Triangle Midday Market Update and Stock Scan July 26

Jul 26, 2016: 3:05 PM CST

Today’s market activity was a volatile, big swing event that resulted in an intraday triangle pattern.

Let’s update our levels for the S&P 500 Index and note the big trending stocks today:

Price continues to trade within the wider range between the 2,160 and 2,175 level.

While it’s a lengthy consolidation rectangle, today saw a tighter triangle compression take hold near 2,165.

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Continue Reading…

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Down Goes McDonalds MCD July 26

Jul 26, 2016: 9:35 AM CST

McDonald’s (MCD) gives us another example of what can endlessly frustrate new traders.

Beating earnings, the stock collapsed 4% in the morning session.

Better earnings… collapsing stock?  What’s going on?

Let’s take a look at the chart, the gap, and see where the price goes from here:

First, Wall St. consensus estimates were for an increase of $1.38 per share.

McDonalds reported an increase of $1.45 per share, beating consensus estimates. Yay!

However, revenue and same-store sales fell just short of expectations, and that’s part of why price collapsed this morning.

It doesn’t have to make sense – in a perfect world, a “beat” on earnings should result in a gap-up in the price of a stock.

In reality, investors and traders take a look at the entire report, especially current and future revenue, and collectively make a decision whether to hold, buy, or sell.

In this case, they hit the sell buttons aggressively, gapping the price through daily EMAs.

Let’s see the set-up on the weekly price chart: Continue Reading…

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Same Pullback Same Emini Fibonacci Grid Plan July 25

Jul 25, 2016: 11:11 AM CST

We start the new week with clear echoes to last week.

Namely, we’re still trading within a clear range with clear resistance and support targets in play.

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

Here’s a reference guide of how to use and trade from these morning updates.

We still can’t use our larger Fibonacci Retracement Grid levels WITHOUT an actual larger retracement.

Positiveand Negative Divergences developed both at the resistance (2,170) and support (2,155) @ES levels as price played “ping-pong” between these pivot points.

The higher Fibonacci Retracement appears at the 2,149 level.

Until we get a breakout, we’ll continue playing the range as highlighted.

Price continues to play between 2,170 and 2,155 and those are the key reference levels for intraday trading now.

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Continue Reading…

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Down Drips Crude Oil to New Swing Lows July 22

Jul 22, 2016: 1:00 PM CST

In a somewhat surprising outcome, Crude Oil dips to a new swing low at the same time the US Stock Market rallies back toward all-time highs.

This disconnect is interesting as we turn our attention to the bend in the intermarket relationship.

Generally Crude Oil and Stocks exhibit a positive correlation (they both move in the same direction).

However a disconnect took hold from June into July as Crude Oil traded steadily lower while stocks advanced amazingly higher to all-time highs.

Despite positive momentum divergences on the hourly chart, Crude Oil continued its short-term downtrend toward – and now under – the $45.00 per barrel price target.

The commodity has declined from its recent peak above $52.00 per barrel to the current $44.00 level.

What looked like a possible bullish reversal up has now turned into a sharp sell-swing and breakdown lower. Continue Reading…

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Yahoo YHOO Surprises with Bullish Breakout into Open Air

Jul 22, 2016: 11:28 AM CST

As the stock market bull continues, we continue to see stocks breakout to new highs.

Yahoo! (YHOO) is another growing example of a leading stock breaking out to a new swing high.

Take a moment to view the prior post “Ten Strong Stocks Breaking to New Highs.

Yahoo shares developed a Trading Range (rectangle) between the $35.00 and $38.00 per share level.

We’re seeing a bullish breakout beyond $38.00 this week and a quick swing up toward $40.00 per share.

Let’s take this Daily Breakout and place it into the larger context of the Weekly Chart Trend and “Open Air:” Continue Reading…

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