Jan 29 Reversal Update and Trending Stock Scan

Jan 29, 2015: 2:20 PM CST

After the Fed Day Wednesday, stocks simply traded down to the lower support of the rising trendline and today rallied up logically from the key level.

We’ll start with the ongoing triangle in the S&P 500 which helped us trade today so far:

For a broader discussion on this ongoing and important pattern, see my update post “Plotting the Current Range and Future Breakout for the S&P 500.”

The main idea is that the market structure is consolidating between compressing trendlines.

In simpler terms, look to play price swings up and down within this range as the market plays “Ping-Pong.”

We saw the movement down from the “midpoint” near 2,030 toward (and slightly under) the 2,000 index target, only to see an intervention trigger a bear trap and instant bullish reversal back above 2,000.

This continues the triangle and once again targets the midpoint or higher.

Continue Reading…

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Surging Prices and Obvious Trend in US Treasuries TLT

Jan 28, 2015: 3:27 PM CST

It’s no longer a “stealth” movement but a blatant, obvious development that Bond/Treasury prices have surged in the last few months and continue persistent uptrends thanks to bullish money flow.

Take a moment to review the prior two updates:

Are You Seeing this Stealth Move in Bond Prices?!” and

Four Strong Trends Kicking Off 2015

With those in mind, let’s make the switch from “Stealth” to “Obvious” and update our bond charts and levels:

With today’s Federal Reserve statement behind us, we’re seeing a surge of additional money into Treasuries, boosting price (at least as seen in the popular ETF with symbol TLT) to fresh new 52-week highs.

Price broke through the $136 per share level which takes the price well-beyond the $130 per share high from 2012.

Amid calls for a “Bond Bubble” to burst, the reality is that bond prices (again, seen in ETFs) continue to see strong bullish money flow in a “safety play.”

Bubble or not, the reality is that price is – and continues – to surge with the continuing acceleration. Continue Reading…

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Fed Day Market Update and Stock Scan Jan 28

Jan 28, 2015: 2:33 PM CST

With the Federal Reserve’s announcement just behind us, let’s update our levels in the aftermath and highlight our top trending stock opportunities of the day (some from earnings announcements).

We’ll start with the ongoing triangle in the S&P 500:

For a broader discussion on this ongoing and important pattern, see my update post “Plotting the Current Range and Future Breakout for the S&P 500.”

The main idea is that the market structure is consolidating between compressing trendlines.

In simpler terms, look to play price swings up and down within this range as the market plays “Ping-Pong.”

The midpoint is roughly where price trades currently – the 2,030 level.

A further breakdown or movement away from the 2,030 level suggests price could again target the 2,000 line.

Continue Reading…

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Caterpillar CAT Shatters Support: Updating New Trading Levels

Jan 27, 2015: 12:04 PM CST

Caterpillar (CAT) shares shattered support at the $85.00 per share level on an earnings miss this morning.

Wall Street consensus estimated a gain of $1.55 per share yet the actual reported earnings were $1.35 per share.

Traders subsequently punished the stock with a downside gap and break of a trendline and key support level.

Here’s the Daily Chart, though the Weekly Chart will give a broader perspective with targets:

Shares initially bounced (rallied) up off the $85.00 per share rising trendline level, only to see this morning’s earnings gap collapse price straight toward the $80.00 per share level.

Let’s actually turn our attention – and planning – to the Weekly Chart where we can see the broader picture: Continue Reading…

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Plotting the Current Range and Planning the Future SP500 Breakout

Jan 26, 2015: 3:16 PM CST

What goes up must come down, and in the market, what goes sideways must break out.

We’re currently charting a wide range pattern but soon, we’ll need to shift gears for a breakout event, so let’s plan both of these events and be ready to jump in when the market tells us it’s safe to do so.

Let’s first start with the left side of the chart (the past) and move forward.

I highlighted each sideways move or consolidation in the market.

Remember, the market consolidates (forms a sideways range) before a breakout, and of course after a breakout impulse has run its course.

While you can trade the ping-pong range action inside the consolidation – “Range Fade” tactics – many traders prefer to wait to join into the breakout to capture more efficient profits.

Closely study each prior small and large consolidation and the eventual breakout from the range.  Note the multi-day movement in the direction of the breakout each time.

My sense is that the market is forming a similar Diamond or wide-range pattern to what we saw around April 2014. Continue Reading…

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