Although the market hasn’t been very conducive to swing trading over the last month or so with the major U.S. stock indices trading sideways, it still appears that the equity markets are poised for another leg down in the coming weeks to months. The leading index, the Nasdaq 100, is starting to roll over after backtesting its primary bull market uptrend line & will likely see some or all of the support levels shown on this daily chart by late 2015/early 2016.
$NDX daily Dec 11th
Unlike the $NDX, the S&P 500 index hasn’t even managed to backtest its primary bull market uptrend line (generated off the March 2009 bottom) and still remains below its May 20th highs. The horizontal lines on this daily chart also mark some key support levels/downside targets which are likely to be hit by year-end & into early 2016.
$SPX daily Dec 11th
The world’s largest company (also the largest component of both the $SPX & $NDX) still appears to be in the bear market that kicked off following the April 28th top in AAPL. After moving well below both the primary bull market uptrend line and the 40-week ema back in early August, Apple made a few feeble attempts to regain the key 40-week ema recently but printed a solid close below today. The bearish technical posture of AAPL meshes with the bearish technical posture of the broad markets increasing the probability that the bounce off the August lows has most likely run its course.
AAPL weekly Dec 11th
The bounce in the Euro/drop in the Dollar that I’ve been calling for continues to play out with the EUR/USD moving higher following the recent break above the bull flag continuation pattern with the 1.11ish level as the next likely target for the pair.
EUR-USD 4-hour Dec 11th
Should the dollar continue to weaken against its peers, gold, silver & the mining stocks should also continue to rise along with the mother of all short-squeezes continuing to build with every tick lower in crude oil. Although my personal holdings along with the trade ideas on the site contains a mixed bag of longs & shorts, my primary positioning is short equities/long gold & silver mining stocks as well as crude oil.
GDX 60 minute Dec 11th
$WTIC daily Dec 11th
On a related note, I’ve recently received several inquires on the recent USO/UWTI long trade. While most of the official (Active) trade ideas posted on the site provide suggested stop-loss levels, a suggested stop was not provided on the recent USO/UWTI. I’ve shared my thoughts on crude oil in the trading room recently but in a nutshell, although the most recent trade was accompanied with a 60-minute intraday chart with some near-term targets, I believe that crude oil has a lot more upside potential in the coming months & well into 2016 based on the bullish developments setting up on both the daily & weekly charts. As such, my personal plan was/is to short DWTI but only a starter position which I will not add to until we see some decent evidence of a reversal in crude.
As that recent USO/UTWI trade did not list any suggested stop & any reasonable stops, including the typical minimum R/R of 3:1 used on the trade ideas has been exceeded (if based on the price targets listed on that recent 60-minute chart), that trade will be considered stopped out for a loss with all associated posts moved to the Completed Trades category for future reference. However, I will continue to provide updates on crude for those still long or looking for an objective long entry. As usual, the bulk of my commentary, updates & replies to questions will be posted in the trading room but I will also post any significant technical developments on crude on the front page of the site as well.
All other Active Long Trade ideas (AMD, WMT, & GDX/NUGT) still look fine & will remain as Active Trades at this time. There are, however, numerous short trade ideas that have either exceeded their suggested stop, hit one or more price targets, or simply no longer look compelling. Those trades will be updated asap with some new long & short setups to follow. Also note that for every official trade idea on the front page of the site, I probably post 5 or more unofficial trade ideas in the trading room not to mention other the trade ideas shared by other registered users of the site. The reasoning behind this is to keep the content on the front end of the site as streamlined as possible while allowing an open forum on the back-end (Trading Room) to allow everyone to share trading ideas, charts, articles, strategies, etc…
Have a great weekend. -RP