Posts Tagged ‘SPY Chart’

Walking on Quicksand

Courtesy of Andy Dufresne at Zero Hedge

“So why have you not written anything lately?” Deadhead asked me on one of our “groupie” chat sessions. Those NC-17 chat sessions are da bomb. You get to see Cheeky Bastard in full force ODed on caffeine and the rest—Lizzy36, thurWopr, TitanTrad, nopat, LesterB—with occasional pokes by Marla. That all would change as the chat goes mainstream, but it was fun while it lasted.

“Because I have not had anything to say”. “ This “wash, rinse, and repeat” cycle as Robo likes to describe it was getting a little boring. When Tyler tells you that bots are trading this market, he is not making it up. The bots seem to have surrendered this week (or gotten instructions to sell mercilessly).

SPY chart

Last week we made a high of 1101 on the S&P 500; on Friday we traded down to 1033. We had a huge down week and closed near the low of the day. This is also a low-tick Friday close that happens to mark the end of the month, meaningful in my book. The VIX went from 20 last week to over 30 this week. Volume is exploding to the downside… Sometimes when the market speaks the market screams. Right now, it is screaming.

Yes, I know every dip has been a gift to buy in this bear market rally. But what has rallied the most is the biggest garbage—AIG, Citi, FifthThird, Fannie and Freddie. Some of those idiotic moves are now unwinding. They will unwind more…

In my opinion, banks should lead this market lower. The relative performance against the S&P 500 is rolling over (above). Throwing a TARP over an insolvent banking system may create a spectacular bear market rally, but that is as far as it will go. Bear market rallies tend to unwind, completely… For an example what a bear market rally looks like in a particular stock see BAC. It will break 10, again…

No one can tell you with precision when S&P 500 at 666 will be retested, but it may be in 2010. I don’t have high hopes that 666 will hold. The US economic model was built on rising leverage ratios for consumers and the banking system is dependent on credit growth…
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Recent Failed Sell Signals and Short Squeezes in the SPY

Recent Failed Sell Signals and Short Squeezes in the SPY

Courtesy of Corey at Afraid to Trade

I wanted to give an updated look at the recent post entitled “If History Repeats, Will it Mean New High for S&P 500?“  As we see today, the answer is overwhelmingly “yes” as I suspected would be the case when I wrote that post on October 6th.

Let’s take an updated look now that ‘history has indeed repeated’ and also step inside the three most recent “short squeezes” on the SPY and S&P 500.

Starting with an updated look at the SPY Daily chart:

SPY Chart

In the prior post, I mentioned that the pattern looked eerily similar to the prior “surprise” rallies that were fueled in part by short-covering (buying pressure to exit positions with losses).  The yellow highlighted regions reflect the “short squeeze” while the red regions represent valid and classic short-sale signals (be they from momentum or volume divergences, and/or breaking beneath the 20 day EMA).

These ‘failed sell signals’ started with the July ‘breaking’ of the widely publicized Head and Shoulders pattern which led to a massive short-squeeze (so many people were 100% convinced the market was going to break to new lows from this pattern).

From there, buyers have invalidated (or busted/broken) three additional short-sell (swing trade) signals, resulting in snap rallies to break to new 2009 highs each time.

Let’s step inside the highlighted zones above and see them on a plain 60min chart:

(Click for Full-Size Image)

Not only were there valid divergences, but there were large downside (morning) gaps and strong selling days that preceded the reversals to the upside, which tells us that shorts were entering positions, and as the market -for whatever reason – began to reverse, an “avalanche” occurred as prices rose, which triggered out stop-losses and drew in fresh buyers.

Notice the swift upside gaps and strong up bars in each of the highlighted regions, especially the current region which began on October 5th.

What is the implication?

As I mentioned in the previous post, odds strongly favored a retest or breaking of the 2009 high which occurred today (a re-test).  Should price continue to nudge slightly higher beyond $108.03 in the SPY and 1,081 in the S&P 500, then we will see more short-sellers be stopped out which will create further upside ‘bursts.’

This is…
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Dave’s Daily Market Comment

Dave’s Daily Market Comment,

Courtesy of Dave Fry, July 20, 2009

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You can’t argue with new highs. The only thing missing in this rally is you since volume is incredibly light. Therefore, the only conclusion is computers are trading against one another. Friday’s volume was as low as a typical half day of trading during the Christmas holiday break. But this is the way things are now and we must accept it and deal with it. Stocks rose today on continued momentum from the usual “better than expected” theme and CIT being taken care of by its own creditors supposedly. It does make one wonder at the arbitrary and random nature of bailouts giving rise to conflict of interest accusations…. 

SPY chart 

 

The volume is light but those still involved have things nicely under control. The HAL 9000s aren’t as idle as individual investors in my opinion. For an inside look at how these machines run markets please review these links that support Da Boyz in their enterprise here, here and perhaps here as well. These are eye-openers for sure…

For the full Dave’s Daily Market Comment, go here.

 


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A Lesson on Intraday Triangles and Divergences

A Lesson on Intraday Triangles and Divergences

Courtesy of Corey at Afraid to Trade

The current S&P 500 60-minute structure (and SPY) gives us valuable lessons in two ascending triangle breaks and multi-swing divergences.  Let’s see what we can learn from this chart.

SPY Chart

In classic technical analysis, you are taught that ascending triangles (which there are two examples on this chart) are expected to break to the upside.

However, in today’s markets, my suggestion is to take triangles for exactly what they are – consolidation patterns as evidenced by the “Price Alternation” Principle.  Generally, a triangle breaks in the direction of the prevailing trend but doesn’t always give a tradeable edge.

The edge from triangles comes from expecting an ‘expansion’ or impluse swing/move once a clean break has occurred and trading in that direction.

We see in this example that price cleanly broke out of the triangles with gaps… and though you may have thought you were late to the party, odds favored lower prices yet to come due to the expectation for range expansion.

Moving on from triangles to divergences….

We see two examples of a ‘three push’ or multi-swing divergence as we turn the corner into July – both of which preceded tradeable price reversal swings (including this last swing up, which I mentioned as a likely course of action in last Friday’s “Idealized Trades Daily” report).

Generally, when you get a triple-swing divergence, price will form a reversal swing in the direction momentum is building.  I wanted to highlight these chart examples as lessons to you.  Each day, I share in-depth “Teaching Moments” and how to recognize trade set-ups and type of day function in my “Idealized Trades” Daily Reports, which also allows me to share my bias and expectations (along with levels to watch) in the upcoming trading day.

Corey Rosenbloom, CMT
Afraid to Trade.com

 

 


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Phil's Favorites

A military perspective on climate change could bridge the gap between believers and doubters

 

A military perspective on climate change could bridge the gap between believers and doubters

A soldier stands guard at the damaged entrance to Tyndall Air Force Base in Panama City, Florida, Oct. 11, 2018, after Hurricane Michael. AP Photo/David Goldman

Courtesy of Michael Klare, Hampshire College

As experts warn that the world is running out of time to head off severe climate change, discussions of what the U.S. should do about it are split into opposing camps. The scie...



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Zero Hedge

The Angels Are Falling: Macy's Downgraded To Junk; Stock Tumbles

Courtesy of ZeroHedge View original post here.

More than two years after Horseman Capital first suggested shorting BBB names on the expectation that a coming recession would lead to an avalanche of "fallen angels", or 'just barely' investment grade names being downgraded to junk, resulting in a major hit to the high yield sector which, sized just over $1 trillion would not be able to absorb the roughly $3 trillion in BBB-rated credits without a corporate bond market crisis, the thesis is star...



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Kimble Charting Solutions

Tech Leader Facing Important Long-Term Breakout Test!

Courtesy of Chris Kimble

Since the 2009 lows, Semiconductors have been taken a leadership role as they have far outpaced the gains of the S&P 500.

Gains since the 2009 lows; SOXX Index = +821% S&P 500 = +273%.

The SOXX index has spent the majority of the past 10-years inside of rising channel (1), which first started at the  2009 lows.

As the SOXX index is testing the top of this 10-year rising channel, it is also testing its Fibonacci 423% extension level of its 2001 highs and 2009 lows at (2).

This leading index would send a positive message t...



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Insider Scoop

6 Consumer Cyclical Stocks Moving In Tuesday's Pre-Market Session

Courtesy of Benzinga

Gainers
  • Tesla, Inc. (NASDAQ: TSLA) shares rose 6.9% to $855.12 during Tuesday's pre-market session. The most recent rating by Morgan Stanley, on February 18, is at Underweight, with a price target of $500.00.
  • Foresight Autonomous, Inc. (NASDAQ: FRSX) shares moved upwards by 5.8% to $1.10.
  • NIO, Inc. (NYSE: NIO) stock surged 2.4% to $3.87. The most recent rating by Piper Jaffray, on December 03, is at Neutral, with a price ...


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Biotech & Health

Coronavirus: the blow to the Chinese economy could be felt for years

 

Coronavirus: the blow to the Chinese economy could be felt for years

Courtesy of Chusu He, Coventry University

Investors are still being fairly complacent about the novel coronavirus. After the number of new daily cases suddenly shot up to more than 15,000 on February 12 following more than a week of decline, there were some jitters in the markets. With Chinese authorities saying the increase was due to a decision to broaden the definition for diagnosing people, there were falls in the region of 1% in European markets, and smaller retrenchments in Asia and North America.

It is...



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Members' Corner

How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part I

Courtesy of Technical Traders

One thing that continues to amaze our research team is the total scale and scope of the Capital Shift which is taking place across the globe.  For almost 5+ years, foreign investors have been piling into the US stock market chasing the stronger US dollar and continued advancement of US share prices. It is almost like there is no other place on the planet that will allow investors to pool capital into such a variety of strong assets while protecting against foreign capital risks.  Yet the one big question remains – when will a price reversion event hit the US stock
market?

So many researchers, even our team of researchers, believe we have found the keys to unloc...



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ValueWalk

Russell 2000 Index (RUT) hits an almost one-month high

By Gorilla Trades. Originally published at ValueWalk.

Ad the Russell 2000 Index (INDEXRUSSELL: RUT) hit an almost one-month high today, commenting on today’s trading Gorilla Trades strategist Ken Berman said:

Q4 2019 hedge fund letters, conferences and more

Russell 2000 Index (INDEXRUSSELL: RUT) Outperforms Large-Cap Benchmarks

While the overnight session was nothing short of scary stocks held on to most of yesterday's gains and small-caps even extended their winning streak. The Russell 2000 Index (INDEXRUSSELL: RUT) hit an almost one-month high today, finishing higher for the fourth day in a row while outperforming the large-cap benchmarks, and since the Volatility...



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Chart School

Dow theory warning from the Utilities Index

Courtesy of Read the Ticker

Charles Dow died in 1902, and the investors should thank him for his ever lasting Dow Theory Analysis.

Carrying on this blog theme looking at the Utility stocks. Previous post.
Dow Jones Utility index could trade like the FANGs
Formula for when the Great Stock Market Rally ends



You can learn about Dow Theory here

This post is concerned wi...

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Digital Currencies

Bitcoin Price May Hit $27K All-Time High By Summer, Predicts Fundstrat's Tom Lee

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Bitcoin is primed for average gains of almost 200% over the next six months, one of its best-known supporters has told mainstream media. 

...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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