I will be leaving town today, returning Tuesday night with very limited access to the computer. Therefore, commentary will be light, if any, until I return.
There weren't any major technical developments in the equity markets this week but I've cut & pasted a few email replies to questions & comments that might be of interest to others:
Q: Latest feelings on GDX? Am in around 13 level. You haven't done a gold update recently. Feelings on how Fed decision will impact gold? Also....need your take on a popularly traded stock....interesting chart as well as the fundies... PYPL (paypal). Looks like it could have a move up from here.
A: I rarely comment on what the Fed may or may not do because it is only noise IMO. Yes, I fully acknowledge that the market almost always has a knee-jerk reaction (or two) following their announcements but I believe that where stocks, gold, commodities, etc… are heading is reflected in the charts, as is what they Fed is most likely going to DO (not just say).
No comments on gold or the miners lately because I don’t have an opinion worth sharing. I do think the charts still have bullish potential when I look at them but my focus is on swing trading & day trading stocks & etfs lately.
Not enough trading history on PYPL for me to get any kind of read on the charts. I usually need to see a year or two of trading history before I even attempt to get a technical read on a stock.
Regarding JO, commodities still look to be setting up for a potential bottom but every time one of them looks to be taking off, they come out of nowhere & smack it down (like JO). I’ve been dribbling into some, like JO, in IRAs & longer-term accounts but won’t get aggressive with them until I see some evidence that they have most likely turned the corner AND the major turn in the $USD that I’m expecting has started to play out.
Q: CENX seems to be breaking down out of a small H&S on the 15 min chart after the failed breakout. Thoughts?
A: Still looks fine to me. Not that its right or wrong but I don't put too much stock into H&S patterns on the intraday time frames, especially below the 60 minute. I prefer to trade them on the daily & weekly charts and then, best if scrubbed for confirming volume patterns first. JMHO.
Q: Just a note to thank you for all your great ideas,thoughts and all the time you put into the videos, really great and do appreciate, I do agree with all,including so many negative divergences in place,my only concern is that when I look at the high put call ratio ,seems like everyone waiting for mkt. drop, what are your thoughts, looks like they might want to run mkt. higher, 2030-2050 just to squeeze and get as many to cover their shorts and THEN THE DROP, down to 1790 - 1830, just to catchas many off guard as possible,any thoughts??
A: Yes, I certainly see that as a possibility. That would also allow for a backtest of the bottom of that big overhead resistance level as well as work of some of the oversold conditions and allow the bearish sentiment to fall back to levels where a more sustained drop is more likely to occur. Tough to say whether that happens, we take another big leg down first or none of the above. Still leaning towards another thrust down but open to all possibilities.
Q: I hope the 43/17 Weekly EMA indicator of yours clearly indicates that we are in a bear market by end of trading day today. Considering that market had been closed in green mostly on 9/11 days since 13 years, I hope this time is an exception.
A: The $SPX did print the first bearish crossover on the 43/17 ema at the close for the first time since Aug 2011. However, not by a huge margin and most importantly, it is not what I would refer to as an “all in short” signal. It certainly increases the odds that we are now in a confirmed downtrend but the leading index, the $NDX, has yet to also confirm. Plus, we need to take out those critical support levels that I recently pointed on the intraday charts.
I meant to update this but I’ve been working extremely hard on some programming changes to the site, in particular, adding a new forum to the site which I hope to roll out soon. I’ll be away from my desk for a few days, leaving tomorrow (Sunday) and not returning home until Tuesday night. I’ll try to post an update discussing my thoughts before I leave town tomorrow.
Q: Which frequency/indicators/averages do you follow if you were to trade intraday? For example: trading ES mini futures.
A: I will typically focus on the 1, 5, 15, 30 & even 60 minute time frames when trading, even keeping an eye on the daily charts. Reason being is that if I allow myself to get lost in, say, the 5-minute charts, a bullish or bearish chart pattern might trigger an entry, only to have the stock, ETF, futures contract, etc.. find support or resistance on a larger time frame (60 minute or daily). I also give a higher weighting to support & resistance levels on the larger time frames & by only focusing on the very short-term charts, I might not catch those levels.
I have numerous indicators & moving average pairs that I will occasional add to my charts or check during a trade but overall, I like to keep it simple & focus primarily on the MACD & RSI. I believe there is value in choosing just a few indicators that you like, know them like the back of your hand and try not to follow too many as that’s like trying to hold sand in your hands… too many grains will slip through.
I put the most emphasis on trendlines & horizontal support & resistance levels when day trading or swing trading for that matter. However, I also use the indicators such as the MACD & RSI to confirm (or refute) my entries & sometimes my exits. I find Fibonacci retracements useful in determining targets as well, particularly when the align with the horizontal support or resistance levels/targets that I’ve already identified. Fib clusters also work well often.