About that Death Cross in the Russell IWM…

Sep 19, 2014: 3:18 PM CST

I’ve been hearing a lot of discussion about the “Death Cross” in the Russell 2000, particularly in the IWM ETF.

Let’s identify what a “Death Cross” is and then test out prior performance of “Death Crosses” specifically in the IWM Russell 2000 ETF.

Here’s a current chart – and we’ll step inside it all shortly:

First, let’s define a “Death Cross.”

A “Death Cross” – that’s such an ominous sounding name – occurs by definition when the 50 day Simple Moving Average (SMA) crosses under the 200 day Simple Moving Average.

It simply means that a shorter-term moving average has crossed under a longer term moving average.

A Moving Average adds the closing price of every day – for example 50 days – and then divides that number by 50 days (or however many days have been added).

The goal is to find the “average” price over that period and we plot this on the chart as a line which we call a “Moving Average.” Continue Reading…

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New Highs Again and Trending Stock Scan for Reversal Day Sept 19

Sep 19, 2014: 2:16 PM CST

Perhaps not surprisingly, the stock market pushed yet again to another intraday high today as the non-stop bullish uptrend continued, yet this time we saw a quick retracement down to the rising trendline.

Let’s start with our updated, uptrending S&P 500 intraday chart:

A stable rising trendline pattern contains the progressive higher highs and higher lows and it should be our market reference point until proven otherwise with a breakdown under the rising level.

Today’s session low represents the lower boundary near the 2,007 level and it will be our focal point (bull above; bear beneath) going forward.

Continue Reading…

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New High Market Update and Stock Scan Sept 18

Sep 18, 2014: 1:08 PM CST

Perhaps not surprisingly, the stock market pushed yet again to another intraday high today as the non-stop bullish uptrend continued.

Let’s take a look at our current S&P 500 levels, Sector Breadth, and note the top trending stocks of the day:

Yesterday’s Fed Day simply spurred additional buying pressure into the market – initially from bulls/buyers and then from frustrated short-sellers (buying-back to cover losing positions) and the bullish money flow continued into today’s session.

Price has compressed distinctly around the 2,009/2,010 target level and we’ll be on guard for a breakout or price expansion from this key index level.

Continue Reading…

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Rally into Range Resistance for Google GOOG

Sep 18, 2014: 12:02 PM CST

Google (GOOG) faces an important “make or break” resistance challenge as a short-term range pattern continues.

Let’s see the pattern, highlight the level, and plan our trades from this vantage point.

A simple chart shows us the short-term rising range (highlighted) that has developed from August to present.

These trendlines have contained price as it bounced from upper to lower levels.

At the moment, price interacts with the upper trendline along with the upper Bollinger Band and resistance cluster near the $590 per share level.

We’ll keep the planning simple and focus our attention and trading plans around this level.

Google becomes “breakout pro-trend bullish) above the $593 and $595 levels (allow room for a trap) which targets the $600 level once again (and above).

Otherwise, the next swing could easily be the third simple downswing (retracement) back to the lower rising trendling which would intersect just above the $570 level in the near-term future.

Here’s a zoomed-in perspective of the trendline pattern in motion:

Drawing trendlines isn’t an exact science as you can see above (nothing in trading is!) which is why we like to reference “levels” as opposed to exact prices to expect a precise reversal or inflection.

Nevertheless, the trendline cluster overlaps the $590 to $592.50 level which should be our “make or break” resistance level.

Bullish breakout trades are favored above this price level and another bearish retracement lower (target $573) is favored on a movement down against this level.

Of course, let price always be your guide.

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Corey Rosenbloom, CMT
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Fed Day Market Update and Stock Scan Sept 17

Sep 17, 2014: 12:27 PM CST

After yesterday’s strength, we have today’s retracement of the bullish reversal.

Though price pushed to new highs, it was on negative divergences and we’ve seen downside action so far this morning.

The afternoon gives us a “Fed Day Announcement” which could radically change the structure, but first, let’s update our S&P 500 chart then highlight the top trending stocks of the day.

Positive Divergences suggested a bullish reversal which occurred this week.  Now negative divergences at a new high similarly argue for caution.

We’ll use 2,000 as a simple reference level and will play cautiously/bearishly beneath it and otherwise bullish – throwing caution to the wind – above.

Again, the “Fed Day” announcement and press conference begin at 2:00pm EST so read the statement and monitor the often volatile price action that develops  into the close.

Continue Reading…

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