s Consumer Confidence Index (monthly update here). The Conference Board Index is the more volatile of the two, but the broad pattern and general trends have been remarkably similar to the Michigan Index.

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And finally, the prevailing mood of the Michigan survey is also similar to the mood of small business owners, as captured by the NFIB Business Optimism Index (monthly update here).

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The general trend in the Michigan Sentiment Index since the Financial Crisis lows had been one of slow improvement. But it is now off its dramatic eleven-year high set in January.





S&P 500 Snapshot: Selloff Ends with a Modest Gain

Courtesy of Doug Short.

Friday was a mixed bag of economic data. Hopes for an upward revision to Third Estimate of Q4 GDP were disappointed when the BEA left the annualized rate at 2.2%. The final Michigan Consumer Sentiment for March was an improvement on the preliminary reading, but it was below the February final and well off the January 11-year high. The S&P 500 spent the day in a narrow range, ending with a modest 0.24% gain, which snapped a four-day selloff. The index was down 2.33% for the week, its second worst weekly performance of 2015 (the worst being the -2.77% plunge in late January).

The yield on the 10-year Note fell 7 bps to 1.95%.

Here is a 15-minute chart of the past five sessions.

Here is a weekly chart of the index, which is now a bit below its 10-week moving average. Volume was unremarkable.

A Perspective on Drawdowns

Here’s a snapshot of selloffs since the 2009 trough.

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For a longer-term perspective, here is a charts base on daily closes since the all-time high prior to the Great Recession.

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Nasdaq finishes on 50-day MA

Courtesy of Declan.

There was some carryover from yesterday’s heavy day of selling. My tracking of ETF alerts for Zignals didn’t mark a trend reversal for ultrashort ETFs, only ultralongs; suggesting yesterday’s selling was primarily driven by profit taking and not shorting activity. Today’s action brought indices closer to support, which slowed the rate of loss.

The S&P closed with a neutral ‘spinning top’ on lighter volume. The 50-day MA didn’t offer much support, but the low at 2,039 remains valid.


The Nasdaq dug in at the 50-day MA, reclaiming the swing low in the process. Tomorrow is set up for a rally to challenge the 20-day MA; an area where shorts may look to get aggressive. Today also closed with a ‘sell’ trigger in On-Balance-Volume.

The other index to watch is the Semiconductor Index. Today’s session recovery occurred just above converged 660 and 200-day MA support. While it’s one of the hardest hit indices, it perhaps offers the best chance for a relief bounce gain,

Just for completions sake, the Russell 2000 finished well above its swing low, but between 20-day and 50-day MAs. A move back to the 50-day MA converging with 1220 support could offer longs an opportunity; stops on a loss of 1206.

After yesterday’s rough and tumble there was always going to be a risk of some carryover into today. With swing low support nearby tomorrow may see a tentative return of bulls, although once bitten twice shy buyers may struggle to make it back to highs. Large Caps remain more vulnerable to selling and shorts than either Small Caps or Tech indices.

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





Gasoline Volume Sales, Demographics and our Changing Culture

Courtesy of Doug Short.

The Department of Energy’s Energy Information Administration (EIA) data on volume sales is over two months old when it released. The latest numbers, through mid-January, are now available. However, despite the lag, this report offers an interesting perspective on fascinating aspects of the US economy. Gasoline prices and increases in fuel efficiency are important factors, but there are also some significant demographic and cultural dynamics in this data series.

Because the sales data are highly volatile with some obvious seasonality, I’ve added a 12-month moving average (MA) to give a clearer indication of the long-term trends. The latest 12-month MA is 8.2% below the all-time high set in August 2005 and fractionally off the interim low set in August 2014.

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Click for a larger image

The next chart includes an overlay of real monthly retail gasoline prices, all grades and formulations, adjusted for inflation using the Consumer Price Index (the red line). I’ve shortened the timeline to start with EIA price series, which dates from August 1990. The retail prices are updated weekly, so the price series is the more current of the two.

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As we would expect, the rapid rise in gasoline prices in 2008 was accompanied by a significant drop in sales volume. With the official end of the recession in June 2009, sales reversed direction … slightly. The 12-month MA hit an interim high in November 2010, and then resumed contraction. The moving average for the latest month is 7.9% below the pre-recession level and 4.8% off the November 2010 interim high. For some historical context, the latest data point is a level first achieved in May 1998.

Some of the shrinkage in sales can be attributed to more fuel-efficient cars. But that presumably would be relatively small over shorter time frames and would be offset to some extent by population growth. For some specifics on fuel efficiency, see the Eco-Driving Index for new vehicles developed by the University of Michigan Transportation Research Institute. However, if we look at Edmunds.com for data on the top 10 best-selling
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S&P 500 Snapshot: Four-Day Selloff

Courtesy of Doug Short.

The S&P 500 dropped at the open, despite a good jobless claims report, and hit its -0.75% intraday low. A slow rally took the index to its 0.30% intraday high in the early afternoon. But subsequent selling pushed the index back into the red. It closed with a modest 0.24% decline, the forth consecutive daily loss.

The yield on the 10-year Note rose 8 bps to 2.01%.

Here is a 15-minute chart of the past five sessions.

Here is a daily chart of the index, where trading volume was right at its 50-day moving average.

A Perspective on Drawdowns

Here’s a snapshot of selloffs since the 2009 trough.

Click to View
Click for a larger image

For a longer-term perspective, here is a charts base on daily closes since the all-time high prior to the Great Recession.

Click to View
Click for a larger image





New Jobless Claims at 282K, Better than Forecast

Courtesy of Doug Short.

Here is the opening statement from the Department of Labor:

In the week ending March 21, the advance figure for seasonally adjusted initial claims was 282,000, a decrease of 9,000 from the previous week’s unrevised level of 291,000. The 4-week moving average was 297,000, a decrease of 7,750 from the previous week’s unrevised average of 304,750.

There were no special factors impacting this week’s initial claims. [See full report]

Today’s seasonally adjusted 282K beat the Investing.com forecast of 290K. The four-week moving average at 297,000 is now 18,000 above its 14-year interim low set in early November of last year.

Here is a close look at the data over the past few years (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession and the volatility in recent months.

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As we can see, there’s a good bit of volatility in this indicator, which is why the 4-week moving average (the highlighted number) is a more useful number than the weekly data. Here is the complete data series.

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The headline BLS data is seasonally adjusted. What does the non-seasonally adjusted data look like. See the chart below, which clearly shows extreme volatility of the non-adjusted data (the red dots). The 4-week MA gives an indication of the recurring pattern of seasonal change (note, for example, those regular January spikes).

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Because of the extreme volatility of the non-adjusted weekly data, we can add a 52-week moving average to give a better sense of the secular trends. The chart below also has a linear regression through the data. We can see that this metric continues to fall below the long-term trend stretching back to 1968.

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Annual Comparisons
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Zero Hedge

Americans Supported and Inspired the Nazis

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

 

Preface:  I am a patriotic American who loves  my country. I was born here, and lived here my entire life.

So why do I frequently point out America's warts?  Because - as the Founding Fathers and Supreme Court judges have explained - we can only make America better if we honestly examine her shortcomings.  After all:

“Dissent is the highest form of patriotism.”

Only when Americans can honestly look at our weaknesses can we become stronger. If we fail to do so, history will repeat ...

While Americans rightly condemn the Nazis as monstrous peo...



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Phil's Favorites

Can the Eurozone Survive? Not in Its Current Form Says PIMCO; Mish Response

Courtesy of Mish.

Echoing statements I have made many times, PIMCO says the single currency area must become a "United States of Europe" in order to secure its future.

Please consider Eurozone can't survive in current form, says PIMCO.
The eurozone is "untenable" in its current form and cannot survive unless countries are prepared to cede sovereignty and become a "United States of Europe", the manager of the world's biggest bond fund has warned.

The Pacific Investment Management Company (PIMCO) said that while the bloc was likely to stay together in the medium term, with Greece remaining in the eurozone, the single currency could not survive if countries did not move closer together.

Persistently weak gro...



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Chart School

Gann Angles on the Dow Jones Industrials - Update

Courtesy of Read the Ticker.

A trend lines requires 2 points to draw, and Gann Angle only requires 1 point, a huge difference. Something  is going to break soon!

Previous Post here

Why?

Simply that Gann Angle is not determined by price pivot points at the last price end, where as a trend line is. That is the beauty!

Price is still holding true to the blue 2x1 Gann Angle. This angle is the demand line, this is why we need to pay  attention to it.

As stated before .."As you can see price is now entering a pinch zone, it will bust out either way."... soon the fun will start.

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



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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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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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Insider Scoop

Raymond James Downgrades Power Integrations To Market Perform

Courtesy of Benzinga.

Related POWI Benzinga's Top Downgrades Benzinga's Volume Movers

Analysts at Raymond James downgraded Power Integrations Inc. (NASDAQ: POWI) from Outperform to Market Perform and removed the price target of $57.00.

Power Integrations shares have dropped 18.42% over the past 52 weeks, while the S&P 500 index has surged 10.69% in the same period.

Power Integrations' shares fell 1.51% to $51.65 in pre-market trading.

Latest Ratings for POWI DateFirmActionFrom...

http://www.insidercow.com/ more from Insider

Sabrient

Sector Detector: Bulls retake the wheel, with a little help from their friends at the Fed

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

Courtesy of Scott Martindale at Sabrient Systems

Well, it didn’t take long for the bulls to jump on their buying opportunity, with a little help from the bulls’ friend in the Fed. In fact, despite huge daily swings in the market averages driven by daily news regarding timing of interest rate hikes, the strength in the dollar, and oil prices, trading actually has been quite rational, honoring technical formations and support levels and dutifully selling overbought conditions and buying when oversold. Yes, the tried and true investing clichés continue to work -- “Don’t fight the Fed,” and “The trend is your friend.”

In this weekly update, I give my view of the cur...



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OpTrader

Swing trading portfolio - week of March, 23rd, 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

Bitcoin vs. Uber: Bitcoin Lovers Respond to Mish

Courtesy of Mish.

I recently commented that it would not surprise me if bitcoin plunged to $1.00. That was not a prediction, it was a comment.

Still, I still feel a collapse in bitcoin is likely.

For discussion, please see Cash Dinosaur: France Limits Cash Transactions to €1,000, Puts Restrictions on Gold; Bitcoin End Coming?

In response, reader Creighton writes ...

Hello Mish

While I'm not going to argue the point about the possibility that Bitcoin drops to $1, or less, (that could happen yet, but not for the reasons you propose) I felt it necessary to point out something you seem to have overlooked.

While it's likely that the US government watching Bitco...



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Market Shadows

Kimble Charts: South Korea's EWY

Kimble Charts: South Korea's EWY

By Ilene 

Chris Kimble likes the iShares MSCI South Korea Capped (EWY), but only if it breaks out of a pennant pattern. This South Korean equities ETF has underperformed the S&P 500 by 60% since 2011.

You're probably familiar with its largest holding, Samsung Electronics Co Ltd, and at least several other represented companies such as Hyundai Motor Co and Kia Motors Corp.

...



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Option Review

Cypress Semi Draws Bullish Option Plays

Bullish trades abound in Cypress Semiconductor options today, most notably a massive bull call spread initiated in the July expiry contracts. One strategist appears to have purchased 30,000 of the Jul 16.0 strike calls at a premium of $0.89 each and sold the same number of Jul 19.0 strike calls at a premium of $0.22 apiece. Net premium paid to put on the spread amounts to $0.67 per contract, thus establishing a breakeven share price of $16.67 on the trade. Cypress shares reached a 52-week high of $16.25 back on Friday, March 13th, and would need to rally 4.6% over the current level to exceed the breakeven point of $16.25. The spread generates maximum potential profits of $2.33 per contract in the event that CY shares surge more than 20% in the next four months to reach $19.00 by July expiration. Shar...



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Pharmboy

2015 - Biotech Fever

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

PSW Members - well, what a year for biotechs!   The Biotech Index (IBB) is up a whopping 40%, beating the S&P hands down!  The healthcare sector has had a number of high flying IPOs, and beat the Tech Sector in total nubmer of IPOs in the past 12 months.  What could go wrong?

Phil has given his Secret Santa Inflation Hedges for 2015, and since I have been trying to keep my head above water between work, PSW, and baseball with my boys...it is time that something is put together for PSW on biotechs in 2015.

Cancer and fibrosis remain two of the hottest areas for VC backed biotechs to invest their monies.  A number of companies have gone IPO which have drugs/technologies that fight cancer, includin...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 

 

...

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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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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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