Archive for the ‘Chart School’ Category

Honors Even

Courtesy of Declan.

The gap down had set up for a big bearish move lower, but the collapse never appeared. Instead, lows held as support. On the flip side, an attempt at a rally couldn’t get off the ground, but markets were able to do enough to register a close above the open.



The S&P closed with a spinning top below support. Watch for a strong ‘sell’ signal in the MACD as other technicals remain bearish.  The only positive is the strong relative performance against the Russell 2000.





The Nasdaq experienced a big gap down yesterday, and today offered a brief move to test the gap. Bulls need a gap higher to leave what could be a very good bullish ‘island’ reversal, combined with a ‘bear trap’. Can they do it?




However, the Russell 2000 is knocking on the door of the January spike low. Unlike the Tech and Large Cap indices, it had difficulty mounting a bullish advance and the outlook for tomorrow looks more bearish. Should the latter come to pass it will hurt all indices.




Tomorrow is a toss up between a bearish break-and-run in the Russell 2000, or an ‘island reversal’ in the Nasdaq. Sentiment lies with bears, which marks a significant level of danger as markets toy on the borderline between a bullish correction or a bear market.  Further losses this week would suggest an acceptance for a new bear market, and place a target for a 40-60% loss from December’s highs.



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







The Economy In Pictures: We’ve Seen This All Before

Courtesy of Lance Roberts of Real Investment Advice

Last week, I gave a presentation discussing the current market environment and the economy. As I was preparing the slide presentation, I noted some concerning similarities to a presentation that I gave in 2007. At that time, I was regularly discussing the potential onset of an economic recession, and then like now, I was dismissed as being a “perma-bear.” There was no inverted yield curve, the vast majority of the media saw no recession in sight, and the Federal Reserve continued to tout a “Goldilocks” economy. Yet, a year later, it was quite evident. 

Currently, there is a plethora of commentary strongly suggesting that the U.S. economy is nowhere near recession currently. That may very well be the case, however, by the time the data is revised to reveal the recession it will be far too late for investors to do anything about it. The market, a coincident indicator of economic recessions historically, may already be revealing future economic data revisions will eventually disclose.

With the economy now more than 6-years into an expansion, which is long by historical standards, the question is: “Are we closer to an economic recession or a continued expansion?”

How you answer that question should have a significant impact on your investment outlook as financial markets tend to lose roughly 30% on average during recessionary periods.  However, with margin debt at record levels, earnings deteriorating and junk bond yields rising, this is hardly a normal market environment within which we are currently invested.

Leading Economic Indicators

LEI-Coincident-Lagging-012016

Durable Goods

Durable-Goods-020816

Durable-Goods-020816-2

Investment

GDI-Real-020816

Private-Investment-GDI-020816

GDI-SP500-020816

ISM Composite Index

ISM-Composite-020816

Employment & Industrial Production

Employment-Pop-Claims-020816

Capacity-Utilization-Production-020816

Retail Sales

Retail-Sales-012016

Retail-Sales-EconomicCycle-012016

PCE & Imports

PCE-Imports-012016

Corporate Profits As % Of GDP

SP500-NetProfit-Margins-012016

The Broad View

GDP-6-Panel-Chart-020816


continue reading





Sellers Start Day, Buyers Finish It

Courtesy of Declan.

Tech averages had the weakest start, Powerful gap downs had set things off, but buyers were able to make a comeback into the close. However, morning gaps remain. Volume climbed to register as distribution, which for the Nasdaq was the second day of distribution in a row.




The Nasdaq 100 is on the fiftth day of selling in a row. The August swing low wasn’t fully tested. Bulls will be looking for a bullish ‘morning star’ where today’s candlestick ‘hammer’ is followed by an opening gap, then a rally for the rest of the day. Should this emerge, then a move to test 4,300 is next. If there is a weak open, then any chance for a bullish ‘hammer’ based on today’s action is significantly weakened.




Losses in the S&P, while comparable to the Tech indices, didn’t see a loss of January’s lows.  Today’s spike low did fall inside the range of January’s spike low. This will offer grounds for a positive response tomorrow; today’s lows will likely see a cluster of stops.




The Russell 2000 has been leading the move down, although the past few days have seen a positive relative response (against Tech averages).  However, today’s low marked a new low for the year. Additional losses has the potential to pull other indices down with it given this leadership role.




Tomorrow’s action will be heavily influenced by pre-market action.  If there is a gap down, then whatever confidence built by bulls today will quickly dissipate. A gap higher, and there will be a scramble between value buyers and short covers.



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







Global stocks have already lost over $6 trillion in 2016

Six trillion dollar question: How much worse is this going to get?

Global stocks have already lost over $6 trillion in 2016

By Bob Bryan at Business Insider

Excerpt:

It's ugly in global markets right now. Really ugly.

In the US, stocks had their worst start to a year ever. In Europe things haven't been much better with bad news coming out of Berlin, London, and Athens. And a crash in Chinese stocks to start the year sort of got this all going on the wrong foot….

2 8 16 Markets COTD

Source: Deutsche Bank





Utilities Winning By Not Losing

Courtesy of Dana Lyons

While the broad stock market has been getting hammered, the utility sector hit a 52-week high this week – and achieved a significant relative breakout.

Our firm’s philosophy when it comes to investment selection, i.e., where to invest, is to concentrate in the strongest performing areas of the market. We refer to this as relative strength. Typically, this means the sectors that are rising more than the rest, especially on a risk-adjusted basis. Occasionally, though – in a market correction or bear market – it can mean the sectors that just aren’t losing ground, or are losing the least.

This is the case currently with the utility sector. For, while most areas of the market are off to a historically weak start, utilities are up 8% for 2016, as measured by the Dow Jones Utility Average (DJU). Furthermore, while the DJU is up a mere 1.7% over the past 52 weeks, it is nevertheless at a 52-week high.

image

Additionally, as the chart indicates, the utility sector has broken out of a well defined downtrend on a relative basis versus the S&P 500. While there is no guarantee, this does suggest that, over the longer-term, the utility sector could be in the early staged of out-performance versus the market. And based on past occurrences when we have witnessed relative breakouts of some variation (e.g., 2000, 2007), this is not necessarily a positive development for stocks overall.

It remains to be seen whether similarly challenging times will materialize for the broader market versus utilities over the longer-term, but that trend certainly is in effect at the moment.

*  *  *

More from Dana Lyons, JLFMI and My401kPro.





Bears Break Deadlock

Courtesy of Declan.

A quick post before the Superbowl begins. Friday’s action was very disappointing if you were in the bullish camp; poor jobs data contributing to the malaise. However, investors can view this as another buying opportunity, with the Nasdaq clocking the 10% percentile of historic weak prices dating back to 1971, and the Russell 2000 making fast work of a push back to 958. Again, it’s not about investing everything at once, but perhaps using the coming year(?) to build long term positions. I would be happier to see a 40-60% trim from highs – keep an eye on my bottom watch table, but this is the kind of action which helps reset the bulls count.



The S&P registered a clear break of rising trend. Volume was lighter, so it wasn’t necessarily a panic sell. And while it could be viewed as a breakown, the glass half full crew would see this as a drop back into the prior consolidation. The disappointing aspect is that the previous Friday’s buying failed to follow through higher.





The Nasdaq experienced higher volume selling – a clear marker for distribution.  While Large Caps didn’t experience panic selling, Tech stocks weren’t as fortunate.




The Russell 2000, squeezed against former support turned resistance and ‘bear trap’ support, cracks and pushes lower.  The worry from here is that Friday’s action will trigger a measured move lower. A 40% loss from high would bring it to 778, still 200 points away. However, a measured move from 1,160 to 958, tagged to 1,037, would deliver a target around 835 – which isn’t a million miles away from a 40% trim from highs.




One index showing signs of life (for bulls) is the Dow. Note the sharp relative advance against the Nasdaq 100.  It was the only index not to register a breakdown on Friday.




For next week, it will be about clawing back the losses of Friday and holding on to those gains. Unfortunately, it’s hard to see confidence returning and it may require a break of January swing lows – and a failure on the part of bears/shorts to jump in – before buyers are prepared to return.



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







Value Investing with help from Wyckoff Logic

Courtesy of Read the Ticker.

value-investing-with-help-from-wyckoff-logicBuying something at good value is a good approach, however it is another approach to know when to enter and exit the market, enter Wyckoff logic. If You ‘know nothing’ of Wyckoff logic is a good time to start.



More from RTT Tv










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…



..“The market always tells you what to do. It tells you: Get in. Get out. Move your stop. Close out. Stay neutral. Wait for a better chance. All these things the market is continually impressing upon you, and you must get into the frame of mind where you are in reality taking your orders from the action of the market itself — from the tape.”…



Richard D. Wyckoff





…“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”…



Martin Zweig (The inspiration behind a number of Martin Zweig’s methods came, from Jesse Livermore).





..“If it’s obvious, it’s obviously wrong.”..



Joe Granville





..”The stock market is filled with individuals who know the price of everything, but the value of nothing”..



Philip Fisher





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











Pause in Action

Courtesy of Declan.

Small Gains as indecision held sway. The S&P finished inside the range of last Friday’s breakout and held rising support, but the index did the minimum to pacify bulls.





The Nasdaq breakout has eased alongside former resistance turned support. Volume was lighter, and the spinning top finish marks indecision. While Thursday’s action offered no side an advantage, a push towards 4,900 would appear to be the favoured path.




The Russell 2000 is caught inside the apex of support and resistance, but as the consolidation appeared below support in what is increasingly looking like a failed ‘bear trap’, a push lower would appear to be the easier path.




The Semiconductor Index is working a swing low, but a solid move higher is required to confirm.




There is more to do for bulls to confirm the low. Today’s action didn’t give either side an advantage, but Friday might offer a firmer idea as to what is to follow.  NFP data will not be left wanting.



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







Afternoon Recovery Creates New Spike Lows

Courtesy of Declan.

Better stuff from bulls as early selling quickly gave way to fresh buying. Best of the action belonged to the Russell 2000 with a bullish cross in the relative performance with the Nasdaq and its 20-day MA. The Russell 2000 is also clinging to a support level and maintaining the ‘Bear Trap’.





The S&P finished with a higher close and a return to the ‘buy’ trigger in On-Balance-Volume.  Today’s spike low moved into the prior consolidation, but there appeared to be enough buyers willing to step in to defend this range.




The Nasdaq didn’t post a higher close, but it did defend the lows.




While January spike lows are a clear marker for a reversal, today’s action was the confirmation to suggest January’s lows are also a swing low.



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







Bears Test Buyers Resolve

Courtesy of Declan.

Last Friday saw a big swing in bulls favor as shorts were forced into covering and value players stepped in to buy the positive reaction to the swing low. Shorts look to have made a tentative return of the market as value buyers failed to follow through on Friday’s action.  Volume climbed to register as distribution, but it was well down on Friday’s accumulation.





The Nasdaq fell back in a move which may see a retest of Friday’s breakout tomorrow. There was a bearish ‘cross’ in On-Balance-Volume after a respectable recovery to the 20-day MA. Relative performance against the S&P also ticked downwards.




The Russell 2000 moved back into ‘bear trap’ price congestion. The spike low should offer good support should prices continue lower. Note relative performance; this continues to improve and is near a ‘buy’ trigger (against rhe Nasdaq) despite today’s loss.




Wednesday will be about seeing the reaction of buyers when they appear (if they appear). Volume will need to rise if Friday’s low is to confirm as the swing low. The concern is that the last couple of weeks action will morph into a sideways consolidation from the current spike low. And if this was to occur, then the likely follow through would be down, not up.



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







 
 
 

Phil's Favorites

Fiscal Policy Has Failed the US Economy

Time to embrace a larger budget deficit, or should we continue to do more of the same that doesn't work? 

Fiscal Policy Has Failed the US Economy

Courtesy of Cullen Roche of Pragmatic Capitalism

The story of the post-crisis economic period is simple:

  • The housing boom left the household sector mired in a deep debt hole.
  • This was further exacerbated by the leverage Wall Street added on top of the household sector’s debt.
  • This left the banks and household sector needing a great deal of support.
  • Since 2008 we’ve seen huge amounts of stimulus from the Federal Reserve and global Central Banks, but we’ve had t...


more from Ilene

Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Deutsche Bank Said in Early Stages of Mulling Bond Buyback (Bloomberg)

Deutsche Bank AG is considering buying back some of its bonds, potentially countering this month’s selloff over concern that Germany’s biggest bank will struggle to make payments on its riskiest debt.

World's Negative-Yielding Bond Pile Tops $7 Trillion: Chart (Bloomberg)

More than $7 trillion of government bonds offered yields below zero globally as of Monday, making up about 29 percent of the Bloomberg Global Developed Sovereign Bond...



more from Paul

Zero Hedge

Is The American Dream Dead?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Tom Chatham via ProjectChesapeake.com,

The American dream is not a thing in physical terms but an idea that lives or dies with certain beliefs in society. Can it die? Yes it can if those beliefs are purged from the conscience of society. This is what Jefferson meant by watering the tree of liberty with the blood of patriots from time to time.

Many people bemoan the loss of the high paying jobs and the mansions and swimming pools we all want to have. They look around them and see their dreams of easy living collapsing and the debt piling up about to drown them. They see life becoming harder every day an...



more from Tyler

Chart School

Honors Even

Courtesy of Declan.

The gap down had set up for a big bearish move lower, but the collapse never appeared. Instead, lows held as support. On the flip side, an attempt at a rally couldn't get off the ground, but markets were able to do enough to register a close above the open.

The S&P closed with a spinning top below support. Watch for a strong 'sell' signal in the MACD as other technicals remain bearish.  The only positive is the strong relative performance against the Russell 2000.


The Nasdaq experienced a big gap down yesterday, and today offered a brief move to test the gap. Bulls need a gap higher to leave what could be a very good bullish ...

more from Chart School

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...

more from David

Kimble Charting Solutions

Nasdaq to follow Silver and decline 30%+?

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

When assets reach prior highs, its time to pay attention from a Risk On & Risk Off basis.

The chart on the left is Silver, going back to the mid 1970’s. As you can see it reached $50 in the early 1980’s and then quickly reversed, losing over 90% of its value in the next 14-years. Then it embarked on a rally, starting in the early 1990’s. This rally took Silver back to the $50 level in 2011, which ended up being a “Double Top” nearly 30-years later. After hitting the $50 level again, buyers disappeared and sellers stepped forward....



more from Kimble C.S.

OpTrader

Swing trading portfolio - week of February 8th, 2016

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 ...



more from OpTrader

ValueWalk

Why Most Investors Fail in the Stock Market

 

Why Most Investors Fail in the Stock Market

Courtesy of ValueWalk, by  

Throughout the past 30 days of wild volatility, here’s what I didn’t do.

Panic. Worry. Sell.

In fact, the best I did was add to a couple of positions yesterday. The world was already in an uncertain state for the past 3+ years. It’s just that with the market rising, we pushed the issue to the back of our  mind and ignored it.

If you read Howard Marks latest memo, ...



more from ValueWalk

Digital Currencies

2016 Theme #3: The Rise Of Independent (Non-State) Crypto-Currencies

Courtesy of Charles Hugh-Smith at Of Two Minds

A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.

We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.

The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies--money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don't require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.

This doesn't just open t...



more from Bitcoin

Sabrient

Sector Detector: New Year brings new hope after bulls lose traction to close 2015

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

Chart via Finviz

Courtesy of Sabrient Systems and Gradient Analytics

Last year, the S&P 500 large caps closed 2015 essentially flat on a total return basis, while the NASDAQ 100 showed a little better performance at +8.3% and the Russell 2000 small caps fell -5.9%. Overall, stocks disappointed even in the face of modest expectations, especially the small caps as market leadership was mostly limited to a handful of large and mega-cap darlings.

Notably, the full year chart for the S&P 500 looks very much like 2011. It got off to a good start, drifted sideways for...



more from Sabrient

Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



more from Promotions

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 ...



more from Pharmboy

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...



more from M.T.M.

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!




FeedTheBull - Top Stock market and Finance Sites



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...

Learn more About Phil >>


As Seen On:




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.

Market Shadows >>