Archive for the ‘Chart School’ Category

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.







Early Selling Rebuffed

Courtesy of Declan.

Healthy Action in today’s markets as early selling was outdone by afternoon buying. The respectable close will help build confidence of buyers, at least until the November-December trading range is challenged.



For the S&P. 2,000 looms overhead, but until this is challenged there is little to add.




The Nasdaq closed near today’s highs as it sits on the verge of  a new On-Balance-Volume ‘buy’ trigger.




The Russell 2000 had only a small gain, but it has the most work to do to rebuild confidence.  On the positive front, it’s close to a ‘buy’ trigger in On-Balance-Volume.




Another index doing well is the Semiconductor Index. It registered nearly a 1% gain as it looks to recover 2016 losses. Supply doesn’t become a concern until 650 is reached.




Tomorrow is a chance for bulls to kick on and put further distance on the recent swing low.. Not much more to add until then. Buyers can now look with greater confidence to accumulate pull backs. Shorts will likely be waiting on a test of November-December swing lows.



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







Counter Break of Consolidation

Courtesy of Declan.

Markets were setting up for a push lower, but Friday’s upside break from consolidations triggered a wave of buying (and short covering). The buying was accompanied with higher volume accumulation. Shorts were left squealing by Friday’s action, and new shorts will need to wait until Nov-Dec consolidations are tested before new positions are entered. Until then, short covering and long buyers rule the day.



The S&P has taken the first step of a rally to take it back to the supply zone of 2,000. Friday’s action was accompanied by a MACD trigger ‘buy’ and On-Balance-Volume ‘buy’ trigger.





The Nasdaq cleared its consolidation. Next up is a move to the 50-day MA and then 4,900. Of the technical indicators, only the MACD trigger ‘buy’ was on record as a positive signal.




Nasdaq breadth improved sufficiently to generate a ‘buy’ signal, with all four metrics in oversold territory.




The Russell 2000 may have done enough to create a sizable ‘bear trap’. Of the indices, it has the greatest potential for upside. Note the relative performance ‘buy’ trigger against the Nasdaq (and watch for one against the S&P too). Pullback opportunities may offer chances to catch the next upside swing. The 50-day MA/declining wedge resistance is the first upside target.




As a final note, breakouts were also noted in the Dow, Nasdaq 100 and Semiconductor Index:






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







Gold stocks bottom is found

Courtesy of Read the Ticker.

gold-stocks-bottom-is-foundOh no another Gold Stock bottom caller!. Hang on! Well its gotta happen at some time!

A G7 country (Japan) has moves to negative interest rates (NIRP). Well having YEN under the bed earns more the YEN at the bank! Gold also protects you from bentral bankers nutters! Get the feeling that gold and silver will now creep onto more portfolios! Gold stocks will follow to some degree gold, may not be rock stars just yet but the environment is changing for this bruised sector! The last week of Jan 2016 price action in NEM was a good 'sign of strength' that looked like a 'change of behaviour' worth watching!


NEM


Investing Quotes…

.."I have yet to find a man, in or out of Wall Street, who is able to make money in (markets) continuously or uninterruptedly. Like anyone else, I have good and bad periods."..

Richard D Wyckoff

…"The four most dangerous words in investing are 'This time it's different' "…

John Templeton

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

Benjamin Franklin

…“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).

Novice Traders trade 5 to 10 times too big. They are taking 5 to 10% risks on a trade they should be taking 1 to 2 percent risks.

Bruce Kovner

 





Market Consolidations Continue

Courtesy of Declan.

The consolidations developing in the market remained in play by the close of today’s business. Volume climbed in confirmed accumulation, which is a potential sign for an upside breakout from these consolidations. But with bearish lead-in trends, any upside breakouts will quickly run into supply issues from Christmas consolidations.



The S&P is shaping a pennant just above support from September/October swing lows. There is a weak ‘buy’ in the MACD and On-Balance-Volume.





The Nasdaq is holding 4,500 with a potentially bullish harami cross. If today’s accumulation does mark a shift towards bulls, then the Nasdaq is well placed to benefit on Friday.




The Russell 2000 is probably the best placed for bears to take advantage. The ‘bear flag’ remains below support and today’s close left it near lows.




The Dow is another index holding to a ‘bear flag’.  I had tried two short positions here on intraday swing highs, but were stopped out. May be best to wait for a decisive break of 16,000 before going short side, as the target is a measured move down to low 14K.  There is plenty of opportunity for profit either way.




For tomorrow. Bulls can look to the Nasdaq/Nasdaq 100. Bears should watch the Russell 2000 and Large Cap indices for opportunities.



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







Consolidation at Support Suggests Breakdown Favoured

Courtesy of Declan.

The back and forth in the markets continued as yesterday’s gains were undone by today’s higher volume selling.



The concern with today’s action is that the consolidation in the S&P has the look of a bearish continuation wedge. And given the potential for a measured move, it opens up the possibility for a push down to 1,650s. A weak ‘buy’ signal in the MACD could trap more bulls.





The Nasdaq accelerated its relative performance down (against the S&P). Today’s 2%+ loss pushed prices back to last Wednesday’s trading range. Additional losses will push into the spike low.  The ‘Golden Cross’ was also undone with a return of the 50-day MA below the 200-day MA.




The Russell 2000 experienced losses as part of a ‘bear flag’, but the losses were lighter than other indices – which improved its relative performance.  The ‘bear flag’ remains contained by former support turned resistance. Together, lower prices look favoured in the short term, but a return above wedge support would confirm a ‘bull trap’. Note the ‘Death Cross’ between the 50-day and 200-day MA; confirmation of bearish change in long term trend.




The Dow was another index to flash a ‘bear flag’.




For tomorrow, watch for confirmation breakdown’s from the bearish wedge / flags. Markets could accelerate quickly lower if there are gap downs off the open. Long term buyers should be getting ready with another tranche of funds to take advantage of a new swing low (should it occur).



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







First Derivatives Seeks New Hires

Courtesy of Declan.

If there are readers out there looking for a change in scenery in their jobs, First Derivatives (my employer), are looking for candidates.  They have offices in the U.S., Ireland, U.K., and Australia.



If interested, I can refer you to HR if you send on your CV to me, and an email detailing what role you would like to fill and why to dfallon(@)firstderivatives.com



The available roles in summary are:


London / New York/ International Based Roles
·         Java Developers
·         C# Developers
·         Vendor SME’s – Murex, Calypso
·         Business Analysts / Technical Business Analysts
·         Programme/Project Managers
·         Experienced Support Analysts
·         Test Analysts

Newry / Dublin/ Belfast Based Roles
·         Business Analysts / Technical Business Analysts
·         Experienced Support Analysts
·         Client On Boarding
·         Test Analysts
·         Java Developers


·         C# Developers


The company website is here.  First Derivatives also made a big acquisition of KX Systems, so kdb+ experience is a bonus.







Financial Engineering Chart of the Day: Fed Balance Sheet vs. S&P 500

Courtesy of Mish.

Fed Balance Sheet vs. S&P 500

I was playing around with some ideas on the St Louis Fed "Fred" database and came up with this.

Mike "Mish" Shedlock

 




Good Recovery

Courtesy of Declan.

Monday’s close had all the look of a retest of last week’s spike low. And the Asian session only looked to confirm further weakness as the Chinese market continued its slump. However, bulls kicked off from the open and clawed back most of yesterday’s losses. In the end, markets are nicely placed for tomorrow, having undone the damage of yesterday.



The S&P still has a 100 point buffer before it gets to supply issues.





The Nasdaq registered an accumulation day. However it’s going to take more than one accumulation day to recover technical weakness. Relative performance has improved, but not enough to swing it to a position of leadership (still held by the S&P).




The Russell 2000 recovered to former support (turned resistance). The index has been in long standing relative underperformance, but it may be in a position to take the role of recovery leader.  The index has suffered the biggest losses, having registered a 25% loss from all-time highs to last week lows, but now it may be beginning to change this story. Watch for a ‘bear trap’ if it’s able to regain support.




For tomorrow, look to the Russell 2000 to lead higher. Long time buyers can continue to look for opportunities, particularly for stocks part of Russell 2000.



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







Nascent Swing Low

Courtesy of Declan.

Friday did enough to confirm Wednesday’s spike low as a potential Swing Low. Markets may look to rally back into the Oct-Dec trading range, but getting beyond that may prove more of a challenge. But until then, is plenty of room to support a low volume rally.



For the S&P, there is a thick level of support from 2,000 up to 2,025. Beyond that, things quieten with the 200-day MA, then a successive level of swing highs. Technicals remain in bears favour, although there was a ‘bull’ cross in On-Balance-Volume.





The Nasdaq is aiming for 4,900, but its first challenge is getting back to the 20-day MA.




Nasdaq breadth has fallen deep into swing low territory – comparable to 2011 – across all four metrics. A trade worthy low should be in place; weakness could be bought






The Russell 2000, the hardest hit of the indices, could form a ‘bear trap’ with a higher close on Monday.  The index was the first to record a 25% loss from 2015 high to recent low. The relative performance of the index remains down, but it’s getting close to a bullish cross.




As a bonus, relative performance across different markets shows how far commodities have fallen.  Historically, they look to have reached a level which could mark a bounce (1999 lows). Global stock markets remain closer to overbought conditions, despite the losses already experienced.




Another sign of a bottom is the spike high in the number of NYSE stocks making new 52-week lows. While further lows (and new spike highs) are possible, a decent trading low should be in place.




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







 
 
 

Zero Hedge

Initial Claims Drop But Goldman Warns "Recent Increase Is More Than Just Noise"

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Initial jobless claims dropped notably last week (from 285 to 269k) but the overall trend (away from the noise) appears in tact. The smoother4-week average remains near 12-month highs and as Goldman notes weakness is widespread - "there is only limited evidence that the rise in claims is due to distress in the energy sector." Continuing claims dropped modestly to 2.239mm but, as Goldman adds, "the persistence of the recent move suggests more might be going on, and we are treating the increase as more than just noise."

And finally, here is Goldman explaining why it is time to be concerned...

Initial and continuing cl...



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Phil's Favorites

Capitulation

 

Capitulation 

Courtesy of Michael BatnickThe Irrelevant Investor

“One day it started raining, and it didn’t quit for four months” ~ Forrest Gump

What’s especially frustrating right now, besides the fact that the S&P 500 is now in a 13.2% drawdown, is that we’re not seeing any sense of panic. While every bounce attempt is getting smaller in both size and duration, the market has yet to do the proverbial flush that we all seam to be waiting for. The “all clear” moment, if you will.

The last time stocks were selling off like this was the summer of 2011 when the S&P 500 fell 21.58% pea...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Asia stocks subdued, safe-haven bonds still rule (Business Insider)

Asian shares sputtered on Thursday as U.S. Federal Reserve Chair Janet Yellen's tone of guarded optimism led to an indecisive finish for Wall Street and further weakness for the dollar.

While European banks found a moment of stability, a renewed rush to the safety of longer-term U.S. Treasury debt suggested the flight from risk was far from over.

Gold Soars Above $1,200 as Yellen Signals Go-Slow on Rates Path (Bloomberg)

Gold jumped to th...



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Insider Scoop

Benzinga's M&A Chatter for Wednesday February 10, 2016

Courtesy of Benzinga.

The following are the M&A deals, rumors and chatter circulating on Wall Street for Wednesday February 9, 2016:

Hearing Chatter of Potential Tencent Offer for LinkedIn

The Rumor:
Shares of LinkedIn (NYSE: LNKD) rose Wednesday, following unconfirmed market chatter of a potential big from China's Tencent (OTC: TCEHY). The rumored offer, accordidng to "sources" is between $120 and $125 per share.

Spokespersons for LinkedIn and Tencent did not immediately respond to requests for comment.

LinkedIn closed at $101.76 on Wednesday, up $0.78.

Opera Confirms Buyout Offer from Chinese Group Including Qihuoo 360

The Deal:
Opera Software ASA (OTC: ...



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Chart School

Bears Win Day - Just...

Courtesy of Declan.

There wasn't a whole lot of change by the close of business, but intraday strength was clawed back in worrisome fashion. The end result was to leave spike highs in markets.

The S&P finished with a MACD 'sell' trigger, but on lower volume. The 'sell' trigger was below the bullish zero line, which makes it a strong signal.


The Nasdaq closed with a 'black' candlestick, which would be more bearish if it occurred at a swing high, but it's still a warning. Technicals are all in the bear camp.

...

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All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Kimble Charting Solutions

Transports working on breakout, after being hit very hard!

Courtesy of Chris Kimble.

When it comes to getting hit hard, the Dow Jones Transportation Index fits the bill over the past year. Few if any major indices have fallen harder, over the past 12-months.

Below looks at the DJ Transportation Index/S&P 500 ratio over the past decade. The ratio reflects that over the past year, the index has been much weaker than the broad markets.

CLICK ON CHART TO ENLARGE

The ratio hit channel resistance at (1) a year ago and decline almost as hard a...



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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 ...



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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, ...



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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...



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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...



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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, ...



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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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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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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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