Technical Momentum Outlook – Week 02.18

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 01 recap and trend charts
  • Indices back to all time highs  
  • Open Gaps continue to form    
  • VIX levels holding at low 9’s 
  • Industrial/Transports 
    • Transport’s  holding above 10ma at short term MML resistance; Industrial’s at short term MMl resistance above 10ma
    • Monitor for the two ETF indices to remain in sync upside as supporting indicator of uptrend momentum

  •  FANG/FAAMG represented by the FDN (ETF) push highs on Trending HA bars on both Weekly/Daily  

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

  • FFTY trending upside
  • VTI Total Stock market Index maintaining upside momentum on strong trending HA bars
  • Uptrend Momentum: (11/30/17):  FEZ ytd return up 25.69% in comparison to SPY 20.34%
  • Current IBD Outlook: Confirmed Uptrend

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Video Outlook:

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Key events in the market this week

  • USA: Consumer Credit, Job Openings, CPI
  • GLOBAL: China/India: CPI
  • Q4 Earnings:
    • Bank stocks – JPM, WFC, PNC
    • Delta Airlines
    • Blackrock
  • Consumer tech show kicks off Tuesday
  • Retail sales data for December

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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
  • FDN (Tech ETF) strong uptrend
  • NYAD/INDU momentum upside 
  • VTI momentum strong upside
  • IYJ/IYT in sync upside above 10ema
  • Bloomberg Commodity index (BCOM) index has surged by nearly 6% since mid-December (@KennyPolacari)

Downtrend Technical Probability 

  • Downside Open Gaps 
  • Price action pushing at MML high resistance on both long and short term levels
  • FFTY crawl back to highs – need a breakout to move to Uptrend Probability
  • Technical indications (MACD) of an extended market (@EDUCOFIN)

My 3 Cents

…and the tides shift from consolidation/probable pullback to lift off in week one of 2018. Surely that can make the eager long term investor happy as markets push higher. The permabears all hoping for the start of 2018 to be the year for a market correction in unprecedented and relentless uptrend where put out to pasture, at least for the first week. Reading the Moors and Cabot newsletter that I receive every several months put a new perspective in mind. Essentially with the natural disasters we saw in 2017, could be the masked increased spending in 2018/2019 to keep this economy upside. Looking ahead to the short term, Q4 data is where my focus will be as all other technical’s keep my probability leveraged to the uptrend.

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. 

01.07.18

  • Quarterly Re-Balance: SELL index account; BUY bond shares
  • 22.6% gain for 2017

EducoFin

01.07.18

  • Technical indications (MACD) of an extended market.   

Moors & Cabot

January 2018

  • The impact of the hurricanes and the California fires may have a bigger impact on the US economy in 2018-19 than the changes to individual taxes.

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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