18
Sep

Fed Day Market Update and Stock Scan Sept 17

After yesterday’s strength, we have today’s retracement of the bullish reversal.

Though price pushed to new highs, it was on negative divergences and we’ve seen downside action so far this morning.

The afternoon gives us a “Fed Day Announcement” which could radically change the structure, but first, let’s update our S&P 500 chart then highlight the top trending stocks of the day.

Positive Divergences suggested a bullish reversal which occurred this week.  Now negative divergences at a new high similarly argue for caution.

We’ll use 2,000 as a simple reference level and will play cautiously/bearishly beneath it and otherwise bullish – throwing caution to the wind – above.

Again, the “Fed Day” announcement and press conference begin at 2:00pm EST so read the statement and monitor the often volatile price action that develops  into the close.

Not surprisingly, Sector Breadth is Mixed:

Our top two sectors are Financials and Industrials (with strength in the other offensive names) which is actually bullish and our weakest sectors are Energy and Staples (which is also net bullish).

Not to be outdone, Utilities join with the bullish sectors.  This isn’t a pure bullish picture but it’s slightly more bullish than bearish at the moment ahead of the Fed announcement.

Potential bullish trend day continuation (buy retracements) stocks include the following:

Dupont Denemours (DD), Nucor (NUE), C.H. Robinson (CHRW), and Whole Foods (WFM).

Today’s downtrending stock scan includes the following bearish candidates today:

Owens-Illinois (OI), General Mills (GIS), FMC, Conagra Foods (CAG).

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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).


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17
Sep

FT: Ukraine volatility benefits Moscow Exchange

Russia’s action in Ukraine has not harmed trading on the Moscow Exchange. Instead, market volatility has even boosted volumes. Evgeny Fetisov, chief financial officer, tells FT Trading Room editor Philip Stafford why investors are willing to trade.

FT Trading Room

16
Sep

Bullish Reversal Stock Scan and Market Update for September 16

And now for something a little different!

Today’s session sported a strong Bullish Reversal in the S&P 500 from a “Rounded Reversal” and bullish divergence pattern.

Let’s update our chart and note the key trending stocks of the day.

I highlighted the positive market internal divergences to members last night (and in this morning’s briefing with TradeStation) and indeed, the market responded with a larger-than-expected bullish reversal.

Price achieved the minimum targets and actually traded rapidly above the 1,997 prior high and then the 2,000 “round number” index level.

The market is caught in a “short-squeeze” or positive feedback loop of bullish action and may continue in this direction as long as the index remains above the focal point 2,000 (where bears will trigger stop-losses at higher levels).

Sector Breadth is Bullish across the board:

There’s not much to say about today’s Sector Breadth which reveals bullish dominance in all sectors.

The only negative note is that the Defensive Sectors are the top performers of the day – not by much however.

Potential bullish trend day continuation (buy retracements) stocks include the following:

AutoZone (AZO), CVS (CVS), Gamestop (GME), and Archer-Daniels-Midland (ADM)

You might not be surprised to learn that we have no stocks on our bearish downtrending scan list today.  Go bulls!

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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).


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15
Sep

Reversal and Market Update with Stock Scan for September 12

The intraday downtrend continued and price traded down from the 1,997 inflection level mentioned in yesterday’s mid-day planning post.

Let’s update our S&P 500 level chart, highlight breadth, and see the strong intraday trending stocks right now.

Price continued the downtrend in motion through September and pushed to another (small) new price low during today’s sell-session.

We’ll focus on the session low and look for additional downtrend action should sellers continue their activities.

However, note that price has a tendency to bounce sharply higher – a retracement – when it interacts with the lower trendline which is near today’s low.

Be on guard for another sudden bullish rally should it occur.

Our Breadth Chart is a little surprising given the strength of the sellers:

What’s our strongest sector on this sell day?  Financials.  Which is the weakest?  Utilities.

“That’s not right!” you may say and you would be correct.

While price action is clearly bearish, internal Sector Rotation or money flow actually paints a bullish classical picture.

That’s because strength is showing in the “Offensive” sectors while weakness appears in the Defensive sectors.

If anything, it’s something to temper any super-bearish bias of today’s price action.

We actually do have very strong trending stocks at the moment:

Best Buy (BBY), Staples (SPLS), ICE Exchange Group (ICE), and Yahoo (YHOO) again.

Strong  bearish downtrend continuity stocks include these candidates:

Ventas (VTR), ProLogis (PLD), Public Storage (PSA), and Boston Properties (BXP).

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).


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13
Sep

Quick Charting New September Trends in Cross Market Money Flow

Even if you are only a stock market trader, it’s important to view money flow moving across major markets.

Let’s take a quick update of our “Cross-Market Money Flow” trends as we move into the middle of September.

We’re seeing the futures contracts of the S&P 500, Gold, Crude Oil, and US Dollar Index.

From the top-level, we see money flowing INTO Stocks and the US Dollar Index and OUT OF leading commodities Crude Oil and Gold.

That’s simple, but we saw a slight retracement up for commodities at the end of August, only to see these new intraday downtrends continue.

Thanks in part to geopolitical instability and money flow into the United States in general, we saw the US Stock Market along with the US Dollar Index both rally non-stop from August to present.

While the US Stock Market (S&P 500) is pausing and retracing lower, so far the US Dollar Index is merely taking a sideways pause in its strong intraday uptrend.

We’ll step inside these markets, look at higher frames, and plot potential opportunities in this week’s Intermarket Strategy Report for members, but do take a moment to study these trends as they continue to develop.

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Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

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

12
Sep

Updating our TICK Volatility Charts for September

I know, it’s not the most compelling title, but it is very important for all of us to monitor the Volatility or Cycles of Market Internals, especially those of us who use them in our trading or analysis.

Let’s update our TICK Volatility Chart and note the current important intraday levels for trading with the TICK.

To get some background on the chart and the concept of “TICK Volatility,” be sure to read some earlier posts:

Updating TICK Volatility and the Compressing Range

“Why You MUST Consider Volatility When Trading with the TICK”

“Research in Behavioral Changes in the TICK Over the Last 10 Years

To keep this post concise, we’ll note that the 20 day average TICK high at the moment is 862 and the average 20 day TICK low is -972.

This is very important if you use arbitrary numbers like 1,000 or -1,000 if you use TICK in your trading decisions.

Sometimes 1,000 is an important number and other times, it rarely occurs (thus you’ll receive no signals).

The red line indicator at the bottom simply measures the change in the average high and average low TICK value (notice how it is cyclical like volatility – we see steady alternation between periods of high volatility and low volatility just like price).

We can actually zoom-in our perspective on the most recent action to make the picture clearer:

Again, the 20 day average TICK high value is 862 (that’s less than the arbitrary 1,000) and -974 (close to -1,000).

Notice also the cluster of lower TICK values and the second lowest TICK reading of the year (-1,420) which occurred on September 4th.

Take a moment to view additional information on the “TICK Volatility” Concept, view any of the prior updates:

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Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

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

10
Sep

FT: Investing in cloud computing

Banks’ trading profits are receding, yet senior executives often speak about the need to invest in technology. Rick Lane, Trading Technologies chief, tells FT’s Philip Stafford why more trading will be done by cloud computing despite security fears.

FT Trading Room

10
Sep

The Course of Crude Oil Never Did Run Smooth

If you’re a trader or follower of crude oil, you’ve noticed the increased volatility and intraday gaps with reversals over the last few sessions.

Let’s take a look at what’s happened and where we are now in the market (the lessons goes beyond crude oil).

We’ll start with the transition from “stable” to “unstable”:

Before we discuss Crude Oil, take a look at prior “stable to unstable” educational posts including the following:

Market Internals Turn Unstable to Start October

S&P 500 Structure Moves from Stability to Instability

A Lesson on Silver, Stability, and the Sell-off

Three Quick Indicators to Measure Volatility

With Crude Oil, we can view our prior update with respect to the successful (yet smaller) “Rounded Reversal.”

Positive Divergences and a “Rounded Reversal” price pattern successfully led to a retest of the prior price high as oil moved up from the $ 93.00 level toward the initial target into $ 96.00.

However, that’s where price devolved (changed) from stable to unstable as you can see in the highlight.

The chart below specifically highlights what went wrong with price (multiple gaps):

In fact, every single day in September (except the 5th) has resulted in a relatively large overnight gap.

There isn’t a pattern to the gaps – sometimes price continues trading in the direction of the gap (impulse) to form a trend day (August 29 and September 3) while other days saw a gap fill and instant reversal (September 4, 8, and 9).

Nevertheless, the volatility – or instability (rapid, seemingly random movement) – has resulted either in instant profits or more likely instant losses for many Crude Oil traders.

The lesson here is that we should participate or trade in relatively “stable” price movement (that which follows a pattern or shows lower degree of “gappiness”) and protect our accounts (stand aside) when markets devolve into instability and show multiple gaps without a clear pattern.

Part of your success as a trader will come from your ability to recognize periods in the market when you shouldn’t trade (when odds don’t favor success).

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

7
Sep

BP Breaks Down through Open Air into Key Target

This morning’s session for BP has been a windfall for the bears.

However, shares trade on the “edge” of a support level that – if broken – simply opens price to a further sharp decline.

Let’s pinpoint this level and the view our “Color Value Area” Chart for BP:

For starters, BP has reversed into a short-term downtrend after peaking (with a lengthy divergence) into the $ 54.00 per share area.

Price broke support and the Moving Average Orientation flipped bearish at the start of August 2014.

From there, shares continued the slide and recently triggered a quick bear flag entry into the falling 20 day EMA.

Today’s sharp gap and sell-off took price rapidly into the key inflection point and target near $ 45.00 per share which represents:

  • The 61.8% Fibonacci Retracement
  • The Gap-UP Opening from October 29th
  • The Lower Bound of a Value Area Pocket (see blue chart below)

Ultimately we’ll watch closely to determine whether shares rally up off this support level (see my prior update on Apple AAPL for a similar support-bounce into target opportunity) or else collapse through it into an “Open Air” pocket.

Let’s take a look at the Value Areas and current Open Air Pocket for shares if price stumbles here:

I’ve customized the Radar Indicator (similar to Market Profile but with better visuals) from TriggerCharts.com.

Without getting too complex, all we need to view is the Value Area (yellow lines with highlight) cluster just above the $ 46.00 per share level.  That’s our focal point at the moment (and price trades beneath it).

The other focal point is the smaller Magnet (Value Area or yellow line) near $ 43.50 per share from April 2013).

Should it come into play on a very sharp sell-off, the next target (Value Area Magnet Cluster) would be the $ 41.50 level.

Nevertheless, the focal point now is the “Open Air” between the $ 46.00 level and lower $ 43.50 target.

At the moment, price is falling sharply like a rock through the Open Air which is what one would expect (there wasn’t much “price at time” transacted between $ 43.50 and $ 46.00 as highlighted by the lack of yellow lines).

Should price fail to hold the key $ 45.00 per share target as mentioned above, it does continue the decline toward the $ 43.50 Magnet Target.

Continue focusing on current levels and the Magnet Areas (yellow) highlighted above when planning trades in BP.

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).


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5
Sep

September 5 Reversal Play and Market Update

The market has reversed course each day this week and today’s session is no exception.

Let’s update our rangebound S&P 500 intraday chart, highlight sector breadth, and end with our strongly trending stock scan of the day.

The S&P 500 has remained in a rather violent trading range the last few sessions as volatility has expanded (along with intraday range).

As mentioned, each session from the start of September has developed a sharp intraday reversal.  Today’s session reversed up from the 1,990 level on divergences.

Study prior divergent reversal examples from the week.

For now, we’ll note the rising trendline into the 2,004 level and will continue to play bullishly above 2,005 (to ‘fill out the range’) or else will be cautious on any sudden movement down against 2,005.

Sector Breadth, while mixed, tilts bearish:

Our strongest sectors of the day are the Defensive Group which includes Staples, Health Care, and Utilities.

Our weakest sectors are the core of the Offensive Group including Financials, Discretionary, and Materials.

Despite mixed or even slightly bearish sector performance, we can focus on bullishly trending candidates:

Wal-Mart (WMT), Microsoft (MSFT), Nike (NKE), and Xcel Energy (XEL).

Bearish trending candidates – some with potential reversals – include these stocks:

Dollar General (DG), Goodyear Tire (GT), Regeneron (REGN), and Noble Corp (NE).

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).


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