Archive for the ‘Chart School’ Category

Weekly Market Recap Mar 19, 2017

Courtesy of Blain.

After a rare down week in 2017, indexes returned to gains albeit mild this past week.  Almost all the action was contained on Wednesday when the market gained nearly 1% with much of that happened post a (widely expected) Federal Reserve announcing a quarter rate hike.

The Federal Reserve on Wednesday lifted a key short-term interest rate for the second time in three months, but in a sign of caution, the central bank stuck to its forecast for just two more rate hikes this year.  The bank pointed to steady U.S. growth, an improving labor market and greater confidence among consumers and businesses to justify its decision to raise its fed funds rate to a range of 0.75% to 1%.   The vote was 9-to-1. The president of the Minneapolis Fed preferred to leave rates unchanged.

The Fed also noted a recent uptick in prices has resulted in inflation “moving close” to its 2% target, another critical component in its decision. The bank’s preferred inflation gauge, the PCE index, rose at a 1.9% pace in the 12-month span ended in January — more than double the rate as recently as last summer.

At this point I believe even most bulls would love a 3-5% pullback to get re-positioned as it’s been a VERY long rally post election with nary a pullback of significance.  But the 2 major indexes are just hanging in there.  This current move without a 5% pullback is over 3 times as long as average since the 2009 bottom!

The S&P 500 has grinded higher for 182 trading days without a 5% pullback, the longest such streak since Feb. 11, 2004, according to Dow Jones data. Over those 182 days, the S&P 500 has gained nearly 19%.  Since the start of the bull market — not counting the current run of trading days without a pullback of 5% or more — the S&P 500 has averaged going about 56 sessions before it pulls back 5% or more

On the economic front, Tuesday the government said producer prices jumped in February by 0.3%, above consensus expectations of 0.1%,…
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Warning Signs

Courtesy of Lance Roberts of Real Investment Advice

Bull Market Still Intact…For Now

This past Wednesday, on the Real Investment Hour, I spoke with Greg Morris about the technical backdrop of the market. During that interview, he discussed that from a technical perspective the bullish trend of the market is still in place, and despite fundamental underpinnings being stretched, investors should remain allocated to the market.

This is shown in the chart below.

For now, portfolios remain allocated to the market currently. However, as I stated two weeks ago, we did lift profits and rebalance current holdings. Furthermore, we are not adding any “new” positions currently until some of the extreme overbought conditions are resolved. 

This is what the “technicals” dictate, at least for now.

As noted in the chart above, the market is very close to a short-term “sell signal,” lower part of the chart, from a very high level. Sell signals instigated from high levels tend to lead to more substantive corrective actions over the short-term. I have denoted the potential Fibonacci retracement levels which suggest a pullback levels of 2267, 2230, and 2193. To put this into “percent terms,” such corrections would equate to a decline of -4.7%, -6.2% or -7.8% from Friday’s close.

To garner a 10% decline, stocks would currently have to fall 237.8 points on the S&P 500 to 2140.20.  Given there is little technical support at that level, the market would likely seek the next most viable support levels at the pre-election lows of 2075 or a decline of -12.7%. Such a decline, of course, would not only wipe out the entirety of the “Trump Bump,” but would also “feel” much worse than it actually is given the exceedingly long period of an extremely low volatility environment. 

Speaking of low volatility, the market has now gone 108-trading days without a drop of 1% for both the Dow and the S&P 500. This is the longest stretch since September of 1993 for the Dow and December of 1995 for the S&P 500.

This is a pretty impressive feat given the rise in policy uncertainty since the election, geopolitical tensions on the rise, and economic data remaining weak.

In other


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Nasdaq Volatility at New Lows

Courtesy of Declan.

While the Nasdaq has reached new highs, the VXN has pushed to lows not seen in over 20 years. This complacency makes it difficult to know how long this lack of fear can go on. The one caveat is that as a monthly chart and any uptick in volatility could take years before it tops out; how will Trump trigger this collapse?






The Nasdaq price chart isn’t offering any clear signs of weakness. Friday’s churn on higher volume marked options expiration, but could also mark a switch from long-term shareholders to short term, weak-hand breakout traders. If the index fails to clear 5,912 and instead gives up a hundred points to undercut 5,812 then profit taking could kick in and trigger the long awaited rise in volatility/fear – which may be the start of the next cyclical sell off (lasting 6 months+).





The Semiconductor Index is approaching the convergence point between rising channel support and resistance connecting the December and February swing highs. Technicals are all positive, so there isn’t any leading indication to suggest the illustrated hashed line will play as resistance.





The S&P experienced the higher volume as selling, but like the Nasdaq there wasn’t any great price change to go with the volume. This came with a ‘sell’ in On-Balance-Volume.





The Russell 2000 had the best of the action, continuing to attract value buyers. The index is close to a new MACD trigger ‘buy’ and a relative outperformance leadership gain against the Nasdaq.





For Monday, bulls can look for a breakout in the Nasdaq and continued value buying in the Russell 2000. Shorts should watch the S&P, after two days of selling it is the most vulnerable to a third. If this leads to a loss of 2,354 then selling could spread to other indices. Short terms are still running in bulls favor, so the path of least resistance is higher.




You’ve now read my opinion, next read Douglas’ blog.




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Buyers Take Advantage of Russell 2000 Discount

Courtesy of Declan.

Bulls are looking to build swing lows with some respectable buying across markets. Best of the market action went to the Russell 2000, gaining 1.5% with a close near today’s highs.  The gain was enough to return the index above the 50-day MA, but there wasn’t much technical improvement.






The Nasdaq 100 played to its strong trend as the year’s market outperformer posted a new closing high on higher volume accumulation. The only negative was the holding MACD trigger ‘sell’, but more action like today’s will quickly rectify that. Stops can be trailed along the 20-day MA.





The S&P also enjoyed an accumulation day with a respectable buying day. It may yet challenge the recent highs, but it will take another couple of day’s buying before this will happen.





The Semiconductor Index also enjoyed a solid day. While it managed new highs on a fresh MACD trigger ‘buy’, it hasn’t yet cleared resistance which would negate a potential shorting opportunity. However, if it can break past the hashed blue line it would open up for a move to the solid blue line of the rising channel (a decent long trade).





For tomorrow, look for more of the same with buyers holding the upper hand. Long stops go on a loss of swing lows.




You’ve now read my opinion, next read Douglas’ blog.




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Where Traders Sold Valeant

Wow – here's a flash-back on Valeant, in the good old days when it had only fallen down to around $90. 

Where Traders Sold Valeant

Courtesy of 

This is where I think traders sold Valeant:

vrx

Not at the high, mind you, but on the way down before it went, well, waaaay down. I can’t imagine anyone who’s trading their own money professionally or semi-professionally is actually still long this stock. They can’t possibly be.

Professional traders are not in the “I want to be right” business, they’re in the capital preservation business. Either that or they face involuntary retirement. When a stock is going up, traders are happy to ride along. When it stops going up, traders get out.

For portfolio managers, it’s different.

They learn everything there is to know about the company and read all the research. They conduct their own research. They get introduced to management by the institutional sales-traders who have been turned into matchmakers and concierges in the modern era. When a stock they’ve learned about goes down, they buy even more. They stick to their guns and make some phone calls. They get the “reason” why the stock is down and decide it’s overblown. They talk to their own investors about the “opportunity” the market has created.

Both can be right on different timeframes.

The difference is, the trader doesn’t let herself get associated with a certain position or be forced to explain why her original bullishness is still justified. She sells a stock as it breaks down and, in most cases, forgets all about it. A portfolio manager who’s come out publicly with a positive opinion on that stock doesn’t have the luxury of moving on without losing face in front of investors.

“Who cares what the investors think, cut your losses!” you might be saying.

OK, sure, but not as easy in practice. Because now there is doubt in the minds of the PM’s investors and the leash gets tightened a bit. There is less latitude for future risk-taking now and maybe a couple of dollars of redemptions. The magic man has lost his touch, they’ll whisper.

Optics and career risk are a factor, even though they…
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Stock Accumulations to Review

Courtesy of Read the Ticker.

stock-accumulations-to-reviewFinding stocks which have patterns of interest, is a sequence of filtering by math and eyeball chart scanning. We start with a large sample and end up with a small sample to act upon.



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…



..”Tape reading was an important part of the game; so was beginning at the right time; so was sticking to your position. But my greatest discovery was that a man must study general conditions, to size them so as to be able to anticipate probabilities.”…



Jesse Livermore





..”The first rule is not to lose. The second rule is not to forget the first rule”



Warren Buffett





..”it is better to have few stocks and to watch them carefully”…



Bernard Burach





..“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.”..



Bernard Baruch





..“How many millionaires do you know who have become wealthy by investing in savings accounts?”..



Robert G Allen











The perverse reality of the Republican health care bill

 

The perverse reality of the Republican health care bill

The more help you need, the less you get.

By Ezra Klein, Vox

The Congressional Budget Office’s analysis of the GOP’s American Health Care Act is one of the most singularly devastating documents I’ve seen in American politics. For a thorough explanation of the findings, read Sarah Kliff’s explainer. But here is the one-sentence summary: Under the GOP’s bill, the more help you need, the less you get.

The AHCA would increase the uninsured population by about 24 million people — which is more people than live in New York state. But the raw numbers obscure the cruelty of the choices. The policy is particularly bad for the old, the sick, and the poor. It is particularly good for the rich, the young, and the healthy.

Here, in short, is what the AHCA does. The bill guts Medicaid, halves the value of Obamacare’s insurance subsidies, and allows insurers to charge older Americans 500 percent more than they charge young Americans.

Then it takes the subsidies that are left and reworks them to be worth less to the poor and the old, takes the insurers that are left and lets them change their plans to cover fewer medical expenses for the sick, and rewrites the tax code to offer hundreds of billions of dollars in tax cuts to the rich. As Dylan Matthews writes, it is an act of class warfare by the rich against the poor.

The result isn’t just 24 million fewer people with insurance: Of those who remain insured, the pool is tilted toward younger, healthier people who need help less, because many of the older, poorer people who need the most help can no longer afford insurance. As German Lopez notes, a 64-year-old making $26,500 would see his premiums rise by 750 percent. 750 percent! And with that 64-year-old gone, premiums are a little bit lower, because the pool is a little bit younger.

It is within this context that it is worth reading Speaker Paul Ryan’s response to the report.

“CBO report confirms it,” he tweeted. “American Health Care Act will lower premiums & improve access to quality, affordable care.”

Let’s break that down. According to the…
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Russell 2000 Under Modest Pressure

Courtesy of Declan.

Glass Half Full or Half Empty? There wasn’t a whole lot to today’s action.  The Russell 2000 had the worst of it, but it still managed to stage a small recovery into the close. The index finished above support with technicals negative. A bullish rally would nicely set up a swing low and could see a run to test 1,414. Shorts would want to keep stops tight (measure risk) to the 50-day MA at 1,376.






There wasn’t a whole lot to say about other indices. Most finished slightly down on (significantly) lighter volume, with indecision the real outcome of today’s action.




The S&P continues to linger around its 20-day MA. Tehnicals were unchanged with positive accumulation On-Balance-Volume offset by the ‘sell’ trigger in MACD.





And it was a similar story for the Nasdaq, although the index is outperforming the S&P, with the S&P outperforming the Russell 2000. While my weekend post pointed to breadth weakness for the Nasdaq, Nasdaq price action sides more in favour of bulls and buyers.





For tomorrow, bulls are likely to try and push on after indices (the Russell 2000 in particular) didn’t see any acceleration in selling. What selling there was came on light volume. If buying, stops go on a break of (last week’s) swing lows.




You’ve now read my opinion, next read Douglas’ blog.




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Tentative Gains

Courtesy of Declan.

Not a whole lot to say about today. The Semiconductor Index gained nearly 1% as it pushed a new multi-year high, but most of the gains were achieved by the open and it didn’t add too much after that. However, it did keep shorts at bay for another day (resistance remains former channel support).






Aside from Semiconductors, there wasn’t too much to add. The S&P had one of the least exciting days in a long time. Technicals were unchanged by the very flat day.





The Nasdaq made slightly bigger gains, but not enough to change the technical picture, nor the context of where the index stands now.





The Russell 2000 didn’t quite make the same gains as the Semiconductor Index, but it kept with the notion of building support at the swing low.





If bears are to strike I would expect a big one day sell off; a hectic first half-hour of trading which doesn’t recover. The bullish outlook is likely going to be more like today with small, insignificant gains, which add up over time. My bias expects a bearish sell off, but I have been wrong on this rally for too long.




You’ve now read my opinion, next read Douglas’ blog.




I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for “fallond”.




If you are new to spread betting, here is a guide on position size based on eToro’s system.









Weekly Market Recap Mar 12, 2017

Courtesy of Blain.

A rare down week in 2017; the first after six weeks of gains.  The market needed one.  That said – barely… the S&P 500 was down 0.4% and NASDAQ 0.2%.  Monday and Tuesday were the first back to back down sessions since last January!  Energy stocks and a drop in oil were one of the main culprits as was the healthcare industry after a vague tweet by President Trump about drug prices dropping in the future.

Oil futures sank by more than 5% Wednesday to post the lowest finish of the year after U.S. government data revealed a weekly jump in crude supplies that lifted total inventories to another record.  The decline in oil prices accelerated Friday after active rig-count data showed an increase for the eighth week in a row.

One of our favorite indicators – the NYSE McClellan Oscillator – flashed a bit of a warning last week; and was very red this week as well so from a technical perspective when you have a divergence like this it calls for some caution.

In economic news, paycheck-processing firm ADP reported Wednesday the private sector added 298,000 jobs in February.  That was followed up Friday by the government’s employment data that showed gains of 235,000 jobs in February, while the January number was revised to show payrolls rose 238,000 (vs 227,000 initially estimated), pushing the unemployment rate to 4.7%. Hourly pay increased 2.8% from February 2016 to February 2017, up from 2.6% in the prior month. .  This should cement a Fed rate hike next week.

Thursday, the European Central Bank left interest rates unchanged as had been widely expected. In a statement, the bank repeated that it expects rates to remain “at present or lower levels for an extended period of time, and well past the horizon” of its bond-buying program, which is scheduled to run through at least December.  So the central bank foot is still on the accelerator in Europe.

There was a lot of talk about the anniversary of the bull market bottom on March 9, 2009.  The…
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Phil's Favorites

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

US consumer confidence explodes to the highest level since 2000 (Business Insider)

US consumer confidence spiked to a 16-year high in March, according to the Conference Board's monthly survey. 

The headline index jumped to 125.6, the highest since December 2000. Economists had forecast that the index dipped in March to 114.0 from a 15-year high of 114.8, according to Bloomberg. 

Traders betting against Wall Street's favorite Trump trade are making a killing...



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ValueWalk

Nepal's Military Will Soon Be Invincible

By Guest Post. Originally published at ValueWalk.

By Col. Jitendra J. Karki (Retired, Nepal Army) and Dr. David Leffler

Nepal’s army schools are finishing their first stage implementation of Invincible Defense Technology (IDT). The ultimate goal of IDT is to prevent enemies from arising by reducing the collective societal stress that culminates in war, terrorism, and crime. IDT involves use of the Transcendental Meditation (TM) technique and its advanced practices, ideally by the military, to reduce this collective societal stress. Extensive peer-reviewed research has documented the efficacy of this approach. Militaries and police worldwide have successfully field-tested and are now using this approach (see Review Ne...



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Zero Hedge

Brodsky: "A Socialized Market With Guaranteed Positive Returns For All Must Fail"

Courtesy of ZeroHedge. View original post here.

Submitted by Paul Brodsky via Macro-Allocation.com

Self-Serve

In Passive Aggressive, we made the case that ETFs can be useful vehicles for thoughtful active investors. A few people agreed with our self-assessment in the piece that we were being self-serving because we are launching a modestly priced pro-volatility fund that actively manages ETFs. To s...



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Chart School

Rallies Come Through

Courtesy of Declan.

Bulls were able to deliver across the board gains, helping to position yesterday's action as a swing low. Weakness at this point would offer itself as a buying opportunity, but markets wouldn't tolerate more than a couple of days of losses if they were to go down this route.

The S&P is at resistance of the prior swing low and the 20-day MA, but today's action is looking good for an upside break tomorrow? Technicals are firmly in the red and need more than today's gain to fix them.



The Nasdaq did today...

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Kimble Charting Solutions

Silver bear market could end here!

Courtesy of Chris Kimble.

Below looks at the performance of Silver, Gold and the S&P 500 year to date. Metals and miners are off to a good start in 2017. Even though the stock market has received a good deal of attention this year, metals have done even better. Is the performance in 2017 the start of something even bigger for Silver & Gold?

CLICK ON CHART TO ENLARGE

It’s been a long time since buy and holders have experienced a bull market in Silver. How long has it been? Silver has created a series of lower highs since 2011. The trend ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

The Biggest Risk From the Dollar's Drop May Not Be What You Would Guess (Bloomberg)

Whipsawed by the greenback and confronted by U.S. policy confusion, carry trades were supposed to be a rare bright spot for investors who want to stay away from the world’s biggest reserve currency.

These Charts Show Alarm Bells Ringing on the Trump Trade (Bloomberg)

Investors on Monday further unwound trades initiated in November resting on the idea that the election of Donald Trump and a Republican Congress meant...



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OpTrader

Swing trading portfolio - week of March 27th, 2017

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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Members' Corner

More Natterings

Courtesy of The Nattering Naybob

[Click on the titles for the full articles.]

A Quick $20 Trick?

Summary

Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:

  • Last time out, Sinbad The Sailor, QuickLogic.
  • GlobalFoundries, Jha, Smartron and cricket.
  • Quick money, fungible, demographics, QUIK focus.

Last Time Out

Monetary policy is just one form of policy that effects capital,...



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Digital Currencies

Bitcoin Tumbles Below Gold As China Tightens Regulations

Courtesy of Zero Hedge

Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations.

A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016.

As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates th...



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Mapping The Market

Congress begins rolling back Obama's broadband privacy rules

Courtesy of Jean Luc

I am trying to remember who on this board said that people wanted to Trump because they want their freedom back. Well….

Congress begins rolling back Obama's broadband privacy rules

By Daniel Cooper, Endgadget

ISPs will soon be able to sell your most private data without your consent.

As expected, Republicans in Congress have begun the process of rolling back the FCC's broadband privacy rules which prevent excessive surveillance. Arizona Republican Jeff Flake introduced a resolution to scrub the rules, using Congress' powers to invalidate recently-approved federal regulations. Reuters reports that the move has broad support, with 34 other names throwing their weight behind the res...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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Biotech

The Medicines Company: Insider Buying

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

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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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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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...

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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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