The tables were turned on the bears today, and we got a sell-off after gapping higher. We saw similar action back last week on the 26th when we gapped to new highs and finished lower on the day. For me that is the playbook I am following today, since market action has been, of late, following precedent set in previous trading sessions. [more]
Economic Reports Due out (Times are EST): ICSC-Goldman Store Sales (7:45am), Employment Cost Index (8:30am), Redbook (8:55), S&P Case-Shiller HPI (9am), Chicago PMI (9:45am), Consumer Confidence (10am), State STreet Investor Confidence Index (10am) [more]
Here we go again with the Europe crap. The market did its typical Europe morning selling then buying after Europe closes. The early morning saw selling as SPY opened below short-term support of 131.23 eventually bouncing off 130.06 as the bulls successfully defended the 130.00 round number level. But the market was unable to get above resistance at 131.43 as the high of the day was 131.44. [more]
I've yet to violate one of my New Year's Resolutions of not breaking a keyboard in 2012, but if the bears lose this battle again today, that may very well happen. [more]
Economic Reports Due out (Times are EST): Personal Income and Outlays (8:30am) [more]
For the bulls last week, it has to mark relief that despite the constant pressures that was seen throughout nearly every trading session last week, they managed to fight back and save face before the closing bell. What we ended up with was a nasty doji weekly candle that shows the market's bullish tendancies of late are becoming neutralized. While the bears are no doubt frustrated by the missed opportunities, and lost intraday gains, there is a lot of potential for them to clean house in the week ahead. In order to do that though, with the aforementioned doji candle and the overextended RSI, T2108 (Worden Chart) and SPRI, they will for once need to figure out how to quit letting the morning weakness slip away, in the first five minutes of trading or so. Also notice on the chart below, how often we've seen market reversals to both the upside and downside when we get these weekly doji candle patterns. It's worth paying attention to. [more]
Here's how Week 1 closed on January 27th for YM, ES, NQ & TF. This was the week of the FOMC announcement to keep interest rates low until the end of 2014. As I mentioned in my post of January 25th, these four e-min futures indices have been travelling upward in a channel from their 2011 lows.
The first Weekly chart below shows that YM took a slight loss from the prior week after attempting new highs, but closed just above a confluence of 3 trendlines (one from the highs of 2007), a 78.6% Fibonacci extension level, this month's Volume Profile POC (horizontal yellow line), and the lower one-quarter of the channel on higher volumes than the prior week. Current price sits well above its 50 sma (red). The weekly uptrend hasn't been broken yet for YM. [more]
Another mix of swing-trades to the long and short-side today. The market is looking indecisive, but that should not come as a surprise considering the run we've been on of late. [more]
Economic Reports Due out (Times are EST): GDP (8:30am), Consumer Sentiment (9:55am) [more]
To best depict what we are currently experiencing in today's market, with the bullish euphoria that exists, the belief that European woes have passed, and that somehow it's different this time, let me point you to the movie clip below that comes from "Meet Joe Black". Here you have Good 'ole Joe and his lovely lady friend, being swept away by one another in a coffee shop. But like the market bulls, both parties are completely oblivious to what lies around the corner... [more]
I tend to run this screen in markets like the one we are currently trading in. Where it is overbought beyond measure, facing overhead resistance, and anything and everything that I measure the market reversal possibilities against, is screaming "Watch-Out Below!". And that is the exact kind of market we are dealing with here. [more]
Economic Reports Due out (Times are EST): Durable Goods Orders (8:30am), Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), New Home Sales (10am), Leading Indicators (10am), EIA Natural Gas Report (10:30am) [more]
If the market stays propped up, and we dont' see some selling start to creep in, than you have to give some thought to trading US Steel (X), because that stock has one incredible ascending triangle pattern that it is breaking out of to the upside. [more]
Seriously, if you don't belt out in laughter at this photo, then you may be be either 1) Too uptight about the election 2) Donating too much money to the Newt Campaign 3) Newt himself or 4) Your Sheldon Adelson who's bet $10m on the Gingrich campaign winning the Presidency. [more]
Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), FHFA House Price Index (10am), Pending Home Sales Index (10am), EIA Petroleum Status Report (10:30am), FOMC Meeting Announcement (12:30pm), Chairman Press Conference (2:15pm) [more]
As I'm writing this post, AAPL has broken out to make an all-time high of 468.95 in after-hours trading after releasing their latest earnings report. I last wrote about AAPL on January 9th and mentioned a couple of possible scenarios. One was a pullback to re-test November lows, and the other was a run-up by market makers into earnings.
The Daily chart below shows where tonight's price was hit...above the +2 deviation level of the upward-trending regression channel which began at the June 2010 lows. When tomorrow's candle opens, it may re-test tonight's high before dropping. Near-term support would sit, firstly, at the +1 deviation level around 440, followed by this month's Volume Profile POC (yellow horizontal line) at 422.32...the next level would lie at the channel "mean" (currently at 412.35), and, subsequently, at the 50 sma (red) at 397.15.
As I mentioned in my previous post, AAPL has, so far, been unable to remain above its +1 deviation level of this channel...we'll see whether the same applies over the next days/weeks ahead, or whether it's "different this time"...with 500.00 within reach, who knows! [more]
The stocks below are showing signs of, or already in the process of, breaking down as the smart money appears to be leaving them in a subtle manner. There are stocks trading at its peak and finally showing some vulnerability, while on the other extreme, there are stocks that have been in a channel near or at their lows, before finally breaking down below those lows. [more]
Economic Reports Due out (Times are EST): FOMC Meeting Begins, ICSC-Goldman Store Sales (7:45am), Redbook (8:55am) [more]
European Confidence data released today shows that consumer confidence remains depressed at 2008/09 levels, well below zero, as shown on the graph below. This low level of consumer spending is fact in spite of the rosy picture that markets are attempting to paint and is well below the average recorded for the past nine years. [more]
We're finally seeing some weakness out of this market as we have pulled nicely off of the day's highs and into the red. But the constant theme of this market so far in 2012 is the seemingly endless bid underneath this market. We haven't seen it kick in yet today, but one can't discount that still happening. We also have a lot of potential news catalysts in the form of the FOMC Statement on Wednesday as well as the GDP report on Friday. [more]
Economic Reports Due out (Times are EST): None [more]
Its another week to chalk up as a convincing win for the bulls. At this point, I'm not looking to load up on short positions of any kind. It's ok to day-trade them where the opportunity exists, but beyond that, I'll leave the overnight short plays to someone else to try. I do however see a nice bearish divergence on the RSI. [more]
Below are several charts and graphs (available at www.Stockcharts.com) comparing the German DAX, French CAC, Portuguese PSI, and Greek GRDOW Indices over three different time periods.
The first two are taken over the past three months. We can see on these that although the DAX and CAC began to rally in November, Greece continued to drop until last week, and Portugal has basically moved sideways from November. Here's the Graph. [more]
How long the bulls can put a constant bid underneath this market is anyone's guess. There's no doubt we are overbought beyond measure, but that seems to hold little value these days. With that said, I've provided a balanced assortment of long and short setups. What's interesting, is that both long setups revolves around oil, while one of the short setups below is for USO. Go figure. [more]
Economic Reports Due out (Times are EST): Existing Home Sales (10am) [more]
Economic Reports Due out (Times are EST): Consumer Price Index (8:30am), Housing Starts (8:30am), Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), Philadelphia Fed Survey (10am), EIA Natural Gas Report (10:30am), EIA Petroleum Status Report (11am) [more]
This is a stock screen similar to "Stocks That Are Breaking Down" (but just the exact opposite). A lot of these stocks are positioned for breakouts in the near future. If you are a momentum trader, you have to take a look at the charts of each of these stocks listed below. Each of the stocks below were hand-picked from a list of screen returns of more than 100 stocks/ETF's. These are the ones that I would consider the best of the best from those returns. [more]
Three Swing Trade Setups that I'm liking this morning... [more]
Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), ICSC-Goldman Store Sales (7:45am), Producer Price Index (8:30am), Redbook (8:55am), Treasury International Capital (9am), Industrial Production (9:15am), Housing Market Index (10am) [more]
Earnings season moves into full swing this week. The last earnings season was quite good compared to expectations. In my opinion, it was the primary driver of the strong October '11 broad market rallies. Now, as we approach 4th quarter earnings, I think expectations are overly exhuberant and the recent rally since late December has lacked volume. I continue to see bearish signals all around. Most of my technical analyses have prompted sell signals for most of the past few days some bearish indications have occurred for more than two weeks.The consistant failure of these signals is highly unusual. Ryan Mallory mentioned the "January Effect" this past week as a possible explanation. The January effect is well documented and certainly a plausible explanation. "The most common theory explaining this phenomenon is that individual investors, who are income-tax-sensitive and who disproportionately hold small stocks sell stocks for tax reasons at year end (such as to claim a capital-loss) and reinvest after the first of the year. Another cause is the payment of year end bonuses in January. Some of this bonus money is used to purchase stocks, driving up prices." [more]
So far the market has disappointed the bulls by not building on the morning gains, but at least the market hasn't gotten away from them. The bears, as has been the case since December, has had a hard time holding on to its losses, and building upon them. We saw it Friday, and we're seeing it so far today, where the S&P seems determined to keep fighting back. [more]
Economic Reports Due out (Times are EST): Empire State Manufacturing Survey (8:30am) [more]
Here are two stocks in the Coal sector that have very similar patterns- descending triangle patterns that are have either just broken below support or are near it. But they have more in common looking at the longer-term charts. In addition these two stocks are both down around 65% since January 2011 so they are mostly oversold. [more]
There hasn't been much of a change in this week's SPRI. However, there have been some fundamental changes in the price action on the weekly S&P, where we are now seeing a breakout from the bearish wedge that was highlighted before. It's hard to really gauge the strength of this market though. On one hand, the SPRI is starting to look exhausted (but not over) to the upside, while on the other hand, we are seeing the index climb above previous resistance and now looking to make a run into the 1300's. At the very least, remain cautiously optimistic, with an eye on the developments taking place in Europe, and trying to ride the momentum as long as you can, being ready to bail on it, at the first sign of problems. [more]
Pattern: Bear Flag (bearish pattern) [more]
PFCB and NYT have been two stocks that were mentioned on here. Both had similar ascending triangle patterns and both set ups showed signs of potential breakouts. Both stocks have "Broken out" but only one so far has truly "Brokeout" under the definition of a technical breakout. Let's start with the good breakout! NYT finally broke out of its ascending triangle today. NYT advances were being stopped at 7.77 and the price action formed an ascending triangle which is a bullish pattern. NYT broke above X which had been resistance for the last 3 weeks and broke the top of its triangle. This is a strong breakout in price but what makes it even stronger is the breakout comes with strong volume. NYT should advance upwards now especially if it takes out 8.01. Chart Markup for NYT.
Now lets look at PFCB it had a similar ascending triangle just like NYT. Resistance was at 31.80 this needed to break to get the breakout going. On the 10th PFCB finally "broke out" closing above resistance. But since then the stock has failed to follow through like we have seen in NYT. It is not a failed trade, there is still support the first breakout level but reassessing this chart one can see the true breakout level is 32.77 which was the high in November and December. Also notice that there was no volume associate with any of the breakout levels. [more]
Quick Run Down: The market closed up just barely after starting the day weak. The bulls regained control at SPY's support at 128.54 our key support was 128.44. The market rallied till hitting the morning resistance at 129.51, our R1 level was 129.65. The selling pressure is noticeable at this level and it comes from a combination of a horizontal resistance and the long-term downtrend(the pinkish line). [more]
Below I've put together three charts that had been on a nice upward trend that is finally showing some weakening and a desire to shift directions and move much lower. Granted, we'll need to see some market weakness in the days and weeks ahead, because at the current rate, it's hard for anything to trade lower. [more]
GIS is an interesting stock to watch as it has the potential to break out to all time highs. GIS has been trending upwards for a while now and has failed to get above 40.75 during the last few weeks. This level represents an all time high so one expects resistance at this level. The question becomes can GIS break out of this resistance level because if it does there is lots of air above it- as its an all time will no resistance above it. Currently there is support at 40 and it has been range bound the last two weeks. [more]
Economic Reports Due out (Times are EST): Jobless Claims (8:30am), Retail Sales (8:30am), Bloomberg Consumer Comfort Index (9:45am), Business Inventories (10am), EIA Natural Gas Report (10:30am), Treasury Budget (2pm) [more]
The following graphs/charts (courtesy of www.Stockcharts.com) depict percentage gains and losses in the Major Indices and Sectors during several periods since the beginning of January 2011.
The first two charts show price action from January 3rd, 2011 to today's close. Prices topped in July of 2011 and bottomed in September. [more]
This is by far, one of my favorite stock screens that I run. I have probably found more winning stocks (and big % ones at that) off of this screen, than any other one that I run. These stocks make it a habit to trade on their own merits and not that of the market itself. Some of them are overlookedby the street, but to those who invest their capital in these stocks, the returns that the investors receive are very rewarding. So if you've been scratching your head recently as to what stocks you should be trading, then the stocks below are probably just what the doctor ordered. [more]
Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am), Beige Book (2pm) [more]
The latest gap up has bought the market into another overbought condition with the PI showing a 68 which is above the oversold threshold. The market has remained in a near overbought condition for a few days now so some selling pressure might start to come into the market. This overbought with combined with technical analysis makes a good case for the bearish side. short-term. Come back for more on this. [more]
It's been a couple of weeks since I last posted the SPRI, and instead of waiting until the weekend, which is when I usually post it, I figured I'd do it mid-week here. While things are looking awfully bullish to start the year out, we are nonetheless, starting to show signs of being overheated. Combined with the pathetic volume showing so far this year, I'd say this market is starting to distribute, and may see some down side before it's all over. Earning season is just getting started, and if we see disappointment there, then it could lead the bearish cross over in the near-term. . [more]
Economic Reports Due out (Times are EST): NFIB Small Business Optimism Index (7:30am), ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Wholesale Trade (10am) [more]
Yikes! Netflix just can’t stay out of the news. At least today it was a good announcement about their expansion into the UK. By now it is no surprise that Netflix has taking a bad bounce and dropped over half of its value. Since then it has been a rollercoaster ride only touched by the gutsy speculators.
Today I noticed a trade to be made in NFLX as it began to pullback and consolidate on an intraday level. The play was a short put on the weekly options. The short put will allow us to take advantage of NFLX moving higher but also not hurt us if it were to stay flat or even drop a bit.
The puts we were looking at are on the 75 strike for a .15 ($15) credit. This would yield a 2.00% return on investment for a 4-5 day hold.
The position was put on when NFLX was trading at 89. At the close of today it is at 98 so we are moving in the right direction.
Here's the rest of the article (w/chart). [more]
Google (GOOG) was downgraded this morning after an analyst at Stifel Nicolaus lowered their revenue and earnings estimates. While I don't consider the news to be important at all (any upgrade/downgrade is done for self-serving purposes, and never to actually warn us of anything), I am enamored by the price action where this stock is breaking a three month-old trend line with little in the way of support below. [more]
Economic Reports Due out (Times are EST): Consumer Credit (3pm) [more]
One of the things that I really value about SharePlanner is the community interaction. This morning one of the regulars, BigApple provided us with two stocks that I probably would not have found, otherwise. The first one International Business Machines (IBM) provides a great head and shoulders setup, while the second one, 3M (MMM) provides a great setup to go long on - a break out, if you will. [more]
Economic Reports Due out (Times are EST): Employment Situation (8:30am), Treasury Strips (3pm) [more]
Two new trades I took this morning. The market is looking, as a whole, like it wants make a move higher, but that will in large part depend on whether it can break through the intraday channel that we've been stuck in since the beginning of the new year. [more]
Economic Reports Due out (Times are EST):Challenger Job-Cut Report (7:30am), ADP Employment Report (8:15am), Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), ISM Non-Manufacturing Index (10am), EIA Natural Gas Report (10:30am), EIA Petroleum Status Report (11am) [more]
Shooting Star: Tuesday and 2012 looked like it was off to the races but this lasted on a short period as selling picked up after hitting 128.38. This price action has caused SPY to form a shooting star candle stick pattern. What this means is that buyers were in control earlier (which we saw with a 1%+ open) then sellers came in at 128.38 to take control of the market. The shooting star candle is bearish candle and either marks resistance or a trend reversal. For now lets say it is marking resistance at 128.38. Yesterday's strong morning also left SPY with a big gap below and with the presence of a hanging man on the chart it appears that SPY may move back towards 126.82. [more]
Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Factory Orders (10am) [more]
LONG: Chesapeake Energy (CHK) [more]
P.F Changs ticket PFCB has a bullish looking set up for this stock with lots of potential if the bulls can regain control because as you will see below there is some strong downside risk. [more]
Economic Reports Due out (Times are EST): ISM Manufacturing Index (10am), Construction Spending (10am), FOMC Minutes (2pm) [more]
Last year I came up with a list of resolutions that would be meaningless if I didn't review them in the new year and see how I did keeping to them. There were some definite hits and misses, so lets review: [more]