Posts Tagged ‘market analysis’

Improve Your Market Timing: Channeling Stocks

 Courtesy of MarketTamer.com

- Stocks will typically channel 65-70% of the time.

- There are essentially three types of channels; Ascending, Descending and Sideways.

- The channel is comprised of two parallel trend lines which define support and resistance.

- The trading opportunity is as a result of buying the bounce off the lower trend line and selling the resistance.

- Channeling stocks as a continuation pattern occur as the stock trends and then consolidates for a period of time, only to eventually break out to resume the prior trend.

- Ascending Channels are usually embedded in a broader downtrend and act as a respite to the primary downtrend.

- Accordingly, Descending Channels are a respite in a broader uptrend and will more often than not resume the initial bullish trend after channeling.

- Sideways Channels are considered consolidations before resuming the original trend.

- The investment community recognizes that stocks neither go directly up nor down without pause.

- A majority of trading activity resides in channels as supply and demand play “tug of war”.

- Eventually traders will push the stock out of the range.

- The quality of the breakout/breakdown move should be measured by the investor participation as evidenced by increased volume.

- The opportunity to make money with channeling stocks are as a result of two approaches: 1) buy on the bounce off of the lower trend line and sell at the top of the channel at resistance and 2) Play the breakout/breakdown out of the channel.

 


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Are clouds looming on the horizon?

Courtesy of Market Tamer

S&P 500

 

Hanging Man on the NASDAQ

 

Improve Your Market Timing: The Symmetrical Triangle Chart Pattern

 

 

 

  • The Symmetrical Triangle is a continuation pattern that is comprised of two symmetrically converging trend lines.  The continuation will normally be in the direction of the prior trend, although at times the pattern can reverse the trend.
  • The breakout usually occurs prior to the triangle reaching its apex and is strongest if that is the case.
  • The target is the trend line breakout/breakdown plus the length of the widest part of the triangle.
  • After the stock has moved either up or down relatively quickly and with increased volume, the stock then begins a period of pause as the stock moves sideways or with a slight retrace against the trend.
  • The initial trading in the period of pause consists of a wider amplitude and narrows as the upper and lower trend lines converge symmetrically.
  • The investment community is telling us that it is indecisive as to the continuing direction of the stock as the trading range narrows and finally breaks out to resume the trend

 


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NASDAQ Video Analysis

 

Improve Your Market Timing: The Double Top

  • The buyers at the top of the first peak were victims of buying from the “smart money” as they sold to the “not so smart money” at the top of the trading range.
  • These unfortunate buyers will usually hold, refusing to take a loss and waiting for the opportunity to unload the stock at a break even.
  • When that opportunity presents itself, at the second top, selling pressure increases and drives the stock lower.
  • Other knowledgeable traders who know that the “Double Top” will present an opportunity to short, will do so thereby increasing the velocity downward move.

 

 


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Weekly Charts + The Reverse Cup & Handle Chart Pattern

Courtesy of Market Tamer

Weekly Charts

Dow Jones


S&P 500


NASDAQ


 

The Reverse Cup & Handle Chart Pattern

- The inverse of a Cup & Handle Chart Pattern.

 

-The stock bounces off of a support level and moves higher on unremarkable volume.

 

- A “Rounded Top” forms and then subsequently moves lower on increasing volume producing “The Cup”.

 

- The pattern is completed when a Bear Flag forms producing the handle.

 

- The breakdown occurs when the stock breaks the low of the handle on increasing volume.

 


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Market Snapshot + Bear Flag Chart Pattern

Courtesy of Market Tamer 

Market Snapshot

ECONOMIC REPORTS

MONDAY 2/1 Personal Income, Personal Spending, Construction Spending, ISM Index

TUESDAY 2/2 Pending Home Sales, Auto Sales, Truck Sales

WEDNESDAY 2/3 Challenger Job Cuts, ADP Employment Change, ISM Services, Crude Inventories 

THURSDAY 2/4 Initial Claims, Continuing Claims, Productivity-Prel, Unit Labor Costs-Preliminary, Factory orders 

FRIDAY 2/5 Nonfarm Payrolls, Unemployment Rate, Average Workweek, Hourly Earnings, Consumer Credit

EARNINGS OF NOTE

MONDAY 2/1 ACV, APC, GCI, HUM, MNKD, PCL, SOHU, TUP

TUESDAY 2/2 AFL, ADM, CTRP, CMI, DHI, FISV, JDSU, MTW, MAN, MRO, MEE, MET, MYGN, NETL, PBG, SU, DOW, HSY, UPS, UNM, GRA, WHR

WEDNESDAY 2/3  AKAM, AMP, BDK, BRCM, CBG, CSCO, CMCSA, EFX, HMC, INSP, IP, MWW, NOV, NVLS, PFE, RL, BCO, TWX, V, WLT, YUM

THURSDAY 2/4  BEBE, BKC, CME, CI, DB, DO, GSK, HIT, K, MA, MCO, NOC, PENN, PBI, SLE, SNE, HOT, SUN, TM, UIS

FRIDAY 2/5 AET, AON, BZH, PC, TSN, WY


Stock Market Insights: The Cash Flow Statement

 

Cash is king!  Liquidity in the form of cash tells us that the company can meet its obligations.  The Cash Flow Statement is the third and last statement that we will touch upon.  The statement is filed quarterly and year over year in concert with the Profit and Loss and Balance Sheet.  The Cash Flow Statement is a measure of incoming and outgoing cash from its business operations for a specific point in time.  The statement further defines the cash flow of the company that is indicated on the Balance Sheet.  There are two methods of accounting that are used 1) accrual and 2) cash.  Most companies use the accrual method which accounts for goods delivered as sales regardless of whether they have been paid for or not.  The outstanding balance is shown on the Profit and Loss Statement under accounts receivable.

 

The Cash Flow statement typically divides the accounting for cash into
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Market Snapshot + Bull Flag Chart Pattern

Courtesy of Market Tamer

Market Snapshot

Well, it appears we are getting our pullback as we had expected would happen.  We are certainly grateful that we were generously hedged as indicated in last week’s newsletter.  This decline may have taken others by surprise but we were ready for it.  Our positions are now biased bearish and delta negative.  The task is now to determine likely targets for the down move.  It is difficult to accurately determine the magnitude and duration of a move such as this one.  The place to begin is to identify where a confluence of indicators exists.  These are areas where several data points line up to tell us a similar story.  While this does not mean that the market is going to cooperate, having a system is important in order to remain disciplined in your decision-making. 

It is healthy that the stock market has a pullback.  We are long-term bullish, and retracements such as these are crucial to long-term strength.  We will simply follow the correction and look to profit from it with bearish strategies, such as bear calls, long puts as well more advanced strategies which we teach at MarketTamer.com.  I am reminded of the analogy that the market goes up like an escalator and down like an elevator.  The last three trading days certainly support that truism.  

As the market approaches target levels noted in the charts, we will begin to take close note of how it reacts at those key levels.   Typically, you will see the indexes put in narrower range trading days with less volume at support.  Don’t be fooled!  The market can do this several times on the way down.  If the market begins to stall and trade sideways, it is tempting to remove hedging, only to be surprised by subsequent whipsaws.  The safest approach is to wait for upside confirmation before determining that the market has found a bottom.  You may miss the exact turn, but don’t let that bother you – safety first is the rule!  Do not underestimate the market’s ability to follow through to the downside.  Momentum can be a freight train and you don’t want to step in front of it.  Just hop on board and ride it to the end of the line. 
 

ECONOMIC REPORTS

MONDAY 1/25

Existing Home Sales

TUESDAY 1/26

Case–Shiller 20 City Index, Consumer Confidence, FHFA Home Price Index

WEDNESDAY 1/27

New Home Sales, Crude Inventories, FOMC Rate Decision

THURSDAY 1/28

Initial Claims, Continuing Claims, Durable Orders

FRIDAY…
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Market Snapshot + Descending Wedges

Charts courtesy of Market Tamer

Dow Jones



S&P 500





NASDAQ




Technical Talk: The Descending Wedge Chart Pattern

·         This is a falling and converging channel pattern.  It looks like the beginnings of a triangle as both trend lines are falling and converging.

·         The lower trend line is putting in lower lows, but not at the pace of the upper trend line.  The pattern has bullish implications as the stock will usually break to the upside out of the channel.

·         The pattern can be found in both bullish and bearish markets.

·         When in a bearish market, the pattern is defined as a reversal pattern.

·         When in a bullish market, the pattern is a continuation pattern.

·         The stock is putting in lower lows, but at a slower rate than the highs. 

·         Volume is diminishing indicating a lack of conviction in driving the stock lower.

·         When the stock breaks the upper trend line it will usually be on increased volume as the stock breaks out of the channel to the upside.

 


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September’s Passing

September’s Passing

Courtesy of Tim Knight at Slope of Hope 
 

 

 


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RALLY & RECOVERY PAID FOR BY MONEY PRINTING

RALLY & RECOVERY PAID FOR BY MONEY PRINTING

Courtesy of The Pragmatic Capitalist

Excellent thoughts and analysis here with Bill Fleckenstein who has been all over the downturn and the subsequent upturn in the markets:

 


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Phil's Favorites

Cannabis quality involves careful science and carefree highs

 

Cannabis quality involves careful science and carefree highs

Cannabis producers must ensure the quality of their products is high, but not too “high.” Dimitri Bang/Unsplash

Courtesy of Michael J. Armstrong, Brock University

Canada’s legal cannabis industry continues to make progress. Product shortages are decreasing. Store numbers are increasing. And ...



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Zero Hedge

Gold Spikes To 6Y Highs As Dollar, Bond Yields Plunge

Courtesy of ZeroHedge. View original post here.

The 10Y US Treasury yield is now down 11bps from the FOMC Statement, plunging back below 2.00% for the first time since November 2016, erasing almost the entire move since President Trump was elected...

Citigroup sees 10-year Treasury yields falling to about 1.65% by year’s end as the Federal Reserve cuts intere...



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Kimble Charting Solutions

Interest Rates Bottoming On Fed Decision Day?

Courtesy of Chris Kimble.

This afternoon the Fed will announce if they are going to lower interest rates. Does the bond market already have a rate decrease priced into the market? Possible!

This chart looks at the yield on the 10-year note over the past 20-years. Without a doubt, the long-term trend of lower highs remains in play.

Rates have declined over 35% since hitting 20-year falling resistance, that came into play in October of 2018.

The decline has rates testing rising channel support and the 2017 lows this week at (1). While dual support is being tested, weekly momentum is hitting the lowest ...



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Insider Scoop

Benzinga's Top Upgrades, Downgrades For June 19, 2019

Courtesy of Benzinga.

Top Upgrades
  • SunTrust Robinson Humphrey upgraded Tripadvisor Inc (NASDAQ: TRIP) from Hold to Buy. TripAdvisor shares rose 3.2% to $47.80 in pre-market trading.
  • Wedbush upgraded Six Flags Entertainment Corp (NYSE: SIX) from Neutral to Outperform. Six Flags shares rose 2.5% to $52.90 in pre-market trading.
  • Analysts at Goldman Sachs upgraded Lamb Weston Holdings Inc (NYSE: LW) from Neutral to Buy. Lamb Weston rose 3.5% to $61.03 in pre-market trading.
  • ...


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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

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

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

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Chart in video

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If gold moves, silver wi...

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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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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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