Posts Tagged ‘patterns’

Long Downside Wick…Dollar testing support

Long Downside Wick…Dollar testing support

By Chris Kimble

Downside wicks usually take place at market lows or at support.  The chart below, highlighting several downside wicks and a bullish falling “PATTERN” was the reasons to go long the 5oo index on 9/1  (see post here).

Click on Chart to Enlarge

The S&P 500 had its best September in 70-years bouncing off this support, after it created these “downside wicks.”

The U.S. Dollar is testing key rising support and created a fairly long “DOWNSIDE WICK” yesterday, in the chart below.

dollar chart

Click on Chart to Enlarge

With the Dollar on support, only 3% Dollar bulls and now with this long “downside wick” taking place, all the more respect for this pattern is at hand and understand that a rally in the Dollar, could be ugly (see post here) for many asset classes!!!

KEEP STOPS TIGHT TO PROTECT GAINS…


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Danger Zone? Nasdaq 100

Danger Zone? Nasdaq 100

Courtesy of Chris Kimble

Are we entering a “Danger Zone” right now?

The phrase “Highway to the Danger Zone“  (theme song here) became popular due to the movie “Top Gun,” starring Tom Cruise. 

I share information with several types of investors…long-term (retirement/401k plans) that don’t move monies often, (which “harvested” at the April highs).  Medium term investors, that feel comfortable moving monies once a month/6 weeks and shorter-term investors that are open to adjustments frequently, yet are NOT day traders. I am not interested in day trading!!!

This post would be for the shorter-term audience, that are aggressive and open to “attempting to score on defense!”

The NDX 100 is at the top of its trading range and the VXN has created a falling wedge.  During this trading channel,  when the NDX is at the top of the range, wedges have formed, followed by lower prices in the NDX. 

For any medium-term investors that are long the NDX, stay long and keep the 3% stop in play!   For those aggressive short-term investors that are comfortable attempting to score on defense, take the inverse position here (Buy PSQ).  Momentum and trends remain a positive so far. This is totally a “Power of the Pattern” play for short-term investors. 

If this pattern really forces the NDX lower and changes it momentum, I will follow-up with more suggestions per scoring on defense. 


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Cyclical Growth, Form and Fibonacci

Here’s a terrific article by Tim at The Psy-Fi Blog about Fibonacci numbers and Elliott Wave Theory.

Brief Intro:  Elliott Wave Theory, introduced in 1933 by R.N. Elliott, is based on Fibonacci numbers and is used to describe market trends.  Robert Prechter’s socionomic theory is an ambitious "theory of everything" based on Fibonacci numbers and fractals (patterns in nature), and extending to the ups and downs of markets, social mood, length of women’s skirts, measures civil unrest such as crime and war, etc. The theory is that all are related, dictated by the numerical series. How, is never answered unless you go mystic. While Elliott Wave counts appear useful for traders, the reason may be that many others use these numbers and patterns for determining buy and sell points. Also, the general notion that markets go up and down in waves, reflecting our collective psychology, makes sense without the grander notions of an all encompassing theory. – Ilene

Cyclical Growth, Form and Fibonacci

Courtesy of Tim at The Psy-Fi Blog

Ancient Ideas, Modern Setting

As an up-to-date in-your face sort of blog we like to make sure our readers are well informed about the financial world as we see it. So, starting back in Ancient India in 200BC and taking in medieval Italy and some early twentieth century anti-Darwinian evolutionary thinking let’s take a look at plant growth and snail shells, how twentieth century humanity’s inclination to see the Man in the Moon translates into modern financial theory and why physics may simply be wishful thinking.

At the root of this journey is a simple mathematical progression named after a man who never discovered it and was more concerned with accountancy than trading. Still, he’s still remembered a millennium after his death, which is more than most of us can ever aspire to.

The Golden Ratio

In 1202 the Italian mathematician Leonardo of Pisa, aka Fibonacci, wrote Liber Abaci, a book which has three claims to fame in financial circles. Firstly it was one of the first books to introduce the Arabic numbering system to the West. Secondly it laid out the foundations of modern bookkeeping. Thirdly it presented the number pattern known as the Fibonacci sequence, although this had been known long before by Indian mathematicians. Only the latter has little significance in the development of science and business but, naturally, it’s the one


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Insiders

Are insiders still NOT buying?  Allan looked into this question and reports as follows. 

Insiders

 
Are Insiders Buying or Selling?

So what if they are?

What do they know?

With the help of the following charts from SEC Form-4, an excellent service for Insider Buying/Selling data, let’s see if we can’t answer these questions.

Starting with a couple of sector-specific charts, since they reveal so much, so clearly and unequivocally. [Click on charts for larger images]:

Technology

 

insiders buying and selling
The above chart represents the ratio of Buys/Sells by insiders in the Technology sector (blue line). Against that ratio is plotted a chart of the Nasdaq (red line). Notice how all of the peaks of insider buying corresponded with important market lows. Conversely, all of the lows in insider buying correspond with important market highs. Finally, look at how insider buying in technology peaked at the November, 2008 lows and then peaked at a lower level at the early March, 2009 lows.

Financial
 


insider buying and selling
Same analysis, same colors, same uncanny correspondence of Insiders buying/selling at key market reversals. The only difference is that unlike in the Technology sector, the peak of Insider buying in early March, 2009 was higher then the peak in November, 2008.

Total Market

insider buying and aelling
Opening the same analysis up to the total market, a similar correspondence is evident. It looks like insider buying levels currently are about what they were in the first six months of 2008. We all know what happened next.

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Insiders – Part II

Here’s Part II of the insider buying/selling study, more charts.  Courtesy of Allan.

Insiders – Part II

 
insider buying and selling
[Click on charts for larger images.]
 
Above weekly chart of the XLF Financial ETF annotated with the levels of Insider Buying from previous post.

insider buying and selling
The above weekly QQQQ chart with Insider Buying annotations.

Below, weekly SPY chart with Insider Buying annotations:

insider buying and selling
***** 

For a free subscription to Phil’s Stock World, click here (it’s easy, no credit card required) – Ilene

 


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Phil's Favorites

You're a Liar

 

You’re a Liar

Courtesy of 

Brendan Mullooly asked a bunch of people the following question:

What do you consider to be your biggest behavioral bias (as it pertains to investing or personal finance) and how do you work to control it?

My answer:

Hindsight bias was my biggest hurdle to overcome.

Hindsight bias makes one part of our brain lie to another part without even realizing it. The way I conquered my internal liar was to write down all of my trades and why I did them. Once every few weeks I would read what I wrote in order to check myself. If I knew Amazon was going higher, why di...



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Zero Hedge

China Is Spending Billions To Dethrone The U.S. In Race For The World's Fastest Supercomputer

Courtesy of ZeroHedge. View original post here.

China is currently in the midst of a multi-billion dollar investment cycle to upgrade its supercomputer infrastructure in a bid to pass the United States for fastest supercomputer in the world after the United States regained the title for fastest supercomputer in 2018, ending a five-year reign of Chinese dominance.

As SCMP notes, China had been first on the global Top 500 list of supercomputers sinc...



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Kimble Charting Solutions

Germany Breakout Bullish For Stocks In The States!

Courtesy of Chris Kimble.

An important message to stocks in the states will come from Germany in the next few weeks!

This chart looks at the DAX index from Germany over the past 10-years. For the majority of the past 6-years, the DAX has remained inside of rising channel (1). The 2018 decline saw the DAX hit support where a 1-year counter-trend rally started.

Over the past year, the DAX has created a new falling channel (2). It is now testing the top of this falling channel and the lows of last February at (3).

For most of last year, the DAX created a bearish divergence with the...



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ValueWalk

Pension Flows Add 5 More Years To Credit Boom/Bust Cycle

By Michelle Jones. Originally published at ValueWalk.

The pension crisis has been capturing headlines for years, but there’s another layer to the pension issue that’s starting to draw attention to itself. Public pension funds have shown an increasing appetite for credit and related holdings, the latest round of pension flows demonstrates that this trend continues One analyst believes pensions are largely to blame for the extremes of the boom/ bust cycles we’ve seen over the last year or so. He now suggests that the equity bull market could last another five years—thanks to the extremes driven by pension funds.

...

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Insider Scoop

Needham: Facebook No Longer A Buy Amid A 'Negative Network Effect'

Courtesy of Benzinga.

The bullish case for Facebook, Inc. (NASDAQ: FB)'s stock has come to an end, according to Needham.

The Analyst

Needham's Laura Martin downgraded Facebook from Buy to Hold with no price target.

The Thesis

Needham's multi-year bullish stance on Facebook's stock can no longer be justified for three key reasons, Martin said in a research report. These include:

  1. A negative potent...


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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

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

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Chart School

Wyckoff Price Thrust Measure

Courtesy of Read the Ticker.

Richard Wyckoff said in his last days as an educator,'follow the waves'. And an important measure of those waves is the 'thrust'. The thrust of price into new ground, considering price and volume support or lack of it. The price wave thrust is clear visual presentation of the composite man demand or supply characteristics: strong, mild, weak or confused. 

readtheticker.com favored trend tool named RTTTrendStatus sister indicator RTTTrendThrust shows off Wykcoff measure of price thrust. RTTTrendThrust can be used to assist mechanical trading systems...

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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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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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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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