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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ValueWalk

Pence On The Latest Jobs Report And Coronavirus Outbreaks

By Jacob Wolinsky. Originally published at ValueWalk.

CNBC exclusive: CNBC transcript: Vice President Mike Pence Speaks with CNBC’s Wilfred Frost on “Squawk on the Street” today on the latest jobs report and coronavirus outbreaks

Q1 2020 hedge fund letters, conferences and more

WHEN: Today, Thursday, July 2, 2020

WHERE: CNBC’s “Squawk on the Street”

The following is the unofficial transcript of a CNBC EXCLUSIVE interview with Vice President Mike Pence and CNBC’s Wilfred ...



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Zero Hedge

BLS Admits "Survey Error" Continues, Resulting In Artificially Lower Unemployment Rate

Courtesy of ZeroHedge View original post here.

Last month we reported that in a report full of statistical glitches and outright errors, the BLS itself admitted that a "misclassification error" led to the May unemployment rate being as much as 3% higher than reported. Well, guess what: despite knowing it was openly misrepresenting what is the most important US economic data, the BLS continued reporting numbers that contained a "miscl...



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Phil's Favorites

Citigroup Has Made a Sap of the Fed: It's Borrowing at 0.35 % from the Fed While Charging Struggling Consumers 27.4 % on Credit Cards

Courtesy of Pam Martens

The first thing you need to know about Citibank and its parent, Citigroup, is that they have an extensive rap sheet. (See here). The second thing you need to know is that Citigroup is a serial predator that perpetually promises its regulators that it’s going to reform, but never does.

The third thing you need to know is that Citigroup has made a sap out of the Federal Reserve – not once, but twice. During the last financial crisis of 2007 to 2010, Citigroup ...



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Kimble Charting Solutions

Nasdaq 100 Relative Strength Testing 2000 Highs

Courtesy of Chris Kimble

The tech bubble didn’t end well. BUT it did tell us that the world was shifting into the technology age…

Since the Nasdaq 100 bottomed in 2002, the broader markets have turned over leadership to the technology sector.

This can be seen in today’s chart, highlighting the ratio of Nasdaq 100 to S&P 500 performance (on a “monthly” basis).

As you can see, the bars are in a rising bullish channel and have turned sharply higher since the 2018 stock market lows. This highlights the strength of the Nasdaq 100 and large-cap tech stocks.

...

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Biotech/COVID-19

Which drugs and therapies are proven to work, and which ones don't, for COVID-19?

 

Which drugs and therapies are proven to work, and which ones don't, for COVID-19?

We are slowly figuring out which drugs and therapies are effective against the new coronavirus. Anton Petrus / Getty Images

Courtesy of William Petri, University of Virginia

I am a physician and a scientist at the University of Virginia. I care for patients and conduct research to find better ways to diagnose and treat infectious ...



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The Technical Traders

Long-Term Consumer Discretionary Winners

Courtesy of Technical Traders

I was live on TD Ameritrade TV talking about consumer discretionary, staples, and utility sectors. Explained is a unique crossover on how some discretionary stocks are also becoming a consumer staple.

Get My ETF Trade Signals, Entry, Targets, and Stop Levels – CLICK HERE ...

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Chart School

US Dollar with Ney and Gann Angles

Courtesy of Read the Ticker

Where is price going, is there strength or weakness in the chart?


Previous Post on the US Dollar : Where is the US Dollar trend headed ?


The question is always what will the future price action look like ?


This post will highlight the use of lines generated by angles. Not trend lines, as trend lines require two known points on a chart, where as angles require only one known point and a angle degree to draw a line. The question then becomes how is the angle degree determined.



There are two theories: ...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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