Current Technical Trend…
- VIX levels above 20 as momentum consolidated on the VXX
- ADX momentum upside – Volatility at hand
- Monitor for the two ETF indices to remain in sync as supporting indicator of momentum (Up or Down)
- Momentum downside and holding at 200ma
- Advances-Decliners/INDU in sync
- IBD Psychological Market Chart indicators – UPTREND
- Indices at 200 period moving averages with open gaps both above/below
- Lowest Open Gaps
- ES: 1589 | NQ: 3864.75 | RTY: 1462.1 | YM: 14745
Market Momentum – ETF’s
- Current IBD Outlook: Market Confirmed in CORRECTION
- IBD ETF strategy: 0% invested
- Current Trend in key ETF Indices may be FOUND HERE
Resume in Week 16
Key Events in the market this week
- USA: Earnings, FOMC minutes, CPI
- Q2 earnings:
- Big Banks report
- OPEC monthly Oil reports
- Facebook’s CEO Zuckerberg testifies
My 3 Cents…
A brief hiatus and back in the drivers seat as markets migrate and settle in consolidation at the indices respective 200 period moving averages.
Playing out the least several months, after an established uptrend run that came back to test the 200ma, lift back to the highs on the NQ, yet it was the YM and ES a bit more reserved that were unable to maintain momentum above the 10 or 50 period moving averages. ES momentarily several weeks back but failure as the 10 period ma’s were never able to cross and hold above the 50. The markets failure to hold upside on unknowing imbalance in the markets, pulls back once again to hold in consolidation for the next move.
So I see two scenarios playing out. There is NO QUESTION, the market is in correction and the momentum can tip the scales in either direction. Do the big banks (reporting this Friday) hold the market up or does the plug get pulled and we start closing out downside open gaps under the 200ma.
From the economic stage, earnings season is once again upon us which can impact. Trade tariffs perhaps and FOMC rate hikes surely can play a role for the mid-term. But neither of these as a technical observer effects the daily momentum. Sure, intraday we are ready in both directions but the bigger weekly question I look for is where is the market pulse and what is the probability that we maintain the current position or initiate a selloff or back upside.
Technically, my ETF charts that symbolize market momentum clearly paints a picture of momentum building to the downside in this short term pullback of the bigger pic Uptrend. The 200ma is a big line to watch and must be respected for it’s support of price action holding above. As long as we stay above it, technical momentum will hold in the bigger picture and breakout of consolidation will be the key to market direction. I don’t claim to have a crystal ball insight and by simply watching the charts tells me all. The ADX which I have been monitoring over the last several weeks on my charts also backs up my technical perspective of downtrend momentum that is flat-lined in consolidation. Weekly Heikin Ashi Doji bars, don’t make it any easier.
Keep your eyes on the 200ma. Watch for the 10ema to go under the 200ma and if 200>50>10>PRICE, we have ourselves a deeper correction coming. Till then, patience is the game in this market uptrend that has just as much probability in either direction.
Big Picture Market Pulse: Consolidation at the key moving averages as they are out of sync. ADX momentum downside on Indices as VIX volatility remains strong to the upside.
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 Q3 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.
- Outlook: Range Bound in a Bull Run
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.
The trade war issue is so far a small potatoes affair, and it should be mentioned widely and loudly that it hasn’t even happened yet and probably never will.
- Quarterly Re-Balance: BUY index account; SELL bond shares
- 22.6% gain for 2017
- 0.3% Gain for 2018
- SP-500 is at the support of a descending triangle (bearish character)
- The monthly trailing-stops are under attack. Their violations will a serious negative signal. The rest is noise.
Moors & Cabot
- Unfortunately a large number of companies in the US are Zombie companies. The cascading effect will eventually cause stocks and high yield debt markets to decline.
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.
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