Technical Momentum Outlook – Week 11.19

Current Technical Trend…     

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  • $SPY pullback in short term MML range 
  • Short term daily range from $281 MML resistance down to $273 support holds – DownTrend
  • 60 day MML range at Major S/R – 50% pullback – Uptrend
  • 90 day  MML range holding above midway Major S/R – Uptrend
  • Long Term bounce off support at 234 holding breaks 277 reversal down to overbought at 273
  • Price action falls above below moving averages
  • 10ema>200sma>PRICE>50ema>100sma; looking for all in sync for push higher
  • 10 day EMA support since January 4th breaks on 3/06
  • 5/10ema crossover downside
  • RSI working down to Oversold zone
  • Average trading range closes out at 2.25
  • MACD pullback continues, gap spread widens, histogram progressive dive
  • VIX continues to vacillate around 13-17; Closes at low 16’s

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ETF Market Momentum – VTI

Current Trend in key ETF Indices may be FOUND HERE

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  • Current IBD Outlook:  Market in Confirmed Uptrend
  • IBD ETF strategy: 100% invested
  • 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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Key Events in the market this week

  • USA: January Retail, Quad Witch, CPI
  • Earnings:
    • Dollar General
  • Chip giants reports
  • Futures contract expires end of the week

My 3 Cents…

Last week: 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.

Seems market played well off the MML resistance down to the 200ma and MML support on the short term. With three out of the 4 MML ranges remaining in an uptrend, no change in overall market direction mid to long term.

Moving averages continue to be out of sync as the 5 crosses 10ema downside and we are back at the 200ma. 

Upside Probability: Watch for price action to break and hold above the 200 as the 5 crosses back upside over the 10ema. Key here is whether we hold above MML support/200ma. Halfway 277 is the next level up. 

Downside Probability: With the 5/10ema cross downside and supporting market internals downside, market may test the 50ma and short term overbought/reversal levels. Deeper selling will test the 269-265 range if market internals continue to drop to oversold conditions.

Monitoring the 4hr charts for either direction and splicing in on a 60m chart cuts out the noise.

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: Key move is where price action follows off the 200ma. Technical Probability leans downside to test lower MML levels down to weekly 50% fib levels however short term pullback upside may be tested halfway to at least 277. Monitor for post 1 hour direction of market open on Monday.

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 $SPX S&P 500 Index chart has the 200 day SMA as resistance and is under the 50 RSI in contrast to the $SPY ETF chart holding up at these levels Friday. Not a good sign for bulls


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 fell last week.
  • The Nasdaq halted its winning streak at ten weeks.
  • The US-China trade deal is taking longer than hoped, and still hung up on big points. China is preparing for a tough economic struggle.
  • The European Central Bank reduced its 2019 growth forecast for the euro zone to 1.1% from 1.7%, and will crank up stimulus.
  • The February employment report was considered a disappointment, at just +20K jobs. However, it looks like a one-off.
  • Ignore announcements that the bull market turned 10 last week. There’ve been several bear markets along the way.
  • The S&P 500 turned down from the 2800 level.
  • The story about a global economic slowdown might be better focused on the next coordinated effort by central banks. This is good for stocks.
  • Watch for NIRPs to go mainstream.
  • Our Sig plans are doing what they’re supposed to do: falling more during sell-offs and rising more during rallies.
  • Daniel Kahneman hasn’t improved his thinking in any way. That makes two of us.

EducoFin

  • Defensive/bearish market character: Tobacco and Utilities Industry groups are the only sectors that display green Heikin-Ashi candles in all 3 time frames, daily/weekly/monthly
    On many charts, haDelta is at its lowest level since the start of the recent rally.
  • The oversold condition may generate a (short) bounce.
  • The S-oscillator chart is an accurate proxy for the filtered trend.
  • 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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