Dow Jones BIG DECLINE?After my daily analysis of the DJIA, my analyses suggests that us30 is going to decline by 1.8-2% in the next 27hours
Tell me what you think down below..
Djia
Lateral Thinking, 9 Feb 2023🖼 Daily Technical Picture 📈
➤ Equities failed to keep the upward momentum. Today, it started lower and finished even lower. Despite that, the price action was not really meaningful. In technical speak, today was an example of an "inside" day, where all the price action was situated within the shadows of yesterday's large bullish bar. Therefore, we are none-the-wiser to what tomorrow brings.
➤ I hope through my daily communications with you, you are starting to get a better feel of my approach to trading. I'd like to think that I bring a form of lateral thinking. This is my trading edge afterall.
➤ That being said, I'm thinking quite literally that markets have a high chance of moving more laterally. Price is trapped around the resistance zone. So far, there is nothing specific in the price action that displays immediate signs of a trend reversal lower. It just looks like the market is biding it's time prior to making the decisive move. The more it trades side-ways, the greater the odds of the market moving higher.
➤ I hold a small short position.
➤ Conclusion: I hope my thinking is wrong.
DOW JONES Scalping range emerged and our medium-term plan.Dow Jones (DJI) got rejected yesterday following Powell's speech as the Resistance Zone of 34300 - 34370 held (August 16 and January 15 Highs respectively), we expect it to turn neutral for a while and trade sideways within the rough 33640 - 34180 Scalping Range illustrated on the chart.
The 4H MA50 (blue trend-line) has assumed the role of the Pivot and the 4H MA200 (orange trend-line) that of the Support. Our short-term trading plan is to scalp this range for as long as the price remains/ re-enters inside it. On the more medium-term, above the green Pivot Zone we are buyers targeting 34300, while below the Higher Lows trend-line we are sellers targeting 32700 (above the 32480 Support). Similarly, we will take the buy break-out if the price breaks the 34370 January 15 High and target the 34910 December 13 High.
Keep in mind that this Higher Lows trend-line is what helped us take this accurate buy entry 3 weeks ago as you can see on the chart below:
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Bulls Never Say Die, 8 Feb 2023🖼 Daily Technical Picture 📈
➤ Equities went full Bull mode today despite some intra-day volatility. It looks like it wants to surpass the recent high.
➤ There's really only one thing that could stop it and that is the super overextended nature of this Bullish move since the Oct 2022 bottom. Perhaps it is not really "stoppable". It may just be some lateral price movement to work off the exuberant enthusiasm prior to jumping higher.
➤ I am still holding my small short position until I get the exit signal to get out. For example, a daily close above the recent peak will definitely do that.
➤ Conclusion: Optimism may fade but it usually comes back. It rarely dies.
First Strike, 7 Feb 2023🖼 Daily Technical Picture 📈
➤ Equities opened lower and ended from where it started. The more speculate stocks selling off more than the Bluechips. This was sufficient to get me into the Bearish mode.
➤ S&P500 is now trading below the double resistance line. I see the potential for it to drop some more. I'm using a small amount of capital to take a short position.
➤ This is also the first "live" test trade for my volatility strategy. This test involves using real capital in real trading conditions but with a small portfolio allocation.
➤ The play book going forward was outlined yesterday: A short opportunity first. This then opens up the second set of opportunities offering the high conviction trades. Increasing short positions as price weakens further with continued selling pressure or reverse with long positions if Bulls come in and support the price to invalidate the short set-up.
➤ Conclusion: Back in the game.
I Smell Opportunity, 6 Feb 2023🖼 Daily Technical Picture 📈
➤ Equities are at an interesting juncture that should provide good trading opportunities. I can smell it.
➤ If we look at the $SPY chart of the S&P500 equity index, we can see that the price is in the midst of testing resistance levels. These resistance lines are probably the most solid since the start of the rally. I therefore foresee the chance that price may settle or retrace downwards from current levels.
➤ Friday price action was a great example. The price was "trapped" entirely between the confluence of key levels. The question is where does it go next?
➤ For me, I really don't know nor do I care. All I really care about is if it will provide trading opportunities long or short. I can see both scenarios playing out. Perhaps a short opportunity first. This then opens up the second set of opportunities offering the high conviction trades. Either prices weaken further with continued selling pressure or the Bulls come in and support the price to pump prices higher.
➤ Conclusion: I'm ready to play.
Bread & Butter, A+ Long SetupNFP or not, I am taking this setup every single time. This is my bread & butter with a very high hit rate. Aggressive plosions here all day with a respectful SL.
DJI - The Stock Market Enters Wave 5: Blow-Off Top Then CRASH!Although the sentiment is incredibly bearish and the world expects the stock market to underperform, it has left thin order books, low liquidity and volume, and an overly emotional state of the market. Considering how certain most analysts, traders, and investors are that a recession is already here, most are in cash, short, or sidelined. This state of the market will lead to FOMO and a rapid chase of prices higher in the most emotional and hated rally ever. It happens fast, sucking in people very late into the wave, and ultimately ends faster than they are prepared for. Many people will take on debt to buy more very close to the top. Just as sentiment switches back to ultra bullish, everyone will be blind enough for the real recession and markets will collapse. This is really how Elliott Wave works - it is a socio-economic phenomenon based on investor sentiment and human behavior.
I'm publishing to be able to look back and see if this trajectory was correct at all.
Apple misses earnings...now what?Apple has seen a massive reversal on earnings. A clear rejection off the 50 Weekly Moving Average has been observed.
The sin Curve of the major moving average is starting to slope down with force and looks poised to start the next down leg with this rejection.
Breaking Loose, 3rd Feb 2023🖼 Daily Technical Picture 📈
➤ ...almost but not yet. There are still some short-term resistance levels to surpass. However, the momentum is there. *After-hours sell-off as I write due to earning reports from Apple, Google etc.
➤ The Dow30 Bluechip stocks are really being left behind in this latter part of the rally. Or we could say the NASDAQ is just catching up on lost time. There is some sector rotation here and the rally is not all that uniform despite many commenting on the "strong" breadth i.e. wide participation of stocks in the rally.
➤ I'm expecting at least a pause in proceedings to work off the extreme overbought conditioins. I currently hold no position.
➤ Conclusion: This may be nearing the end of the short squeeze.
The Resistance, 2nd Feb 2023🖼 Daily Technical Picture 📈
➤ February started off with a bang as equity participants responded favourably to the US interest rate decision. Notable was the strong performance of the NASDAQ and the flat performance in the Bluechip Dow 30.
➤ Price in the S&P500 equity index has reached key resistance levels. It will be interesting to see how prices react. So far in after-hours trading prices have kept moving higher but this is generally unreliable.
➤ At these levels, the price is heavily overextended to the upside. Therefore I am not joining in the fun. The price can keep rising and defy gravity but usually this happens after setting all time highs. We are not in that situation. The higher probability is for some sort of retracement or sideways movement to ease out of the overbought zone.
➤ Conclusion: Waiting for better opportunities.
I'm a Skeptic, 1st Feb 2023🖼 Daily Technical Picture 📈
➤ Equities finished strongly to end an outstanding month. The enthusiasm is palpable, however, I'm a skeptic of market conditions for two reasons:
i) Many believe we are back in a bull market. I think this is pre-mature. A monthly close above 411.73 will change my mind. The market did not achieve this just yet. The current level of the S&P500 equity index is where it was in May 2022. The market has moved laterally. Furthermore, the move since the October 2022 low looks very laboured. It's not a fast rise, each step up is very small. It's not displaying the kind of strong buying with confidence.
ii) In the very short-term, I also don't like the way the price finished today. It may be a minor observation but I don't like to see a bullish bar finish below a recent high (27th Jan 2023). Why stop just short of the high and not exceed it?
➤ I closed my small long position to wait for the next opportunity.
➤ Conclusion: Back on the sideline but not for long.
DOW JONES A mix of patterns ahead of the Fed!The Dow Jones Industrial Average (DJI) has made a strong medium-term rise since our buy signal 12 days ago:
Still within the High Volatility region, hence neutral long-term, the price is rising today after finding Support within the 4H MA50 (blue trend-line) and 4H MA200 (orange trend-line). The medium-term pattern is a Triangle, the short-term a Channel Up.
However the price needs to break above the 2 day Channel Down (red) in order to test the top of the Triangle and if broken extend the Channel Up into the medium-term to test the 34910 December High.
A break below the Channel Up, should extend the red Channel Down towards the bottom of the Triangle again.
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Dow Jones needs a breakout before an entry kicks inConfused Triangle has formed on the Daily.
We are in the apex, so awaiting a breakout.
First 7>21>200 - Bullish
RSI >50 coming down (mixed)
Target up 36,288
Target down 31,559
This clearly shows the confusion with the index as well as the fundamentals with the uncertainty with interest and inflation rates.
The Fed is having a meeting tomorrow to discuss the macro aspects, which it looks like investors remain trepidatious.
I will be waiting for the breakout before making any rash decision.
The First Move, 31st January 2023🖼 Daily Technical Picture 📈
➤ After Friday's weak close, prices acted even weaker by a sharp fall on Monday. Well...not really a sharp fall...more of a standard-sized fall given the jump in volatility post 2021. In any case, the Bears have made the first move in this important week of economic announcements. What response will the Bulls have on interest rate decision day Tuesday?
➤ Remember, I would consider the Bear market over with a monthly close above 411.73 on the SPY monthly chart. Will it be achieved on the final day of January?
➤ The VIX has moved higher off the lows. It's not very convincing at the moment. Another heavy down day will change that narrative completely.
➤ I have entered a small LONG position given the technical set-up.
➤ Conclusion: Back in the action.
The Business End, 30th January 2023🖼 Daily Technical Picture 📈
➤ We've come to the end of January and it is going to be one of the busiest of the year. Interest rate decision, major earnings and key economic data combine. Add on to the important technical levels for the S&P500, you can see why we really are at the business end of things.
➤ There is time for the S&P500 to close above the monthly highs of recent months. That should cement the Bullish enthusiasm. If not, we will have to see if the market can do so at the end of February.
➤ Some selling came at the end of the session Friday. This may just be profit-taking but I can sense a certain hesitation since we are at key levels straddling 410 on the SPY.
➤ I currently hold no position.
➤ Conclusion: I'm hoping to get into the action with the expected volatility.
The Last Chance Saloon, 27th January 2023🖼 Daily Technical Picture 📈
➤ It turns the Bulls were not very exhausted after yesterday's recovery. Equities burst higher but not before filling the opening gap. This is a good sign that move higher is supported.
➤ For the Bears out there, it is the last chance to hold out. Price is approaching a very significant technical level. Please refer to my interpretation on the monthly chart (see related Ideas)
➤ The important level is the 410-411 resistance zone. This has been the graveyard for many a Bullish move. The ability to close above it on a monthly basis would be very meaningful. This is also the last chance for the VIX to hold it's key level.
➤ I currently hold no position.
➤ Conclusion: Don't get in the way of a Bull's run until it has run its race.
DOW JONES Time to test the December 13 High.Dow Jones (DJI) held the dashed Higher Lows trend-line and rebounded, as we outlined on our last week analysis:
That was on the 4H time-frame, now we zoom out to 1D where the index broke again above the 1D MA50 (blue trend-line) but after last weeks 34,390 rejection, it remains within the High Volatility region.
As long as the 1D candles close above the (dashed) Higher Lows trend-line, we are expecting not just a re-test of the 34300 August 16 High but also a direct hit on the 34910 December 13 High. The reason is that, as we mentioned last week, the current price action based on RSI terms, looks very similar to that of October 03 - 21.
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The Boy Who Cried Wolf, 26th January 2023🖼 Daily Technical Picture 📈
➤ Equities recovered after a very weak start to end the session flat. It was a case of the Boy Who Cried Wolf.
➤ This counts as the second time in recent days that equities has refused to fall when it ought have. The first cry was on 18th January. Despite the fall that day, equities recovered quickly unable to gain downside momentum. Today was the second cry but there was again no wolf.
➤ The price is still playing chicken with the 200-day moving average. Similar to what occurred during Nov/Dec 2022. Today, there was a lot of effort used to support the recovery. That recovery was only sufficient to break-even. Having spent all that energy, how much is there left in the tank?
➤ I currently hold no position.
➤ Conclusion: Fool me once, fool me twice...
A Pause, 25th January 2023🖼 Daily Technical Picture 📈
➤ Equities ended slightly weaker and traded in a narrow range (for once). There are a lot of games being played at the widely watched 200-day moving average that the S&P500 now sits.
➤ There's an overall contraction in the price swings in recent months due to the sideways moving market (since at least November 2022, stretching to May 2022). This flat-lining of movement is a process of building up energy for the next large directional move whatever that may be.
➤ Many people have observed the formation of the inverse head & shoulders chart pattern (a bullish formation). I'm not a big fan of these formations as they are unreliable but more so the construction of the current pattern looks "non-textbook" if I can put it politely.
➤ I currently hold no position.
➤ Conclusion: Pause in the action but not for long.
MrStocky
The Professional Loss Maker
$NDX looks better than $DJI, but it's no slouchPls see profile for more info
We limit data
as it's copy paste
We're cautiously bull $DJI, bit more on $NDX
But there's reasons:
#ECONOMY = TRASH
Tons of good lost jobs
Unemployment low but most BAD jobs & multiple jobs
#DJI RSI negative divergence (slight weakening)
#NDX RSI looks good & many green candles
$DIA $QQQ #QQQ #Stocks
A Trader's Dilemma, 24th January 2023🖼 Daily Technical Picture 📈
➤ Another bullish day. Price has reversed the recent weakness and set a new short-term high. Yet, I'm not buying into it right now. Why? Well it's not because of my fundamentally (misplaced?) bearish view. I don't trade on those views. I trade by reading the short-term technicals. I'm completely agnostic when it comes to being long or short.
➤ Today there is no trade because I am faced with a Trader's Dilemma and it's forcing a strong debate within.
➤ The price setup is NOT something I've seen from years past (at least 13yrs in my data). It looks very much like a bullish continuation in the short-term but with bearish overtones too. If I went bullish, I would be using a max. position size. If bearish, half size. So, what's the optimal decision? If I had to force a trade, I would be a buyer. That means using max. risk on an untested trade set-up. Perhaps reducing the trade size is better? That would mean giving up on large profits knowing I'm more likely to be right than wrong.
➤ I've made my decision and have decided to restrain myself in making the trade because this trade set-up is "novel". In cricketing terms, I'm letting the ball "pass through to the keeper" and ignoring my greed for making money. At the end of the day, I'm not "forced" to make the trade. I can choose to not play. There's always another opportunity with a better set-up.
➤ I currently hold no position.
➤ Conclusion: What would be your decision if faced with this situation?
Indices looking GOOD, pt 2 $NDXGood Morning!
👀 $NDX, made it clear it would not break 1st try
However, this is NOT the 1st!
$DJI maintains its PUMP, need HIGHER HIGH
#stocks are pumping, risk
$VIX stable over last week
$DIA $QQQ #NDX #DJIA
