DOW JONES Trading approach going into JuneDow Jones / DJI is trading inside a Channel Down pattern for more than a month.
The price is now under the 4hour MA50 and as long as it closes there, sell and target close to Support A at 32600.
A crossing (and candle closing) over the 4hour MA100 will be a short term buy signal targeting 33400 (top of the Channel Down).
A crossing (and candle closing) over the 4hour MA200 will be a long term buy signal targeting Resistance A at 34260.
Previous chart:
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"Bearly" Alive, 31 May 2023🖼 Daily Technical Picture 📈
➤ Bulls may have horns instead of FAANGS but it is just an effective weapon. By some measures the Bear market is over and the Bull market phase is in its infancy.
➤ For me, a strong monthly close in May above the February high is that confirmation. Such a close would reverse the downtrend on the monthly chart. A failure to do so will keep the Bears alive...barely.
➤ The only threat to the Bull market story is in the lack of breadth of stocks contributing to the rise of equities. A strong market is usually composed of multiple sectors leading the charge. Here we only have a very select group of mega tech stocks. To breathe new life into the Bearish narrative, the FAANG bubble needs to implode almost immediately along with the AI hype.
➤ I hold a small short position.
➤ Conclusion: 🐆 FAANGS are sharp.
EQUITY TREND:
⦿ Short-term (weeks) - UP
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
DJI looking for upside resumptionGood morning all!
I'll be breef as I the count kind of speaks for itself. It looks like we are ready to resume higher into wave 3 as we are looking at what appears to be a clear three wave move into wave 2.
It looks like TECH will be giving a break and VALUE will come back strong into sector rotation.
CHECK OUT my previous post on the NASDAQ which played out perfectly, let's see if this post will have the same faith.
Feel free to ASK me questions in the comments.
Enjoy the weekend and trade safe!
I've Got the Magic, 26 May 2023🖼 Daily Technical Picture 📈
"I've got the magic in me
Every time I touch that track, it turns into gold
Now everybody knows I've got the magic in me
When I hit the floor, the girls come snapping at me
Now everybody wants some crystal magic"
I'm borrowing those song lyrics by The Treblemakers from the Movie: Pitch Perfect.
➤ Equities did indeed gap higher to close the previous days' price gap and magically also closed the gap it created during today's open. Killing two birds (I mean gaps) with one stone.
➤ Nvidia's share price also played with the AI magic trick for a huge price gap of it's own. Will this gap get filled? I'm 💯% sure it will but not in one day.
➤ That being said, that bit of magic helped me out of my long position with a teeny tiny profit leaving behind a small short position. Price is setting up nicely for a Short move. If the price path that I imagine magically comes to fruition it should look something like this: Prices are re-testing the recent high by moving slightly up or down or sideways for a couple of more days prior to the real move lower.
➤ Conclusion: 🐆 I'm looking forward to seeing more magic tricks. 🪄
EQUITY TREND:
⦿ Short-term (weeks) - UP
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
Watch the Gap, 25 May 2023🖼 Daily Technical Picture 📈
➤ Equities gapped lower but found short-term support at the 410 level on the SPY. The VIX accelerated higher. In after-hours trading the price has bounced higher. It would be interesting to see if this is sustained until market open. It could lead to the filling of the gap and in doing so creating another gap. Are you following my gapping explanation? If not, look at the chart. You'll note there are a couple of other unfilled gaps lower as marked by the blue arrows. These tend to get filled over time.
➤ Without prior knowledge of the after hours bounce, from the naked eye it does look price wants to bounce higher given the combination of 1) hitting a support level 2) deceleration in the drop (reducing bar/candle size)
➤ I do favour the notion that the immediate gap should be filled. That will hopefully get me out of my long trade for a profit. If that is fulfilled, I'll be looking for a potential Short entry shortly after if things play out as expected.
➤ I remain positioned fairly neutral for now.
➤ Conclusion: 🐆 The favoured view is for price to straddle lower.
EQUITY TREND:
⦿ Short-term (weeks) - UP
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
DOW JONES: Hit the 1D MA200 after almost 2 months.Dow Jones touched today the 1D MA200 for the first time since March 29th, almost 2 months after the strong bullish break-out. The 1D timeframe is technically bearish (RSI = 38.438, MACD = -67.410, ADX = 30.240), indicating that we are approaching low enough levels to justify a long term buy. However we are only willing to open a buy position as long as the 1D candles close over the 1D MA200 and target R1 (TP = 33,600).
If a candle closes below the 1D MA200, we will open a sell and target the bottom of the dashed Channel Down (TP = 32,000). Once the 1D RSI gets oversold, we will again buy on the long term, aiming at the top of the seven month Channel Down (TP = 33,900).
Keep in mind that the 1D MA200 has held and provided excellent buy signals, three times and only once on March 9th it broke.
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D for Distribution, 24 May 2023🖼 Daily Technical Picture 📈
"D is for Down
Like the Market today
D is for Distribution
We are on our way"
➤ Equities fell back into the recent consolidation. As discussed in yesterday's note, the price action now favours the bearish view. Price tends to fall to the bottom of the range.
➤ Assuming we are in the Distribution phase, the path lower can be abrupt or staggered. The abrupt case sees prices shoot straight through and below the low of the consolidation. The speed that happens displays the urgency of Sellers.
➤ A staggered path will see re-tests with prices briefly bouncing higher along the way down. It normally starts with the re-test of the high of the range. Each time the re-test will fail and prices fall further. It is at a lower speed with less urgency.
➤ Given the narrow range of the consolidation, it would only require a couple of large down days to find the bottom of the range. I'm not expecting a slow grind whatever path the price takes.
➤ Interestingly, I have received a buy signal and this has been dutifully executed. It is a small position to play the "re-test". Incidentally this hedges out the pre-existing small short position. Overall the portfolio is fairly neutral.
➤ Conclusion: 🐆 The Distribution can only be confirmed after the fact. i.e. price breaks below the range and keeps falling. Anything before that is just conjecture.
EQUITY TREND:
⦿ Short-term (weeks) - UP
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
Weekly Update: The Triangle Count was Invalidated, Now What?Since the December lows of 3788 ES, I have been tracking a triangle pattern that would have reconciled higher in my target box for a larger B-wave. Readers can look at previous postings to see what I have been forecasting. Last week, SPX Futures breached the 4208.50 level. So, with that, the final micro target of an e-wave was invalidated and thus the triangle count abandoned.
With respect to a triangle pattern, two topics I continue to share with my members in our trading room is (1) Triangles are rare patterns, and (2) they typically invalidate between the D and the E wave, only to reveal a much simpler pattern. Yes, it is true price patterns can become complex when in the midst of a counter trend corrective rally or decline. However, I tend to keep my labeling simple rather than defaulting to the complex as many of these patterns tend to be viewed as simple zig zags in the rear-view mirror. That is what we have been presented with now that price has invalidated the more complex triangle pattern as featured above.
Here's where things get tricky.
For the Elliott Wave uninitiated, after an A and B waves you get…” Wait for it” …a C wave. Anyone who follows or practices Elliott Wave Analysis would agree when I say that a C-wave feels like a Crash when the reconciliation is to the downside, or a parabolic move when the trend is up. If you wish to challenge that my determination of that feel free to post your comments below.
I will admit in the short term, there appears to be some work to do to the upside for our A wave to equal our C wave higher. But here’s the most important piece of information I share with you today. With the breach of 4208.50 last week, I now have the minimum waves in place to consider this counter trend rally complete. However, as of the time of my authoring this weekly update, I have no immediate information that our upside pattern is complete. Let’s discuss what I expect now, and what clues we will see before such a “Crash Event” lower is underway.
My Expectation:
Let me start with the mathematical sweet spot for the counter trend price action to complete and reverse from. That price point is the .618% Fibonacci retracement level up at 4309.50. That would mean we have about only about 2.8% upside left to go from current levels.
However, the reasonable target area higher (above the .618% level at 4309.50) could extend at maximum to the price area of 4529. That is the .786% retracement level. In fact, prior to that level, price would have to exceed the 1.0 extension level higher at 4517. So, let’s assume that everything goes right with the Fed, Inflation, the Jobs Market, and Not to mention the debt ceiling…4529 would be the statistical anomaly for higher price action.
So, what’s my expectation higher: Provided we do not breach 4062.25 then I think it’s reasonable to expect 4309.50. Below 4062.50 and the possibility we are in our C-wave down to NEW LOWS, starts to get higher.
Disclaimer: If you have gotten this far in this post then you have read all of the above. Many of the comments I receive here on TradingView...are from people who scan my posts...but have a lot to comment on...al of which I address within the context of my posts.
Just like trading...reading is hard.
Best to all,
Chris
DOW JONES Emerging Bullish Cross may take it higher.Dow Jones (DJI) has broken above the former long-term Channel Down, hitting our previous upside target (see idea below) and is now forming a new pattern:
The new pattern is a Channel Up, which has been on a correction leg (blue channel down) since the 34270 High, similar to the one from December 01 to January 05. The 1D MA50 (blue trend-line) is supporting a loose Triangle pattern (dashed trend-lines), which above it targets Resistance 1. Our target is slightly lower at 34250.
The critical factor is on the 1D MACD, which is close to forming a Bullish Cross. Every MACD Bullish Cross under 0 in 2023 has been a major Buy Signal, and interestingly enough both have been formed while the price was consolidating within a Triangle.
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Hesistancy, 23 May 2023🖼 Daily Technical Picture 📈
➤ Yesterday I discussed the potential bullish narrative resulting from a "re-accumulation" phase. Today I'd like to explore the bearish narrative in the form of "distribution".
➤ Distribution is the result of Whales reducing or selling out of their previously accumulated positions. Obviously, they wish to get the best price when exiting. This can be done by drip-feeding sells as prices push higher. The last buyer is normally the retail investor who is late to the party. Once the initial rush of retail buying starts to dry up, a consolidation forms where the demand and supply is largely balanced. This is where Whales start unloading larger positions helping to keep a ceiling on the price.
➤ Looking at the current price action, we can either view it as a re-test of the breakout (bullish scenario) or it is "hesistancy" - hesitancy at the resistance (yes I made that word up). It may result in the price reversing back into the range (an "upthrust" action). This could signal the stage of the distribution phase at which Whales start dumping the remainder of their positions indiscriminantly as retail buyers dry up. The result is a quick cascading fall.
➤ This hesistancy has forced me out of my long position for a minor loss, one of the outcomes I outlined before. My trade signals can be very sensistive even to minute price movements. I hold a small remaining short position as part of the secondary strategy.
➤ Conclusion: 🐆 So is it accumulation or distribution?
EQUITY TREND:
⦿ Short-term (weeks) - UP
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
Textbook, 22 May 2023🖼 Daily Technical Picture 📈
➤ Due to unpopular demand there will be no more rhyme. I guess I will stick with Trading as my full-time job.
➤ We currently have a textbook re-test of the breakout above the recent consolidation in the S&P500. We will need to re-label the consolidation as a "re-accumulation" if it proves to be a bullish. Re-accumulation simply means that the Whales have been buying up while trying to shake loose Weak Hands. This is the only method for increasing their overall holding without moving prices higher (hence the ups and downs within the consolidation).
➤ That being said my secondary strategy has triggered a Short trade. This means we are partially hedged with a large bullish position and a minor bearish position. Remember, these are independent trades. Either both could be right or both wrong or split eachway. It just depends on how price evolves.
EQUITY TREND:
⦿ Short-term (weeks) - UP
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
#us30 will perform an enormous rally today from this point.Us30 will rally by about 680 points today from this point. If/when this pans out give me a like and a comment.
Breakout, 19 May 2023🖼 Daily Technical Picture 📈
"The market has broken out,
So has my trading drought,
We are back in the action,
Will we profit? That is the question."
➤ The colour theme of today's chart background is fire 🔥 because it looks like the equity market is red hot. Is the Bear market over? It's certainly pointing that way. 👆
➤ To be frank, I'm not a big fan of breakout trades. It probably worked very well during those times before I was born but these days there are more fakeouts. Price may either completely reverse or sometimes retrace the break. Both actions can result in an exit for a loss.
➤ If I lose, I guess I can always quit trading and make money through rhymes...Oh wait there's CHATGPT.
➤ I'm long with a large position
➤ Conclusion: 🐆 MrStocky the Sometime Trader, Rhymer of Words, King of Patience, Protector of Profit (but not yet the King of Copytrading)
EQUITY TREND:
⦿ Short-term (weeks) - UP
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
Averting Disaster, 18 May 2023🖼 Daily Technical Picture 📈
➤ S&P500 moved higher to the top of the range. It has been consolidating since 18th April. Wyckoff enthusiasts will note that we may be approaching the latter stages (Phase C). If I were to use a plane analogy, the plane is taxiing towards the runway ready for lift-off. The issue is that we aren't told if we are heading North or South.
➤ Consolidations are tricky to trade, especially if it is narrow (distance between top and bottom of the range. We got caught out at the start of this range with a -1.5% losing trade (early May) and we've been "lucky" to have averted further loss (so far). Yesterday, a Short trade almost materialised. If that had triggered, we would be sitting on a -2.5% (unrealised) loss.
➤ Furthermore, we would have been chopped to pieces if other trades were triggered earlier in this consolidation phase. In that sense, Non-Trades are just as important as actual Trades. Although Non-trades will not make you a profit, it does prevent you from making a loss.
➤ I highlight all this because I take managing risks very seriously. My nickname is the Professional Loss Maker. I am an expert at handling losses. Afterall, you don't want Amateurs to be handling explosives. 💣
➤ Conclusion: 🐆 MrStocky the Non-Trader.
EQUITY TREND:
⦿ Short-term (weeks) - NEUTRAL
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
DOW JONES: Inverse Head and Shoulders on 1W target 34,350.Dow Jones hit again the underlying Support which marked a low on January 16th. That was the Left Shoulder (LF) of a potential Inverse Head and Shoulders pattern and if it holds again, this one will be the Right Shoulder (RS). The 1W timeframe is technically neutral (RSI = 49.180, MACD = 258.440, ADX = 22.862), which makes it a solid buy opportunity on a two month perspective. Our target is the bottom of the R1 Zone (TP = 34,350).
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A Nose Hair Away, 17 May 2023🖼 Daily Technical Picture 📈
➤ S&P500 showed further signs of weakness. Can you guess which stocks prevented the true weakness from showing? We were a nose hair away from triggering a Short trade. In fact I had the order page ready on all my trading platforms. Perhaps we need to wait another day.
➤ To be truthful, I'm glad we haven't been in any trades these past week or so. If a trade(s) had triggered, we would have been chopped to pieces. This may be due to pure luck on our part but I'd like to think that my Strategy didn't trigger those trades to avoid this potential.
➤ It's a totally different story when it comes to individual stock trading. Here trade potential is vast. This is one of the benefits over index trading. Even with my short-list of just 33 stocks divided by the main sectors of the S&P500, I have found plenty of trades.
➤ Conclusion: 🐆 I can smell a Trade coming.
DOW JONES Death Cross on 4h after 3 months.Dow Jones posted its first Death Cross on the 4h timeframe since February 22th.
This should prepare us for more selling if Support (1) breaks.
Trading Plan:
1. Sell under Support (1).
2. Buy over the MA200 (4h).
Targets:
1. 32450 (Channel Down bottom).
2. 34500 (Megaphone top and Resistance 1).
Tips:
1. RSI (4h) is posting a price action indentical to the one on the start of the Megaphone.
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Notes:
Past trading plan:
DOW JONES Big Buy signal if it holds the 1D MA50Dow Jones (DJIA) has gone a long way since the efficient buy signal we gave exactly 2 months ago:
The index is right now testing the 1D MA50 (blue trend-line), which has closed 3 straight 1D candles above it and 4 since May 04. Since it broke below the Channel Up, going to the 1D MA200 (orange trend-line) and 32800 is possible but not as long as it keeps closing above the 1D MA50, which has been established as the short-term Support. Instead, as long as it does, we are bullish and targeting 34250.
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End of the End, 16 May 2023🖼 Daily Technical Picture 📈
➤ Daily range of the S&P500 is coiling tighter together, forming a symmetrical triangle pattern (▶︎). Can you see it? That means price is about to make a move. It's the end of the end.
➤ Symmetrical triangles are symmetrical for one reason, the price movement out of the triangle is a 50/50 toss of a coin, up or down. There is no edge to be obtained from guessing which direction it will go.
➤ So relax like I have been by chewing on some good ol' bamboo and wait for price to resolve itself. That is when the action starts.
➤ Conclusion: 🐆 Enter the beginning of the beginning.
P.S. For those of you following my Live Paper Testing (trading of individual stocks and multi-asset classes), take note that I'm shorting quite a number of stocks. Despite the market moving higher today most of those stocks fell. This reflects the funny market where a handful of mega tech stocks are holding up the index.
DJIA Expected To Recover From 32500-32800 areaThats a nice pattern on DJIA; five up and now three down underway, so ideally more gains will come, but after wave C down that is still missing. We may see a bounce later this week from around 32500-32800 area.
US 30 showing mixed signals - Waiting for break either wayWHICH WAY TO BREAK?
It's up to the market and for us to act accordingly.
There is an ascending Triangle that's clearly forming on the Daily.
And normally, with the higher lows and same highs, the bias is normally up.
If it breaks up the target will most likely hit 40,000.
My issue is the state of the world right now, which is probably wrong to think about as charts are charts.
But many main indices have been rattled with what's been happening (which I mention in many analyses before hand).
Also 21>7 and the price action is just not strong enough to break as of yet.
There are also conflicting signals with Nasdaq and SP500 which lead world indices.
I think my mind has been clouded with unnecessary information which needs to be corrected and humbled by the market.
But if the price breaks below the Ascending Triangle, the target will be 26,652
What do you think up or down?
Stalemate, 12 May 2023🖼 Daily Technical Picture 📈
➤ Equities are trading in a range within a range within another range in varying timeframes. It’s a stalemate. After the stalemate comes the party. I’m getting my outfit ready. 👗
➤ Although equities are in a stalemate, other asset classes are not. GOLD looks to be in the early stages of breaking lower. EURUSD is already on the way down. I’m looking at this from a short-term trade opportunity.
➤ If you have seen my trading history you will notice plenty of flat spots where I am not involved in the equity market like now. Periods like this don't last very long.
➤ Conclusion: 🐆 Don't miss out on the Party! 🎉
EQUITY TREND:
⦿ Short-term (weeks) - NEUTRAL
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
The Exception, 11 May 2023🖼 Daily Technical Picture 📈
➤ SeePI is out of the way and we are pretty much none-the-wiser. TLT representing long-term interest rates remain in a range and not giving anything away, equities is also trapped in a range. The only exception is the NASDAQ, it has broken above a trading range.
➤ Will it remain the exception? It may do as long as broad markets trade sideways or well supported. I doubt it will continue to outperform if markets begin to fall.
➤ In last week's daily note I talked about topping formations in the SPY in recent times. Currently, the price is testing the high. A failed test of the high (meaning we don't see a new high but a lower high) would be the likely trigger for a reasonably sized fall.
➤ Conclusion: 🐆 Stalking my prey...
EQUITY TREND:
⦿ Short-term (weeks) - NEUTRAL
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN
