DIA
$IWM $RUT $TNA $TZA Small Caps About to Lead The Markets!While the large-cap stock indexes like the $SPY $SPX $QQQ $DIA have been running higher, they are now at resistance and should stall out or at least slowdown. Small-cap stocks have been building a base for a mega rally that could make the large-cap run look like chump change!
See more analysis on the small cap sector: www.thetechnicaltraders.com
Dow PennantCoiling... not sure which way this will break (depends on economic data and/or China news) but I got this feeling that it will hit the upper trend line first before it breaks up or down.
In other words, more whipsaw action
DIA IndecisionIndecision in the Market right now.
Bear Case:
*Multiple failed attempt to break resistance
*Head and Shoulder formation
*Broken wedge up
*Lack luster volume
*Bearish divergence on RSI
***Motivation for break lower : recession fears
Bull Case:
* 50 MA broke back above 200 MA
* Price holding above those two MAs
* Symmetrical Triangle engulfing the H&S (Larger pattern usually plays out)
* Possibly a bull flag forming (look at it in the weekly)
***Motivation for break higher : Trade deal
****Personally, I think we break lower... Let's talk about it!
VIDEO analysis on small cap stocks, bearish but at fib supportVIDEO analysis on small-cap stocks, bearish but at fib support for a bounce as of today
Small Cap Stocks lead broad market - This is bearishSmall Cap Stocks lead broad market - This is bearish
Chart does the talking
SPY Next Week Expected Moves ($52) + Gravity PointsLast week's call had me nervous for a second there. A very chaotic week, but I had several opportunities to put on a couple positions. Hats off to anyone who waited for that upper expected move. (two opportunities)
Large expansion for the expected move from last week to this week = expect volatility to pick up.
Couple quick notes:
- 10 yr / 3 mo yield inverted. You now are paid more to buy a 3 month bond than a 10 year bond. Fundamentally this makes no sense because you should be compensated for the additional risk of loaning your money for longer periods of time. Ill share some of my excel doc data of different yield curve pair inversions for the 10/3because it's so important:
---> 10 yr / 3 mo yield inversion time prior to next Recession: Average = 13 Months
---> S&P 500 Peak to start of recession percentage gain/loss: Average = -13.3% Median = -13.5% (Most losses happen prior to official recession)
---> S&P 500 percentage gain/loss during Recession: Average = -1.3% Median = 6.7%
---> Number of Months from Peak to Recession: Average = 8.7 months Median = 8.5 months
---> Number of Months in Recession: Average = 13.5 months Median = 10.7 months
---> Recession Start to S&P 500 Trough: Average = 8 months Median = 5.3 months
- Powell signaled to the market that the economy is weak
- Germany slowdown bad Friday morning manufacturing report
- China slowdown
- Brexit delated but nowhere near resolved
Best of luck next week gentlemen
- RH
P.S. Wish me luck on my Series 7 exam on Friday next week!
Small Cap Stocks with Bearish daily and weekly chartsThe Russell 2000 ETF continues to deliver critical technical and longer-term price patterns for skilled technicians. Combining the IWM chart with the Transportation Index, Oil, Gold, and others provide a very clear picture of what to expect in the immediate future.
Recently, we posted a research article about the Head-n-Shoulders pattern setting up in the $INDU. Again, the IWM chart is also showing a very clear Head-n-Shoulders pattern with critical resistance near $159.50 and support near $144.25. Our researchers, at Technical Traders Ltd., believe this right Shoulder will prompt a downside market move towards support near $144.25 before a downward sloping wedge pattern sets up. This first downward price leg will setup and congesting wedge formation that will, eventually, break to the upside and drive market prices higher.
We authored a research article about this pattern setup on February 17, 2019. You can read it here.
Skilled traders watch all the charts to assist them in identifying characteristics that can assist them in understanding price moves, key support/resistance levels, and price patterns. This IWM chart should be on everyone’s radar at the moment. Where the IWM finds support, so will the other US stock market indexes.
The IWM setup indicates we may only see a 5~7% downside price swing before support is found. We’ll have to watch how this plays out over the next few weeks/months to determine if the $144.25 level is true support or if the lower $137.00 level will become support. Either way, the downside price swing appears poised to unfold over the next few days/weeks – so be prepared.
Please take a minute to visit www.TheTechnicalTraders.com to learn how we can help you find and execute better trades in 2019. We have already positioned our clients for this move and we believe we can help you stay ahead of these markets.
Expected Moves ($33.50) + Gravity PointsPop and Drop likely. Target $2842.75 Gravity Point.
Next week is a positioning week. A bigger move is likely setting up in the following week. Take off / Put on Risk above and on that Gravity Point. Price must be firmly and immediately rejected, if price hops above $2842.75 and sits on top of it for a couple days the probability of profiting on a short trade diminish.
Good luck next week gentlemen
-RH
US Equities Show Decent Pullback PotentialIf we see some follow-through selling this week to break the first red dash support level it will spark the first high volume wave of selling and vix spike.
Reversal candles on the daily chart point to drop 19-21stReversal candles on the daily chart point to drop 19-21st could have followed through selling next week. Next three sessions are going to be critical...
US MAJORS COMBINED INDEX PAINT CLEAR PICTUREPrevious significant market top that formed a mini double top and drop looks to be happening again.
Monday we should see another gap down and continued follow-through selling, or at least next week which should create a spike in the vix as shown here: www.thetechnicaltraders.com
Market at critical support- likely to breakdown over time here.Yesterday the Russell 2K IWM broke down and tends to lead the broad market. Now let's see if the other indexes breakdown.
Topping pattern/candles starting to form as expected...SPY Stock market showing signs of reversing but still needs several more days to form top. But who will lead the decline and next rally? DOW or NASDAQ?
Here is an article talking about it.
SP:SPX AMEX:SPXS AMEX:SPXU NASDAQ:QQQ SQQQ AMEX:DIA SDOW UDOW
SP500 Should Stall out here for a quick correction OnlyThe big question is if the index can break and hold above this key pivot level. I feel it may test it more with pops and drops but a quick 3-5 day correction to shake traders out will unfold before the next real rally. Volume has been declining which means fewer traders/investors are willing to pay these higher prices. Once the momentum slows enough we should get this pullback and set us up for another long position.
The concept of “failure to fail” or “failure to succeed” continues to baffle many traders, investors, and researchers. If you break it down into the simplest terms, it means “you are absolutely correct” or “you are dead wrong”. The question then becomes, “do you have a plan of action for both of these potential outcomes?”. Keep this in mind as I continue posting future charts and I do talk more about it on my blog . AMEX:SPY DIA IWM QQQ
