Current Technical Trend…
- Daily VXX (VIX Volatility) momentum FLAT
- Weekly uptrend momentum pullback
- Monitor for the two ETF indices to remain in sync as supporting indicator of momentum (Up or Down)
- Momentum down /ADX down
- Advances-Decliners/INDU in sync
- IBD Psychological Market Chart indicators – UPTREND
- Indices ADX momentum down; moving averages out of sync, consolidation ensues
- Lowest Open Gaps on Futures
- ES: 1589 | NQ: 3864.75 | RTY: 1462.1 | YM: 14745
Market Momentum – ETF’s
- Current IBD Outlook: UPTREND under Pressure
- IBD ETF strategy: 500% invested
- Current Trend in key ETF Indices may be FOUND HERE
Key Events in the market this week
- USA: Earnings, CPI
- Q2 earnings:
- Chinese internet leaders reports
- Semiconductors report
My 3 Cents…
Finishing off week 18 on the NFP report to give a little push in the market unfortunately on lower volume. ADX momentum continues to drawn down though flat to the naked eye. Moving averages continue to be out of sync where preferred to see price action above or below the 10, 50 and 200 in Trend, we continue to be congested, consolidated and range bound. not an electric year for 2018 so far. The 200ma remains top be the last stronghold as market price action continues to hold the line.
Technically, the momentum remains unchanged as price action will either break to the upside and regain synchronous traction on the moving averages to take us higher, or we retest the 200ma once again and drop further. Watch for the daily ADX to cross to indicate direction of short term trend and confirmation of price breaking back above the 50ma with the 10ma trailing. If the market is unable to regain the traction, weakness will prevail and probability will take us down further. Tough call in congestion. 50% get it right, the other half missed the mark.
For the intraday trader, both directions offer opportunity. Swing traders, be ready for major earnings to move the market and respond at the 50ma. Long term, sit quietly and wait to re-balance at lower price at the end of Q3.
Big Picture Market Pulse: Consolidation remains at the key moving averages (10/50ema) as they are out of sync with slight edge to the downside. ADX momentum downside FLAT on Indices as VIX volatility trending downside.
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: Blurred Lines
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.
- I attended the Berkshire Hathaway shareholder meeting yesterday.
- Disappointments included: Warren Buffett could not explain his plans for health-care reform, was forgiving of Wells Fargo’s many transgressions, and is just now realizing that the internet is killing newspapers.
- Main takeaway: Buffett’s career bears steadily less relevance to individual investors.
- Quarterly Re-Balance: BUY index account; SELL bond shares
- 22.6% gain for 2017
- 0.3% Gain for 2018
- SP-500 is still inside a descending triangle with a bearish character.
- A short reaction is expected on several daily charts.
- The long-term charts offer no indication of a trailing-stop violation.
- 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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