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Look out belowI don't always look at the weekly (I'm generally too impatient), but today... I took some time back testing one of the public libraries favorite strategy. I noticed that we haven't touched the lower band since 2008 then again in 2002. Its pretty obvious why- we've been in a crazy non stop rally since the market crash of 2008, but still. HISTORY REPEATS ITSELF. I know it's quite impossible to predict the next crash, but damn if any chart could convince it was going to happen, it'd be this one. Take a look.
CME_MINI:ES1!
by TradeAgainstDaMachine
Dow Theory - DJIA and DJTA Clash to Signal Bearish Future*Yellow = 200 EMA | Blue = 100 EMA This video goes over the divergence between the DJ:DJI and DJ:DJT . Currently, the DJIA is trending upwards, setting new highs, and lows. However, contrary to this movement, the DJTA is moving downwards heading towards a trendline shown in the video, but could very easily break through that trendline. Why do I care? In 1929, several months before the flash crash and the official start of the Great Depression, divergence indicated by Dow Theory helped forecast bearish price action. This is outlined in the Intelligent Investor . Part of Dow Theory states that if either the DJIA or DJTA starts moving in a direction in contradiction of the other, the index whose movement has not yet transitioned will begin to do so. In this case, that means that the DJIA should start to trend further downward. On the weekly charts of both indices, the RSI shows obvious bearish divergence moving in confluence with the hypothesis presented by Dow Theory. This could mean short term breaks of trendlines and longer-term moves to lower supports around 21 000 - 22 000 price range for the DJIA or lower. Internationally, we've seen global growth in regard to Europe (eg. Germany's poor GDP report), China's poor manufacturing, the inverted yield curve, and greater bearish sentiment as a product of Trump and his trade war. These factors along with this analysis indicate looming bearish movement, but also the potential to BUY more stocks as they become cheaper and become bargains. Good Luck Traders!
DJ:DJIShort
by olympus_trading
4
S&P Next Week Trade Plan: Expected Move ($41) & Gravity PointsWelcome to Earnings Season! Google and Amazon report earnings on the 25th after the market. Both will highly influence Friday's trading session. Expected Move for the week is $41.25 +/- which is a 25% increase w/w of the expected move so put on your seatbelt. Netflix missed horribly. Fed cutting interest rates will be negative for the financials XLF. We broke through the bottom of last week's expected move so I colored it from Orange to Red to represent that. I have a buy target if we end up overshooting this week's expected move and falling all the way to our longstanding Gravity Point . It looks like the smallcaps and transports are a bad day or two away from breaking down The SPX is dangerously extended above all of its moving averages. Gold bugs watch Silver for confirmation. If you want to watch Google getting relentlessly spanked here's the link; www.youtube.com Last Week's Post: Best of luck next week gentlemen - RH
CME_MINI:ES1!Short
by RHTrading
Next Week Expected Move ($32) and Gravity Points + ExtraThink we're going into a melt up. Powell all but confirmed a rate cut. Last week I mentioned watching Bonds closely, and that played out well. I've had a long term target from 2017 coming into play here, we'll see what happens and if technicals remain relevant over longer time frames. Earnings next week can shift the narrative either direction. I think much has been priced in, both bullish and bearish. Last Week's Post: Extra - Unfilled Gaps: Value Line Geometric Divergence: HYG/TYX Divergence: Small Caps Look Interesting:
CME_MINI:ES1!
by RHTrading
3 Little Indians Pattern + Divergence With Other Indices + More On a long time frame, we have a “three little Indian” pattern consisting of 3 peaks and 3 rivers. Expect accelerated selling once we return to the 2nd peak high buy institutions From $3000 - $3047.38 (The 2008 Financial Crisis 2.618 Fib Retracement Level) I expect selling pressure to be heavy. We have already fallen out of the most recent ascending wedge 2 days ago, in which we retested the previous support and have proceeded to trade down from there: Divergence on the MACD histogram and the CMF was negative the entire way up. This market traded up on the idea that bad news is good in hopes of a rate cut, completely ignoring the US and macroeconomic slowdown that has begun. That and trade tensions around the globe. Don't get me wrong, I love Trump, but if you think the Chinese will actually give the US a favorable trade deal you're wrong. Here is the current weighting of the top 10 companies in the $SPX (as of July 11, 2019): Rank Company Ticker Weight (%) Price 1 Microsoft Corporation MSFT 4.249644 137.89 2 Apple Inc. AAPL 3.573786 202.46 3 Amazon.com Inc. AMZN 3.356436 2,007.59 4 Facebook Inc. Class A FB 1.959511 200.78 5 Berkshire Hathaway Inc. BRK.B 1.667792 213.36 6 Johnson & Johnson JNJ 1.508331 139.54 7 JPMorgan Chase & Co. JPM 1.474984 114.24 8 Alphabet Inc. Class C GOOG 1.406174 1,142.85 9 Alphabet Inc. Class A GOOGL 1.374452 1,142.67 10 Exxon Mobil Corporation XOM 1.319375 77.43 Total Weight of Top 10: 21.890485% Weight from 12/31/2014 - 3/31/2019: Ticker Company Name 3/31/2019 12/31/2018 12/31/2017 12/31/2016 12/31/2015 12/31/2014 MSFT Microsoft Corp. 3.83% 3.73% 2.89% 2.51% 2.48% 2.10% AAPL Apple Inc. 3.60% 3.38% 3.81% 3.21% 3.28% 3.55% AMZN Amazon.com Inc. 3.11% 2.93% 2.05% 1.54% 1.45% 0.65% FB Facebook Inc. 1.68% 1.50% 1.85% 1.40% 1.33% 0.72% BRK.B Berkshire Hathaway 1.65% 1.89% 1.67% 1.61% 1.38% 1.51% JNJ Johnson & Johnson 1.58% 1.65% 1.65% 1.63% 1.59% 1.61% GOOG Alphabet Inc. Class C 1.53% 1.52% 1.39% 1.19% 1.26% 0.85% GOOGL Alphabet Inc. Class A 1.49% 1.49% 1.38% 1.22% 1.27% 0.84% XOM Exxon Mobil Corp. 1.45% 1.37% 1.55% 1.94% 1.81% 2.16% Total: 19.92% 19.46% 18.24% 16.25% 15.85% 13.99% Data gathered from: www.slickcharts.com & siblisresearch.com Top put this into prospective here are some charts: Dow Jones Transports/Dow Jones Industrial Average: NYSE Composite: Russell 2000: WilShire 4500 Index: No one can truly ever time the very top. It can definitely go higher, but please be careful when buying up here. Best of Luck
SP:SPXShort
by BigDGoesHard
4
S&P 500 Expected Move ($33.75) and Gravity PointsI'd expect more volatility next week than the $33.75 move the options market is pricing in. I'm leaning bearish going into next week. Not willing to commit to it unless I see a higher time-frame divergence though. Leaning bearish because the underlying reason the market was rising was Fed rate cuts, which was a damaged with Friday's uber strong jobs report, it reduced the probabilities of a 26% chance of a 50 bpt cut to a 3% chance. There's still a 100% chance of a 25 bpt rate cut next time. I try to be data driven but I can't help but have the suspicion that the Fed is not going to be eager to cut and might not next time even though the data is saying there's a 100% probability of it. Would catch a lot of people offsides. Watch Bond reaction next week. Last Week's Post: (Quite happy with results from last week) P.S. for what it's worth, adding additional ticker tags in your Idea doesn't impact your views. Last week's experiment proved as much. Good luck next week gentlemen, - RH
CME_MINI:ES1!
by RHTrading
4
S&P 500 Next Week Expected Move ($45) and Gravity PointsLeaning slightly bullish due to the weight of the evidence but there are too many binary events coming up in the coming week that could throw off my thesis. Plus we rallied so strongly the last 3 weeks that I wouldn't discount the fact that the market might just consolidate while it waits for the G20 meeting. Blew through last week's expected move ($41) and had a $63 gain on the week. This next week the options market is pricing in a $45 move higher or $45 lower, nondirectional. Amazingly, for the first time in 18 months I have no Gravity Points lurking above us to target. They have served me very well and I hope they have for you. I will continue to locate Gravity Points going forward as we make them. Many significant things occurred this week. I'll list those I'm aware of: (Negative) - Economic data is now definitively weakening - shown by the Empire Manufacturing Data and several others (Positive) - The Dollar; $DXY, $UUP is on the brink of breaking down (Neutral) - Most interestingly; $GOLD, $GLD is breaking out of a 5 year base which adds to the bearish case on the USD (Neutral) - I think Small Caps $IWM might turn the corner and start leading relatively soon here, the ratio between the $IWM and the $DIA is at the low end of its historical range, however my two favorite market leading indicators the IWM and DJT weekly charts failed at the moving averages and is nowhere near all time highs which is bearish. (Positive) - Market Sentiment is very neutral, which is odd given that we are making new all time highs and a positive omen going forward (Positive) - Copper is staging a bullish reversal which is a relief for foreign equities (Positive) - OIL; $USOIL is staging a bullish reversal which is also bullish (Neutral) - Quadruple Witching occurred this week which means there's a lot of rebalancing going on (Negative) - The $VVIX and $VIX are both back to considerably low levels (Neutral) - The correlation between bonds and stocks is very high and unsustainable; typically I trust the debt market over the equity market but not this time (Positive) - Bonds; $TLT created a significant bearish divergence after rallying for nearly 20% in 6 months (Positive) - Related to the TLT, the $TNX had a capitulation low at 1.95. Now that the FOMC is out of the way, I think bonds will stop advancing in the near term. Scorecard: Bullish - 6 Neutral - 4 Bearish - 2 Last Week's Post: I'm not sure if this makes any difference for getting this post out there or not but I'm going to try it out anyways. Don't know how the system works. $SPY SPY $ES1! ES1! $SPX SPX $DIA DIA $QQQ QQQ $NDX NDX $IWM IWM $RUT RUT $IYT IYT $DJT DJT
CME_MINI:ES1!
by RHTrading
1
S&P Next Week Expected Move ($47.25) and Gravity PointsNeutral Call. I think the ' h-Pattern ' we have here will provide a nice bump in price but I think selling pressure will keep the market relatively rangebound especially during next week's shortened 4-day week. Our Standard Deviation trend lines have been working quite well. I believe we have enough data to call them reliable. I highlighted in a green circle what was a nice trade setup that I missed. Had a confluence of support there from the Gravity Point, Expected Move, and SD after the completion of a 5-wave move. Best of luck next week gentlemen and have a nice Memorial Day weekend! - RH $SPY SPY $SPX SPX $ES! $ES1! ES1!
CME_MINI:ES1!
by RHTrading
2
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!
CME_MINI:ES1!Short
by RHTrading
Next Week Trade Plan: $82 Expected Move + Gravity Points + ExtraFor what it's worth, I don't have any Gravity Points identified under the "Gravity Point Very Hard" Chart Dump this week. See what I see. Last Week's Post Other Relevant Charts: (One Last Rally) (Interesting Development) (Kings Crown) (Extremely Useful) (Combo Equal-Weight Indice Chart) (Extremely Useful) (Should've made it public) (Semi-Useful) (Just for fun) Sector & Indice Trendline Watch: I use a fan of different trendlines from different anchor points (candle wick, candle body, Day prior, Day after, ect.) and connected them in a similar way to 2015/2016 Lows to capture a more complete picture of the trendline. That way I'm not second guessing if the trend is broken or not because I have all of the possibly variations already displayed. See Below: Indice: (Broke?) (Very Weak) (Hanging on) Sector: (Strong) (Very Weak) (Struggling) (Broke) (Still Well Above)
CME_MINI:ES1!
by RHTrading
4
S&P 500 Trading Plan: $47 Implied Volatility + Gravity PointsLast week's Implied Volatility was $49. This week's Implied Volatility Expected Move is $47. So another volatility contraction right? Wrong. We've got a holiday next week folks and we've got three and a half trading sessions. Given this, I'm inclined to say it's going to be a pretty volatile week. I zoomed in to the 15 minute time frame here, as opposed to my usual 30 minute chart because I wanted to show just how extremely accurate and important these Gravity Points have been for weeks and weeks now. Use them. I intend on making another 30 minute time frame just for continuity and bigger picture. Last Week's Trading Plan: - Incredible action last week here. - On the button we came back inside of the Implied Volatility Expected Move.
CME_MINI:ES1!
by RHTrading
S&P Expected Move ($65) + Gravity Points -Next Week Trading PlanIt's getting dicey out here. Huge moves in the market this last week. Last week $90 expected Move. We moved all of that and then some. Next week only a $65 expected move. We saw that kind of action in the S&P's on Friday. All of next week, we're supposed to move $65, but we did that on Friday. I anticipate the price action will move OUTSIDE of the expected move. Here's a more "Busy" chart on the 15 minute for active traders: Good luck next week gentlemen, - RH __________________________________________________________________________________________________________________________________ Some other work I've done recently: Redid my trendlines for the 100th time. The two multi-trendlines and one final trendline from the (2009 Low - 2016 Low) & the (2009 Low - 2nd 2016 Low), (2009 Low - 2018 Low); This is a big deal. https Recognize that if this breaks, it will be resistance on the way up.
CME_MINI:ES1!
by RHTrading
One of DJI's Confirmations Not Looking Good - DJTAs is suggested by the heading even though we're seeing a rebound of DJI's rally one of it's confirming indicators is showing weakness. For the most part we use the Dow Jones Index as loose indicator of the overall economy, when it's performing well, on it's face, we discern that the economy is humming along well. As a confirmation for the thought process we use the Dow Transports Index, among others, and discern from if the rally is real or not. The reasoning being, as an index that follows the biggest transporting companies within the economy, it's reasonable to think if transports are performing well then commerce within the economy must be doing well. So, when DJI is rallying and it's confirmed by the DJT, along with other factors, we can discern that the economy is performing well. I'll move onto the analysis, to explain how the index is tracking. Weekly 1. Noticed that there's been high volume in the last two years of trading relative to long-term trend, 200-moving average. 2. It's been trading in a channel YTD which is confirmed by relatively accurate tracing stochastic indicator. Daily 1. Within the YTD channel, there's an interior resistance that's quite robust. That's where we find the index, today-July 25, 2018, and as with the other reactions from that interior resistance it's retracing back to the bottom of the channel. 2. The Stochastic indicator is tracing accurately with the index, which is on tracing downwards confirming the hypothesis. Conclusion: The Dow Jones Index has been on an upwards trend but one of the confirming indicators is showing that that might be a faux-upswing. In terms of the overall economy, we're starting to see that the market starting to be affect by the tariffs and the trade war.
DJ:DJT
by ReadySetBudget