Posts Tagged ‘trends’

Case Shiller’s Double Dip Has Come and Gone

Courtesy of Lee Adler at Wall Street Examiner

The S&P/Case Shiller Home Price Indices reported Tuesday are, as usual, so far behind the curve that not only did they miss the “double dip” that has come and gone, it will be at least July or August before it reports an apparent upturn in prices in March and April. S&P’s view of the data was dour. “There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing, ” said S&P’s David Blitzer. “The 20-City Composite is within a hair’s breadth of a double dip.”

There’s just one problem with that. Other price indicators that are not constructed with the Case Shiller’s large built in lag, passed the 2009-2010 low months ago. The FHFA (the Federal Agency that runs Fannie and Freddie) price index showed a low in March 2010 that was broken in June 2010 and never looked back. That index is now 5.6% below the March 2010 low. Zillow.com’s proprietary value model never even bounced. It shows a year over year decline of 8.2% as of February. Zillow’s listing price index shows a low of $200,000 in November 2009, followed by a flat period lasting 6 months. As of March 31, that index stood at $187,500, down 6.25% from the 2009-2010 low for data.

The Case Shiller Indices for February held slightly above the January level (not seasonally adjusted). I follow their 10 City Index due to its longer history. It was at 153.70 in February versus 152.70 in January. These levels are still above the low of 150.44 set in April 2009.

The Case Shiller index showed a recovery in prices in 2009-10 only because of the weird methodology it uses. Not only does it exclude the impact of distress sales that have been such a big part of the market, but it takes the average of 3 months of data instead of using just the most recent available month. The current data purports to represent prices as of February. In fact, it represents the average price for December, January, and February, with a time mid point of mid February. These are closed sales which generally represented contracts entered in mid to late November, on average. That means that the current Case Shiller index actually represents market conditions as of 5 months ago. Things can change in 5…
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The Trends Are Extended, Start Thinking Consolidation and Reversals, But Wait For It

The Trends Are Extended, Start Thinking Consolidation and Reversals, But Wait For It

Courtesy of JESSE’S CAFÉ AMÉRICAIN

The trends are extended on quite a few charts. The action in the US markets is being artificially inflated and supported by monetization and liquidity so it *could* continue on for some time, even until the November election. It is being fueled by the expectation of a large quantitative easing by the Fed shortly thereafter. That QE, when it arrives, is likely to be sold if it is not significant enough to meet expectations.

I am more cautious on short term positions here, and have had some short hedges on in the overnight, but deftly. It is important not to exhaust yourself expecting a trend change before it is ready to happen, and one cannot anticipate exogenous events by definition. Still, the time is ripe for one to have a significant effect should it occur. 

The long term trends are all intact, but we have reached a position where we might be looking for intermediate tops and consolidations.  The Fed is not infallible or omnipotent, but rather determined and capable within its limits.  The combination of government and the monied interests is powerful and ruthless.  Manage your money tightly and wait for the market to reveal its intentions if you are trading.

 

 

 

 


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S&P 500: On a knife’s edge

S&P 500: On a knife’s edge

Courtesy of Prieur du Plessis, Investment Postcards from Cape Town

Last Thursday was a so-called 90% down-day for American stock markets (and many other bourses also recorded downward dynamics). A 90% down-day is defined as a day when downside volume equals 90% or more of the total upside plus downside volume and points lost equal 90% or more of the total points gained plus points lost. The historical record show that 90% down-days do not usually occur as a single incident on the bottom day of an important decline, but typically on a number of occasions throughout a major decline. As far as the very short term is concerned, 90% down-days are often followed by two- to seven-day bounces.

The stock market is on a knife’s edge at the moment as seen in the chart below, showing the long-term trend of the S&P 500 Index (green line) together with a simple 12-month rate of change (ROC) indicator (red line). Although monthly indicators are of little help when it comes to market timing, they do come in handy for defining the primary trend. An ROC line below zero depicts bear trends as experienced in 1990, 1994, 2000 to 2003, and in 2007. And 2010? With the ROC delicately perched just above the zero line, the primary trend is still bullish, but barely so.

Source: StockChart.com.

Regarding seasonality, I have done a short analysis of the historical pattern of monthly returns for the S&P 500 Index from 1950 to August 2010. The results are summarized in the graph below.

Source: Plexus Asset Management (based on data from I-Net Bridge).

As shown, the six-month period from May to October has historically been weaker than the period from November to April as seen in the average monthly return of 1.05% for the “good six months” compared with 0.25%% for the “bad six months”. Importantly, when considering individual months, September (-0.18%) and October (-0.19%) have historically been the only two negative months of the year. (A word of warning, though: one should take cognizance of seasonality but understand that it is not a stand-alone indicator and it is anybody’s guess whether a specific year will conform to the historical pattern.)

Where does this leave us at this juncture? Considering an array of indicators, we are somewhat in no-man’s land regarding whether the bull or bear will…
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VXX Trend Models

Here’s an update from Allan on the VXX chart, showing a shorter-term chart on a buy signal and suggesting a possible new buy on the daily chart soon. – Ilene 

VXX Trend Models

Courtesy of Allan

Below is the VXX 480 min and Daily charts.  The 480 minute chart, by its construction, is a good precursor for new Daily chart signals.  In this case, its suggesting an imminent Buy on the VXX Daily @ 28.35, which would be a negative signal for the general market.

VXX 480 Minute Trend Model
 

VXX Daily Trend Model 

 

Allan’s “Trend Following Trading Model,” is based on his trend-following trading system for buying and selling stocks and ETFs. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here.  For more details, read this introductory article.


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Now’s The Time To Buy Leading Stocks At Low Risk Entry Points

Now’s The Time To Buy Leading Stocks At Low Risk Entry Points

Courtesy of David at All About Trends 

Upon completion of the first leg down we would get some sort of rally that could last a month or even longer to correct back the excesses of this recent waterfall down (Wave 2).

There is a good possibility we are done with the first leg down. We see tagging some support levels on the charts. The reaction off of those support levels was exactly what we wanted to see. Powerful and with conviction.

Notice in the chart above the 50 day average is at 1100? That’s going to serve and a point of initial resistance.

The blue circle is actually about 5 days worth of market action in a range of 1070-1090 with a spike down to 1050 ish thrown in for good nellie action.

In the first chart we talked about 1100 being the 50 day average. It’s also a 38.2% Fibonacci level as shown in yellow. Note the confluence of the blue 38.2% Fibonacci retracement level and the 50% yellow Fibonacci level. See how close they are? That’s confluence and what is commonly called a Fibonacci cluster. Watch those levels next week or the week after for resistance and stalling.

This doesn’t mean we are out of the woods but we liked the action we saw Friday. So IF we now enter into a period of a Wave 2 (upward bias, or the alt count) then it ought to look like an ABC up. We may see some morning weakness on Monday. The chart below is the S&P 500 in a 1 minute time frequency.

As you can see, we stopped cold on a down trendline. We could


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Trend Following Tutorial

Trend Following Tutorial

Courtesy of Allan 

In its simplest incarnation, this is Trend Following:

 
 

The SHORT on this SPX Weekly chart was generated at the end of the week of Jun 16, 2008 @ 1317.  It was in force until the end of March, 2009 @ 843.  That trade gained 474 SPX points, or about 36%.  It could have been implemented using an unleveraged index, SPY, for about a 36% gain.  It could also have been implemented using a leveraged ETF for approximately double, or triple that return.  The key focus for this tutorial is that the methodology was SHORT during a severe and prolonged market decline.  

The next signal was a LONG signal, as shown on the chart below:

 
 

This LONG signal was generated at the end of March, 2009 @ 843.  It was EXITED at the end of January, 2010 @ 1074.  The gain on this LONG was 231 SPX points, or about 27%.  

These two signal totaled over 700 SPX points over the course of about two years.  Such are the market times we are in and unless and until these volatile swings come to an end, this is a simple, mechanical, tradable way to participate successfully in these trends.

The trend line you see on the above charts is based on what is called an Average True Range algorithm.  It was written up in the June, 2009 issue of Technical Analysis of Stocks & Commodities.  The algorithm I use for these trends is slightly different then the algorithm written up in the article, not that mine is better, but I think it is more tradable.  

Daily Charts

The same algorithm works on Daily charts.  Below are some examples using the same trend model on the SPX Daily chart:

 

Notice how the Daily Trend Model works in the exact same way as the Weekly Trend Model.  In this case, a LONG signal in early November lasted through late January and gained about 30 SPX points.  Below, the ensuing SHORT signal in late January:

Following the late November, 2009 BUY, the daily trend reversed SHORT in late January, 2009.  Below, the late February LONG signal:

By now this looks the proverbial greatest thing since sliced bread.

Not so fast……looks what happens next: 

The SHORT_EXIT(LONG)_SHORT series of signals in late April is


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Playing the Gap: Identifying and Trading Gaps

Playing the Gap: Identifying and Trading Gaps

Courtesy of Pharmboy

Gaps are very profitable technical indicators.  A gap is an area on a chart where no trades take place and these are caused by fundamental or technical events that usually occur after the market closes and before the market opens, also known as ‘non-regular trading hours’ (NRTH’s).  There are four basic gap types:  area, continuation, breakaway and exhaustion.

Gaps are significant for many reasons:

  1. Gaps tell traders that something occurred during NRTH’s.  Typical events include: earnings announcements, FDA approvals, analyst upgrades/downgrades, company press releases and other significant events that may cause investors and traders to place orders to buy or sell during NRTH’s, causing an order imbalance.
  2. The type of gap will help you determine the probability of the stock’s direction in the short and intermediate term.
  3. Gaps are profitable.  Traders can take advantage of the imbalance of orders by either “catching the momentum” or “fading the gap”.  When riding a gap, the traders are betting that the stock will continue in the direction it gapped.  When a trader fades a gap, they are betting that the gap will “fill” and move opposite of the gap’s opening direction.

Types of Gaps

Area Gaps

Area gaps are usually small and unimportant.  They are also referred to as “common gaps” because they occur so frequently.  Characteristics of area gaps are that they are fill very quickly. When the word “fill” is used, traders are referring to the gap’s closure.  The gaps usually occur in trading ranges and they form on very low volume.  Because of the low buying volume of the stock, the gap cannot sustain itself, thus filling relatively quickly. 

The easiest way to determine if a gap will fill is to watch the first 30 minutes of the day.  If the candlesticks appear to be fading in the opposite direction, it’s very difficult to stop it.  This is because many others see the same fade and will jump on board.  Remember, a gap does not have to fill on the same day of the gap.  These types of gaps are unpredictable and are hard to trade.  Figure 59 an example of an area gap.

Figure 59.  Area gap.

Continuation Gaps

Continuation gaps are extremely important because they “continue” a trend.  They are also known as “runaway” or “measuring” gaps and they do not fill quickly.  These…
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Considering XLF

Looks like a "wait" signal. – Ilene 

Considering XLF

Courtesy of Allan

XLF Daily Trend Model
 
 
XLF Weekly Trend Model
 

This pretty much sums up the dilemma of financials, the GS fallout triggered shorter-term sells, but the weekly trend is still up, over 60% gains from last year’s Buy signal.  One of these charts will reverse trends and that reversal will be a heads-up for new positions. 

Allan’s newly launched newsletter, “Trend Following Trading Model,” goes with the trend-following trading system he’s been working on for years. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here.  For a more detailed introduction to the Trend Following Trading Model newsletter and trading system, read this introductory article.

 


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The Wheel

The Wheel

Courtesy of Allan

Below is my QQQQ chart, including the Daily Trend Model, an EW count, Auto-Trend Channels and the Elliott Oscillator.

Since the mid-February LONG signal, the index is up about 10%.  Prices have been contained in a well defined trend channel, all the time safely above the Daily Trend Line (navy).  On the bottom oscillator, the recent new highs in price are not being confirmed by new highs in the oscillator.  This suggests that the proposed wave count on the screen is correct and that after the completion of the Wave 5 of 5, a significant decline will be likely.

Below is the same QQQQ chart, less all of the bells and whistles save one, the Daily Trend Model: 

This chart suggests only one thing:  that the market is in an uptrend and traders/investors should be LONG.  The late January EXIT was good for about a 10% decline before the index flipped back to the bullish camp.  There is no suggestion here about any imminent declines,  non-confirmations, wave counts or trend channels.  Just that one thing: LONG.

There may be a market environment coming where such simple, observable, understandable analysis will fail.  Alternatively, this kind of market analysis will continue to be an effective steering current for navigating market direction.  All I can say is that this analysis continues to amaze me with its effectiveness across so many indexes, ETF’s and stocks, as well as across multiple time frames.

I don’t claim to have re-invented the wheel here, only to have found one and am now employing it in all of my market decisions. 

*****

Allan’s new newsletter, “Trend Following Trading Model,” incorporates his chart-based, trend-following method. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here.  For a detailed introduction to the Trend Following Trading Model, read this introductory article.


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BIDU Weekly

This is perhaps one of the best examples of Allan’s trend trading system.  Allan says that BIDU is an excellent trender and his system would have got you in sometime in January, though the last weekly signal was back in 2009. For you bears, his system should catch a trend reversal early.  (It’s hard not to look at that chart and anticipate a BID adieU moment, but maybe that’s just me.) Anyway, Allan’s system is easy to trade and you’d only be looking at signals on Monday morning. – Ilene 

BIDU Weekly – Update 

Courtesy of Allan

I wrote up the Weekly Trade Model of BIDU back in January.  It has turned into one of big success stories of the Trend Models:

 BIDU Weekly Trend Model

We knew in January that BIDU trended well and was a good stock to trade in a longer-term model.   Although they all don’t trend this well, having one or two that do, make up for any that don’t.  Another "Basket" idea in the making? 

 

And the market as a whole?  

Says Allan: Back to Trends.

Notwithstanding my personal trend line, the market’s trend has been up since mid February.

 

SPX Daily Trend Model

 

The beauty and simplicity of this directional model cannot be overstated.  The up-trend continues, as it will until it reverses.  Trade accordingly.

Allan just launched a newsletter, “Trend Following Trading Model,” to go with the trading system he’s been working on for years. His trend-following method is chart-based and objective. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here.  For a more detailed introduction to the Trend Following Trading Model newsletter and trading system, read this introductory article. – Ilene 


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Phil's Favorites

Bloomberg's Ted Merz Joins Me on Panic with Friends to Discuss Financial Journalism and Information Dissemination in the Age of Social Media

 

Bloomberg’s Ted Merz Joins Me on Panic with Friends to Discuss Financial Journalism and Information Dissemination in the Age of Social Media

Courtesy of Howard Lindzon

My friend Ted Merz at Bloomberg has one of the most interesting jobs in the world. Ted has been at Bloomberg since 1991 and today heads Bloomberg’s Global News Product. That is a complicated job and this is a complicated era of news considering the 24/7/365 flow of information, misinformation and of course news. Ted makes it all look easy. I mi...



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Zero Hedge

Microsoft Patents AI-Chatbots That Imitate Dead People 

Courtesy of ZeroHedge View original post here.

The United States Patent and Trademark Office (USPTO) granted Microsoft one of the most bizarre patents to date: chatbots using deceased people's personal information. 

...



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Kimble Charting Solutions

Bitcoin Parabolic Rally Reversal Faces Big Support Test!

Courtesy of Chris Kimble

One of the biggest breakouts of 2020 came by way of Bitcoin. And it was epic.

The coronavirus crash saw the cryptocurrency retest its 2018 lows before rocketing higher in parabolic fashion.

Did Bitcoin Peak? What’s Next?

Today we examine a “weekly” chart of Bitcoin, highlighting its parabolic rally… and recent reversal lower.

The rally in Bitcoin surged all the way to the 361% Fibonacci extension level at (1) before creating the largest bearish reversal in years.

In just a few weeks time, Bitcoin is testing its 261% Fibonacci level near 31,000 at (2). This is a big test of support for the cryptocurrency. A “weekl...



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ValueWalk

Hybrid Electric Vehicles: A Stay of Execution for NiMH Batteries

By Jacob Wolinsky. Originally published at ValueWalk.

Hybrid Electric Vehicles: A Stay of Execution for NiMH Batteries, Explores IDTechEx

Q4 2020 hedge fund letters, conferences and more

NiMH Batteries Are Still Commonly Used

When we talk about battery-electric vehicles, the lithium-ion battery is dominant; however, for full hybrid electric vehicles (those that have electric-only modes but do not plug-in), NiMH batteries are still the most common battery on the road. With the growing market for hybrid electric vehicles (HEVs), will this drive further demand for NiMH batteries and stop them from being eliminated from the automotive market?...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Saturday, 11 July 2020, 05:26:16 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: This is lack of liquidity means support is likely to break if it is tested hard!



Date Found: Saturday, 11 July 2020, 09:51:58 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Nasdaq losing momentum.



Da...

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Politics

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

 

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

Rioters mass on the U.S. Capitol steps on Jan. 6. Samuel Corum/Getty Images

Courtesy of Jeff Inglis, The Conversation

In the wake of the insurrection on Jan. 6, the U.S. is bracing for the possibility of additional violent demonstrations and potential riots at the U.S. Capitol and state capitol buildings around the nation. W...



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Biotech/COVID-19

The simple reason West Virginia leads the nation in vaccinating nursing home residents

 

The simple reason West Virginia leads the nation in vaccinating nursing home residents

By mid-January, only about a quarter of the COVID-19 vaccines distributed for U.S. nursing homes through the federal program had reached people’s arms. Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Courtesy of Tinglong Dai, Johns Hopkins University School of Nursing

The urgency of vaccinating nursing home residents is evident in the numbers. The COVID-19 pandemic has claimed the lives of mo...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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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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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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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.