US - Market Direction 40 (May 17 - Feb 18)

Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Mon Feb 12, 2018 1:46 pm

CHARTS

On the lows some important levels were touched. SP500 sold to tap the 200 day SMA, passing the 78% Fibonacci retracement along the way. Then a sharp rebound to the 61% retracement.

DJ30 did not get that far, undercutting the 61% Fibonacci retracement then rebounding to close much higher.

NASDAQ touched close to its 200 day and it held right at the 78% retracement and shot back upside. All show doij with long tail, a reversal indication.

RUTX and SP400 undercut their 200 day MA's and then snapped back to show
nice doji with tail over that level on the close. That kept RUTX over the
200 day and the November low. SP400 ditto.

It is a pretty decent bet to surmise the Friday low is the low of the first leg. It is not a proven fact, but it is a good support level with good extreme internals that suggest a high probability of a rebound that lasts more than a day and a half.

It is not THE bottom, but one that supports a relief bounce that sets up THE bottom or at least a try at THE bottom after the coming relief move stalls and falls to test the Friday low.

That said, we didn't buy the rebound. Really thought about it, but opted to wait and see if stocks can hold Monday. A soft open met with buying is a great entry point for the relief rally back up to test somewhere below the highs from late January. That is the tradable move w are looking at this weekend with plays.

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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Mon Feb 12, 2018 9:33 pm

NEW HIGHS OF NOTE LAST WEEK

Twitter (TWTR)... social media
Match (MTCH)... online dating
Grubhub (GRUB)... on-demand food delivery
TD Ameritrade (AMTD)... online brokerage
New York Times (NYT)... global news coverage
World Wrestling Entertainment (WWE)... pro wrestling
Churchill Downs (CHDN)... horse racing and gambling
Lululemon Athletica (LULU)... athletic apparel
Tapestry (TPR)... luxury purses
Weight Watchers (WTW)... weight-loss help


NEW LOWS OF NOTE LAST WEEK

General Electric (GE)... debt-ridden industrial giant
Ford Motor (F)... "Big Three" U.S. automaker
Eli Lilly (LLY)... Big Pharma
Kraft Heinz (KHC)... Big Food
Anheuser-Busch InBev (BUD)... beer
Molson Coors Brewing (TAP)... beer
Dish Network (DISH)... satellite TV
Sears Holdings (SHLD)... retail "old guard"

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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Thu Feb 15, 2018 8:43 pm

Charting the Resistance and Why It's Important for the Stock Market

By GUY ORTMANN

Source: The Street

https://realmoney.thestreet.com/article ... yptr=yahoo
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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Mon Feb 19, 2018 11:13 am

TUESDAY

Market is closed Monday for Washington's Birthday, and that could be bad for US investors and traders. The rest of the world will be open, and it could be that they get the jump on the US in selling and that could have US stocks opening lower Tuesday. That is speculation, but it is a possibility.

While the relief move, or whatever you want to call it, still remains intact as of Friday, the indications are and the history suggests it is ending and a test of the prior low is coming in the near future.

Therefore, we took some gain Friday on several positions, let positions still working well continue, and if the market hesitates Tuesday, we are going to close the upside outside of those strong areas such as biotech, and have downside plays ready to go.

Indeed, it may be that even the biotechs, metals, retail have issues if the rally has run its course and starts the test of the prior low.

As a refresher, historically when a market peaks and then reverses as violently as stocks did three weeks back, they rebound over the course of a few weeks, then fall back down to test the prior low.

Often that test undercuts the prior low and really shakes out the weaker hands that got in late, bought too high, and don't have the stomach for getting burned again (as is usually the case because they always come in late). Once they are gone, the people left are the stronger holders and they use the violent shakeout to start buying. Then a new rally begins.

That shows why this works: in the heat of the battle most players, even the veterans, lose sight of the big picture, what they know to be the likely scenario. When stocks are getting slaughtered in a sea of red, redemption requests are surging, and margin calls are peppering the accounts, even the seasoned traders and managers succumb to their emotions.

Their algos read the headlines and sell, then the managers take over after the initial selling, but then someone panics again and the downside resumes. The run to the sea is on.

On days when the market is strong, they are gushing that you should buy everything, talking about their dogs or anything that pops in between the ears, chiding those who actually have a plan.

On down days, and I have seen it the day after one of those up days and the talk that the sky is the limit, they are almost morose, saying the market is just fickle right now, that selling will come so get your buy list ready.

But what? Didn't they just say the day before to buy everything, that you were a fool for not owning them? This is what you are up against and you have to see through it. Don't ignore it; use it to illustrate the kind of emotion that plays in the market and makes people make emotional decisions.

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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Mon Feb 19, 2018 11:30 am

CHARTS

All of the indices rallied higher and touched or came very close to the levels we see as very likely peaks for the relief move that then turns back to test the recent low. A bit too fast getting there, and they may bump at these levels a bit more before giving up, but it is what it is.

They all showed tombstone doji on the session, and after a furious reversal the prior Friday and a 6 session surge, that strongly suggests the relief move is capping out. At the very minimum is suggests a pause. Given the market circumstances, I would not assume a pause.

SP500: We pegged 2740 to 2750 (61% Fibonacci retracement at 2743) as resistance with 7262 (upper gap point from early February) as the outside high. SP500 moved past the midpoint in that gap zone Friday, also moving past the 61% retracement (2754.42 intraday high). It then reversed to a tombstone doji. As noted, after such a surge and in this kind of market with that huge selloff, this suggests a reflex move is at or near its end.

NASDAQ: The same action, just different levels. NASDAQ filled the second gap lower from early February (the big gap) and moved to 7303, the point of a small price consolidation in mid-January. Didn't make 7317 (78% Fibonacci retracement), but it made a game shot at it. After that rise, however, NASDAQ tossed it back, closing with a tight tombstone doji. After a furious
670 points in 6 sessions recovering from a huge selloff, NASDAQ retraced 70% of the move and indicates the relief rally is on the edge of the knife.

DJ30: The Dow rallied up to and through the 61% Fibonacci retracement, hitting 25,432 at the high. That moved DJ30 into the gap down zone from early February, but it was unable to make it to the upper gap. BTW, the gap was filled the day after the gap as DJ30 moved higher to test that selloff only to roll over and sell massively that session. Thus, the gap is filled and with DJ30 showing a tombstone along with every other index on Friday, it looks as if the Dow has hit our targets for the relief move and that move now risks falling back to test that prior low.

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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Wed Feb 21, 2018 8:02 pm

Market sell-offs 'tend to happen in three waves' and the last one is coming, strategist warns

The recent sharp pullback and volatility in global equity markets is not yet over, according to the chief executive of financial advisory firm Longview Economics.

Chris Watling said that market models show a "third wave" of the market correction is coming.
'Huge complacency' seen in the market, he said.

by Holly Ellyatt

History showed that sell-offs "tend to happen in three waves".

You tend to get a third wave to either new lows or testing the lows from the first wave of the sell-off."

There's probably some more downside risk over the next few weeks."


Source: CNBC

https://www.cnbc.com/2018/02/21/market- ... yptr=yahoo
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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Thu Feb 22, 2018 6:30 am

Too Few Stocks Rebounding From Rout for Chart Gurus to Calm Down

Equity gains since Feb. 8 are impressive, but breadth is not
Analysts waiting for buying thrust to confirm market’s bottom

Relative weakness in energy, transports and even Facebook.

“Despite the amazing run-up in equities we’ve seen, none of the days qualify as a true breadth thrust,” Visch wrote in a research note. “In fact, it’s not even close.”


Source: Bloomberg

https://www.bloomberg.com/news/articles ... yptr=yahoo
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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Thu Feb 22, 2018 6:38 am

This hidden factor may have exacerbated the recent stock selloff

By Ryan Vlastelica

The correction coincided with a ‘blackout’ period for stock buybacks

A “blackout” for stock buybacks refers to how most companies and insiders are prohibited from repurchasing their own shares in the month before the release of their quarterly results, removing a steady source of buying power from the markets.

The concentration of results during the multiweek span that comprises the earnings season means that four months—January, April, July, and October—see this impact the most.


Source: Market Watch

https://www.marketwatch.com/story/this- ... yptr=yahoo
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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Mon Feb 26, 2018 8:27 am

MONDAY

A new break higher, but it was Friday and sometimes a light volume Friday move is countered or at least tested a bit on Monday. A bit of testing is not bad.

Friday is not our favorite time to buy. The old adage, buy on Monday, sell on Friday has truth to it. Thus you can see a late week move tested early week, providing better entry points.

A bit of a pullback on Monday even into Tuesday is opportunity, as long as the pullback does not
slam back on screaming volume.

Now, while volume has not been a key ingredient on a relief move, if the move is going to take on 'new bull rally' status it will need to ultimately show strong volume on breakout moves. For now low volume can be overlooked.

In new high territory it must show real volume. Why? Because this is not Yellen's Fed anymore and the general idea among smart people is that the Fed under Powell is not going to be such an easy money, always back the financial markets kind of Fed.

I personally don't want to chase a SP500 gap upside.

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Re: US - Market Direction 40 (May 17 - Mar 18)

Postby winston » Mon Feb 26, 2018 8:43 am

CHARTS

NASDAQ: After gapping over the 50 day MA's two Thursdays back and a our-session volatile but lateral consolidation, NASDAQ gapped higher and rallied to a far and away new rally closing high. Volume was pathetic as it remained as low as it was in the consolidation, but it is a relief rally, at least for now, and volume is not that big of a deal.

NASDAQ is now 20 points through the 78% Fibonacci retracement and is 10 points from entering
the second gap lower in the selling. Potential resistance there (7347) as well as the gap fill at 7386.


SP500: New closing high for the recovery rally though still below the Wednesday and prior Friday intraday highs. Pathetic volume. I mean pathetic. Again, however, a relief move so giddy up, right?

Just past the 61% Fibonacci retracement (2743.51) and into the third gap zone from the selling gaps (the first one on the way back up). Still tons of overhead supply, but it is moving up in a continuation of the relief bounce so it is what it is and we take advantage of it.


DJ30: Moved up through the 50 day SMA on the close and put in a new rally closing high, but just by a token amount. Terrible volume as well, but . . . DJ30 is still below the 61% Fibonacci retracement touched the prior Friday, and that means it is still not even in the gap zone (there were only two for DJ30). Unlike NASDAQ and even SP500, not a great move.


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