Jan 292015
 

The US equity markets continue to move sideways within the trading ranges that have formed over the last several months but it is worth noting that the SPY ($SPX) is now sitting precarious close to the bottom of its 3 month trading range which runs from about 198 up to 209. The QQQ ($NDX) although trading lower today, is still slightly above its similar trading range, albeit, by a slightly larger margin the the SPY. Both trading ranges as well as several other technical developments on various time frames where discussed in detail in the U.S. Equity Market Overview video published yesterday.

 

On a related note, a fairly comprehensive video covering the precious metals & mining sector was also published yesterday in which I communicated the fact that based on my latest analysis of the charts, I had decided not to add back any exposure to the mining sector following the recent successful DUST long/GDX short pullback trade, which was previously my plan. A case was made that we were more likely to see additional downside in the precious metals and mining sector, which so far is clearly the case today.

As I have very few trading positions at this time and do not see many attractive trade opportunities (although a break below the SPY & QQQ trading ranges could quickly change that), trade ideas & market updates will probably remain on the light-side throughout the week. As such, take some time to review the two videos posted yesterday and as always, feel free to share any feedback, comments or trade ideas via the contact form which can be found under the "Resources" tab on the top menu of the site.

In doing some housekeeping items, I have updated the Long Trade Ideas category today. The following long trade ideas have either hit one or more profit targets, exceeded their most recent suggested stop, or both. As such, these trades will now be moved to the Completed Trades category where all associated commentary & charts will be archived for future reference:

CORN: On Jan 5th, after CORN had already hit & exceeded the second of three profit targets, it was pointed out that a bearish rising wedge pattern had developed. It was suggested at that time to either book profits or raise stops and that CORN would be considered stopped out if/when price broke down below the wedge pattern, which they did just a few trading sessions later.

PPLT: PPLT (Platinum ETF) hit the sole swing target of 124.19 (T1) on Jan 20th. PPLT still holds potential as a long-term trend trade or investment but the previous trade setup was only intended as a typical swing trade.

PT: Stopped out yesterday as per the suggested criteria (SOAPSC) of any move below 0.84.

SOYB: (Soybean ETF), Hit T2 back on Oct 11th for a 13% gain. T3, which was the final target (the primary downtrend line) was hit a couple of months later essentially around the same level as T2 because SOYB traded in a sideways trading range between T1 & T2 for months after the second target was hit, eventually causing the downtrend line to come in at the former T2 level.

WLT: Hit T2 for a 43% gain back in early November just 3 weeks after entry. The trade continued over half-way towards the third & final target (T3) before reversing & exceeding any reasonable trailing stop (none suggested).

UCO/USO: The UCO (2x long crude)/USO trade exceeded the previously suggested stop of a solid break below the recently highlighted trading range on the 60 minute chart. That recent (current) break below the trading range is also the most recent preferred scenario that was posted a few days ago (a flush-out move below the range before crude begins to move higher) and I will continue to post updated on crude oil/USO but as far as the recent UCO/USO long, it would not be prudent to continue to extend any stops/losses on that trade.

Jan 272015
 
PT 60 minute Jan 27th

PT 60 minute Jan 27th

PT (Portugal Telecom) is currently trading about 7% below the 0.95 support/resistance level, at the tail-end of the suggested stop range for those targeting T1 at 1.14. However, a decent support level lies just below at .84-.86 for those targeting one or more of the higher "unofficial" targets or willing to give their position a little more room. PT will be considered stopped out & moved to the Completed Trades category on any move below 0.84.

Jan 272015
 

There haven't been any significant developments to discuss on the broad markets for month now, hence the reason for my lack of commentary on the US stock indices. Thanks in part to MSFT, we're finally getting the first half-decent sell-0ff in a while although the price action so far today, for the most part, is relatively insignificant from a technical perspective.

 

The charts above show the 2-hour & daily time frames of the $SPX/SPY (S&P 500) and the $NDX/QQQ (Nasdaq 100), highlighting the recent trading ranges & key technical patterns on both. As with all other recent divergent highs on the 60-120 minute time frames in these leading US equity indices, prices have moved lower since the most recent divergent highs (late Jan on the $SPX & late Nov for the $NDX) and based on the technical posture and some recent developments on both the daily & weekly time frames, my expectation is for additional downside in both the $SPX & $NDX before moving above those recent & all-time highs. However, from a pure risk/reward perspective, the most objective short (or long) entry would come on a solid resolution (breakout below or above) the patterns/trading ranges highlighted on the 120-minute charts. As always, links to the live $SPX & $NDX daily charts are accessible on the sidebar of the homepage as well as the Live Charts page of RSOTC (found on the top menu bar).

Jan 262015
 

PT (Portugal Telecom) is currently backtesting the 0.95 former resistance, now support level. PT was a long trade idea on Friday on the breakout above the 0.95 resistance level. That break of horizontal resistance followed a break above a bullish falling wedge pattern as shown on the previous & updated (below) 60 minute & daily time frames.

 

To reiterate, this is an aggressive trade. Although multiple price targets are shown on these charts, my current preferred & the sole official profit target remains 1.14 (about a 20% gain from current levels). Once could either place a very tight stop slightly below the 0.95 support level (e.g.- .92 or .93) or use the suggested stop parameter of 6-7% below entry.

note: On the previously posted daily chart, the 0.95 support line was inadvertently placed a few cent below the actual level. The correct adjustment to that line has been made to the daily chart above which can also be viewed via the live chart link below. The percentage gain measurements to each target/resistance level were also adjusted accordingly.

click here to view the live, annotated daily chart of PT

Jan 262015
 

The DUST (3x short miners)/GDX pullback trade gapped above the 13.75 resistance/preferred target level today and is will now be moved to the Completed Trades category. With DUST falling shy of my profit target on Friday, the gap today allowed for a more favorable exit price on the trade and a quick 20.6% gain in less than four full trading sessions, that's in addition to any would-be losses or profit give-back on the long mining positions that I was able to book profit on when the charts indicated a pullback was likely.

Although my plan from last week was to add back the long exposure to the mining sector once my pullback target was hit, other than a few core positions in my longer-term accounts (IRA's, etc...), I might hold off on adding back exposure to the sector for now. I'll continue to monitor the metals & miners and will communicate my thoughts as I go but as of right now, my gut tells me to just sit back & watch how the metals & miners trade for a while until adding back exposure to the sector.

 

The charts above are the original 15 minute chart of DUST from last week followed by today's updated 15 minute chart along with the Friday's 60 minute chart of GDX highlighting the most likely scenarios followed by today's updated 60 minute chart.

As today's first few 60 minute candlesticks show, GDX hammered off the first horizontal support line/bounce target shortly after the open today, managing to close right back above the bottom of the ascending price channel (white uptrend line) and moving higher within the channel since. Overall, today's price action has all the signs of a potential reversal in the miners so a GDX long here with a stop below today's lows is certainly objective although again, my personal preference is to sit tight & let the dust settle (no pun intended) before re-engaging the mining sector.

note: For categorical purposes, inverse (short) ETFs are always added to Short Trades Categories (e.g.- Short Setup, Active Short Trade, etc..), even though you will actually go "long" the position in order to short the index or sector of the trade idea. For example, DUST has now been moved to the Completed Short Trade Category along with GDX (as the posts related to any inverse or related leveraged ETFs are also tagged with the more popular 1x long ETF (e.g.- QQQ/QID/QLD/TQQQ/SQQQ or SPY/SSO/SDS/SH, etc...)

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