Archive for the ‘Chart School’ Category

How to Use the Stochastic Oscillator

A lesson from EWI's Jeffrey Kennedy

The stochastic oscillator is a technical tool that was popularized by George Lane. It is a momentum indicator based on the idea that in an uptrending market, the close tends to be near the high of the price bar, and in a downtrending market the close tends to be near the low of the price bar.

Watch an 11-minute lesson from Jeffrey Kennedy's Trader's Classroom to learn to use this popular indicator in your analysis and trading.

 

3 Lessons: Learn to Spot Trade Setups on Your Charts

In these three video lessons, Jeffrey Kennedy shows you how to look for trading opportunities in your charts. Kennedy, instructor for Elliott Wave International's popular Trader's Classroom service, reviews the 5 core Elliott wave patterns and then shows you how to combine technical methods to create a compelling forecast.

Get your free lessons now >>

This article was syndicated by Elliott Wave International and was originally published under the headline How to Use the Stochastic Oscillator





Relief Rally?

Courtesy of Declan.

Big gains and a strong reversal in the Russell 2000 puts a potential bottom in play.  The Russell 2000 started the day below the 200-day MA, but then rallied to claim a spike low and a close above this key moving average. Small Caps are a key driver in trend cycles. The ‘bull trap’ from June is still dominant. and a push above 1,280 looks a tall order. but reversing the breakdown of the rising trendline at 1,240 is a different proposition. If it fails at this, then a swift return below the 200-day MA, and then some, opens up. And the long awaited intermediate term decline begins.





The S&P gained over 1% with a second bounce off the 200-day MA. But, it’s a bounce which has come a little soon given the last test of the 200-day MA was earlier in the month. Supply kicks in on a move above 2,100, and the 50-day MA is also lurking around this price level to offer resistance. Technicals are net bearish. My hunch suggests the sellers are going to regain control, but bulls will be looking to press today’s advantage.




The Nasdaq closed the gap from Monday, but there is more work for bulls to do. The ‘bull trap’ above 5,200 is dominant, but today’ buying amounted to a successful defense of converged 20-day and 50-day MAs. However, a test of the 200-day MA is long overdue.




The Semiconductor Index had a tricky day. It gained against recent day’s losses, but it hasn’t really offered the makings of  strong bottom, at least not yet. This will make a recovery in the Nasdaq and Nasdaq 100 more difficult.




For tomorrow, assuming no shocks premarket, bulls have a chance to continue with the work they started today. Shorts covering will drive the early action, but as highs are approached, fresh buyers will emerge.



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







Fifth Day of Selling

Courtesy of Declan.

Sellers in the S&P made it five days of downside in a row. On this last day it closed near the day’s lows, but also on its 200-day MA. If there was reason for a bounce, then tomorrow could be the day.  Technicals are all net negative.





The Dow took the selling harder. It undercut the July swing low having earlier lost its 200-day MA. Next up is the February swing low.




Small Caps finished at its 200-day MA, after it lost trendline support on Friday. Value players may get a bite of the cherry tomorrow as the index makes it first test of the 200-day MA since February.




The Nasdaq remains caught inside the range. It suffered a fairly clean slice of both 20-day and 50-day MAs, but the nearest support appears to be the July swing low, then the 200-day MA. If markets rally tomorrow, then look for a push to close today’s breakdown gap.




Tomorrow looks to be set nicely for bulls, even if the broader picture appears to favor an intermediate term correction. Indices trading at 200-day MAs are likely to offer the best opportunity, with the Russell 2000 perhaps the best of all.



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







Broad Selling

Courtesy of Declan.

There was no doubt as to the nature of Friday’s action. A weak, end-of-week close adds to the negative tone, suggesting the damage is more long term. However, not all indices are in true bearish mode.

The S&P is stuck inside its range, and won’t be challenging range lows until 2,045 comes into play. The 200-day MA at 2,063 is an area to look for buyers, although the last test of this key moving average was in early July, which is a little too soon for a new test to hold again. Technicals are mixed, which fits with what is trading range action. Bears may win in the long term, but bulls may get some joy at the 200-day MA for a short term bounce play.

The Dow is not playing so well. It’s struggling with a potential break of the trading range, not something S&P traders will want to see succeed. The undercut of the 200-day MA with a new lower high looks quite damaging. Add a new distribution day, one of a recent sequence of three, piles on the bearish pressure. Net bearish technicals is the final icing on the cake. Bulls won’t regain control until 18,200 is breached to the upside, but a recovery above 17,625 would force shorts to cover and offer bulls something to work with over the next couple of days.

Damaging is the action in the Russell 2000. The index lost rising trendline support, but it will quickly find itself up against the 200-day MA; a test last (successfully) made in January. Technicals are net negative. The next major support test will be 1,100.

The Semiconductor Index took heavy losses, bringing it back to lows. A strong ‘sell’ trigger remains in play with the MACD.

The Nasdaq is working off a ‘bull trap’, but only has one supporting technical on a ‘sell’ trigger. It also has converged 20-day and 50-day MAs to lean on too. If buyers are able to step up…
continue reading





Selling Continues

Courtesy of Declan.

Bears keep the pressure the on with another around of selling. Markets remain range bound, particularly after July’s sell off and recovery, which confirmed market trading ranges.



The S&P finished at its 50-day MA on lighter volume selling. Beyond the 50-day MA next comes the 20-day MA, but neither MA has played as support in recent months.




The Nasdaq almost registered a bearish engulfing pattern, but held up better than other indices. Volume was lighter than yesterday’s. Although a support test remains some distance away.




Worst hit was the Russell 2000, which suffered nearly double the loss of other indices today. The rising trendline is looking like the next logical test for bulls.




The other hard hit index, Semiconductors, was actually able to recover some lost ground, but remains vulnerable to fresh losses. The index has shed 15% from high to low, but it does look like it will lose more with buyers likely reluctant to step in here.




Tomorrow could see more of the same as indices look to return to the low end of their range. Again, look to Small Caps to lead, although a successful test of trendline support would give some measure for optimism.



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







‘Bull Trap’ in Nasdaq

Courtesy of Declan.

There was some spill over from yesterday’s after hours disappointment in Apple, but after a weak open, bulls were able to mount some challenge by close of business. However, today’s close was still below that of yesterday and registered as distribution. Hardest hit was the Semiconductor Index. It experienced a gap down, shedding 2.5%, as it continues to trend lower. Given the extent of the decline it’s hard to see how the Nasdaq and Nasdaq 100 can continue to trade near yearly highs.





The late recovery in the Nasdaq wasn’t enough to stop confirmation of the ‘bull trap’. The next challenge will be closing the breakdown gap. Technicals are all bullish, and only the performance of the index relative to the S&P is indicating potential weakness.




The S&P suffered a further loss as the rejection of 2,132 continues. However, the first support level to look for Thursday or Friday is the 50-day MA (assuming loses continue).




Finally, the Russell 2000 was able to recover some ground. It’s range bound, so future price action is likely to remain scrappy. A challenge of the ‘Bull Trap’ would offer some direction, but bears are probably feeling a little more confident.




Sellers will probably look to take things into a third day. Keep an eye on the Russell 2000. If this can push towards 1,278 it would offer buyers something to work with for other indices. In the meantime, all indices are back inside trading ranges, and are net neutral.  The broader direction has still to be determined, only the prior trend suggests markets will end this by pushing higher.



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







8 Unprecedented Extremes Indicate a Stock Market Bubble in Trouble

 

8 Unprecedented Extremes Indicate a Stock Market Bubble in Trouble 

By Elliott Wave International

This article was adapted from Robert Prechter's June 2015 Elliott Wave Theorist. For more charts and detailed commentary, analysis and forecasts from Prechter's latest issues, click here for the extended subscriber version of this report — it's free.

It is amazing to read assertions from the Fed and others that the stock market is nowhere near being in a bubble. Several aspects of the financial environment are actually so extreme as to be unprecedented. Some indicate a bubble, and others a bubble in trouble.

Below are eight indicators we are watching closely, among others.

1) Record debt in U.S. dollars

Total dollar-denominated debt peaked at $52.7 trillion in early 2009. At the end of Q1 2015, it stands at $59 trillion, an unprecedented amount.

2) Margin Debt at All-Time Highs

Never have more trading-account owners owed so much money, and never have they had such a low level of available funds from which further to draw.

3) Stocks Are Overvalued (based on dividend yields)

The Dow's annual dividend payout has been less than 3% for 235 out of the past 246 months. Prior to the bull market that started in 1982, the longest duration under 3% was just one month, at the top in 1929.

4) Fund Managers Are Maxed Out

The percentage of cash in mutual funds has been below 4% for all but one of the past 70 months (a period of nearly six years). Prior to this time, the longest such duration was only nine months, a streak that ended in October 2007.

5) Stocks are at a Triple Extreme

Previous triple manias occurred in 1901/1906/1909 and 1965/1968/1972, and both led to severe bear markets. This one is even bigger and has lasted longer.

6) Stocks Rose on Low Volume for Six Straight Years

Such a thing has never occurred before — one year, maybe, but not six.

7) Unprecedented Divergence Among Major Indexes

continue reading





A Bad Earnings Day, But A Good Day For Profit Taking

Courtesy of Declan.

A bad day for earnings, with IBM, United Technologies and Apple all disappointing. With indices at highs (or just shy of resistance) it was going to be a day of easy selling.  With technology particularly hard hit, the Nasdaq did well to cling on to its upside breakout, but given Apple’s earnings were after hours it’s unlikely to be the same story tomorrow.





The Dow was particularly hard hit with its membership of IBM and United Technologies. Given it finished the day smack bang in the middle of its range, it will probably find it hard to attract buyers – value buyers in particular.




The S&P did well do lose less than half-a-percent, and volume just crept above to register as distribution.  Bulls should keep an eye on this for a potential break of 2,135. It’s not too far away.




Small Caps had already been feeling the pain for the last few days, so today’s selling was nothing new. It did come with a new ‘sell’ trigger in Stochastics (momentum) however. It’s ‘bull trap’ is also looking particularly damaging.  Longs won’t be pressured to sell until the rising trendline connecting 2015 swing lows is hit.




For tomorrow, Apple is likely to set the tone. A gap lower would appear likely, the question is whether anyone will be willing to buy such weakness? Given indices are effectively range bound, much as they have been throughout 2015, it’s hard to see sideline market lurkers wanting to participate at this stage. Shorts may go fishing, but even they may struggle to build any downward momentum as numerous support levels are on offer.



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







Gold Gann Angle Update

Courtesy of Read the Ticker.


gold-gann-angle-updateSeriously if you have a billion dollar gold position, why would you sell it a 2.00am on a Sunday morning when the markets only have $100,000 dollar value bids? Well no human would do that, but a govt would.



However the fix for lower prices is lower prices. The massive open interest built up in Gold and Silver required a punch down to allow position to be un wound, so watch out for that to happen, and that will most likey mean a strong bouch is due.



FYI, so why isnt silver crashing just as hard as gold? Simply all time high open interest and there massive positions to unwind. Every silver cent down is being hit with short covering. Banks like Citi and JPM morgan have to unwind massive silver shorts, to do this they need price falling to show a profit for their efforts.



Price is on the 1st 1×1 Blue Gann Angle, second resistance.



GLD Gann




The $100 on the GLD is a very big magnet, one level to watch.





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

GLD




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





..“By failing to prepare, you are preparing to fail”..



Benjamin Franklin





The minute you get away from the fundamentals – whether it’s proper technique, work ethic, or mental preparation – the bottom can fall out of your game.



Basketball Legend Michael Jordan.





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



John Templeton





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











RTT browsing latest..

Courtesy of Read the Ticker.


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

Date Found: Tuesday, 16 June 2015, 11:03:14 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: QUESTION: How do I short this bubble?

Date Found: Sunday, 21 June 2015, 08:01:52 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: Pay attention – High Yield Credit market warning! (zerohedge)

Date Found: Monday, 22 June 2015, 07:45:15 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: Caterpillar sales stink. No sign of an upturn here. Strong US dollar does not help. Same trend as world growth, down.

Date Found: Monday, 22 June 2015, 10:47:51 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: Light blue is volume outstanding, red line is frequency of turnover. Its BAD when you have lots of stuff out there when turnover crashes. This is musical chairs with few chairs, this is typical in ‘penny stocks’, but this is investment grade BONDS…hope no one wants to SELL…ouch!

Date Found: Tuesday, 23 June 2015, 03:13:47 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: At market highs the smart money (brown) sells to the dumb money (green), that’s called distribution, and its been going on through out 2015.

Date Found: Friday, 26 June 2015, 12:55:52 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: This is not good, upward trend of SP500 cant continue with out the blue line..

Date Found: Saturday, 27 June 2015, 04:31:48 PM

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Comment: Chinese stock market margin Debt….exponential!

Date Found: Saturday, 27 June 2015, 07:14:23 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: Your Banker’s goal to those that have stuff of vlaue! youtu.be/NNvKGkMunYY

Date Found: Saturday, 27 June 2015, 07:19:27 PM

Click for popup. Clear your browser cache if image is not showing.
Comment: Dont worry it is different this time. …I…
continue reading





 
 
 

Zero Hedge

The True Minimum Wage Is $0 Per Hour

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Jeffrey Snider via Alhambra Investment Partners,

The minimum wage is not what is commonly referred, as is being proven again as parts of the US experiment directly with this boundary. In New York, fast food workers have been given a $15 per hour minimum wage which is being celebrated by the same fast food workers who will bear the brunt of the experimentation. Some of them will be happy with the results, but there will be clear losers – the full wrath of redistribution is usually unseen which is why it persists.

Twitter had been having fun on the ...



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ValueWalk

Are Managed-Payout Funds Better Than Annuities?

By Advisor Perspectives. Originally published at ValueWalk.

Are Managed-Payout Funds Better Than Annuities?

July 28, 2015

by Joe Tomlinson

PDF | Page 2

Managed-payout funds promise to meet retirees’ need for sustainable lifetime income without relying on annuities. To see whether this promise can be fulfilled, I’ll answer three questions: What’s the best design for such funds? How do they compare to annuities? Can retirees do even better by combining managed-payout funds and annui...



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Phil's Favorites

Putting the Puzzle of Greece Together

 

Putting the Puzzle of Greece Together

Gordon T. Long (at Macro Analytics) talks with John Rubino (Dollar Collapse) about the current developments in Greece and the seemingly impossible choices facing the Greek people and their government.

THE ACCOUNTING CHARADE

To better understand how Greece and the EU found itself in this perplexing problem, John Rubino traces the history of Greece prior to joining the EU. John doesn't hold back in describing the manipulation of economic numbers carried out by Greece, abetted by Goldman Sachs to gain entry into the EU. Greece never met the Maastricht Treaty bar but nevertheless was granted entry. Goldman Sachs and the International Bankers...



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Chart School

Relief Rally?

Courtesy of Declan.

Big gains and a strong reversal in the Russell 2000 puts a potential bottom in play.  The Russell 2000 started the day below the 200-day MA, but then rallied to claim a spike low and a close above this key moving average. Small Caps are a key driver in trend cycles. The 'bull trap' from June is still dominant. and a push above 1,280 looks a tall order. but reversing the breakdown of the rising trendline at 1,240 is a different proposition. If it fails at this, then a swift return below the 200-day MA, and then some, opens up. And the long awaited intermediate term decline begins.


The S&P gained over 1% with a second bounce off the 200-d...

more from Chart School

Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Dollar gains against yen, but weakens vs. pound (Market Watch)

The dollar advanced against the yen on Tuesday as worries about China’s stock selloff abated somewhat, but the buck fell against the pound after the latest reading on U.K. economic growth matched expectations.

Some stabilization by Asian stocks prompted nervous investors to loosen their grip on the perceived safety of the Japanese currency.

The dollar USDJPY, -0.01%  was up at ¥123.73, compared with ¥123.24 late Monday in New York. ...



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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

Travel indicator being put to critical tests

Courtesy of Chris Kimble.

The American Economy is driven a good deal by the consumer.

The table below reflects that nearly 70% of GDP is based consumption.

CLICK ON CHART TO ENLARGE

The 4-pack below looks at consumption with a focus on the travel and leisure sector, by looking at Avis (CAR), Hertz (HTZ), Expedia (EXPE) and Priceline (PCLN).

CLICK ON CHART ABOVE TO ENLARGE

While many seem to be occupied by the news abou...



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Sabrient

Sector Detector: Lackluster earnings reports put eager bulls back into waiting mode

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

Courtesy of Sabrient Systems and Gradient Analytics

In this weekly update, I give my view of the current market environment, offer a technical analysis of the S&P 500 chart, review our weekly fundamentals-based SectorCast rankings of the ten U.S. business sectors, and then offer up some actionable trading ideas, including a sector rotation strategy using ETFs and an enhanced version using top-ranked stocks from the top-ranked sectors.

Corporate earnings reports have been mixed at best, interspersed with the occasional spectacular report -- primarily from mega-caps like Google (GOOGL), Facebook (FB), or Amazon (AMZN). Some of the bul...



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OpTrader

Swing trading portfolio

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

Gold Spikes Back Above $1100, Bitcoin Jumps

Courtesy of ZeroHedge. View original post here.

Gold is jumping after the overnight double flash-crash...testing back towards $1100...

Bitcoin is back up to pre-"Greece is Fixed" levels...

Charts: Bloomberg and Bitcoinwisdom

...

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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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