Technical Momentum Outlook – Week 11.18

Portion of Article posted HERE @ Seeitmarket   


Current Technical Trend…   

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  • VIX levels at high 14’s (dropping from recent highs)

VXX

  • Advances-Decliners/INDU in sync – UPTREND

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  • IBD Psychological Market Chart indicators – UPTREND

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  • Indices back at (NQ) or near (ES/YM/RTY) all time highs

  • Lowest Open Gaps
    • ES: 1589 | NQ: 3864.75 | RTY: 1462.1 | YM: 14745

Market Momentum – ETF’s

VTI

  • Current IBD Outlook: Market Confirmed UPTREND 
  • IBD ETF strategy: 100% invested
  • Current Trend in key ETF Indices may be FOUND HERE

Video Outlook:

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Key Events in the market this week

  • USA: Earnings, CPI, Retail Sales, Industrial Production, Quad Witch, Producer inflation
  • Q1 earnings:
    • Adobe
    • Chip Sector
  • Space Industry Conference

My 3 Cents…

What an amazing rush to finish off week 10 as the NQ breaks and makes new all time highs. That surely put the permabears out to pasture.

As we head into Quad Witch week and earnings season slowing down only to begin here shortly once again, the overall sense remain positive and upbeat as market regains traction and continues to drive higher. So the big question is, do we remain in this chop off the lows of the 200ma to the highs in consolidation, or do we charge ahead with higher highs on the US indices?

As any optimistic trader, I too have upper levels that the market may achieve and likewise, just as many to the downside. My own personal “probability formula” has no mathematical basis as for intraday setups, we simply watch the momentum of the chart as it plays out with absolutely NO BIAS. As for the long term, I prefer to analyze four times a year and simply re-balance the portfolio. For the short-term, this is where the challenge lies, and by this is what I attempt to leave you with each week.

Each week the perspective I strive for is purely based on a technical outlook. To put that big picture together, I use a variety of charts and then step back and equate through a qualitative analysis of both MML support/resistance, moving averages and where price action relates to them. If I lost you there let me paint a picture.

  • To determine overall market momentum, I use the following ETF charts: VTI, FFTY, LDRS, SPY, VXX and UUP.
  • For market pairs in sync: IYJ/IYT; NYAD/INDU;  IBD Psychological market indicators
  • Tech industry strength: XLK and FDN
  • Moving averages and candles: 10/50/200 and Hekin Ashi Flex Renko candles

Now I am sure many of you have preferences and additional indicators you may use to support your weekly hypothesis and who knows, I may even add one to the collection in time. However it isn’t rocket science and you need no graduate degree to appreciate what a market in trend looks like and have a strategy to answer two simple questions. What is my entry and what is my exit? For this Jedi trader, the Heikin Ashi bars have answered those questions and with the support of the Big Picture charts, the timing of entries have a higher chance of probability of success on continuing in trend. Timing can be everything and at this juncture, the entry was several weeks ago so the only position I support is moving one’s stop up (indices) and not initiating any new positions for the short term to either side. 

Stepping back and looking ahead to week 11, the CPI data may throw a wrench into the market, but overall momentum is in only one direction right now supported from the fact that more charts as listed above lean UP then DOWN.

Trend on the other hand is not 100% confirmed on all 4 indices.

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 Q2 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.   


Steve Burns


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. 

3.11.18

Through it all, the US economy remains strong.

01.07.18

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

EducoFin

03.11.18

  • The monthly trailing-stops remain relevant. Their violation is a serious negative signal. The rest is noise.
  • A good trailing-stop takes most emotions out of a trade or investment.

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.       

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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