Technical Momentum Outlook – Week 52.17

Portion of Article posted HERE @ Seeitmarket   


MML Charts

Using the Murray Math Level (MML) charts on higher time frames can be a useful market internal tool as price action moves among fractal levels from hourly to weekly charts. Confluence of levels may be levels of support/resistance or opportunities for a breakout move. Optimal setups will pass through Resistance or Support prior to moving in the opposite trend.     

Charts of Interest

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Current Technical Trend…   

  • Week 51 recap and trend charts
  • Indices back off from all time highs
  • Open gaps remain downside on all 4 indices   
  • VIX levels holding at high 9’s 
  • Industrial/Transports 
    • Transports breakout to short term MML resistance with Industrial’s consolidated at short term resistance
    • Monitor for the two ETF indices to remain in sync upside as supporting indicator of uptrend momentum

  •  FANG/FAAMG represented by the FDN (ETF) in Pullback on both Weekly/Daily  

  • NYAD (NYSE Advance – Decliners)/INDU in sync sideways   

  • FFTY consolidation
  • VTI Total Stock market Index maintaining upside momentum
  • Uptrend Momentum: FEZ ytd return up 26.48% in comparison to SPY 20.24%
  • Current IBD Outlook: Confirmed Uptrend

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Video Outlook:

  • Will resume in 2018

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Key events in the market this week

  • USA: Consumer Confidence, SP Case Shiller
  • GLOBAL: JP CPI, CN PMI Manufacturing
  • Stocks building a base in consolidation
    • Fast Food Restaurants
  • Bitcoin Judgment Week 
  • Post-Season Retail numbers

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the-bottom-line

Uptrend Technical Probability

  • Key moving averages in sync on indices with no crossovers
  • Indices remain at all time highs – go higher (IBD motto)
  • VIX average low holding under 10
  • UUP – Dollar index momentum BIG PIC downside

Downtrend Technical Probability 

  • Showing technical signs of slowdown in momentum
    • FDN/TECH pullback
    • IYJ/IYT in sync upside above 10ema with Industrial’s stall
    • NYAD/INDU momentum upside 
    • VTI momentum pullback
  • Downside Open Gaps 
  • Price action pushing at MML high resistance on both long and short term levels
  • FFTY Consolidation
  • McClennan Adv/Dec indicator  struggling to maintain uptrend (@KennyPolcari) 
  • Bloomberg Commodity Index (BCOM): is not pretty….it is now down 5% since early November and the longer term trendline is downward…… The index has now broken all supports and is struggling to hang on, but with no near-term support in sight. (@KennyPolcari) 
  • Most equity/index charts show weakness (haDelta) in weekly and monthly time frames (@EDUCOFIN)

The bottom line for me remains the data REMAINS positive with signs of a slowdown or consolidation heading into end of Q4/2018. Tax reform passed and for what it may remain at this point will keep the market up. Monitor for holiday retail sales numbers for next move. Of course at any point, geo-political landscape can change that in a heartbeat.  Watch for the Q4 data to set off the the tone for 2018. For now, I view the probability on both sides and as it appears, the momentum remains upside with a definite slowdown. At least for the remainder of the 2017. Watch for lower volume going in to week 52 but that never stopped the trend.

Watch for MML setups on price action break above resistance high and back under resistance low for first signs of a pullback. Downside, watch for open gaps to be closed and 50% pullback as 1st level of support.

Swing ETF positions should be careful about chasing at the highs as pullbacks/quarterly 3sig re-balance are always opportune times to re-enter the trend. Quarterly re-balance in Q1 2018.   


 Attempting to determine which way a market will go on any given day is merely a guess in which some will get it right and some will get it wrong. Being prepared in either direction intraday for the strongest probable trend is by plotting your longer term charts and utilizing an indicator of choice on the lower time frame to identify the setup and remaining in the trade that much longer. Any chart posted here is merely a snapshot of current technical momentum and not indicative of where price may lead forward.   


LOWEST OPEN GAPS

  • ES: 1589
  • NQ: 3864.75
  • RTY: 1462.1
  • YM: 14745

Jason Kelly

For the long term investor, a solid strategy that only requires 4x year portfolio review by achieving a  steady 3-percent quarterly growth in a small-company stock fund by skimming off excess quarterly profit into a safe fund that’s later used to make up shortfalls in weak quarters. 

12.25.17

  • On vacation. Preparing for Q1 2018 re-balancing.

12.17.17

  • Bears are suggesting active management over index funds for the difficult market ahead. Two problems: The market is always difficult, and they got it wrong in the past so will probably get it wrong again.

Educofin

12.17.17

  • An overextended market
  • SP500: Short-term: positive. Long-term: weaker (haDelta).
  • QQQ: Short-term: breakout above the November high. Bullish. Long-term: bullish.
  • IWM: Short-term: consolidation with a positive bias. Longterm: caution
  • DIA:  Short-term: negative bias (December negative divergences, haOscillator failed to go above zero). Long-term: weaker.
  • Gold: Short-term: negative with more room to fall. Long-term: bearish. Positive only above the 2016 high.
  • Oil: Short-term: consolidation. Long-term: consolidation with a very bullish bias.

ETF Sectors


As always, leave your bias at the door of where you think the market should be, watch the charts in front of you and stay away from the Z-Vals. Be ready in both directions. Trend will reveal itself on Heikin Ashi bars and proper trade management will keep you in the trend.


Thanks for reading and remember to always use a stop at/around key technical trend levels.


Government Required Risk Disclaimer and Disclosure Statement

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.   

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