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If you fail to plan, you plan to fail

December 17, 2014

If

These are a few of the charts I shared on the twittersphere today.  If this is a tradeable bottom, we've got plenty of quality options.

Let's start with the NYSE stock only advance-decline line.  This thing is more stretched below the lower bollinger band than it's EVER been.  Have we all just lost our minds?  Or is it a sign of a strong new trend?  Maybe both?  All I gather from it is we have high probability for a meaningful bounce.  Feel free to chime in @atmcharts.



Netflix is at a huuuge support level and trying to plant a firm reversal today.  If so that sets up a clear exit for anybody looking to trade long.  Unfortunately, there's not a lot to like about the chart, but does that even matter to an investor if you have such well defined risk?


COPA is bouncing today at this long term pivot area.  It's been thrown out with everything else in Latin America, but it's an airline and the largest holding in the CUBA ETF.  In case you don't know  CUBA is up on news of vastly improved US relations.


 NOAH bouncing hard after re-testing the top of the base and 10 week MA.


INFN has traded in a tight range for over a month after a monster bottom base break.  


We see this 14's area was a resistance in 2008.  If that goes, next stop 20's?


ZLTQ has shown great relative strength and consolidates tightly near the highs.  



Thanks for reading

Trade 'em well

December 14, 2014

Rotation Report: Yellen Claus

Last week was hectic!  Bond yields are going haywire across the globe.  Energy stocks are starting to show signs a bounce is near, while the rest of the market is getting sold aggressively.  Still, a few biotech stocks refuse to go down!

The Fed meets and Yellen will speak this time.  It'll be interesting to see what the Fed says about the global economy.  They've been pretty upfront about conditions worldwide.  There's not a lot of good economic data worldwide to speak of and long term treasuries from the US to Germany to Japan are reflecting that.

Let's start with...you guessed it, Oil.

Crude oil has dipped below the 200 month MA for the first time since the 2009 lows!


Looking at the energy stocks we see they aren't quite as oversold as October AND there is a short term bullish divergence.  This via XLE's McClellan Oscillator


XNG is deep within a major support zone.  Maybe this is one of the energy groups where long term investors will show up first.


Friday, Bakken energy producer OAS had a massive bullish engulfing day with record volume.  It's dropped a cool 80% from the YTD high.  This is by far the clearest daily reversal attempt it's had.  WE could expect more from the group.


Another theme gaining strength on an intermediate time frame is a preference for bond like equities.

Staples are attempting to take out a 14 month peak in relative strength


The S&P dividend index relative to the S&P 500 is breaking out of a ~20 month downtrend.


Real Estate relative to Tech has formed a falling channel over the last year plus.  Notice the MA's starting to curl higher.


Taking a look at the Consumer dashboard we see Apple testing it's relative strength uptrend via the 50 day moving average.  Also note the possible cup with handle in Wal-Mart's RS.


Consumer discretionary has shown great relative strength during this pullback, but buyers earlier in the week have become sellers into the end of the week shown via the shadow tails in the candlesticks


Why is the Hong Kong Index trading so poorly?  I don't understand the Chinese market merger, but this looks precarious at support with the false break above and backtest of the 24K area.


Gosh it sure looks like a huge rounding top in the FTSE at the 2007 high.  A break to fresh highs would negate it, but for now, it looks ugly.


The Euro staged a strong reversal week at trend support connecting the 2009 and 2011 lows.


The drop in US high yield bonds was highly publicized last week, but the action is much worse in the emerging markets!  


If you haven't already, check out my latest two pieces for See It Market: 


Stock/bond ratios key into 2015 (they're rolling over since I wrote it)

To quickly summarize the action of numerous leading groups, most had large bearish engulfing weeks while they start to approach numerous rising moving averages such as the 20 day and 50 day.

Thanks for reading!  Happy Holidays!

December 09, 2014

Bottom fishing

Here's a list of stocks i'm watching into the end of the year.  You'll notice a lot of longer time frame downtrends ending and bottoming patterns in this list.  I like large bottoming patterns at this time of year because they tend to move VERY aggressively once they break out.  Let's dig in.

ACAT has coiled for weeks now.  The classic gas guzzling toys play.  The risk reward is pretty great for active investors.


CSLT has coiled and coiled for some time now and has finally cleared the resistance line.  Can it stick?  It's a name in the hot healthcare software space


With Banks showing strength, BOFI has managed to form a continuation triangle after a 15 point rally off the lows of the year.  This could make a run at 100 in the coming months.


PAAS is a silver play that's breaking RS resistance and could be a major H&S bottom here. 


Speaking of H&S bottoms, if you like home builders, TMHC could be one.



Coming up in the next week or two, I'll be posting about the networking group as a top sector for 2015. Recent IPO ZAYO appears to be a major beneficiary of that recent group strength.


INFI has based out for a year.  Is that a head and shoulders bottom?  Regardless, with a breakout, this could be a heck of a end of year run.  


TSRO has blasted out of a tight inside week and continues to run after this major downtrend break.  There could be a double digit % gainer day here soon.


Trade 'em well!

Reminder:

All ideas shown on this blog represent the authors opinion based on the data available.
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