August 25 Breakout Market Update and Stock Scan

Aug 25, 2014: 12:30 PM CST

Well there we have it!  It’s official – the S&P 500 achieved the 2,000 Magnet target.

We now ask the question “Did buyers use up all their fuel to push the market into this level?”

Let’s take a look at the charts, breadth, and highlight our trending stocks of the day.

I’ve repeatedly stressed the “Repeat Pattern” in the S&P 500 to members (and the open blog) recently and for good reason – the market traded up exactly as would be expected according to the “Repeat Pattern” thesis (it was very successful).

Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!)

“Onwards and Upwards to New Highs for the S&P 500?

Planning a Breakout (from a Repeat Pattern) in the S&P 500

S&P 500 “Breaks on Through to the Other Side

Decision Point for the Dow Jones

So here we are – either price skyrockets through this level on a “Short-Squeeze,” or perhaps more likely we see a Bull Trap trigger with a reversal down against 2,000.

Note the clear negative TICK divergence which argues for a trap-and-collapse scenario.

Either way, we’ll focus all our attention on the 2,000 index level. Continue Reading…

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Charting Apple AAPL Through the 100 Dollar High

Aug 22, 2014: 11:08 AM CST

Last week I posted about “Open Air” and magnet levels in Apple – let’s update the chart now to focus our attention on the $100 per share level (now achieved) which has served as a floor of support.

Here’s the Daily Chart with the progression to the new highs:

First, start with a little background on the “Apple Through Value Areas/Magnet Levels” post from last week.

It targeted a distant “Magnet Area” into $100 as long as price remained trading above the $95.00 Magnet Level.

Indeed, this outcome occurred a bit faster than expected (price simply moved through an “Open Air Pocket”) and not only have shares achieved the $100 simple target level, but they just exceeded them strongly today.

Despite two doji reversal candles into the upper Bollinger Band this week, buyers triggered a short-squeeze and continued the multi-day rally up from $94.00 through $100.

While there were progressive negative momentum and volume divergences, buyers stepped up with higher activity during the recent August rally (green highlight). Continue Reading…

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August 21 Stock Market Update with Trending Stock Scan

Aug 21, 2014: 12:51 PM CST

As we continue yet another trend day to the upside, let’s highlight the price action, sector strength, and identify the strongest trending stocks so far at mid-day in the bullish session.

We’ll start with the S&P 500:

I’ll let the chart speak for itself but will again reference the series of posts I wrote leading to this point:

Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!)

“Onwards and Upwards to New Highs for the S&P 500?

Planning a Breakout (from a Repeat Pattern) in the S&P 500

S&P 500 “Breaks on Through to the Other Side

Decision Point for the Dow Jones

We’ll be carefully watching news for the rest of the day as the indexes trade through new highs (the S&P 500 seems to be pulled higher like a magnet to 2,000… or perhaps a moth to a flame). Continue Reading…

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Color Keltner Channel Chart into Highs for SP500 and NASDAQ

Aug 21, 2014: 12:06 PM CST

Sometimes it’s helpful to look at one indicator at a time, and we can do that with our special “Color Keltner Channel” Chart – as seen on the S&P 500 and NASDAQ indexes.

Let’s take a look at where price trades relative to the Keltner Channel sand what message this activity sends to the market.

We’ll start with the S&P 500:

Keltner Channels plot two ATRs – Average True Range values – above and beneath the midpoint or 20 period moving average.

While Bollinger Bands reflect standard deviation, Keltner Channel bands reflect a slightly different measurement of volatility over time.

Nevertheless, the logic is roughly the same in that pushes (or touches) of one Keltner Channel extreme tends to result in a quick reversal or retracement down against the band.

I highlighted instances where price pushed and closed BEYOND the Keltner Channel.

For reference, I’m plotting a 2.5 ATR band (black line).

The main idea here is that price pushed up off the lower Keltner Channel into the upper channel without stopping.

I suggest you compare the current action specifically with February’s bullish non-stop action and then to a lesser extend with that of April.

This is just another way to show what I’ve been highlighting for you in the prior updates:

Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!)

“Onwards and Upwards to New Highs for the S&P 500?

Planning a Breakout (from a Repeat Pattern) in the S&P 500

S&P 500 “Breaks on Through to the Other Side

Decision Point for the Dow Jones

We can see the same type of pattern playing out in the NASDAQ: Continue Reading…

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Triangle Breakout Triggering for USDJPY Dollar Yen

Aug 21, 2014: 11:01 AM CST

FOREX traders – or those who simply monitor currencies as part of an intermarket picture – should be aware of the breakout trigger and potential expansion developing in the USD-JPY (US Dollar/Japanese Yen) pair.

Let’s take a look at the current “triangle” breakout and then compare it to prior breakouts:

First, I highlighted the current Triangle or low-volatility consolidation pattern that developed through 2014.

We see an initial trigger-break in July through the 102.000 level which resulted in a retest of the upper trendline (a great buy signal) into August.

The next phase was the “bull flag” breakout and impulsive upward rally from 102.000 to the current 104.000 target.

We’ll be focusing our attention on the simple 104.000 level for planning trades:

We’ll be “breakout bullish expansion” biased above this level and otherwise cautious beneath it.

Simply compare the late 2013 (larger/wider) triangle breakout with the retest of prior price swing highs as price traveled a pathway to new highs. Continue Reading…

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