Archive for the ‘Chart School’ Category

Dow Transports (IYT): Triple Support Test In Play!

Courtesy of Chris Kimble.

A swift 30 point drop (nearly 15%) from mid-September through the end of October has the Transportation Sector (IYT) testing important long-term support. The Dow Jones Transports Sector (IYT) also represents an important slice of the domestic and global economy. So losing support here would not be good. Let’s look at the weekly chart of IYT.

A triple support test is in play for the Dow Transports at (1).

The long-term trend remains “up” but the price action could be concerning, due to the drop-off in long-term momentum. A lot is at stake here friends. Keep an eye on how this bonce performs and watch this important support zone!

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This article was first written for See It Markets.com. To see original post CLICK HERE 

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Junk Bonds Continue Divergence, Testing 9-year Support

Courtesy of Chris Kimble.

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Junk Bonds have sent an important message to stocks at important tops and bottoms over the past 20-years! Junk bonds sent bullish messages to stocks as they created bullish divergences at the lows in 2003 and 2009.

They also created bearish divergences, sending a negative message to stocks in 2000 & 2007, as they turned lower months ahead of S&P topping.

This year junk bonds have been diverging with the S&P 500 for almost a year. This chart highlights that Junk bonds and the S&P 500 are both testing support off the 2009 lows at the same time.

Keep a close eye on what Junk bonds do between now and the end of the year as they test 9-year rising support. How they perform at support, should send an important message to the S&P 500.

To become a member of Kimble Charting Solutions, click here.





Weekly Market Recap Nov 4, 2018

Courtesy of Blain.

Words rarely spoken the past few years:  “The market was due for a bounce back after some intense selling.”  Modest selloffs Monday and Friday bookmarked 1%+ rallies Tue-Thu on the S&P 500.  It’s not so much the rally during a selloff to examine as the action after the rally.   So we should have a good amount of information at this time next week – bears have been so used to rallies just continuing straight up the past half decade plus so we’ll see if there is a change in nature.  Aside from fixing some technical damage bulls would want to see a significant drop in volatility.

October once again struck as one of the trickiest months on the calendar for markets:  The S&P 500 shed 6.9% for its biggest monthly decline since September 2011, while the NASDAQ dropped 9.2% in October for the biggest fall since November 2008.

(Far) across the pond, we mentioned the bullish “outside reversal” day a few weeks ago in the Chinese market – despite the selling in U.S. markets this reversal held up and the Chinese market looks like it has put in a short term bottom at least!

For the week the S&P 500 gained 2.4% while the NASDAQ added 2.7%.

In economic news, Monday the government announced consumer spending rose 0.4% in September, matching forecasts. Incomes rose a smaller 0.2%, the smallest rise in 13 months.

Thursday, ISM Manufacturing fell to a six month low of 57.7 vs economists’ expectations of 58.7.  Still a very strong number.

Friday, the government reported job gains of 250,000 in October, beating economists’ expectations for payrolls to rise by 202,000. The unemployment rate remained flat at 3.7%, while the report showed year-over-year wage gains rising to 3.1%, slightly above the consensus estimate of 3%.

Here is the 5 day weekly “intraday” chart of the S&P 500 … via Jill Mislinski.

The week ahead…

Earnings season is slowing down but still some heavy…
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Market Stalls At Resistance (Selling The Rally)

Courtesy of Lance Roberts, RealInvestmentAdvice.com

Market Stalls At Resistance

This past Tuesday, I wrote “A Sellable Rally” in which I laid out the 4-reasons for a rally based on the psychological, fundamental, technical, and seasonal underpinnings. That rally came to fruition over the last few days.

For us, it has been the technical backdrop which remains the most compelling. To wit:

“Unlike the February lows, the recent sell-off fell 4-standard deviations below the 50-dma which is a rare event historically speaking. Such deviations do not last long as such an extreme move away from the average price tend to be corrected in fairly short order.“

As shown, the combination of both the extreme oversold and deviated conditions contributed to a bounce which hit our “target neighborhood” of 2740-2750 on Friday morning.

In accordance with our portfolio management strategy, when the markets reached our target zone yesterday morning we executed sells of positions that have been under-performing both the market and other holdings within our portfolios. As we have stated many times previously, one of the primary tenants of portfolio management is to “sell losers.”

“Only losers, add to losers.” – Paul Tudor Jones

With portfolios reduced to 50% equity, we have a bit of breathing room to watch the elections next week. There is more than a decent chance the currently Republican-controlled House of Representatives switches to Democratic control which would likely lead to further market volatility. However, Kevin Giddis from Raymond James laid out three likely scenarios last week.

“What could a potential change do for bonds and stocks? There are many possible scenarios, so the devil is in the details. I will lay out a couple of them for you:

1) The Republicans could lose the House, or the House and Senate. Either of these possibilities could derail the President’s agenda, leading us back to a period of gridlock that has plagued this country in the past. This would likely be good for bond prices and bad for equity prices.

2) The Republican majority remains intact, and the President pushes forward his plans of another tax cut, among other items as well. This would likely be good for stocks and bad for bond prices.

3) A complete rout that not only gives the majority of


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Commodities and Metals could scream higher, says Joe Friday

Courtesy of Chris Kimble.

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The long-term trend for Commodities, Gold, Silver, Copper & Miners remains down at this time. Could the long-term bear trends be coming to an end? Possible!

This chart looks at the Australian Dollar where it highlights that the AU$ has spent the majority of the past 30-years inside of the blue shaded rising channel. The correlation between the AU$ and commodities has remained high over the past 30-years.

The AU$ created a “W” (Double Bottom) back in 2001 as a 13-year bear market was coming to an end as a new 10-year bull market was getting started.  As the AU$ was moving moving much higher from 2001 to 2011, Gold, Silver, and Commodities went along for the ride.

The AU$ peaked in 2011 as it was hitting the top of this 30-year channel, where a major trend reversal took place. As the AU$ was peaking in 2011, Gold, Silver, miners, and Commodities did the same! The 7-year bear market in the AU$ has it now testing 30-year rising support at (3).

Joe Friday Just The Facts Ma’am- The AU$ is testing 30-year support at (3), with momentum oversold. If 30-year support holds and it breaks above falling resistance, it would send a bullish message to Gold, Silver, and Commodities not see in years!

If taking advantage of opportunities in Gold, Silver, Miners, and Commodities is of interest to you, check out our Metals and Commodities weekly reports!

To become a member of Kimble Charting Solutions, click here.





Fangs Stocks Change Review

Courtesy of Read the Ticker.

fangs-stocks-change-reviewChange comes to every thing, the oxygen we breath slowly ages all human cells, and some how it is a big surprise change has come to the FANG stocks.

In the charts below the FANG stocks (FB, AAPL, AMZN, NFLX, GOOG) are compared to the benchmark XLU (utility stocks) in readtheticker.com sector rotation chart. Utility stocks are nice and safe and slow. An excellent control set against the aggressive FANG stocks.

Here is the picture just before the volatility of 2018. The rock stars are in control of the majors trends.  All FANG stocks are judged as very strong compared to the benchmark (XLU).


Sector Rotation readtheticker
 

Now after the recent pre 2018 mid term sell off. The picture shows FANG stocks still a strong, but strength compared to the benchmark XLU is rapidly evaporating. Time to buy during a moment of weakness, or a time to adjust portfolios? The readtheticker.com asset rotation chart helps you to watch asset class rotation. 


Sector rotation readtheticker


Investing Quotes…

…"The game taught me the game. And it didn’t spare the rod while teaching."…

Jesse Livermore

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

John Templeton

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

Robert G Allen

…“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 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





King Dollar Creating Double Top This Week?

Courtesy of Chris Kimble.

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This chart looks at the King Dollar over the past 10-years. It remains in a long-term uptrend, creating a series of higher lows and higher highs inside of rising channel (1). King$ has spent the majority of the past 3-year trading sideways between 90 and 105.

In August King$ created a weekly bearish reversal pattern and sold off a small percentage (3%). The rally over the past 5-weeks has it back at August highs, where it could be creating another bearish reversal pattern this week at the August highs.

Sentiment for the US$ currently stands at 77% bulls, as a good deal of investors are confident it will rally.

Metals bulls would love King$ to be creating a double top this week! Potential important price point in play for the Dollar and metals!!!

To become a member of Kimble Charting Solutions, click here.





Chart o’ the Day: Buying stocks before, during and after the peak

 

Chart o’ the Day: Buying stocks before, during and after the peak

Courtesy of 

What a friend we have in time 
Gives us children, makes us wine
Tells us what to take or leave behind
– John Denver

The good thing about having a long-term time horizon is that, with dollar cost averaging of the sort you do in a 401(k) or similar account, the effects of market peaks are eventually blunted. It begins not to matter that some of your allocation to the stock market occurred at high points.

But that’s over multi-year periods and decades.

J.P.Morgan Asset Management is out with its 2019 Long-Term Capital Markets Assumptions piece this week and, in the chart below, they take a look at the effects of ten-year returns for investors buying the S&P 500 a year before the market peaks, at the peak, and then a year later. In none of these cases are the results egregious, and again, the chart assumes a one-time lump sum, which is not the way people actually invest IRL. But anyway, here it is…

Speaking of market peaks, do not miss Michael’s excellent survey of charts looking at the drawdown in Amazon this fall. It’s one of only 25 stocks that have added over $100 billion in market cap since the March 2009 bottom, and since then its shareholders have had to endure five (5!) separate drawdowns of 20% or more. Despite these recurring drawdowns, the stock has appreciated at roughly 40% a year on average, which is breathtaking.

Did you know that Amazon has lost more in market cap this fall than THE ENTIRE COMPANY WAS WORTH IN 2016? True story, link below:

A Top or The Top? (Irrelevant Investor)

Source:

2019 LONG-TERM CAPITAL MARKET ASSUMPTIONS EXECUTIVE SUMMARY (JPMorgan Asset Management)





Stocks testing dual long-term support at the same time!

Courtesy of Chris Kimble.

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This chart looks at the NYSE Index over the past 20-years on a weekly basis. This very broad index has traded sideways for the past 15-months, while the long-term trend remains up.

Weakness this month finds the index testing dual long-term support as weekly momentum is creating lower highs as it nearing oversold levels.

Support is support until broken and this broad index is testing a very important support zone as October is coming to an end!

The long-term bull trend would get receive a concerning price message if dual support fails to hold.

To become a member of Kimble Charting Solutions, click here.





A Top or The Top?

 

A Top or The Top?

Courtesy of 

Since the S&P 500 bottomed in March 2009, there are 337 stocks that were part of the index then that still remain in it today. Of those 337, Amazon is one of 38 that has gained 1,000%. The stock has compounded at nearly 40% a year for the better part of the last decade, for a gain of 2,350%.

It is one of 25 companies to add $100 billion to its market cap.

Amazon has been one of the most important drivers of this bull market.

But that was then and this is now. Amazon is 25% off its highs, and in its fifth separate 20% drawdown since 2009…

…with all of its recent decline coming in October, this will be its worst month since November 2008.

So the question is, was this just a top, or the top?

It’s hard to compare Amazon in 2018 to Amazon in 2011 for a multitude of reasons, with perhaps size being the obvious one. In its last 20% decline (February 2016), the market cap was $227 billion. From its bottom in 2016 to the recent peak, it rocketed up 320%, and now, with its 25% decline over the last 40 sessions, it shed more market cap than the entire company was worth in 2016!

What’s also obviously different are interest rates. In February 2016, the 2-year treasury rate was 0.75%, today it’s 2.85%.

Another major difference between Amazon today and in previous drawdowns is that their core business growth is decelerating. Cooper Smith writes “Amazon’s core e-commerce business slowed to 11% year-over-year growth in Q3, down from 22% a year ago…Revenue from Amazon’s international business grew just 15% YoY, down from 28% a year ago.”

Maybe the simplest explanation here is the most likely one. The stock went, excuse me for a second, too far, too fast. At one point earlier in the year, Amazon added more in market cap than the combined value of Walmart Target and Costco. Even after this decline, it’s still up 32% in 2018.

Is today another opportunity to buy one of the most transformative companies ever at a discount, or are we staring at Cisco in 2000?

*Data from Ycharts and Bloomberg





 
 
 

Zero Hedge

Apple Slumps Back Below Key Technical Support, Loses $150 Billion In A Week

Courtesy of ZeroHedge. View original post here.

Apple has never lost more market cap in seven short days... ever. The 'no brainer' stocks

Following yet another downgrade overnight (from Goldman this time), the world's largest market cap company fell back below its 200DMA at the open, attempted to stage a comeback,

...



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Kimble Charting Solutions

Party Like 1999 & 2000 or respect bearish divergences?

Courtesy of Chris Kimble.

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This 4-pack looks at the DJ Home Construction, Banks, Junk Bonds and the S&P 500, highlighting that bearish divergences took place in 1999 and 2007 at each (1). These assets were sending bearish topping messages “BEFORE” the tops in 2000 & 2007.

Looking at this year, each asset has been creating bearish divergence since early 2018 at each (2).

Are each of these assets sending an important Risk/Reward message again or will it be different this time?

Just the Facts Ma’am– The majority of stock indices remain above respectiv...



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Phil's Favorites

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



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Members' Corner

NY Times: OPERATION INFEKTION

 

This is a three-part Opinion Video Series from NY Times about Russia’s meddling in the United States’ elections as part of its "decades-long campaign to tear the West apart." This is not fake news. Read more about the series here.

OPERATION INFEKTION

RUSSIAN DISINFORMATION: FROM COLD WAR TO KANYE

By Adam B. Ellick and Adam Westbrook

EPISODE 1

MEE...



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Insider Scoop

Things Are Going From Bad To Worse For GE

Courtesy of Benzinga.

Related GE Putting GE's Horrible 3-Week Run Into Perspective Bulls & Bears Of The Week: Apple, Disney, Ford, Target And More ...

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

Chart School

Weekly Market Recap Nov 11, 2018

Courtesy of Blain.

This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic.   Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been.   Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!

The market is interpreting Wedneday’s result as insuring that “no big things will get done,” in Washington between now and 2020, Craig Birk, chief investment officer at Personal Capital told MarketWatch. “The market appreciates the relative certainty of the slow legislative agenda.” he said.

“As President Trump plans his 2020 reelection campaign, a gridlocked Congress is unlik...



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Digital Currencies

Bitcoin's high energy consumption is a concern - but it may be a price worth paying

 

Bitcoin's high energy consumption is a concern – but it may be a price worth paying

Shutterstock

Courtesy of Steven Huckle, University of Sussex

Bitcoin recently turned ten years old. In that time, it has proved revolutionary because it ignores the need for modern money’s institutions to verify payments. Instead, Bitcoin relies on cryptographic techniques to prove identity and authenticity.

However, the price to pay for all of this innovation is a high carbon footprint, created by Bitc...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

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

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 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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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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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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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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