Jul 312014
 
FRC daily July 31st

FRC daily July 31st

FRC (First Republic Bank) offers an objective short entry here around current levels (46.88ish) as it sits just below resistance on the daily chart. FRC was discussed in this post a couple of weeks ago as it was one of numerous regional banks on my watchlist that fell too much, too fast following my price alert in order to post an objective short entry before I could get the chart marked up, uploaded and compose a post with notes & details on the trade. I did go ahead and added FRC as a Short Trade Setup and I have been monitoring the stock closely, waiting for the near-term overbought conditions as a result of that one-day post-earnings plunge to moderate, which they have.

I was also waiting to see if FRC would regain what was my first target (former support, now resistance) level, which so far, the stock has failed to accomplish after several attempts over the last week or so. As such, I’ve decided to establish a short position in FRC with a suggested stop above 48.10, which is slightly above the former first target, now R1 (resistance) level. This relatively tight stop (in relation to the two price targets, T1 & T2) give this trade an attractive R/R or nearly 4:1 to the first target and better than 5:1 if targeting T2 (the final target).

Remember, many of the Active Short Trades are in the regional banking sector. Just as with long-term investing, proper diversification amongst positions when actively trading is extremely important in the mitigation of risk due to the potential over-exposure to any one sector.

click here to view the live chart of FRC

Jul 312014
 

The KRE (Regional Bank ETF) Active Short Trade & Short Setup has been consolidating over the last week or so in what appears to be a bear flag continuation pattern. If/when prices break below the pattern, we are likely to see a relatively swift move down towards the neckline of the aforementioned Head & Shoulders topping pattern on KRE.   click here to view the live, updated chart of KRE

KRE daily July 31st

KRE daily July 31st

On a related note, I had recently mentioned my observation of several increasing bearish developments within many of the key components of the XLF (Financial Sector ETF). I find it a bit less than coincidental that these bearish developments are coming at a time when Argentina has decided to default on their debt as well as the recent implosion of the Portugese mega-bank Banco Espirito SantoFunny how quick the mainstream & Wall Street pundits are quick to dismiss these as isolated events, likely to not have any spillover into the rest of the financial markets…. all very late 2007-esque IMO. Regardless of whether these incidents prove to be isolated, contained events without any spillover or ripple-effects into the financial system (hint, hint… keep an eye on junk bonds ‘JNK’ and credit spreads), here’s the updated chart of XLF with a key support level to watch and some downside targets for if/when prices break below that level.     click here to view the live, annotated chart of XLF

XLF daily July 31st

XLF daily July 31st

Jul 312014
 

After the brief whipsaw sell signal (false breakdown) in the SPY two weeks ago today, price went on to breakdown & backtest the rising wedge pattern & have moved impulsively lower since, tagging the S1 support level (minor support) this morning. As minor support levels (S1, S2, etc…) are levels where I expect any reactions (i.e.- a consolidation and/or bounce) to be relatively minor in scope & duration, my current expectation is to see prices continue lower towards at least the T1 zone (192.50ish area) in the coming sessions. Note how the Q’s are also approaching their S1 level as well, all the more reason to expect a reaction in the broad markets from around current levels before a resumption of the current short-term downtrend.

Looking at the bigger picture, the $DJIA (Dow Jones Industrial Average) has clearly taken the lead on this move lower by breaking below it’s rising wedge last Friday, July 25th, and moving lower since. That puts both the S&P 500 & the $DJIA on clear near-term sell signals (still some work to be done to trigger longer-term sell signals) with the Nasdaq Composite hovering just above dual intersecting support levels as shown on this daily chart. Keep in mind that when the market is moving fast, prices may have already taken out support or resistance levels on the static charts by the time that you read these posts. During times of increased volatility or more frequent technical developments, I will make every effort to keep the live charts updated, particularly the major US indices. Daily & weekly charts of the major US indices can be found on the Live Charts page and I am considering adding links to the 60 minute charts there as well, although only stockcharts.com subscribers are able access the 60 minute charts via the links (see below for a go-around to that issue). Also note that I plan to review & likely update the downside price targets. Click the links below to view the live annotated charts of the following:

SPY 60 minute     QQQ 60 minute     $SPX daily     $DJIA ($INDU) daily     $COMPQ daily

non-stockscharts.com subscribers should be able to cut & paste the following URLs in the address bar of their web browser to view the 60 minute charts:

http://stockcharts.com/c-sc/sc?s=SPY&p=60&yr=0&mn=4&dy=0&i=p69927574797&a=359792442&r=1406817944248

http://stockcharts.com/c-sc/sc?s=QQQ&p=60&yr=0&mn=4&dy=0&i=p69720840045&a=360945467&r=1406818125483

Jul 302014
 

The following video covers spot gold prices as well as the gold mining sector including some of my top picks as potential long-term trade/investment ideas. As this video is quite lengthy, a brief summary of the items covered can be found in this order:

  • About the first 6 minutes discusses the big picture on spot gold prices ($GOLD) with some comments on the mining sector as well.
  • Starting at the 6:25 mark, I begin covering the daily & weekly charts of some of the most promising long-term trade candidates in the gold & silver mining sector in the following order: AU, NEM, HL, KGC, IAG, HMY, SSRI, SLW, GG, EGO, PAAS, AEM, AUQ, GOLD, & GFI (note: A couple of these names I discuss the charts but I am not currently very bullish on).
  • Starting at the 33:00 minute mark, I cover the 60 minute chart & near-term outlook of GDX. (total video time 36:40 minutes).

The bottom is that the miners remain in the consolidation range they’ve been in for the last month as do gold & silver prices. Most likely, the miners are waiting for a resolution of the trading range in the metals (i.e.- a confirmed and sustained upside or downside move out of the recent trading range). $GOLD is also precariously close to its long-term secular bull market uptrend line. Therefore, I am watching closely for the possibility of another successful test of that uptrend line although a sustained breakdown below that level would be a bearish technical event that could bring prices down to re-test the mid & late 2013 double-bottom lows. My overall bias in gold, silver & the miners from a long-term perspective remains to the upside for now although I am still not confident enough in the near-term direction to aggressive start adding back the exposure that reduced in my trading account last month. Maybe soon, quite possibly very soon just not yet. In my longer-term accounts I continue to hold exposure to the gold & silver mining sector, allowing for relatively wide stops at this time.

 

Jul 292014
 
KATE daily July 29th

KATE daily July 29th

KATE (Kate Spade & Co.) will trigger a short entry on the open tomorrow unless the stock opens above 38.90. T2 is my preferred swing target at this time. Stops should be based upon one’s preferred target although a relatively tight stop can be placed above 41.10.

Note: KATE is scheduled to report earnings on Aug 14th. Also note that I had mocked up this chart shortly after 3pm ET with the intention sending out the setup well before the close. However, I decided to add the following market commentary & charts below which took quite a while put together. Hence, my original entry criteria was met by the close today but will have to be changed to the open tomorrow as per the comments above.     Click here to view the live, annotated daily chart of KATE

On a related note, on KATE as well as several of the recent new trade setups, I have included the upcoming earnings release dates (if scheduled in the near-future) as we are still in the midst of earnings season. In last week’s post titled Earnings: To Hold or Fold?” I had discussed how each trader must make the decision whether or not to Continue reading »

Jul 292014
 

LYV (Live Nation Entertainment) will trigger a short entry on a break below the daily uptrend line. In addition to the divergent high in place on the daily time frame, LYV is also challenging its all-time highs while the RSI is also turning lower following a divergent high that was put in at extreme overbought levels. Stops TBD upon entry.  Note: LYV is scheduled to report earnings this Thursday, July 31st, after the market close.    Click here to view the live, annotated daily chart of LYV

Jul 282014
 

CORN (Corn ETF) offers a somewhat aggressive entry here on the break above this 60 minute bullish falling wedge pattern. CORN will also offer a second objective entry or add-on to an existing position taken here if & when prices move solidly (5 cents+) above the top of the July 21st gap (26.67). I refer to this current entry as somewhat aggressive for two reasons: First, that July 21st sizable gap is not too far overhead. Gaps, particularly large gaps, often act as support & resistance, especially on the initial tests of those gaps following their creation. Therefore, taking a long-side breakout in relatively close proximity to resistance may limit the upside potential on this trade, should prices ultimately fail to surmount the 26.67 level.

The other reason that an entry here is somewhat aggressive is due to the fact that CORN might go on to backtest this 60 minute falling wedge at lower levels. As the weekly chart below highlights, $CORN (spot corn price) has been in a very powerful downtrend (actually, a third reason this is an aggressive entry) and is currently trading in what I call No-man’s Land, which is when a stock is trading in an area well above & well below any decent support and resistance levels. When trading these “catch a falling knife” trades, where a stock is in free-fall mode yet I believe a powerful trend reversal is imminent, I prefer the stock to be approaching a key support level on the weekly chart while setting up in a bullish chart formation on the daily and/or intraday charts. In the case of $CORN, the next solid support level (340ish) is about 8% below current levels.

With that being said, I still see enough potential for a possible trend reversal from current levels to initiate a starter position in CORN (CORN ETF). An ideal scenario in the upcoming days would be a gap above the top of the July 21st gap (26.67), to put in place an Island Cluster Reversal bottom, with the “island cluster” being the group of candlesticks that were formed over the last week or so. That would be a very bullish technical event & one in which I would bring CORN to a fully position. As of now, my plan is to establish a partial position on the breakout of this 60 minute falling wedge, adding if and only if price move above the top of that July 21st gap (by at least 5 cents, to help avoid a false breakout). I plan to use a stop below 25.60 in case $CORN does want to go on to test that 340 weekly support level.

CORN is being added a both a typically swing trade entry & setup as well as a Long-Term Trade Idea & Setup, as this trade is based largely off the weekly time frame and has the potential to morph into a long-term trend trade with additional targets likely to be added, should we get some decent technical evidence of a likely trend reversal in the upcoming weeks. Long-term traders & investors might consider a wider stop that that suggested above for typical swing traders. A stop somewhat below the 340 level on the $CORN weekly chart would still provide an attractive R/R if target the top of the R2 zone which comes in around 550.

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