So yesterday was a bit of a shakeup as I expected and mentioned last weekend. I expect a bit more in the coming few weeks. I had a short term SELL signal on the S&P yesterday and QQQ had it on the 29th. So some damage was done to the charts but I would expect a bit of a shakeup and not full on market drop. Likely retracement to about 2340 on my charts for S&P. Will be tightening stops on all trades to minimize losses and preserve profits.
2340 is a pretty good drop, well below the 100 day MA at about 2370. If you are right I think a lot of longs are going to be stopped out.
This is true. I expect volatility to pickup a bit. I will try to reevaluate this target this weekend. As expected market bounced a bit here. I made up most all of yesterday's losses today and no stops were triggered today. Still a short term SELL on my charts for S&P and QQQ but these could change. DIA is still not showing a sell signal. Many commodities took a hit this latter half of the week. We will see next week if the rotation continues as I outlined but I think that is what is likely to occur. We will likely see a bounce for short term oversold conditions in Gold and GDX as well as oil. So far GDX trade has been doing well and has made up most of my gains since the start of this Journal. I am seeing oversold signals on the hourly chart and expect a bounce up to about $22 on GDX next week. I will tighten my stops to a bit better than break even but expect to see about reloading on the short GDX trade if the charts look to roll over to the downside around that level. SRPT is curtly a slight loss but NSC and CENX are both still winnners. Both CENX and NSC seem to show signs of also wanting to bounce here. Both bounced off short term support. NSC happened to be about EMA 39 on hourly chart and CENX was around EMA 50 on the hourly chart. Trendlines drawn showed where this was likely to occur and made for good BUY opportunities. Unfortunately I am still at my max position on these and my stops were still where I kept them as described in prior posts so I could not add to those positions. For now will continue to tighten stops as close to break even as possible and see about adding to these positions or new ones as they materialize. Trade what you see, Eganon
Just a brief review of my trading for the last 2 weeks since start of Journal. So far so good. Since the first trade was placed on the Friday prior to starting the Journal we will start with 6-23-17, where the S&P closed at 2438.3 and today closed at 2425.18 for a net LOSS of 0.54% for last 2 weeks. This Journal has had a rise in account balance of nearly 2.62% in that interim. Nearly 1.80% comes from the short GDX trade but I am expecting a retracement and probable rise to nearly my short price. I do not like to take profits when I think the trade is heating up but this part is where things really test me in keeping with my trade while seeing the account balance dropping as there is a retracement. However, over the years I have learned (although not mastered) that I need to be patient and WAIT for the turn lower, tighten my stop and try to maximize my profit by staying with the trade. I will lower my stop (will update where to later this weekend) to minimize risk and hopefully add to this trade if given the chance but at that time my entire capital may already be allocated. I do use Margin on my trading but limit it to about 50% of capital since I feel I am rather conservative with my risk management. So in this account I may trade up to $150K on a $100K account. As far as the SRPT it is looking like it wants to turn higher again and I expect to become profitable on this soon. Stops raised to $32.27 Chart below shows the bounce at the trend line and around EMA 39. This trade so far is making up about 0.25% LOSS on the account. NSC had some retracement and also looking like its going higher again. I have a considerable amount into this trade as well but so far only accounts for 0.35% of the gain so far. Stop moved to $118.34 CENX accounts for a small but nice gain of 0.72% gain in the account. This trade is right at support on the trendlne (assuming its a correct trendline support) and EMA 39. We will see if this holds. Stop moved to $15.19 Despite the week we had with S&P and Nasdaq showing short term hourly SELL signals the weekly trend remains intact on the S&P but not on the Nasdaq. Again the DJIA is still showing strength and in fact the DJ Transportation Index made a NEW HIGH on 7-7-17. This should bode well for the market in general and my NSC trade. Given this I am currently looking for more DJ Transport opportunities on the long side. Trade what you see, Eganon
My TA shows more evidence of LIKELY continued volatility this week and mostly sideways or downward movement in the market in general. I think this again will shake out weak longs AND weak shorts. THEN,...I suspect we will see new highs later this month. See below for the TA reasons. Daily Transport chart was posted above with evidence of a recent breakout to the upside. Below is an hourly chart of the Transports showing we are at the upper end of a up trend channel and MACD above ZERO and rising but there is a slight BEARISH divergence (Blue line on MACD) This suggests a slightly higher move before a downward retracement of Transports and that the daily trend is not really in jeopardy unless this HOURLY trend channel is broken. So transports can drop ~2% to 9480ish without much chart damage to the trend. This is bullish for the overall market as transports are LIKELY to continue HIGHER. S&P HOURLY chart below shows the recent down ward move was noted by the BEARISH Divergence in MACD (falling Blue line starting back on June 5 while price went HIGHER until June 19). Notice now we have an early BULLISH divergence of the MACD line (small blue line rising since the lows of June 29). This is forming a narrowing wedge with the upper MACD falling blue trendline. This is suggesting there will be price compression in the coming week. HOWEVER, looking at the trendline (Green/Red channels) you can see price is on a downtrend recently since the recent high of 2450 on June 26. We are at the right edge of the downtrendline and would reasonably expect a drop from here or just above these levels with the Red and Blue trendlines on the price chart suggesting possible resistance (Red) and support levels (Blue). This matches the MACD price compression described above and what I think will likely happen this week,...price compression and volatility ranging from 2407 to 2428 or so. Price could also drop as low as 2390 and still maintain the downtrend. But I think we need a convincing break below 2390 for there to be any real damage to Daily and in particular weekly charts I follow. Otherwise I will consider such drops to be BUYING opportunities before breaking higher. I know many think the market has topped but I think there is an important rotation going on. I think we are getting a rotation out of high flying tech to value and financials and transports and many commodities except precious metals. Jury is still out on steel and copper in my opinion. IMHO, that's the reason for the sell off in tech/Nasdaq. I do NOT follow fundamentals or news BUT I think you would have to be a complete idiot to not recognize that interest rates are at near all time lows and are starting to rise. We have to see how these issues will impact our trading. Lets look at Bonds, and Interest rates,... TLT DAILY chart below shows a recent downtrend since the latter half of 2016 to Dec 2016. Then sideways action until March 2017 where an uptrend started up to a recent high of 128.31 on June 26 2017. Now notice that the uptrend has been broken. Also notice that the MACD line shows a trendline break JUST AFTER the recent high on June 26 and MACD is pointing down and about to break through ZERO. I have used this analogy in the past but this resembles a needle popping a ballon. If it is pointing directly at the ZERO line it is almost bound to POP the barrier (ZERO line) and when it approaches the ZERO line at a more shallow angle it often bounces and does not penetrate suggesting a good BUY. Here we have a POP setting up. My bet would be that TLT continues DOWN and below ZERO on MACD. It may have a slight retracement but I suspect we continue lower. This makes the most sense given RISING INTEREST rates. Also notice that the WEEKLY chart shows TLT MACD rolling over and about to also break below ZERO. This suggests a continuation of the weekly downtrend that started in July 2016 and momentum picking up to the downside and a downside target of TLT of about 115. $TNX and BAC are charts of the 10 year treasury Interest rates and Bank Of America. Notice that the MACD and price of each of these charts almost MIMICS one another. As interest rates are rising Banks are coming more in favor,...obvious synergistic relationship. This also MIRRORS almost EXACTLY the TLT chart over the last 12 months. As the TLT chart shows its curling and breaking DOWN on MACD and price was rising and now breaking down this is exactly opposite to the $TNX and BAC. (Yields are rising as Bond prices fall) Also notice that BAC has ALREADY BROKENOUT on WEEKLY chart. This suggests that TLT and $TNX are a little behind BAC chart but this adds more weight to my TA of the TLT and $TNX as being correct. Putting it all together,....as the bond bubble breaks down further interest rates rise. As interest rates rise BANKS come into favor. Rising interest rates also signal some inflation is starting,....inflation means rising prices in COMMODITIES. Transports are also breaking out. Stocks will rise as bonds break down. So there is not as much of a need for safe havens like Utilities or precious metals. Stocks in general will go UP despite the recent selloff which I think is simply a rotation. I suspect it will NOT be the 5% drop everyone is calling for but more like a 2.5% or LESS move down on S&P. I will be buying when this happens and adding to shorts of GDX. Trade what you see, Eganon
Also notice the forming Head and Shoulder top formation of the TLT,...also adding to the S&P continuing HIGHER analysis. We will see what happens.
I noticed you added the Stochastic Oscillator in a few of these. Thats new. Hey fwiw....All the hard work you put into the above posts is deeply appreciated.
Thanks Van Zandt. Not sure how much longer I will posting such detail or even at all on this Journal. When I was doing it I realize that it takes me about 8x longer than if I just do it for my own personal trading Journal. I will be taking a vacation mid week for the next 2 weeks so my posting will be rather minimal then. Will see in 2 weeks or so how correct my TA is. Trade what you see, Eganon