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Equity Market Overview 6-13-16 (video)

This video takes a comprehensive look at the diversified U.S. stock indices as well as many key sectors of the U.S. market. These index & sector ETFs are discussed in the following order: SPY, QQQ, IWM, XLF, USO, XLE, XOP, XES, XLV, XBI, IBB, PBE, XRT, XLP, XLU & GDX.

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Jun 13, 2016 7:30pm|Categories: Equity Market Analysis, Gold & Commodities|Tags: , , , , , , , , , , , , , , |8 Comments

8 Comments

  1. snp June 13, 2016 7:52 pm at 7:52 pm

    6:41 you say the break out is completely in tact etc. you mean break down, correct?

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    • rsotc June 14, 2016 8:21 am at 8:21 am

      Yes, a breakout of the pattern to the downside, aka breakdown. While I often refer to a downside break of a chart pattern as a breakdown, they are also referred to as downside breakouts (vs. an upside breakout).

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  2. pangblood June 14, 2016 3:53 am at 3:53 am

    @rsotc Randy, say I’m looking to either short oil or XOP, which one do you think offers the better risk reward ratio (keeping in mind that I can only go long DWTI or DRIP)? Being waiting for a pullback, but it looks like the breakdown on XOP (trendline + Resistance) and close below looks quite bearish. Thoughts?

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    • rsotc June 14, 2016 9:03 am at 9:03 am

      It looks to me that from this point, both USO & XOP have about the same downside potential & the R/R ratio of either is simply a function of what your profit target & stop will be based on your entry price. A more important consideration, IMO, is the fact that they have both experienced some pretty sharp selling over the past two trading sessions & while that could certainly continue, with each tick lower the odds for a counter-trend bounce increases. The 3x leverage ETFs like DWTI & DRIP work great during a unidirectional selloff, marked by consecutive red closes. However, even if my price targets were to be hit, there is the possibility that oil & the energy stocks could make a choppy, slow grind lower which could result in decay if long the 3x ETFs.

      SCO is the 2x short crude ETF which would suffer less decay in a choppy move to the targets while still providing you some leverage. SZO is the 1x (non-leverage) crude short ETN although it is thinly traded so you might have to use limit orders to buy & sell if the spreads are large to prevent a bad fill. Likewise, instead of DRIP you can use SOP (2x short oil & gas exploration ETF). Again, a thinly traded option but you can also use DUG (2x short oil & gas, which has plenty of liquidity although it tracks the DJ Oil & Gas index).

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  3. pangblood June 14, 2016 9:20 am at 9:20 am

    Thanks Randy, and also could you also provide some comments on VIX? Volatility has being on an absolute tear the past 2 trading days, considered taking a position but VIX seems quite over extended to the upside, and near the upper price range. And with the upcoming FOMC decision tmrw, this may be a bad trade. Thoughts?
    Thanks Randy

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    • rsotc June 14, 2016 9:28 am at 9:28 am

      pang- I’m walking out the door for an appt so don’t have time for a full reply but I did give my thoughts on this $VIX in this reply yesterday: http://rightsideofthechart.com/members/getitriight/activity/10524/
      You might have to use the search box (search “$VIX” or “VIX”) to find my most recent charts that show those levels. I’ll be back around 11am ET if you have any other questions on it.

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  4. dan123 June 14, 2016 12:49 pm at 12:49 pm

    Great video Randy, thanks

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    • rsotc June 14, 2016 1:03 pm at 1:03 pm

      Thx for that feedback Dan. The video ended up much longer than I had intended & may have seem redundant, as there seemed to be a common theme in the charts of nearly all sectors (breakdowns of clearly bearish technical patterns followed by a WTF? sharp rally to marginal new highs on questionable low volume with bearish divergences in place). However, as I often mention, for every official trade idea that I post, there are many more unofficial trade ideas & some of those sectors that were covered, such as the financials, still look poised to move lower in the coming weeks & possible months.

      One of the key takeaways that I wanted to share in the video was that it appears like another broad based selloff has only recently begun in which I see very few, if any places to make money on the long side as nearly all sectors, even those that might normally rise during a stock market correction, look poised to fall. That includes the gold mining stocks, which I had covered, and even corporate bonds, which I did not have a chance to get to but appear poised for a correction as well (LQD is the corp bond ETF & looks poised for a correction IMO).

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