23
Jul

FT: Taming the high-frequency beast

With high-frequency trading still making headlines, politicians are examining whether to clamp down or raise revenues from the sector. John Lowrey, head of electronic markets at commodities broker Marex Spectron, tells Philip Stafford, editor of FT’s Trading Room, that it is too late to put the HFT genie back in its bottle.

FT Trading Room

20
Jul

July 18 Bounce Level Planning and Intraday Update

It’s as if yesterday never happened – buyers intervened and tripped the market higher as bears covered losses during the rally.

Let’s put today’s price action in the context of the broader trading range (highlighted in yesterday morning’s update post on the S&P 500 and Dow Jones rising trendline levels to watch) and note which levels are important for trade planning now.

After a false breakdown (Bea rTrap) under the 1,960 level, buyers intervened at the 1,955 level which resulted in part in today’s bullish rally up off the trendline support in a stronger move than we saw from the July 10th intervention (similar scenario).

The index now interacts at the pattern midpoint near 1,971 which is our focal point for the remainder of the trading day.

Any further support-up off this level suggests 1,983 is back in play while a break under 1,970 opens a sell pathway again like July 10th.

Continue to compare today’s session to July 10th.

Sector Breadth sends NO SIGNAL to us at the moment:

We typically group our nine major sectors into Risk-ON and Risk-OFF groups but we see across-the-board bullish performance for all sectors except Energy.

Offensive and Defensive sectors are doing just as well today, which underscores the large amount of money coming back into the market (or losses being covered by the short-sellers).

Now, let’s shift our attention to bullish-trending stocks for potential buy-trades the rest of the day:

CME Group (CME), ICE Exchange (ICE), Hershey (HSY), and Gamestop (GME).

Bearish potential trend day continuity stocks include the following candidates:

Johnson Controls (JCI), General Electric (GE), Airgas Inc (ARG), and TransOcean (RIG).

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

18
Jul

Focusing on Just the Rallies – an Interesting Pattern Emerges

Jul 18, 2014: 1:14 PM CST

What does price reveal if we focus on “just” the recent rallies?  A stealth bullish repeating pattern emerges that demands our attention.

Let’s focus just on the spike-rally impulse phases in the S&P 500 recently:

I’ve purposely eliminated the sell-swings from mid-June to present on the S&P 500 30 min chart.

We can thus compare ONLY the rally swings (impulses) and focus our attention on something compelling.

Notice that each green highlight represents a strong intervention force of buying pressure at the start (or in the case of July 1st and 14th – in the middle) of a non-stop bullish impulse.

Just like yesterday’s price action drew a number of bears (short-sellers) into the market, today’s intervention and bullish surge turned the BEARS into BULLS at least in the sense that they were forced quickly to buy-back instantly losing positions with their stop-losses that triggered.

Compare each green highlight with the outcome of a straight-up, similar angled, market impulse.

These are created in part by buyers buying but also by sellers buying to cover losing positions.

Here’s a closer look at the price action without any highlights:

As traders, we look for patterns in price and compare recent events to discover these patterns – and then exploit them when a similar pattern occurs in real time (like this morning).

Sometimes it’s simple patterns that overrule complex analysis, especially if complex analysis keeps us protected on the sideline or – worse – short-selling a market that has so much hidden bullish pressure supporting it.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


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16
Jul

FT: Clearing’s impact on buy side

Clearing becomes mandatory for over-the-counter derivatives trades in the US this year. Garth Friesen, co-chief investment officer of III Associates, explains to FT Trading Room editor Philip Stafford why he is confident institutional investors will be ready for the transition.

FT Trading Room

15
Jul

Learn the Five Steps to Spot and Trade Rounded Reversals in a Live Webinar Wednesday

Jul 14, 2014: 4:19 PM CST

Have you ever been stumped by elusive market reversals?

Would you like to learn the five most common steps a market takes directly ahead of a reversal?

More importantly, would you like to know how to anticipate and trade price reversals following this five-step process?

Join me live with the eTrading Expo this Wednesday, July 16th at 3:00pm EST for a special live webinar entitled “Five Steps for Spotting and Trading Rounded Reversals.

If you’ve ever been in doubt about when to stop trading with a trend that is showing clear signs of reversal, or if you would like to increase your trading skills about how to recognize opportunities to enter a trend reversal, please take the time to join us live Wednesday.

You’ll also learn the following:

  • A Check-list to Measure Odds of Reversing
  • The safest spot to enter a Trend Reversal Trade
  • How Momentum and Volume are Key for Confirmation
  • What Indicators work best … and Which Mislead you

The educational event is free and open to all traders – you’ll just need to register and attend live.

You may also view presentations from other educators during the exciting eTrading Expo this week.

See you there!

Corey


Afraid to Trade.com Blog

13
Jul

Planning a Breakout and Watching Key Levels in Amazon AMZN

Amazon.com is showing signs of life this morning with a range breakout into a key resistance area.

Let’s update our Amazon (AMZN) chart planning levels and note what event could trigger a breakout trade.

I like to keep the charts simple, so let’s focus our attention on the highlighted box (between the $ 322 and $ 338 levels) and note today’s breakout above the upper resistance and $ 340 level.

Amazon is trying to build a base and develop a bullish trend reversal from its divergences that occurred near the $ 300 price level in May 2014.

What we’re seeing now is continuation of the strength and potential upside action that may trigger IF buyers can advance price above the next confluence resistance area near $ 350.

Right now, the break above the $ 338 level sets up a short-term bullish target play toward the $ 350 confluence of the 200 day SMA and a Fibonacci Level.

We can see the short-term Fibonacci Retracement Grid on the chart below:

Again, focus your attention on the $ 346.34 Fibonacci Retracement which (almost) intersects the 200 day SMA at $ 347.54.

Not only is this a short-term target (it could serve as a key resistance area), but it could also trigger the next breakout and bullish play (swing) for Amazon shares.

A clean trigger-break above $ 348 that carries above $ 350 could set-up another strong upward impulse at least to the 61.8% Fibonacci Level ($ 361) or even higher at the March 2014 swing high and gap area near $ 380 per share.

There’s one more piece to the potential bullish puzzle and it comes from the Weekly Chart:

Amazon trades above the 20 and 50 week EMAs ($ 330.76 and $ 327.63 respectively) and thus has entered an “Open Air Pocket” on the weekly chart which means that there are no obvious resistance levels on the weekly frame until price trades toward the prior $ 380 high.

Remember, this is not to say that Amazon WILL trade up through the pocket, but that price has an upward pathway to travel should it break above the current resistance cluster near $ 350.

Continue watching the current ceiling (near $ 350) and if buyers push price higher, it could be a catalyst (and trade set-up) for further upside action.

Also, I’m excited to be teaching an educational webinar as part of the eTrading Expo series this Wednesday (July 16th) at 3:00pm EST entitled “Rounded Reversals:  Five Steps to Spotting and Trading Gentle Reversals” which will help you increase your ability to plan market events (and trading strategies) like this.  You may use the following link to register for the Rounded Reversal free live presentation.

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Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

9
Jul

FT: Barclays conduct questioned again

Barclays’ shares dropped on news that New York’s top securities regulator had sued the UK bank for allegedly favouring high-speed traders using its ‘dark pool’ trading venue while misleading institutional investors. Lex’s Alan Livsey and Oliver Ralph discuss the financial and reputation risk to Barclays.

FT Trading Room

9
Jul

July 8 Sell Swing Intraday Update and Stock Scan

Today continued the expected sell-swing already in motion and price achieved its downside target (see yesterday’s intraday update and level planning to recap the live analysis as it occurred now that we know the outcome).

With price back into a support target level, let’s update our intraday charts and trending stock scan:

The intraday target for the next likely downswing was (and is) 1,960.  Price achieved this level with dual divergences mid-day and now is rallying up off the support level to create a possible bullish “rounded reversal” or trend day that ended into known support.

Watch the price movement above the 1,965 EMA and price pivot (bullish above; bearish beneath 1,965).

It shouldn’t surprise us that Sector Breadth  shows a very bearish picture at the moment:

Similar to yesterday, the strongest sector is the defensive/bearish Utilities sector (97% of stocks are positive right now) followed distantly by Materials and Energy (42% of stocks higher now).

Relative weakness continues across the board (again, the same picture as yesterday).

Let’s turn our attention now to potential bull-trending stocks (relative strength leaders) today:

Defensive Colgate-Palmolive (CL), Duke Energy (DUK), Avalonbay (AVB), and Costco (COST).

Potential downtrending (trend day) candidates include the following stocks:

Trip Advisor (TRIP), Walgreen (WAG), Motorola (MSI), and big name Amazon.com (AMZN).

Also, I’m excited to be teaching an educational webinar with Trader Kingdom this Thursday (July 10th) at 3:30pm EST entitled “Stalking the Short-Squeeze: Protection and Profit from Unexpected Events” which will help you increase your ability to plan market events (and trading strategies) like this.

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Corey Rosenbloom, CMT
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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

7
Jul

July 7 Intraday Update Level Planning and Stock Scan

What levels are we watching at the moment and which stocks are setting up as potential Trend Day candidates?

Let’s start with our S&P 500 intraday level-watching chart:

SPX July 7

The S&P 500 traded down from just above the 1,980 level on TICK and momentum Divergences into the upper trendline of a rising pattern (see this morning’s update on “Color Structure and Planning the Next Swing”).

The intraday target near 1,975 has already been achieved and we’re looking for any sort of bounce-up (with positive divergences this time) off the potential support inflection target at today’s low.

The market is in the “green buy zone” above 1,976 and otherwise is in the “red sell zone” under 1,975.

Sector Breadth shows a very bearish picture at the moment:

A quick glance at today’s “bearish” Sector Breadth shows clear relative strength with the Utilities (77% of stocks positive right now) along with Consumer Staples (41% of stocks positive).

These “Defensive” sectors tend to outperform during bearish periods in the market and we’re seeing that same pattern develop today.

Let’s turn our attention now to potential bull-trending stocks (relative strength leaders) today:

Archer-Daniels-Midland (ADM), Apple (AAPL), Cognizant Tech (CTSH), and Boeing (BA).

Potential downtrending (trend day) candidates include the following:

Textron (TXT), Wynn Resorts (WYNN), Intuitive Surgical (ISRG), and Delta Airlines (DAL).

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

6
Jul

The Key Support Level Bonds TLT Must Hold to Prevent a Bearish Reversal

What support level must bond fund TLT hold or else trigger a breakdown/reversal event?

Let’s start with the Daily Chart to highlight the structure and key level at play now:

We’ll see the current trade level clearer on the hourly chart, but the first level to hold must be the current $ 111 price support level.

A failure to hold $ 111 opens a swift downside pathway toward the overlap of the 38.2% Fibonacci Level with the $ 110 “Round Number” support line.

Any future breakdown under the $ 110 critical “must hold” confluence suggests that bonds could reverse and trade down to previous support targets including the $ 107 Fibonacci and Price overlap (highlighted).

A downward reversal in bond prices suggests a boost higher in Treasury yields.

I also wanted to highlight the recent bearish spikes in volume (red candles) from May to present.  It suggests selling pressure could be lurking behind the scenes of the price action.

Let’s turn our attention now to the Hourly Chart and note the broader range in motion now:

Note also the momentum divergences at recent turning points (reversals) on the intraday frame.

There’s no divergence present at the moment, and in fact the oscillator carved out a new chart low (suggesting $ 111 may fail as support).

A clear downward path is open – especially in the context of the gap and sell-swing in motion – toward the $ 110.50 level then $ 110 as highlighted on the Daily Chart above.

We do note a sideways rectangle trading range between the $ 110.50 and $ 112.25 level with respect to a fast “Open Air Pocket” through $ 112.25 to the $ 113.50.

In the days ahead, monitor price action relative to the current $ 111.00 then $ 110.50 and especially the $ 110.00 levels as potential pivot points and “Must Hold” zones – lest bond prices develop trend reversal event.

Afraid to Trade Premium Content and Membership

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


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