AKS analysis. I’m bearish. Also I meant SBUX not AMZN in the previous post.
TA for AKS
It has been a long time since I’ve done any analysis or watched the markets. I can’t believe it’s already November.
Anyway I sat down for the first time in ages and spent a little time looking at some charts. A few surprises in there, and some decent looking charts. It feels like it’s going to take me a while to get my eye back in and to regain familiarity with trading.
Been looking at these anyway:
Bear flag on GT
Flag into heavy resistance on declining volume on MON
Predicted consolidation/low vol drop to $48 before breakout to new highs +$50 on NEM
AMZN is also approaching strong overhead resistance at $21 with strong buying pressure.
Trading is the only thing I have a genuine passion for.
Spent the past 4/5 weeks moving house and job hunting. Had 2 interviews this past week for different segments of Schlumberger (SLB), but didn’t get either. Pretty gutted because I really wanted the Field Specialist position.
Will begin spending a little more time on the blog in the coming weeks, once I have sorted out the new house/internet/career – just don’t have much time at the moment for trading or technical analysis.
Does gold have the plums to get over and above 1000 an ounce before the end of the week. We have seen a few intra-day spikes over this level in the past couple of years, but it never lasts.
Gold bug
If the indices and economy plummet or pullback significantly, gold will get the run over this price. There have been a lot of ads on the TV these past 2 weeks with companies asking you to send in “any gold, jewelry or broken jewelry etc for CASH!”. You would be a fool to do this right now.
Well it looks like the stats spreadsheet I had been working on the past 2 weeks was actually a pretty useful tool. Nice prediction of this sell off here. The most important lesson from a technical perspective during this time was the whipsaw consolidation period in the S&P. The spreadsheet pointed towards a drop from the range, which it did. During the same day the market rocked out all day, with a surge above the same range the following day.
The surge north was on very small volume. Here is the chart, and I feel it could be useful in the future to determine the top/bottom of trends.
About time too
I would be more satisfied should we close below 100 2 days running.
Charts that looked interesting on Monday night were: CPB, WY, CX, PCP, AA, CMI, EMC, WHR, MRVL, DAL, CHL, CBS, TWC, WAG & LVS.
EMC, WHR & DAL remain interesting. I am reminded yet again of just how straight forward the smaller airline trades are just now from a technical perspective (JBLU and DAL).
Strong consolidation range
DAL double bottomed off the 50ema (daily) at support range for a wonderful 3 day candlestick pattern
On the EMC chart, I am watching the $15.40 level which has been prior resistance and is now being tested as a double bottom on the 30min/20day. The breakout was on strong volume, and the trading has been light the past 2 sessions with a small range.
Inversely, WHR broke out nicely, hit a nice first time retest at $62 but has not dropped below and is testing that price as resistance with a nice bear flag pattern. The volume is light, and a break below $60.50 would be another nice area to catch a short.
Decided to get back to paper trading to keep my mind sharp. Two fake outs from the trading range in the past 7 hours. Why is everyone trading when the market is such a chop-fest!?
Yesterday was an absolute chop-fest. Really dull and indecisive day for the first time in a while. Pre-market the futures are up 2 points at 1028.75. I’m not really planning on any trades until the following range in SPY has been breached to either side of $102.50-$104. Statistically, yesterday was really weak and was comparable with August 20th in terms of my stats spreadsheet. I have noticed a bit of a pattern at the moment, highlighted by the following diagram:
Set to rip today?
Leading days of the 19th and 25th have similar stats; Adv/Dec, ratio, average percentage of DV total, similar R values, similar Up >AR matrix values. The Av% sector values were slightly stronger on the 25th.
The 20th and 25th shares similar statistics, however the main difference is that the market was up about a percent on the 20th, while barely staying afloat yesterday. Again the ratios and matrices are similar here. Elsewhere, look at how weak the materials have been relative to everything else lately, one day of top 2 performance.
The 21st was a strong day all round and has been the best performing day since I started keeping these stats. If all the stats in the leading days are similar, then technically today should be pretty bullish. HOWEVER, like I keep saying; in this market, what ever you think is going to happen – take the opposite side. Therefore I am bearish leading into today but will not be surprised with a bull rally. The short term range breakout in the SPY should point to where we are heading.
Elsewhere, I am going to have a bit of a cull on the overall watchlist. Every day I keep finding another 5-10 setups to add to my daily shortlist. It’s really better for me to concentrate on a list of about 10 all up premium setups instead. Exposure to tickers has been good for me, but I am looking firstly to narrow the list to about 150 before figuring out where I am best at making the trades.
Speaking of “more setups”, keep a note on AMAT at $14 resistance, LUV setting up nicely on the daily chart in a similar way to FE. I am waiting for WAG to pullback to the $32 mark (although I think we’ve missed this one), ITW at $42 & EMR to start forming a bull flag. See what I mean about too many setups to monitor?
Checking the past 10 days of relative strength, I have noticed that healthcare and utilities have performed the best. If this is such a bullish rally, then why are defensive stocks outperforming financials etc? In the shorter timeframe, materials have been hammered the last 3 sessions as consumer, industrial and financials begin to wane.
Up or Down?
It is interesting to overlay the stats spreadsheet colour system atop the 10 day relative strength. Would be more useful if this were done for each specific sector instead.
Charts and intra-day stuff to follow once market open. /ES now only up 0.25 points before opening in 20 minutes.
Update 09:48US
Futures down 4.5 points in somewhat predictable fashion. SPY right at the bottom of the range here at 102.50 so expecting a bounce here (to coincide with time of day).
JBLU featuring my favourite short term trading pattern (ascending wedge):
Easy trading
Update 10:00 US
We have slipped out of the short term trading range in SPY and are looking very bearish across the board. Market top as indicated by contrarianism.
Update 12:00 US
There is absolutely sweet F all volume in this bounce – again.
I’m really hacked off with trading right now. Last 3 trades in the red, including yet ANOTHER tos limit order issue and a horrendous trade in RDS. The market maker on this stock has been taking the mickey for the past 2 hours, I even recorded it with camtasia with intent to post on here. It was just like FTSE stocks used to me. He’d narrow the spread to a cent, get a few, then widen it up to 15 cents at points – as soon as someone filled at market he’d move it the other way and lock it back into 1 cent. I shouldn’t blame anyone or anything for the errors and I take full responsibility for my trading, but something else has happened in the past few days in terms of motivation. Lately it seems (RDS, RTN, ITUB, ERTS) that every time I get into a trade with a nice chart, it goes nuts and just chops around.
I was well pumped last week and enjoying the trading, but this week I just haven’t gotten into the swing of things, and spending day after day in front of a computer (11am-10pm UK time) grinding out tiny winners with a micro account just isn’t satisfying. Particularly when you consider the amount of work I have to put into it. Neither is the fact that 2.5 months after finishing a college course, I still cannot even get an interview because EVERY company around here has a recruitment freeze on at all levels. All of this is having a seriously negative effect on my positivity, and trading is impossible when your not mentally in the game.
Anyway the markets are just ripping at lunchtime at the moment on the back of zero volume, and it’s almost impossible to trade when it acts like this. Especially when the participation by the big movers is minimal and particularly when were are testing overhead right now. I don’t have a clue where these markets are heading and nobody else does either. But some people are just being straight up retarded with this action right now (ie sales data yesterday).
Anyway with the last 3 trades being negative, these have negated all the gains of my previous 5 successful trades. The ITUB one is just an absolute killer. I knew the bounce yesterday was total BS, but you can’t change your stop level – ever. Anyway the stock went back down to Yesterdays lows on a weak double bottom. About the only stock doing what it should at the moment is JBLU which itself if pretty much a junk stock.
My main issue is lack of capital. I can only have 1 or 2 trades open at any one time (and also the 3 trade rule), and all too often I am simply picking the wrong trades. If I could have 4-6 open at any one time, I would be absolutely owning this market right now and be much more capable of absorbing these small losses.
For this reason I’ve decided to stop actively trading until I work up to save the $25k required to day trade. I estimate this will probably take 3-5 years so let’s hope there is still a market then. I will try out ideas on the paper system at TOS just to keep the trading brain oiled, but until I have saved up $25k, this blog will be pretty sparse in reading material.
Happy trading.
Stats from yesterday:
Tuesday stats
There were a lot of stocks making new “10 month” highs yesterday, which for me really isn’t that encouraging. I would much rather see 12 month highs and good strength. The numbers show some strength, but underneath the stats above I am seeing a bit of weakness and indecision particularly in techs and financials which have been fuelling the fire lately. Services and consumer were strong yesterday on the back of consumer spending.
As the market grinds to new highs it is interesting to note that yesterdays participation was significantly weaker than the up days on the 19th and 21st. The ranges in a list of 10 stocks I keep advanced stats on were insightful: higher on materials on the drop (all with increased dollar volume too), narrower in financials (also with shorter DV) and much lower in techs.
Interesting DV action in these stocks at the moment:
Dollar Volume changes of note
WAG, EXC, HD, ITW, EMR, ITUB, OI and NKE looking interesting going into today, but I will continue to monitor my core list of swing stocks from this weeks Crystal Balling post. Market about to open up with futures up 1.75 points at the moment. Charts will actually follow today (got sidetracked yesterday with physio and football).
Update 10:45 US
This market is a total chop fest this morning. Very weak looking opening before home sales and oil numbers causing a big hard bounce on small volume for most stocks before the market started to stall. Same thing happened today with these numbers as the consumer confidence numbers yesterday. At the moment there seems to be no bad news, and when all the news is good and the market either edges up slightly or sells a little; imagine what will happen when some bad news hits the screens?
Statistically, yesterday was pretty poor and that showed in the opening. Breadth was bad until the numbers came out. Good job I don’t trade oil at all as I would have been chopped up.
Airlines have been performing well the past few sessions, but I spied this on JBLU:
Bearish wedge on JBLU
My RTN and ERTS trades cancelled each other out yesterday. Covered ERTS by accident on a planned “make it and take it lower” limit order. I stopped out on RTN for a small hit after the sector showed relative weakness. Good exit on RTN as it has been dumping since. Bit peeved on ERTS but c’est la vie.
I’m short ITUB, was up nicely this morning and was all going to plan until the spike in the markets. I was stopped out flat for a half and continue to hold a half position short at $18.82. The setup was from this:
ITUB short
I was actually planning to short this yesterday at $19.30 yesterday, but I had to leave for a physio appointment at 1700BST. Double top forming with negative divergence with little buying demand. Secondary pattern of ascending wedge was broken this morning at the open where I shorted. Realistically looking for someting around $17.50.
$18.60 is a short term support level as shown by the candlestick formation and former flag breakout last week.
I like this bounce on declining volume, and the divergence continues to be negative. Let’s see if this starts to show some weakness.
Industrials are the weakest sector by quite a bit today.
Update 19:20 US
This JBLU trade was so implied it wasn’t even funny. Ultra high probability trade. Time to cover half.
Trades do not get easier than this
NYSE breadth today
NYSE breadth has been weakening since the “oh wow it’s summer and people buy houses in summer so new home sales are up wow what a shock” news earlier in the day.
Futures up nicely with 30 mins before the open, however I’m expecting these to pullback a few points to the 1022-1026 range (currently 1032). Slightly higher open from what I can see in the financials. Today I will be managing my trades in RTN (long) and ERTS (short) while also watching the rest of the stocks on this weeks watchlist.
Elsewhere on my larger tracklist, VALE and PX look quite interesting. Vale with fairly strong overhead at $21 with support levels at $20.40 and $20. Check the daily and 15min charts on that one.
PX is looking very choppy at $79 and I’m waiting for a sell-off or breakout here.
In the shorter timeframe, BTU at $36 and MEE at $40 are also catching my eye, so I will be watching the materials and coal sectors today. Let’s also see if the short term double top in MOS pans out. Charts and intra-day analysis to follow after market opens.
Excellent day on Friday, here are the end of day statistics. All sectors rocking out on nice volume.
Friday statistics
Lots of things on my radar for next week in terms of setups, the majority of which are bullish. Mostly based on the daily and 15min charts, so check the one I don’t include for another perspective if any of the tickers catch your eye:
| ITUB | MOS | CAKE | ERTS | MEE | CAG |
| DIS | OI | CSX | RTN | KMB |
MOS:
Short term ascending triangle with overhead resistance in the $55.50 region. Full moving average support, however Friday formed an indecisive candlestick with the stock down 0.02% on the highest dollar volume of the week. I will be watching this for a breakout or retracement after breakout and don’t intend to short.
DIS:
Since the March recovery, Disney has performed well with two nice continuation patterns. At the close on Friday, Disney is on the verge of a breakout from the third consolidation range in what is a very similar setup to what happened in April.
Disney range
Quadruple bottom support with triple top resistance ($25 and $28). Nice range trading here, however the volume has been strong the past few days and I anticipate a breakout. Full MA support
CAKE:
Looking for continued strength in CAKE this week which has the early signs of a breakout. Psychological resistance area of $20 is an area to watch this week, pullback to $18.50 would be a a good RRR trade.
Cheesecake up 6%
ERTS:
Bad earnings in sector shoving EA down. Classic bear flag formation at the moment with a small bounce on tiny buying pressure. Similarly to CAKE, ERTS has tested the $20 level as resistance (prior support) and looking frim.
EA games; challenged by everything
No real support until $17.50. Another nice RRR trade if you get short above $19.75.
MEE:
Looking for a breakout from a nice resting period following a nice rally on the daily chart. On the half hour chart there are a few key levels worth watching. $30.50 (res), $27 (sup), $29.50 (short term sup) and also the two way support line (dashed blue).
MEE looking to rock or drop
My only concern that volume has been fairly light on the most recent rally. For what it’s worth, the divergence at the top at $30.50 is positive, however MEE did not break to new highs with the market on Friday and might show weakness on an average day for the broader market as materials stocks are now beginning to show percentage performance parity with the S&P 500 (check relative strength chart).
CAG:
Check the 15min chart on CAG and you’ll see a nice breakout from the $19.8 level with a close above $20 on increasing dollar volume levels. I would normally like the long setup here, but by close on Friday, CAG had more or less closed the gap from a year ago. On top of that the daily chart is forming an ascending wedge. Should the market begin to show any weakness at the start of next week, CAG could be a good short candidate. This one could go either way, and as such is a nice stock to be watching.
OI:
A close above $35 could see some movement in OI to the $37.50 region. Divergence is positive. Check the next chart of CSX for the same type of setup.
CSX:
Another consolidation range breakout potential chart. Volume not overly impressive lately. Support at $42.50 and a close above the $45 region means there could be another few dollars here. No major overhead until $50.
Let's talk about csx
RTN:
RTN is one of those stocks that shows little emotion at support and resistance levels. The wicking is minimal (like at DIS at the moment), and the levels hold or reject very well. A nice volume breakout on RTN occured on Friday which caught my attention. Yes, these consolidation breakout plays are the flavour of the week it seems, but RTN is the nicest for me.
Clinical
$48 if you can get it (or under $48.25) would be a spectacular entry for a RRR trade with technical price targets at $50 (which is also psych overhead) and $52. I really like the probability on this setup.
KMB:
There are only so many charts of consolidation breakouts you can publish in one post!
Relative sector strength over the past 20 days:
Mighty financials
Economic calendar for next week from Briefing.com:
Sup next week
Should be some good trading next week, here’s something for the weekend:
| ITUB | RTN | OI |
| DIS | MEE | ERTS |
| CAKE | KMB | CSX |
| MOS | CAG |
