Technical Momentum Outlook – Week 10.19

Current Technical Trend…     

  • $SPY trading in short term MML range after pullback off 281 resistance
  • Short term daily range from $269 MML support to $281 resistance
  • Long Term bounce off support at 234 holding above 277 reversal
  • Price action above all moving averages
  • 10ema>200sma>50ema>100sma; looking for all in sync for push higher
  • 10 day EMA support since January 4th
  • Overbought at 81.20 RSI
  • Average trading range closes out at 2.44
  • MACD pullback initiated
  • VIX continues to gradually decline; under 15

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  • Industrials/Transports
    • Monitor for the two ETF indices to remain in sync as supporting indicator of  momentum (Up or Down)
    • Price action at Daily MML resistance zones

 

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  • IBD Psychological Market Chart indicators – UPTREND
    • Bulls vs Bears: when the percentage of bears crosses above the bulls, a market bottom is more likely.
    • Margin Debt: indicator will exceed 55% when optimism runs rampant on Wall Street and investors are heavily borrowing money during the late stages of a bull market.
    • High Low Ratio: indicator shows its first up day after crossing below 0.5, look for a short-term bottom in an intermediate correction during a bull market. 

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Market Momentum – ETF’s

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

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Key Events in the market this week

  • USA: Employment
  • Earnings:
    • Costco, Target
  • Wholesale Chains reports
  • Futures contract expiry nears

My 3 Cents…

Been a rough ride intraday at the tops but we continue to hold strong off the bounce of end of Q4/2018 at the MML lows on the daily chart. While volume has been hovering around under the 60 day average, the slow steady grind upside is welcome as solid strength x 2 months.

GDP numbers out, employment this week and Brexit deadline this month with upcoming earnings for Q1 in the next month is enough to take us to the next level. 

Technically, the momentum remains upside above the 10ema. Watch the 5ema for even shorter support and look for any crossover of the two for pullback opportunities back upside off the MML. Moving averages continue to be out of sync and looking for the 50 to cross above the 200 for even stronger support. MML reset long term will give us our next level upside.

Pullback opportunities back upside off the 200, long term overbought MML levels downside, down to the 50ma and top level resistance as long as price action remains stable for next move up. 

For the intraday trader, both directions offer opportunity. Swing traders, be ready for pullbacks of MML major support off 4 hour charts.  Long term, sit quietly and wait to re-balance at lower price at the end of Q3.

Big Picture Market Pulse: With VIX under 15 and back up near short term MML resistance, watch for price action to continue up to short term reversal until we have a mid term MML reset, monitoring the 5/10 moving averages for a continued move. Agree with SBurns analysis of market working out overbought conditions before pushing higher.

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 2019.   


 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.   


Newtraderu (Steve Burns)

The stock market as a whole has become primarily overbought and starting to settle into a trading range here with the odds favoring a pullback more than another trend to the upside before working through overbought conditions.


Jason Kelly

For the long term investor, a solid strategy that only requires 4x year portfolio review by achieving a  steady three 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. 

  • Stocks rose last week.
  • It was the best January-February since 1991.
  • Federal Reserve Chairman Jerome Powell told Congress the Fed paused tightening because conditions are less supportive of growth.
  • China’s economy is slowing, but its stocks are rising.
  • US economic data were tepid but not terrible.
  • The only issue facing the Fed is inflation, which is tame. Globalization prevents prices from running wild.
  • Chartist’s are still fascinated by the notion that rising prices reach higher levels.
  • Fundamental analysts say earnings need to improve, and they should because earnings weakness is tied to the trade war, which is ending.
  • Berkshire Hathaway, Warren Buffett, and the firm’s two stock pickers have trailed the S&P 500. Buffett himself advocates using index funds.
  • J.D. Salinger needed to survive WWII to continue his writing. Modern novelists can barely survive their Amazon rankings.

EducoFin

  • Conflict between short- and medium-term heikin-ashi charts. Consolidation?
  • The combined currencies price and heikin-ashi charts show the high level of noise FX
    markets display.
  • haDelta and haOscillator are at elevated levels on weekly charts.
  • The short-term positive bias remains for some days ahead.
  • haDelta offers another positive signal on most daily charts.
  • Well above the trailing-stop on daily and weekly charts.
  • Long-term, the market is getting closer to hit a resistance.

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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