Last week was grueling, as expected and even flatter than expected. Friday was poised to be a pretty volatile day and it clearly disappointed. The mixed bag of economic news didn’t help. But now we head into expiration week with a bunch of pent up energy and a whole lot of economic data to contend with. It seems to me that this mkt. feels toppy, but at the same time it wants to push higher. Lately opx exp week has tended to be an up week, and since we have slightly broken out on the indices it could easily be the same thing. The NASDAQ continues to be the clear leader with the DOW the clear lager. Now onto this week’s video:
Once again we are living in breakout city. Almost all the indices have broken out of their nearest resistance, and, for the most part, seem poised to push even higher. Most of the economic news coming out has been wte, and surprisingly so. However, the jobs numbers have been bte, still horrible, but bte nonetheless. This seems to be what is pushing this mkt. higher. Ignore the bad and run with the good, pretty much the standard for a year. Personally, I still do not think the fundamentals of our country are good, but that doesn’t matter. What matters is how I can trade well, and right now the easier trades are to the upside. So I hold my nose, and trade. The last two weeks my trades have been pretty mixed between puts and calls. So far, all my call trades have worked and about 1/2 my put trades have worked. So trading against this trend is much harder, as it should be.
In my perfect scenario, I would like to see a pullback to my support lines, then I would have some great places to go long. I still see a lot of individual charts coming up against resistance, and they are all attractive to me because they have clear stops. As stated in the video, the VIX has dropped into the gray box of death, and I will be looking for some up movement. If it does breakdown, then I will be looking at 16 to offer support. It seems to me, barring any unforeseen news, Monday & Tuesday will probably keep moving sideways to up. There are some earnings coming out, but nothing too mkt. moving. Now on to this week’s video:
I have a new mike, and I noticed a hum and some odd sounds, I apologize. I will try and to have a new mike by next week.
What a way to kick off the week. I could not see a direction for most of the morning, the breadth, internals, everything was up and down, but that didn’t last too long. Now the NAS already blew last week’s highs out of the water and was the early leader last week. I was looking for that big down day, and now, if we move up a little more, I will instead be looking for some consolidation, then more rally. I really want to be flexible and be able to grab some of these great moves. I missed out on today because I wasn’t ready and wasn’t by my computer when the move went off. You will note I added the MACD to tonight’s charts. I use the MACD a lot, for confirmation and direction, but I rarely put it on my posted charts. I do this just to keep the charts clean and easy to read. If you guys don’t like it, let me know and I will clean them back up, but let’s try it for a bit. On to the charts:
As I talked about yesterday, the bottom of that gap would be a logical place for the VIX to find support, and it did. The next most logical place is near 21.20, the previous low and the 50 ma. We could see a hold / bounce here, but if not we will likely hold in the 21.20 area.
One reason I put the MACD w/ histogram on these charts is to show how I look for confirmations. Check out this beautiful move in unison, its like synchronized swimming. Usually this will lead to at least a little upside momentum. However, at the blue arrow is some very obvious resistance, and I think it will be pretty decent resistance. If we take that out, I think we head towards 11,000.
You can see the same thing on the SPX. I took the liberty of pointing out some of these unison moves and you can see the corresponding SPX move. I see decent resistance at 1105.
Originally I thought this was a cliff walker; moving sideways off the bottom bollinger band. But then it took out the top of that big black candle and is nearing another resistance line. This looks strong, very strong, but strong moves often have a pause and that is what I am watching for.
The RUT looks even more impressive than the NAS. It has already taken out the 20, 50 and previous high. I would be watching for a buying opportunity on any small pullback.
The UUP really gave up the ghost today on light v. It makes sense for this to drop to the 200 ma and hold. I think when we see another big v day, we see another big up day.
I still like BWLD to head to the $40 area. It was weak on a very strong day today, and all the indicators are still signaling a drop. I do think it needs to move sideways or up slightly for a day or two before falling more.
I like this simple chart. Strong up move on earnings, gap down move up a little more the next day, then a bearish engulfing today. I think this is headed to $7.
In closing: The RUT and NAS look very strong, and the SPX and INDU are very near looking strong. I think the key is whether the SPX will take out its previous high. If it does not, then I think it will drag the others down with it. If it does, then I am going long. Trade well and prosper. AKOT
As I say in the video, this week was pretty rough. I expected some sideways movement after we touched that support line on the DOW, but instead we actually had a pretty decent up move, and made a recent higher high. Yet, the NASDAQ still looks very toppy and ripe for a turn down. It has been a meat grinder lately, and it might stay that way. But when I look at the dollar strengthening exponentially, I just have a hard time seeing this sideways to up movement holding on. We have a little economic news this week, but that didn’t really move us much at all last week, just pops here and there, and most of that move was prior to any news. Let’s see if we get more of the same.
As text-book as yesterday’s supports held, ditto today for resistance. I watched the open rubbing my hands waiting for a spot to short this rally that I was sure was going to fail mightily. I chose the SPY as my vehicle of choice for an intra day trade, and finally when it set up on the 5 min. chart I was in, right around 9:45. I should’ve waited for one more candle, but I was pretty confident of the move. Then we stalled and began to fall. I thought for sure we would fill that gap and then some, even possibly take out yesterday’s support. Much to my chagrin, we did not. In fact at 10:20 we started moving up, for what I thought was a breath and then took out most of the down move, and my small gains with it. We ended up grinding the rest of the day and I ended up a little below even and still in my “day trade”. Why did I stay in? Well we didn’t hit my stop, at 110.95, and man o man these charts still look pretty bearish to this northern chartist. So I made the decision to hold overnight, so I am short several positions that are grinding me out right now. I need a good solid move one way or the other and I am still leaning to the downside.
The reason I went short was due to the wte initial claims, the UUP the VIX and the eur/usd. As this mkt. rallied, these did not react as they should, in fact, they reacted the exact opposite as I would’ve expected. So I did not think this move up had legs, and I was right. But I waited for a decent entry and had to give up a good portion of the move. Well, we have more news tomorrow, and maybe I should be hoping for good news, then the mkt. will drop and I can get out of my shorts with at least some small profit. Quit being a baby AKOT and let’s look at some charts: Okay, but first speaking of babies……
Let’s start with the eur/usd since I was just chatting about it. As this falls, so does the mkt. The top chart is the DOW the bottom is the eur/usd. You can see that the eur/usd has started dropping, yet the DOW has yet to follow suit.
Currently the eur/usd has stalled out on support I have been showing for a few days, the 1.4717. However, now it has formed a bearish wedge / flag. I will be looking for another big burst down out of this wedge.
The VIX 60 min. chart shows this current up trend. We took out the gap and the rallied right back above it at the close. A strong break of this trend line will be sentiment change signal. However, this thing opened the day down .80 and pretty much rallied all day from then one, with one blip.
Here is a very pretty resistance touch and pullback. Never nudged a line on this chart. It is screaming breakout, but to which side is the question. You know my thoughts.
Not as picture perfect as the DOW, but the SPX gaps up, rallies close to resistance and sells off 50% of the move. Looking at just this chart, I would expect a move / gap down tomorrow and a re-test or even break of the red support line. V has been down three days in a row.
I want to point out this divergence in the NASDAQ. It is not brutally apparent but it is there. Again, another great reversal candle on resistance seems to signal reversal, but reversal candles are a dime a dozen right now.
So, with the previous chart in mind, check out the QQQQ. Divergences all over the place, and the current one is the longest baddest of them all. Taken in context with another tombstone doji, perhaps it is time to start dropping. But if you look at 12/1 we had a similar, not quite as bearish candle, and moved sideways 3 days before dropping. I really don’t want that right now, this sideways action is brutal.
I should’ve put this up there with the eur/usd, but I am too lazy to move it right now. As I type this, I just notice that looks like a bullish flag right there. Interesting, and on support. This looks like another pop up signal to me.
Man I got my charts all out of whack tonight. The RUT has made a second double top or a double top squared as I like to call it. Followed by today’s bearish engulfing candle and the RSI finally curling down, we could surely see some selling here. The 20 ma is moving up into the 50 and that is more bullish than bearish, so watch that.
Here is one of my Chart.ly / twitter charts from a couple days ago. It looks like it is working and still playable for a small short trade. Be cautious at support, but if the RSI is still above the 20 line, It may break support.
I thought LIZ may want to test that 200 ma again, and it appears that it may be headed there. I think it would be better if the RSI had come up a little more to give us more room to the downside, but still playable.
This could be affected by retail numbers tomorrow, but it is bouncing off support and the RSI is oversold, so if the numbers are good or okay, this has technical reasons to rally from here. But bad numbers and we could see a break of support and a move to the $32 area.
Overall in up trend, but a hammer followed by a tombstone doji today, resistance at the 20 ma and trend line and the RSI crashing could lead to a test / break of support.
In closing: More econ news tomorrow, and we are now on the new futures contracts with one week before 3f. I don’t think it will take much to push us over the edge ( like wte initial claims numbers today, yeh that worked real great AKOT!) Well I have to share what I truly think, and believe me I put my $$ where my blog is, and this week, other than TOL, it has been a little painful. I will post more charts on Chart.ly / twitter tonight, it is faster, easier and overall more efficient.
So trade well and prosper my friends. And I will leave you with my favorite line from the Star Trek movie: Old Spock to young Spock: “Since my customary farewell would seem oddly self-serving, I shall simply say good luck.”
We opened pretty weak today, and in my ultimate sell off scenario, I would’ve been looking for a gap up followed by a huge sell off. The weak open made me feel that we may see some significant selling early in the day. But the mkt. just idled by and slowly actually ended mixed. Yesterday I said that I would not be surprised to see a couple small up days on the DOW before a huge sell off day, well today was a small up day. Tomorrow could be day two. If it occurs, then hang on tight. On to the charts.
This is the 195 VIX, and as you long time followers know, I often use the 195 to show the sentiment of the day. It breaks the day into two candles. I usually put more weight on the second candle. Here you can see clearly the last 1/2 of the day the VIX was selling off. I think it wants to fill that gap before bouncing again. It was still up nearly 4% today, on a day when the DOW finished +40.
This is pretty much picture perfect. You rarely break straight down on the right shoulder, and like I have said, we will probably hang around here, up to 8430 for 2-4 days. I still think we see a huge sell off day by Friday, breaking this support.
The S&P 500 decided that the 200 ma would serve as support today, like it has this past month. We also have a fib line that adds a little support, so it will take a push to bust through. Maybe a move up a little, followed by a drop with v.
I have much respect for that trend line, until it is broke. It ain’t broke yet. I could see up moving up from here a little and then taking another stab at the strong, dashing blue line, finally breaking through. Note the 1771 line acted as support just as we thought it would.
The QQQQ on the other hand, well it looks a lot more bearish to me. We more than filled the gap, but could not rally back up through the $35.56 line. Further we have a dragonfly doji, which, in a sustained down move could signal a pop. Here it looks like it is just barely hanging on. We may break that line, but I don’t see the next one giving way anytime soon.
Been tweeting the XLF a lot lately due to this support. We could certainly bounce back up, but not to new highs. Wouldn’t be shocked to see a one day candle fill this wedge leaving a long top wick. If we break the support, then we drop hard and fast.
The DZZ looks like it is ready to move back down to this trend line, if the fib line holds. I think it will. The key is if the trend line holds or not.
The previous lows on DUG are now serving as resistance. I think we drop from here, probably around the $18.75 area before moving back up.
Finally I thought I would throw a little INTC in the mix. It is in a decent channel and looks poised to retest the bottom.
In closing: Things are going according to my evil plan… I don’t like that. It is too easy and that scares me. Be cautious, and watch closely for a sentiment change, but as for AKOT I still think we finish the week down, perhaps way down. I am still in puts, putting along. AKOT
We had a pretty good week last week. A little choppy the last couple days, but other than that it was very tradeable and profitable. I hope all of you did awesome. Now what does this week hold? Well we never know but we can see what it appears via some technical analysis. You can see below we have a ton of data coming out next week that is going to move this mkt. I think the housing news may be a little wte, all others possibly a little bte. I think by August most everything we be guided down, which going into then will make it bearish, but it also makes it easier to beat expectations. To me all the charts still look pretty bearish, and I will be poised to trade that way this week. BUT with key data M-Th, anything can happen. One of my old favorite trades was to trade the opposite of the news for the day. I would wait for the pop, and then quickly buy some puts on my favorite index. Or wait for the drop and buy some calls. It seemed to work much better with the pops than the drops, but it was effective either way. I have not done that trade lately because this mkt. has been acting a little spooky, but I may try it again this week. If I do I will twitter it so you can see if it worked or not. Well onto the video and economic data for the week.
Here is this weeks economic data, thanks to briefing.com. If you don’t subscribe you should.
Now for this week’s video, please for you to enjoy:
Even taking the volatility of the last week, I still think we are on target for my June sell off. Also, we have some potentially mkt. moving data coming out next week as early as Monday. I think Friday’s up move may be a case of the old pump n dump or mkt. makers manipulation. As long as were are stuck in the trading range, I think this mkt. will be difficult to trade and by definition, be a sideways mkt. Here is this week’s calendar, thanks to briefing.com and the video. Please for you to enjoy.
Today looked to be a good down day at the open and then slowly strength started building. I thought perhaps the bte economic news would cause a bounce up and then a sell off. Well the bounce up surely came, but the sell off stayed away. I am hearing a lot of bullish talk out there in trading land and it is hard for me to be unbiased and see what I see, not what others see. I know we have seen some strong rallies, but we are still way overbought and we still have not made a higher high. Until then I have to keep leaning to the downside. I know I will miss some up move that way, but I will feel much more sure about playing to the upside when I do.
I found this extremely interesting today. Here is the line I put on the VIX chart yesterday, notice where we closed. Coincidence? Perhaps, but I think it means that we are dead on support. However, this is the second time testing it, the third time could break it our we could bounce. Just watch it.
Here is a 5 yr view of the DOW> Note if you look from here, I see no reason to be bullish long term, short term perhaps. I have never seen a real rally off one test of a bottom and I feel that we will test 6500 again.
Here we sit on the SP. We filled the gap, but we closed above support. We are far from making a new high and we could rally that way, but until it is made I am still watching for down moves.
The NAS has formed a nice wedge the last couple days. Still trending down and still has not made a higher high. Now it could be consolidating for that surge up, and this formation certainly would sustain such a move. But it could also easily break down, either way I think we will soon see a big move.
Quick post on Wed. as always. There is certainly room for up moves, short term, but until the new highs are made, we are in a down trend.
I know I have been saying that this mkt. is going to turn around and drop, and when it does it will be like an anchor. And yet, it defies my understanding of charts and emotions and traders. Still, when I look at charts I see a market that has rallied too steep too fast and may be starting to head south. The anemic v of last week may be a sign of things to come. This could be an interesting first week of April, hang on to your hats. Please for you to enjoy….
Synchronized Signals
Tags: Charts, DOW, Nasdaq, qqqq, resistance, s&p, s&p 500, spx, stock charts technical analysis, stock market, Stock Market Analysis & Commentary, Stock Trade Setups, support, uup, vix
What a way to kick off the week. I could not see a direction for most of the morning, the breadth, internals, everything was up and down, but that didn’t last too long. Now the NAS already blew last week’s highs out of the water and was the early leader last week. I was looking for that big down day, and now, if we move up a little more, I will instead be looking for some consolidation, then more rally. I really want to be flexible and be able to grab some of these great moves. I missed out on today because I wasn’t ready and wasn’t by my computer when the move went off. You will note I added the MACD to tonight’s charts. I use the MACD a lot, for confirmation and direction, but I rarely put it on my posted charts. I do this just to keep the charts clean and easy to read. If you guys don’t like it, let me know and I will clean them back up, but let’s try it for a bit. On to the charts:
As I talked about yesterday, the bottom of that gap would be a logical place for the VIX to find support, and it did. The next most logical place is near 21.20, the previous low and the 50 ma. We could see a hold / bounce here, but if not we will likely hold in the 21.20 area.
One reason I put the MACD w/ histogram on these charts is to show how I look for confirmations. Check out this beautiful move in unison, its like synchronized swimming. Usually this will lead to at least a little upside momentum. However, at the blue arrow is some very obvious resistance, and I think it will be pretty decent resistance. If we take that out, I think we head towards 11,000.
You can see the same thing on the SPX. I took the liberty of pointing out some of these unison moves and you can see the corresponding SPX move. I see decent resistance at 1105.
Originally I thought this was a cliff walker; moving sideways off the bottom bollinger band. But then it took out the top of that big black candle and is nearing another resistance line. This looks strong, very strong, but strong moves often have a pause and that is what I am watching for.
The RUT looks even more impressive than the NAS. It has already taken out the 20, 50 and previous high. I would be watching for a buying opportunity on any small pullback.
The UUP really gave up the ghost today on light v. It makes sense for this to drop to the 200 ma and hold. I think when we see another big v day, we see another big up day.
I still like BWLD to head to the $40 area. It was weak on a very strong day today, and all the indicators are still signaling a drop. I do think it needs to move sideways or up slightly for a day or two before falling more.
I like this simple chart. Strong up move on earnings, gap down move up a little more the next day, then a bearish engulfing today. I think this is headed to $7.
In closing: The RUT and NAS look very strong, and the SPX and INDU are very near looking strong. I think the key is whether the SPX will take out its previous high. If it does not, then I think it will drag the others down with it. If it does, then I am going long. Trade well and prosper. AKOT