3
Sep

S&P Futures


The persistence of this rally caught me off guard a bit but fits well as a wave (ii) counter trend move. Several of my intraday indicators show the market overbought here. I’m not sure we’ll get a breakdown this morning, but ideally the rally should stall here and perhaps break down 30 minutes prior to the close. The jobs report should then trigger wave (iii) down tomorrow morning. This count remains valid as long as 1992.75 is not broken. Although even if it is, we could still work the 3 wave rally off the wave 1 low as a wave 2 correction. More after the jobs report Friday…


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.


Principle Analysis: Elliott Wave Principle and Automated Strategies (An Elliott Wave Blog)

3
Sep

S&P Futures



This wave count using closing points on the 1hr time frame is tracking well.  Friday’s fractured market, as I pointed out, was a good indication that a top was in place as Monday and Tuesday this week has shown significant weakness.  And after two days of heavy selling, the bulls managed only a modest float rally higher.  Not good for the bulls.  Friday is the big jobs report in the morning, then on to the 3 day Labor Day weekend, so I expect the market to probably float around sideways to slightly up Thursday, then huge moves Friday morning after the jobs report, then volume and volatility should taper off significantly after a few hours of trading as traders take off to enjoy the long weekend.

The wave count suggests a major declining phase is underway and that I should favor the downside for my trades in stocks and their derivatives.


PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.


Principle Analysis: Elliott Wave Principle and Automated Strategies (An Elliott Wave Blog)

1
Sep

Video: Actionable Option Strategies in Any Market Condition

Sep 1, 2015: 9:44 AM CST

I’m excited to share with you my colleague John Carter’s new video he just released after the recent market volatility.

John is best known for teaching actionable strategies in easy-to-understand language and I fully support his educational efforts to the trading community – and hope you benefit from his teachings and strategies.

His new video is entitled “Actionable Option Strategies to Profit in ANY Market” and it’s more boldly subtitled “How I turned $ 150,000 to $ 650,000 in 8 Months with this Plan.

John has the numbers to back his claims up – as he’s done repeatedly in the past – and he’s happy to share his option-based strategy for how he did just that.

Click above to learn more and watch John’s video for you

In the video, John specifically will be covering with you these four points (and more):

Don’t hesitate!  Even if you are totally new to options, or don’t feel like they would be beneficial to you, I still recommend clicking over to watch the video and learning how a professional trader uses options to grow his account consistently.

Learn his strategies, what worked and what didn’t, and then copy his success into your own trading plan.

I’m a fully supportive and enthusiastic affiliate and colleague of John and I’m always excited when he releases new videos to the trading community.

Go see what he did, how he did it and how you can benefit from his teachings right now!

Corey


Afraid to Trade.com Blog

30
Aug

S&P Futures Setting up for Major Decline

The triangle count I posted earlier got crushed almost immediately after I posted it, lol.  But that does not change the bearish count overall.  This count makes sense from a practical EWP perspective, but does not from a purist fundamental EWP perspective.  The reason is that 2nd waves are usually sharp and deep rallies while 4th waves are usually flat and shallow affairs. This count above is opposite of that as wave (ii) is flat and shallow and wave (iv) is sharp and deep.  Although the count does not violated any EWP rules, it does contradict EWP guidelines for wave characteristics. But if I tweak the bars a little, we get a cleaner count in my view…


When using closing lines instead of intra-bars we get a much more ideal wave count.  Note that waves ((ii)) and ((iv)) are much more proportionate, and that the sharp rally late last week aligns nicely with 2nd wave characteristics (wave 2).  An alternate view of this count would be to replace wave 1 with A, and wave 2 with B.  Either way, wave 3 or C down will be impulsive, strong and probably quite deep.

The market action Friday was pretty bad for the bulls.  The market was very fractured with varying markets and sectors up with others down most of the day.  This type of “fractured” behavior often occurs at tops.  That type of behavior doesn’t always result in in tops, but most tops do exhibit this type of behavior.  If the bulls don’t come out strong on Monday and hold the gains throughout the day, I expect this market to resume its decline in wave 3 or C quite soon.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.


Principle Analysis: Elliott Wave Principle and Automated Strategies (An Elliott Wave Blog)

26
Aug

Today’s Midday Update is Very Different from Yesterday’s Aug 25

While yesterday was another powerful sell (liquidation) session in the market, today sparks a sudden relief rally up away from the 1,900 target.

Is price headed back to test the lows?

And what levels are we focusing on now in the high volatility? Let’s chart them:

Again, please take a moment to review the prior “What Two Breadth Charts are Saying about the S&P 500.”

Also, compare that with the real-time expected sell-off we’re seeing in today’s morning update: Weekly Chart Perspective of the Steep Stock Sell-Off

From positive divergences at the 1,880 index level (1,900 is our simple reference line), stock prices rallied sharply in the morning but stalled mid-day ahead of yet another bearish swing down from the 1,945 and 1,940 resistance levels.

I drew a short-term triangle connecting the compressing highs and lows – price trades near the 1,920 level (the Midpoint) currently which will be our intraday reference between 1,900 and 1,940.

Receive daily updates, planning, and education by joining fellow members of the Afraid to Trade Premium Membership (before subscription prices rise).

Let’s see what our Breadth Chart reveals about current market strength (or weakness):

Yesterday’s large sell-session saw over 95% of stocks negative on the day – across all sectors.

Today reveals almost the opposite, though Utility Sector stocks are the weakest group today.

All other sectors – this time except Materials – trade above the 80% bullish breadth level.

Here are today’s strongest trending (intraday) names – candidates for pro-trend continuation:

Best Buy (BBY), Zillow (ZG), KLX Inc (KLXI), and Michael Kors (KORS)

Bearish downtrending candidates include the following stocks from our “weakness” scan:

Pepco (POM), DSW, CMS Energy, and DTE Energy

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership 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

26
Aug

S&P Futures


The bears were in full control the last 3 trading days and shaved a huge chunk of capital from the markets. The bears have run out and short covering and “discount” buyers are in control. But make no mistake, the selling craze is not over.  There is at least one 5th wave to male new lows before we can even consider if the selloff is over or not. I’m waiting for the bears to regroup and getting ready to go short again since the larger trend is still down.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.


Principle Analysis: Elliott Wave Principle and Automated Strategies (An Elliott Wave Blog)

24
Aug

Four Strong Dow Stocks Shattered by the Selloff (But Bouncing Back)

Until recently, four leading stocks in the Dow Jones Index were trending stably, comfortably higher and higher.

All that changed with the recent pullback and “Flash-Crash” style open this morning.

Let’s take a look at these charts and identify possible opportunities on the bounce-back.

We’ll start with Disney (DIS):

First, be sure to read my prior update:  “A Dynamic Drop for Strong Trender Disney DIS.”

Of the four strong trending stocks mentioned here, Disney (DIS) broke down ahead of the others, but the decline was still dramatic.

Share prices tumbled from above $ 120.00 per share to the current cluster support zone into $ 90.00.

That’s where buyers found opportunity and boosted the stock higher off this level this morning.

Shares now trade into the underside of $ 100.00 per share – a simple reference price.

Like a rubber band stretched much too far, stock prices can instantly snap-back with more financial pain than many traders can imagine.

Still, the pivot for Disney shares after the collapse is again the $ 100.00 per share gap and price level.

Home Depot (HD):

We recently congratulated Home Depot (HD) shares on a breakout and gap to all-time highs above $ 122.50.

That praise was short-lived as price tumbled two days down to the $ 115.00 level before collapsing in a “Flash Crash” event on Monday’s open.

Price crashed through to $ 92.50 per share before instantly regaining the $ 110.00 level which is just above the rising 200 day SMA.

Our critical bull/bear support pivot – and thus potential buy zone – for Home Depot shares is the $ 110.00 per share shelf.

Shares are likely to continue to tumble if under $ 110.00 or else rally higher to regain the losses if buyers can push price – and extend a short-squeeze – above $ 115.00 per share.

Nike (NKE):

Similarly, Nike (NKE) shares have consistently remained at the top of our “strong stocks getting stronger” scans.

However, negative divergences and distribution volume – along with reversal candle patterns into $ 118 – preceded the initial sell-swing to the rising 50 day EMA ($ 111) and the “dead cat bounce” back to $ 116 ahead of Friday’s collapse and Monday’s “Flash Crash.”

Like Home Depot (HD), share prices collapsed but recovered and rallied up away from the rising 200 day SMA which is just above the $ 100 per share simple confluence (reference).

Just as aggressively as sellers, buyers thrust price higher up away from $ 100.00 per share.

Note the bullish potential pathway higher toward $ 111.00 again.

Finally, United Health Group (UNH):

Somewhat similar to Home Depot (HD), UNH crept higher, pushed to new highs above $ 126.00, then collapsed down toward the range support low near $ 118.00 per share.

Today’s “Flash Crash” collapsed the price (at least momentarily) to $ 96.00 per share ahead of an instant recovery back above the rising 200 day SMA.

Our pivot reference points are $ 112.00 (price and 200 day SMA overlap) and the $ 118.00 prior rectangle support level.

These four stocks clearly caution us against complacency – there’s no place for complacency in the stock market.

We do expect “strong stocks to continue to get stronger,” but we also know that price can surprise us at any moment with volatile and violent moves like these.

These stocks were broken but they’re being rebuilt by buyers.

Focus on the key reference levels, the ongoing higher timeframe trends, and the behavior of price this week.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership 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

24
Aug

S&P Futures

Well that bullish triangle I proposed got scrapped quick.  The markets are in real trouble. We fell hard and closed in the lows Thursday and Friday, then today the S&Ps were down over 100 points in pre-market. We have been in a topping pattern for several months and so the rubber band has gotten real stretched and it now snapping back. Despite the market continuing lower in the foreseeable future, remember that the largest rallies have occurred in bear markets. So the bears need to be vigilant, use proper money management, and have strict discipline not to let greed over run your trading plan as those rallies will be fierce.

My target for S&P futures is the 1750-1770 area.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.


Principle Analysis: Elliott Wave Principle and Automated Strategies

21
Aug

Aug 21 Steep Selloff Market Update and Stock Scan

The Steep Stock Market Retracement continues with a breakdown under yet another support level (2,045) into a second impulsive trend-day type environment sell-off.

What levels are we focusing on now amid this large trend day? Let’s chart them:

Again, please take a moment to review the prior “What Two Breadth Charts are Saying about the S&P 500.”

Also, compare that with the real-time expected sell-off we’re seeing in today’s morning update: Weekly Chart Perspective of the Steep Stock Sell-Off

The 2,045 target only held price for a few hours yesterday, and the end-of-day breakdown set in motion today’s gap and downtrend continuation environment.

Price shattered the 2,000 index target, rallying initially higher – on positive divergences – at the 1,990 level.

It’s this level that we’ll once again focus on today – balancing the odds of a “bounce” rally (if above 2,000) or a continuation of this sell-off into a collapse environment (if under 1,990 and 1,980).

Receive daily updates, planning, and education by joining fellow members of the Afraid to Trade Premium Membership (before subscription prices rise).

Let’s see what our Breadth Chart reveals about current market strength (or weakness):

Like yesterday, we’re still seeing a strong confirmation of the bearish price action in the index as the market experiences a deep correction.

Utilities – along with Energy – top the market as the strongest Sector, but that’s only with 25% of stocks positive.

The bigger picture is that all sectors are extremely bearish and few stocks at all – 10% of the S&P 500 and 7% of the Dow Jones – are positive during today’s session.

Here are today’s strongest trending (intraday) names – candidates for pro-trend continuation:

NONE.  NO stock meets our criterion to be included today.

Bearish downtrending candidates include the following stocks from our “weakness” scan:

Deere & Co (DE), Ross Stores (ROST), Valero Energy (VLO), and Wells Fargo (WFC)

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership 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

20
Aug

Extreme Reward but High Risk for Leveraged Inverse Crude Oil DWTI and DTO

How would you like to buy a stock – or ETF – that tripled in value in less than two months?

Sounds impossible?  It’s not – that’s exactly what triple leveraged inverse fund DWTI did recently.

Shares of the ETN tripled from the $ 60.00 per share level to the breakout high above $ 180.00 today.

Let’s take a look at this monumental movement but also highlight the huge risk inherent in any double or triple ETF.

Here’s DWTI, the Triple Inverse (3x Short) Crude Oil ETN:

If oil moves up 1% in a day, the DWTI ETN (ETF) is calculated and balanced to return as close to -3% as possible.

And if oil moves down 1% in a day, the ETN “should” return close to a 3% price gain.

Because commodity prices tend to trend or move in one direction for a sustained period of time, this can quickly add up for those holding positions.

The reward can be large, as seen from December into January with a powerful movement up from $ 50.00 to $ 200 (quadrupling in two months) or the March 2015 movement from $ 100 to $ 180 in about two weeks.

That’s an extreme, powerful, and potentially large return for those who bought this fund into the downswing in the price of Crude Oil.

Of course, in the real world, you’re not going to buy the bottom and sell the high.

There’s another hidden reality to this golden profit machine and it’s the immense drop or collapse in price during even a modest (small) rally in the price of Crude Oil.

The lower chart plots $ WTIC – Crude Oil itself – with two yellow highlighted periods.

At the time when Crude Oil “only” moved up from the $ 45.00 level toward $ 50.00 per barrel, the price DWTI collapsed from $ 200 to $ 100, losing half its value in one week.

With great reward comes immense risk.

The exact same event happened in late March during a two-week period where price was slashed from $ 180.00 to $ 90.00 and then lower toward $ 60.00 in May (collapsing throughout April).

Keep this fact in mind when trading a position in double and triple leveraged – and especially leveraged inverse – funds.

However, we do note the tripling of price from July to present, surging from the $ 60.00 per share base to the current $ 180.00 high.

If your wish to trade these type of aggressive funds, seek to capture a piece of the big movement, NOT the entire movement.

Also, if the position starts to go against you (a buy position quickly becomes a loss), take the stop-loss and sell the position immediately.

DO NOT “Hold and Hope” that things will work out if you’re patient.

You expose your position to a literal melt-down if you’re on the wrong side of a double or triple leveraged fund.

Here’s a chart of a double inverse Crude Oil ETN – the PowerShares DTO:

Compare the double inverse leverage – moving up from the same $ 60.00 per share base toward (this time) the $ 120 level.

New traders should start with standard (no leverage) ETFs and ETNs and build experience from there.

Then try your hand and build experience with double leveraged funds if you desire more reward – with more risk.

Finally, with a track record of success – and an understanding of how these funds work – a trader can graduate to the triple and triple inverse world.

The alternative would be to use these funds as day-trading vehicles only, not as swing trading candidates.

Don’t be lured by out-sized gains – also be fully aware of the risk of any fund or stock you buy (or short-sell).

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership 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

© Copyright 2010-2015 Investing Advisers. All rights reserved.