Aug 28 Sideways Market Update and Stock Scan

Aug 28, 2015: 2:09 PM CST

Yesterday’s relief rally stalled into overhead resistance at the 1,990 target level.

What levels are we focusing on now within the slightly lower volatility? Let’s chart them now:

It’s logical to expect a consolidation or pause as the market takes a breather after a huge impulsive rally.

This time, price stalled shy of the 2,000 “Round Number” index level and stalled into the 1,990 region.

Internals and Momentum declined during today’s consolidation as a new short-term intraday trading range has developed between 1,975 and 1,990.

Focus on these levels on the intraday basis and be ready to trade a breakout (up toward 2,000; or down to 1,950).

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Finally a Bounce Back Reversal for Crude Oil

Aug 28, 2015: 12:23 PM CST

Like stocks, Crude Oil is finally getting a strong bullish bounce.

However, unlike stocks, Crude Oil snapped a much longer and persistent downtrend in price.

Let’s update our Crude Oil charts and note new levels in play.

The 30-min intraday chart highlights the strength of the short-term downtrend – or ongoing collapse – in price.

Price continued to carve a series of lower lows and lower highs in a falling EMA environment complete with higher volume during most of the sell-swings lower.

One of the core principles of technical analysis (charting) is that trends, once established, have greater odds of continuing than of reversing.

Oil gives us a textbook lesson in why this principle is so important.

Retracement trades – like bear flags – become the easiest trade set-ups to take during trends like these.

However, even the strongest trend has to end eventually (unless a company goes bankrupt) and oil finally snapped its intense sell-swing lower.

Price spiked off the $38.00 per barrel level, eventually spiking to a new momentum high on August 25th (gap) from a small divergence.

Price then gapped yesterday above the falling advanced trendline and then above the larger trending into $40.00.

The result was a powerful short-squeeze of bullish impulsive price action all the way to the $45.00 level currently.

Let’s put this huge rally – and even larger short-term downtrend – in the context of the Daily Chart: Continue Reading…

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August 27 Big Trend Rally Update and Stock Scan

Aug 27, 2015: 1:16 PM CST

The bounce continued!  The relief rally propelled stock prices higher, breaking free from a Triangle Price Pattern as detailed yesterday.

And what levels are we focusing on now within the high volatility? Let’s chart them now:

As detailed to members last night,

“We’re actually tilting toward the BULLISH side and will aggressively buy a breakout above the 1,940 level (note the divergences and strong Breadth)”

“For now, we see a bullish bounce rally – on stronger momentum and internals (and even volume) – which favors a continuation rally up toward the 2,000 level at least.”

We’re simply seeing this dominant (logical) thesis planning with today’s powerful Trend Day.

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New Color Structure and Value Area Reference Chart for SP500

Aug 27, 2015: 10:39 AM CST

During volatile times, it’s often helpful to step back to get a broader, simpler perspective of price, where it’s traveled, what levels are important, and where it may be headed in the immediate future.

“Color Structure” price-only charts can provide valuable roadmaps for traders.

Let’s update our current Color Price Structure chart of the S&P 500 to pinpoint key levels now:

What we’re seeing is the @ES Futures (S&P 500 Index) on a Daily Chart from early 2014 to present.

The small ranges – white and purple – are most important at the moment.

These represent periods of balance or equilibrium between buyers and sellers (bulls and bears) and are reference points for today.

As price trended higher, it did so in bursts (impulses and rallies) and consolidations (ranges) – stops and starts.

The first noted range developed early 2014 between 1,800 and 1,850 with 1,825 as the “Midpoint” or value area.

After a breakout surged price higher toward 1,950, a wider “box” or Value Area developed between 1,850 (the prior range high) and 1,980 with 1,930  as the Midpoint Reference.

What happened next should draw our attention because it could hold clues for the current environment. Continue Reading…

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August 26 Bouncing Market Update and Big Stock Scan

Aug 26, 2015: 2:11 PM CST

Eventually this market has to rally, right?  We’ll see – continue focusing on our key price levels.

And what levels are we focusing on now within the high volatility? Let’s chart them now:

Again, please take a moment to review the prior “What Two Breadth Charts are Saying about the S&P 500.”

Also, compare that with the real-time expected sell-off we’re seeing in today’s morning update: Weekly Chart Perspective of the Steep Stock Sell-Off

Price has stabilized into a sideways trading range – taking the shape of an intraday Triangle – after the sell-off.

We continue to focus our attention on the 1,880 key pivot support level (four support examples) as well as the declining upper resistance trendline heading toward 1,900.

For now, price is above the upper trendline and failing into the 1,915 level which will be our pivot.

Market Internals (TICK) is strong going into the current resistance level so any firm movement up above 1,920 could be an impulse (aggressive) breakout buy signal.

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