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Technicals

S&P Rally Short LivedWith the tsunami of data this week, it was really hard to sieve out anything stellar. At best, we had employment data that was above expectation on Wednesday, as well as a moderately improved ISM manufacturing index. PMI and Factory Orders left much to be desired. Central Bankers all over the world are scratching their heads and trying in futility to save face against waning markets and negative interest rates that have taken Europe by storm and seem to be spreading at a clip rivaling the Zika virus. So why is S&P rallying? As Keynes himself said, "The Market Can Remain Irrational Longer Than You Can Remain Solvent". With the overtly bearish momentum this year to date, a proverbial 'dead cat bounce' was due. But that's all it is. One of the prime directives of trading is to trade with the volume not against it. This recent buying volume is still paltry with respect to the selling volume which drove the market down. Timing is everything in trading. When can we expect a turnaround? If we take a look at the chart of SPY and apply some fibonacci analysis, we see a bearish butterfly pattern foreshadowing another bearish turnaround. If you apply fibonacci time slice analysis, you see that we can probably expect this to begin as early as tomorrow or to even by market close today. The RSI seems to hint that the market is becoming overbought at this point, and we see a macd cross starting to form at 1 hour intervals. The OBV is still indicating positive pressure which indicates now is not necessarily the time to enter a short position. This is confirmed by the Aroon and ADX indicators as well. Wait for a big bear candle tomorrow or by Monday, 2016-03-07. At this point you can set a stop loss at the base of that candle and ride the trade down to the 0.5, 0.382, or 0.236 levels drawn out.
AMEX:SPYShort
by quantguy
When predicting micro moves, remember the tide matters... Saudi Arabia controls the price of oil. Once you understand that, all technicals need to include variables for real world political manipulation of the worlds most important commodity. .... "Church of Krümel" Back in the day, there was a King, he turned off the blood supply to the industrial world. The world went into chaos, wars started... wars stopped. In the end the world found that one country... No, one man controls the affordable supply of the earths most important commodity . Agree or not with anyone's politics, technical reads, or overall forecasts... My approach is to start with the above in mind. Until we have a new king or new war, I see no reason to buy oil. Micro channel guys will laugh.. So much money to be made in the foam. This is true, though they may spend more time stressed that their finger is faster than a sword. I just invite those to know there are other ways to skin this cat.. Ways that allow for thought and time to walk outside. Charting has been around a long time. The tools are better.. but not always the results..
FX:USOILShort
by BigEz
No End to Bearish News for the S&PYesterday, Janet Yellen of the Federal Reserve spoke confirming expectations that the Fed would sit tight on interest rates. She even admitted today that the Fed is considering negative interest rates. Her ominous tone did not bode well for the markets as evinced by the abysmal market opening today here in the US. In fact, the world's markets are rearing from this glut. As for the technicals, we have a bearish Aroon crossover, with the ADX signifying a solid negative trend. Additionally the MACD has crossed over into negative territory, yet the RSI indicates we are not yet oversold. Also note the bearish head and shoulders pattern which suggests we have a way to go before the bulls return. Consider any rallies due to short covering at this point. Fade into any uptrends, for they will be short lived.
SShort
by quantguy
S&P Solidly BearishAny hopes for a recovery this week were quashed by today's open and marked declines henceforth. There really doesn't seem to be any indication of a turnaround, unless some good data comes out this week, and there is quite a bit to anticipate. As the attached article notes, analysts are cutting their expectations for the S&P, and it would be good advice to any investor heed this warning and do the same. The head and shoulders pattern drawn here indicates a bearish trend, and today's open confirms this. Its a bit oversold at present (although the RSI does not confirm this, yet), but any rally should be a good point at which to enter a short trade, or exit a failing long position, thus easing the sting a bit. As for the technicals, the MACD histogram is still in positive territory but its hanging by a thread and looking to cross soon. The OBV indicates a lot of selling pressure, and ADX indicator is distinctly bearish, and the difference between the up and down components are widening further, despite a recent apparently bullish Aroon crossover.
AMEX:SPYShort
by quantguy
1
Swing Trade Entry - Technical & Fundamental Setup GBPCAD offers an attractive entry price at 2.00 even for a long term swing setup attempt for targets in the 2.20 area. From a Fundamental perspective, The UK remains to be the most likely to be starting it's rate hike cycle next. At the moment, none of the other Major currencies have even given any slight indication of the same. The unemployment numbers are good, and Services sector, which comprises the majority of GDP remains strong and growing. Inflation continues to be a problem, however a global one, thus putting the UK ahead of the list of candidates for normalization. The Canadian dollar, slightly bullish as of late, as a repercussion of a miss price due to an expected rate cut that didn't materialize, as well as a temporary rally in oil. However, with oil under pressure in the long term, the upside will be limited for CAD. Please see link to related ideas, where the Oil chart has still not been able to break it's down trendline from Nov 2015. The Technical setup shows: 1. Long term channel dating several years 2. 2015 Low's - Major Support 3. Price near smaller term channel 4. Price bouncing from 88.6 % Fib level from 2015 lows to 2016 highs 5. 4H Hammer Candle in the making This trade setup can be played as a range targeting the top of the smaller channel, or a swing setup targeting long term targets of 2.20 Risk to Reward very favorable from this area with stops below the 2015 spike low.
Long
by JigneshDavda
Dark times for the EuroFrom political instability to ineffectual QE, bullish news for the Euro is scant. We can look for more confirmation from Draghi to this effect soon to come. As far as the technicals are concerned, we have a very strong bearish head and shoulders pattern forming on the weekly chart. There is massive resistance from above via the ichimoku cloud which will make a turnaround difficult. The MACD is waning and the RSI indicates entry into a position is safe. Further, there seems to be some high selling pressure via the OBV indicator. The Aroon indicator notes that we've entered bearish territory (on a day chart), and the ADX indicator is waning with the MACD, suggesting a collapse may follow soon, perhaps even after Mr. Draghi's speech.
Short
by quantguy
Bearish Double Top on NetflixUnfortunately for NFLX on the fundamentals side, they were ousted from Indonesia, which was a prime target for their international expansion endeavors, due to a failure to fulfill their censorship standards. Unfortunately for them, this simply adds to the list of bearish technical indicators despite 'buy' ratings from numerous sources. First, note the bearish Aroon and ADX indicators indicate a solid down trajectory. Also note that the MACD has been bearish for some time now, since before the new year (2016) in fact. Note further the strong selling pressure via the OBV. The optimal time to enter a short position? Wait for a short covering rally sometime in the next week following the massive dive from today, similar to what we saw in oil earlier this week. It will look head for the Ichimoku cloud bound from above, but most likely turn sharply after a Heikin Ashi doji candle when the market ranges for a day or so.
NASDAQ:NFLXShort
by quantguy
Bearish Head and Shoulders and a Gloomy Outlook for AAPLWhen Apple was using the Power PC line of processors in their computers, I was extremely skeptical of them. Their operating systems prior to OS X were abysmal. They crashed all the time, and the availability of software for anything I wanted to do was scant. Then they started rolling out Intel processors, and updated OS, and a slew of performance upgrades and I was sold. But, as the attached article mentions, the hegemony of AAPL is slipping. From the dreadful abomination that is iTunes, to less intuitive interfaces, to slipping iPhone sales, they are slowly and surely losing ground in the markets. The most obvious support for this statement technically is the bearish head and shoulders pattern apparent here. Next, we see a clear rejection from the important technical and psychological level of $120, and an exodus from the Ichimoku cloud. The MACD is solidly in negative territory, and the Aroon indicator together with the ADX confirms a lot of bearish momentum. The RSI indicator shows AAPL is oversold slightly, and the selling pressure evinced by the OBV seems disparate to the bearish price action, so we may anticipate a small rally soon, but this should be interpreted as a good time to enter a short trade, at around the $104-105 level. The doji candle at present seems to confirm a turnaround, or at least a pause from the recent landslide.
NASDAQ:AAPLShort
by quantguy
The Bears are still in full force on CrudeThere seems to be no shortage of bearish news on Crude oil lately. In fact, today's 'dark cloud cover' candlestick pattern is a bearish rejection of the level formed by Friday's close proves the little rally we saw on 2015-01-22 was merely just a short covering frenzy. Almost all the technicals indicate we are in a solid downtrend. The Aroon indicator is still at almost maximum divergence, and the ADX indicates a very strong downtrend. Although the MACD seems to have crossed, the strength of today's rejection shows its not likely to last. The OBV indicates strong selling pressure, and the RSI confirms this might be a good time to enter a short position. Also note that it closed below the important psychological and technical level of $30, as it is consistently breaking lower lows. The only concern is the distance from the Ichimoku cloud. Typically, this amount of distance may indicate a rally is near as we saw on 2015-08-27.
NYMEX:CL1!Short
by quantguy
Green Light on US Treasuries The China crisis has the world's markets in panic mode. Stocks had the worst first week in history. Currencies are tumultuous and volatile. Its difficult to endorse the Euro for anything more than short term swing trades at best due to their own problems. Commodity currencies are sure to tank, and stocks are too volatile lately in my opinion. One good idea for a long seems to be US treasury products, which historically have faired well in times of fear and panic. In particular, take a look at this bull ETF which tracks the US ten year treasury note. Observe the steadily rising lows and the roughly consistent level the highs have maintained at $78.00, a nice round number at that. Further, note the support from below via the ichimoku cloud indicating that a 'bounce' or retracement may be in order from the recent bearish momentum of the past week. The RSI confirms its a great time to get in, though admittedly, the MACD still suggests a bit of bearish momentum. I'd set a stop loss at either $73.75, or $72.50, both recent lows and psychologically sound, round numbers.
DLong
by quantguy
Remninmi Bottomed?With the China crash still fresh on everyone's minds its time to ask if the Renminbi has bottomed out or if there is still room to crash. Based on the link attached, there seems to be the potential for a lot more bad debt that China is trying to avoid confronting, and probably couldn't even account for if they tried. On the technical side, note the massive resistance from above via the Ichimoku cloud, successive massive drops and the inability to break previous highs. There seems to be a nice profit target at about 0.13730, which was tested and rejected on October 14th. As for a stop loss, there seems to be a level of support around 0.14032. The MACD and RSI do not indicate that this asset is oversold, despite the massive downturn as of late.
Short
by quantguy
China fears wreck commodity currenciesAs we all know by now, the Chinese markets were only open 14 minutes before a crushing 7% loss tripped safeguards. Recently, news came out to the effect that we can expect a further devaluation of their currency. This will hurt commodity currencies like AUD. In fact, its slipping as I'm writing this. My short position is bolstered by massive pressure from above via the Ichimoku Cloud, and the difference between the MACD and signal is rapidly closing suggesting a bearish turnaround. The RSI gives us a green light.
Short
by quantguy