Comments on: QQQ Swing Trade & IHS Scenario Update

By: rsotc

rsotc — Mon, 16 Apr 2018 13:41:31 +0000

The correlation between the stock market & the US dollar has been on & off in recent years. At times, the both the $USD & the stock market have rallied together but for the most part, the correlation between the dollar & the stock market has been inverse (one goes up while the other goes down). A lot of that has to do with the fact that US stocks become “cheaper” to foreign investors when the dollar falls. However, overall the correlation has been so hit & miss that I’m not reading too much into that right now, especially any one or two day move in the dollar vs. the market although I do give a direction of the $USD dollar a very high weighting for gold, silver & the mining stocks.

By: rsotc

rsotc — Mon, 16 Apr 2018 13:35:40 +0000

In reply to kls1022.

kls1022 – That bottom indicator is a custom histogram that I created using the 28-period EMA along with the 68-period EMA. In the chart above, the “period” is 15 minutes as that is a 15-minute chart. Essentially, I use the histogram in two ways: 1) As a trend indicator to quickly identify when the faster (28-period) EMA is trading above (bullish/green) or below (bearish/red) the slower (68-period) EMA. I can also use the histogram to identify divergences between the price of the security above and the peaks or troughs in the histogram in order to identify possible trend changes in advance.

Here’s a video I created a while back showing how to replicate & use this histogram: https://youtu.be/ax6OJ20mmiM I’ve also been able to replicate it on some other charting programs via similar methods but not others. Let me know if you have any other questions.

By: kls1022

kls1022 — Mon, 09 Apr 2018 16:44:03 +0000

Somewhat new to trading here… please forgive my ignorance, but what is the bottom indicator 28,68? I am trying to setup my Fidelity ATP charts to look like yours.

By: BIGBADWOLF

BIGBADWOLF — Mon, 09 Apr 2018 16:11:58 +0000

Hi Randy,

Many thanks for market insight. While QQQ is rallying, the dollar is down about 0.25%. How would you see the impact of dollar on the direction of this stock market rally?

By: rsotc

rsotc — Mon, 09 Apr 2018 14:26:22 +0000

Should this IHS pattern fully form with the potential right shoulder being finalized by a rally up to the neckline, it could provide us with clues as to the overall health of the market & whether or not the primary trend is still bullish or if we are in the early stages of a larger correction or bear market with more downside to come. What I am referring to is that when the primary trend is bullish, bullish chart patterns tend to play out with a high success rate & often rally beyond their measured targets. Conversely, bearish chart patterns during a primary uptrend have an increased rate of the pattern formation not finalizing or if it does, any breakout (sell signal) often proves to be a whipsaw signal/failed breakout with any sell-off falling well shy of the measured target. With increase bearish developments on the daily & weekly time frames, while I remain net long, for now, I am not married to any one scenario & will adjust my outlook & positioning as/if the case for the current near-term outlook starts to be called into question. If nothing else, in recent weeks this market has shown us that it can turn on a dime & do so very quickly. While I'm leaving the suggested stop on the QQQ official trade as any move below 152.30 for now, once might consider raising or trailing up their stops.