Bristol Myers Squibb BMY Teaches us the Value Spotting Extended Negative Divergences

Jan 20, 2017: 6:36 PM CST

If you’ve ever wondered why we chart momentum and volume along with price, BMY tells us why.

Today shares literally collapsed back to the lows, down from the prior swing highs.

Wouldn’t it have been nice to know this was a distinct possibility?

Divergences warned us many days in advance.

Let’s study this example from this  reversal and learn to spot it in the future – and be ready.

We’re seeing Bristol Myers Squibb (BMY) reverse UP away from the $50.00 level in October to peak at $60.00 as we began 2017.

Look closely at the swing highs in November, December, and January.

If you understand divergences, you’ll know that something is very wrong that price isn’t showing.

With price at new swing highs, comfortably above the 20 day EMA, things are severely deteriorating beneath the (price) surface.

Namely volume has been weakening since November along with momentum (both are trending lower).

The chart above shows us the collapse back to $50.00 but let’s zoom-in on the divergences for clarity: Continue Reading…

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Pondering a Perfect Pattern Repeat for Market at the Highs

Jan 20, 2017: 1:17 PM CST

A major part of technical analysis (charting) is identifying prior patterns – and their outcomes – and comparing them to what’s happening right now in the market.

It’s not to say that history will repeat 100%, but if it does, you have an advantage over other traders who don’t see the pattern (and who are likely to make the same mistakes they made last time).

We’re seeing a direct Pattern Repeat situation in the S&P 500 and it’s time to study it for a proper plan of attack (what we expect to happen next).

Here it is in full pattern glory:

I’ve been highlighting this pattern with members and wanted to share it with you as well.

We’re focusing on the July to August pattern where price rallied sharply higher and then developed TWO small trading ranges just above the rising 20 day EMA (green).

We even observed a similar negative momentum divergence in the oscillator (red arrow).

Ok – that’s great.  We’re mainly concerned with the immediate future and if the outcome from August will be similar – repeat – into January/February.

Let’s take a quick moment and zoom-in on the pure price action with respect to the moving averages:

The left image is the candles (price bars) from July into August and the right image is the current rally.

Does it look familiar?  It should – and does.  That’s undeniable.

What we’re concerned with is the price action in August AFTER the two highlighted regions.

Price stagnated a bit more (continued to trade sideways) and then plunged lower in September, kicking off a bearish swing that ended in November.

No, the immediate future won’t exactly match the past but there will be echoes and clues savvy traders can use in their game plans into February.

Continue studying the July/August pattern and the September/November outcome and plan today. Continue Reading…

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This is a Very Tight Range for Traders Emini Jan 20

Jan 20, 2017: 1:07 PM CST

Stop what you’re doing and look at the trading range.  Take off all indicators and focus on price.

We’re still trading within a clear range – no breakout yet – and today’s action fits perfectly in that context.

Here’s today’s updated Emini (@ES) trading levels for your trades:

We continue to see price – as planned – move within the 20 point trading range.

We’re back at the midpoint of an expected sell-swing “down away from” 2,270 as we trade through 2,250.

A future breakout is on the horizon but it’s not here yet. Play the range until we do get this future breakout.

We had a strong gap UP from 2,260’s Midpoint to 2,270’s trendline and then right back down to 2,250.

Love it or hate it – you should be indifferent – this is the hand the market is dealing all of us at the moment.

If you’re new to this style of simple level trading, welcome aboard and keep checking back or get more details beyond just the @ES (stock scans, money flow, education) by becoming a member!

Continue Reading…

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No Breakout Not Today Emini Trading Update Jan 19

Jan 19, 2017: 12:09 PM CST

My heart goes out to you if you excitedly decided 2017 was the year you would begin trading the @ES for the first time.

I can’t imagine a worse environment to begin your trading journey into the index futures market than this.

Yet here we are, January almost over and we have a flat, low volatility, frustrating trading range at the highs.

On the other hand, if you enjoy trading the back-and-forth action between range support and resistance, 2017 has been a great year for you so far!

Here’s today’s updated Emini (@ES) trading levels for your trades:

We continue to see price – as planned – move within the 20 point trading range and our Fibonacci Levels.

We’re in the midpoint of an expected sell-swing “down away from” 2,270 potentially toward 2,260 then 2,250.

A future breakout is on the horizon but it’s not here yet. Play the range until we do get this future breakout.

If you’re new to this style of simple level trading, welcome aboard and keep checking back or get more details beyond just the @ES (stock scans, money flow, education) by becoming a member!

Continue Reading…

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High Flying Financial Goldman Sachs GS Falls from the Highs

Jan 18, 2017: 1:20 PM CST

Stocks that are high-flyers run the risk of crashing back to earth.

Goldman Sachs (GS) – a supremely strong stock – plunged $15 from the new highs and is on an expected – if not overdue – sell pathway lower.

Let’s pinpoint the chart pattern and note the key levels in play right now for GS:

After the November Election, financials stocks surged to the front of the market in terms of relative strength.

Money flowed into the financial sector and Goldman Sachs (GS) benefited strongly from this money flow.

Shares surged from $175 to peak under $250 here in January.

However, a lengthy sideways pattern and negative divergences in December set the stage for the January fall.

The breakdown under the support of the rising 20 day EMA ($240) sets the stage for a fall toward the rising 50 day EMA into $225.

Here’s the pattern and development of the divergences and current plunge from the highs: Continue Reading…

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