This has turned into something of an essay, so consider yourself forewarned about its length. It's intended to be a brief lesson about investing in general, and ultimately about "investing" in gold in particular. I'm going to be my contrarian self and take a big dump on everyone's favorite present commodity, glittering gold. First though, I want to present a few...
Just a basic observation on this one: a head and shoulders pattern may be developing here.
I believe that a major market downturn will coincide with a great strengthening of the dollar index. So, it's a good thing to watch. Today, I have redrawn the lower trend line as strictly as I can on the weekly chart (yellow) in an effort to see just how much room it needs to fall for a strike. Furthermore, I have added a horizontal line representing the low...
I often say that I do not begrudge anyone for making short-term plays in an effort to capture some of the bubble we're in right now. That said, my long-term outlook on Tesla remains the same. I had previously identified a rising broadening pattern within a rising broadening pattern on this stock. The two overshoots of the larger broadening pattern were both...
PSX has a nice flag off the March lows, which briefly got it above its long-term trend line from 2015 before immediately giving it back up again. That flag has also now broken into a bearish, downward-sloping channel. And finally, it trades well below both its 50- and 200-day moving averages. This is a short.
Someone I respect posted a bullish interpretation of Cisco Systems recently, so I decided to take a look at it. And I cannot confirm that. What I see on the daily is a rising wedge from the March lows, which has broken and is flagging. This looks near-term bearish to me. On the weekly, I see a possible head and shoulders, also bearish. And zooming way back...
As pointed out the other day, SPY is possibly unfolding in one of two structures, either a consolidating wedge (yellow) or a rising wedge (orange). Since we have arrived once again at the wedge, we may gap down on Monday. However, if we are in the rising wedge, we may gap up again before then selling off. In either case, I believe the rally is coming to its conclusion.
The other day I reported that the Bollinger Bands on the ES futures we at their narrowest since the February highs. Since then, upon further scrutiny, I see other eerie similarities. After the narrowest point in February, the Bollinger Bands expanded, as they have now as well. Furthermore, just before the February crash, the market formed a clear bearish wedge,...
This bearish channel has showed a continuing weakening of buying. I have been predicting that it may deteriorate, and it has now pushed below that channel. I have longer discussions on Bitcoin in the previous posts I've made on it, so be sure to check those out if you're interested. Also, the weekly fast stochastic RSI line continues to lead the slow line down.
Beyond Meat, like much of the broader market, instead of falling from the rising wedge from the March lows, melted into a fairly well-structured head and shoulders pattern. We are flirting with the neckline now, so it will be good to continue to monitor this one.
The ES Futures, unlike the SPY, are already in the form of a rising wedge. Interestingly, today's prince action was noisier than SPY and has formed a broadening pattern. That could indicate greater volatility tonight.
On Twitter, I used the terminator crawling after Sarah Conor as a meme to express the unending endurance of this bear market rally, because it's just taking forever to roll over. Sigh. Sort of boring, frankly. People just cannot get enough of overpriced stocks in a crisis, so, we just have to continue to wait until they run out of money before we see any serious...
I had been viewing SPY as forming a consolidating wedge over the last month, which would resolve hard to the downside. However, since we haven't seen any consistent selling, I want to introduce a second structure that may be developing. And while it does involve slightly higher short-term highs, it's actually an even more bearish structure, a rising wedge...
JNJ has, like many of the individual stocks I have recently covered, also formed a long-term rising broadening pattern. But whereas with, say, Amazon, which is at the top of its broadening pattern's range, Johnson & Johnson looks to have completed that last stop in January of 2018. After the final touch on the bottom, in this case March of this year, the price...
Until the local highs made on July 13th, I had been viewing the ES futures as forming a consolidating continuation wedge. With the recent highs, it has now taken the form of a bearish wedge, complete with RSI divergence. The structure will have the same conclusion. When it is complete, price action will quickly resolve to the downside.
As with many charts, the stochastic RSI can be a valuable oscillator to detect trend changes. With the VIX, we can observe that when the daily stochastic RSI fast line crosses out of oversold territory, we inevitably get a strong percentage move in the VIX. Even the leftmost "blip" was a 58% reaction by the impoverished standards of those low VIX days. We can...
We have a rising broadening pattern on the weekly. Opened at the top channel of the broadening formation, pushed through it but soundly rejected. Bearish divergence on the weekly RSI and the stochastic RSI fast line has turned down. We should now work our way to the bottom trend line.
Like Amazon, Zoom and also possibly AMD, Intel also has a stubbornly obvious rising broadening pattern. And worse, this one's last bounce-able trip to the bottom of the formation looks to have been accomplished in March. After this half-trip to the top, the next step is typically to fall out of the bottom. Perhaps we can use this price action to predict a poor...