Yes the previous reversal on the SharePlanner Reversal Indicator, which was a bearish one, did come to fruition, but it was one of the weakest three week pullbacks I have ever seen. 

The market barely gave up any ground, and over the course of the past three days, the bulls have managed to recover basically all of it. Coming up in June, there is a FOMC meeting where there is a good chance Yellen will raise rates again. Last time she did this the market was strong all the way up until she raised rates, and afterwards was when the market completely fell apart. I would not be surprised if a similar scenario unfolded yet again where we rally hard, get the bullish reversal on the SPRI, and then once the statement comes out and rates are raised, that we see another sell-off.

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Technical Outlook:

  • great gatsby stock marketMassive, and very unexpected rally yesterday. The 5, 10, 20, and 50-day moving averages were smashed as if they didn't even exist. 
  • The biggest issue at hand here is that the bulls could violate and nullify the head and shoulders pattern by having price break above the right shoulder at 2084. 
  • The longer-term head and shoulders pattern on the weekly chart going back two years would be nullified on a move back above 2116. 
  • There is a lot at play here and a lot of potential to change the scope and shape of the market should this market continue rallying higher. 
  • With the choppiness this market has experienced over the last two years, there are a lot of conflicting patterns that have emerged. As crazy as it sounds, SPX going back to November of last year, has formed an inverse head and shoulders, though it is a very sloppy one. 
  • Volume rebounded on SPY yesterday as it it jumped back to average levels after previously hitting yearly lows yesterday. 
  • Downward channel on the 30 minute chart and also seen on the daily chart was broken yesterday. As a result a higher-high was established. 
  • Favorable inventory report on oil suggests that oil could break $50 today, particularly if the 10:30 petroleum report is favorable. 
  • 2040-2138 price range on SPX continues to show just how difficult this price range is for trading, and over the last two years the price action has spent its time trading in it. 
  • VIX continues to struggle with a break over 16.40. It is a massive resistance level that is still a problem to any sustained downward momentum. 
  • It goes without saying that the two day price range that stocks were stuck in on the 5 minute chart between 2048 and 2055 was smashed at the open yesterday. 
  • Follow through is absolutely key today for the bulls. So much lately has resulted in next day reversals. A close higher today, would challenge that notion as SPX has closed down/up/down/up for eight straight sessions. 
  • The 50-week and 100-week moving average have crossed two weeks ago to the downside. Last time this happened was 2001 before the tech correction and again in June 2008 before the mortgage crisis saw its major correction. 
  • I believe at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run - the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important. 
  • Historically the May through October time frame is much weaker than the rest of the year.

My Trades:

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The profits continue to increase in May - Don't let the month waste away without at least signing up for a Free 7-Day Trial to the SharePlanner Splash Zone! With your membership, you will get each and every trade that I make with real-time text and email alerts (international too) as well as access to my chat-room that I trade in each day. Click Here to try it for Free!.

Here's your swing-trading watch-list:

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No doubt about it, this market has become a full-fledged, Rick James, Super-Freak.

stock market super freakThe S&P 500 sells off for three straight weeks, and in one day, with one rally, the S&P 500  wipes out 2/3's of those losses. 

I can't explain it, I just embrace it. I was short coming into the morning, I am now long. I don't question it, I won't mope around, I won't break  a keyboard over it. 

Nope! Instead I just accept the market for what it is, and buy stocks as a result

If you stand around complaining about what the market isn't doing or what you think it should be doing, then you are likely to see opportunity pass you buy. 

Don't Let It!!!

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I feel like this post is entirely inappropriate considering the current state of the market today, where it happens to be rallying in a manner no one foresaw at the close yesterday. 

Even so, we've seen how many reversals this market has experienced the following day, and if tomorrow doesn't follow through on today's gains, we may be setting up for the same thing again. 

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Technical Outlook:

  • Extremely dull price action that only saw a trading range between 2048 and 2055 and when it finally started to move at the close yesterday, did nothing but close at the lower end of the range at 2048. stocks lack enthusiasm
  • Price action in the pre-market looks to take price to the upper end of the trading range from most of the past two days. However, it will not represent any technical improvements. 
  • Following a significant rally off of the February lows, SPX could be forming a massive bull flag. A break above 2065 would signify a push above and out of the bull flag and declining channel. 
  • So there are two scenarios to consider 1) Bull flag as I just mentioned, and 2) Head and shoulders pattern on the daily chart formed over the last two months. 
  • SPX still trading above the 5-day declining, moving average, but still below the 10, 20 and 50-day moving averages - all of which has converged together. 
  • Unable to establish a higher-high on the 30 minute chart of SPX, though today's pre-market strength suggests it will attempt to do so again. 
  • At the expense of sounding like a broken record, a break and close below of the 2039 price level will effectively confirm the head and shoulders pattern on the daily chart. 
  • VIX finished higher yesterday by 4.1% and still range bound. A push above 16.40 would change that. Though like yesterday, each time it tests the level, it immediately sells off. 
  • Volume on SPY yesterday fell off a cliff and came in well below average and the lowest volume reading of 2016 and just barely above the volume we saw on Christmas Eve (which was also a 1/2 day of trading and would have had more volume had it been open a full day). 
  • SPX is trading inside of a well defined channel on the daily off of the April highs. Currently the declining resistance is at 2065.
  • The moving averages are all converging on current price action which is a sign of a market that hasn't moved any where in a couple of months. 
  • The last two times we saw this happen, a massive sell-off ensued (last August and December/January). 
  • From 2040 to 2138 - you have a price range that is insanely choppy and continues to be such. 
  • The 50-week and 100-week moving average have crossed two weeks ago to the downside. Last time this happened was 2001 before the tech correction and again in June 2008 before the mortgage crisis saw its major correction. 
  • I believe at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run - the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important. 
  • Historically the May through October time frame is much weaker than the rest of the year.

My Trades:

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The profits continue to increase in May - Don't let the month waste away without at least signing up for a Free 7-Day Trial to the SharePlanner Splash Zone! With your membership, you will get each and every trade that I make with real-time text and email alerts (international too) as well as access to my chat-room that I trade in each day. Click Here to try it for Free!.

Here's your swing-trading watch-list:

Short Rockwell Automation (ROK)

rok-1

Short Trimble Navigation (TRMB)

trmb-1

Short Aecom Technology (ACM)

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If you've been following this market over the last two trading sessions there are probably a millions things that you can think of that would be more productive than watching the current state of price action. stock trading rules of engagement

  • Watching grass grow
  • Watching paint dry
  • Watching Jim Cramer

- No wait, no....I don't wish Jim Cramer on anybody. 

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oil-05

Is it a top in oil? 

Maybe. 

Maybe not. 

What I do know is that USO (United States Oil Fund for those wondering) is having a horrible time trying to push through the 200-day moving average. If you look, at the weekly chart, this commodity has surged higher and since the February bottoms, and hardly hindered at all. Not until the daily chart met the 200-day MA. 

And so far the moving average is winning. The last six trading sessions has seen oil unable to break through it. 

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You get the feeling that today is going to be yet another one of those trading sessions that you say to yourself, "I wish I could get back those 6.5 hours of trading!"

Since the early ramp Friday morning, the market has been insanely dull and boring and today is doing little to change that if not exasperating the problem. 

I've added one additional short position and I'm not inclined to add anything else at this moment. I don't have any current plans to add any long positions either. 

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